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RNS Number : 0063L Helleniq Energy Holdings S.A. 31 August 2023
Maroussi, 31 August 2023
Second Quarter / First Half 2023 financial results
Good operating results, despite weak benchmark refining margins -
Acceleration of RES investments and faster implementation of the Group's
transformation and energy transition plan
HELLENiQ ENERGY Holdings S.A. ("Company") announced its 2Q23 consolidated
financial results, with Adjusted EBITDA at €164m and Adjusted Net Income at
€26m. Accordingly, 1H23 Adjusted EBITDA came in at €568m and Adjusted Net
Income at €277m, reporting yet another strong performance. It should be
noted that operating results (EBITDA) do not include results of our
associates, ELPEDISON and DEPA, which are consolidated under the equity
method.
2Q23 results reflect a weaker benchmark margin environment, especially when
compared to the historic-highs of 2Q22, limiting thus the benefits of improved
operations and increased availability of all 3 refineries. Oil product sales
reached c. 4m MT (+16% y-o-y), with exports up by 28%, corresponding to 54% of
total sales volume. At the same time, increased installed capacity following
the last 2 years of investments and higher electricity generation, resulted in
improved contribution from RES.
Reported Net Income amounted to €7m in 2Q23 (2022: €524m) and €162m in
1H23 (2022: €869m), with the big difference reflecting the losses from
inventory valuation on compulsory stocks held and financed by the Company.
Specifically, the movement between the two periods exceeds €700m, with 1H23
incorporating a €197m loss, reversing part of the €513m gains reported in
1H22.
Strategy Implementation - Vision 2025
Following the completion of the first phase of the Vision 2025 strategic plan,
the Group focuses on four pillars: a) operational excellence across all
businesses b) acceleration of targeted portfolio development in RES and
storage in Greece and internationally, along with the development of
commercial capabilities, c) carbon footprint reduction in our core activities
and d) further improvement in ESG.
Through HELLENiQ Renewables, the Group is accelerating its development in the
RES sector, with the aim of reaching operating capacity of 1 GW by 2025.
During 2Q23, agreements were concluded for the acquisition of PV parks
portfolios with a total capacity of 211 MW in Romania and up to 180 MW in
Kozani, which are expected to be operational in the next two years and within
2024 respectively, as well as 15 MW PV parks in operation in Cyprus. These
agreements mark HELLENiQ ENERGY Group's entry into two new, rapidly developing
markets, Cyprus and Romania, achieving geographical diversification of the RES
portfolio and strengthening the Group's extroversion. At the same time,
HELLENiQ Renewables signed a framework agreement for the development of an
additional RES portfolio with a total capacity of 600 MW in Romania, while the
Group's entry into another international market through another subsidiary is
in progress.
HELLENiQ Renewables successfully participated in the Regulatory Authority for
Waste, Energy and Water (RAWEW)'s recent tender and 3 energy storage projects
in Greece with a total power of 100 MW and a guaranteed capacity of 200 MWh
were selected as eligible to receive investment and operating aid. This marks
the Group's entry into a new market which is essential for further scaling-up
RES while facilitating appropriate management of our investments in the
sector.
The Group's RES total operating capacity along with projects under
construction has reached ~680 MW, with the portfolio pipeline at 3.8 GW.
In order to accelerate its RES portfolio development, HELLENiQ Renewables
signed a financing framework agreement of up to €766m with 2 Greek banks for
the implementation of multiple financing arrangements (project finance) in
relation to existing and new projects for RES electricity generation in
Greece. The agreement covers the RES projects' operational/commercial model,
with pricing structures such as feed-in-tariffs, feed-in-premiums or even
power purchase agreements (cPPAs). It is a particularly innovative
transaction, pioneering for the Greek market, with material benefits, such as:
a) sufficient financing capacity to support the Group's growth, b) flexibility
and speed of projects implementation, c) improvement of the Group's capital
structure, d) competitive financing terms and costs.
Further de-escalation of crude oil prices and weaker refining margins
International crude oil and product prices continued to fall during 2Q23, with
Brent averaging $78/bbl due to developments in the broader macroeconomic
environment and the expected impact on demand, despite OPEC+ announcements of
production curtailments.
In 2Q23, refining margins declined significantly compared both to the 2Q22
historic-highs, following Russia's invasion of Ukraine, and to 1Q23. Refining
margins weakened due to ample inventories, milder weather conditions and
sufficient global supply of oil products after the redirection of Russian
products exports to markets other than Europe, following the implementation of
new sanctions by Europe and other Western countries on 5 February 2023.
International benchmark FCC and Hydrocracking margins in 2Q23 averaged
$4.4/bbl and $5.5/bbl respectively vs $21.4/bbl and $11.1/bbl in 2Q22.
Improved domestic market demand
Domestic market demand in 2Q23 reached 1.5m MT, higher by 5% y-o-y, mainly as
a result of a growing economy and tourism, with auto fuels consumption
increasing by 3%. Aviation fuels sales increased by 7% to 416k MT on higher
air traffic, while bunkering fuels offtake rose by 3% to 723k MT.
Balance sheet and capital expenditure
Capex amounted to €101m in 2Q23, directed primarily to maintenance upgrade
projects at the refineries as well as to the acquisition of the 2 PV parks in
Cyprus.
Net Debt was shaped at €1.55bn, lower by €0.4bn since the beginning of the
year, due to positive cash flow generation in 1H23, as the Temporary
Solidarity Contribution is set to be paid in the following months. Gearing
(Net Debt to Capital Employed) fell to 36%.
At the end of 2Q23, refinancing of a €400m revolving credit facility (RCF)
for 5 years was completed. In addition, in 3Q23, the return on the Temporary
Solidarity Contribution on excess profits for FY22, amounting to €267m, was
filed to the tax authorities, with the repayment gradually taking place,
starting from July 2023 and affecting the 2H23 cash flow.
Andreas Shiamishis, Group CEO, commented on the results:
"2Q23 results and developments across all Company's businesses were positive,
especially considering the significant decline in international refining
margins and prices vs last year. Amid a quarter with weaker refining benchmark
margins, we improved our refineries' operational performance, further
developed our fuels marketing business in Greece and internationally and
increased contribution from RES. 1H23 Adjusted EBITDA came in at €568m, with
a positive outlook in terms of full year financial results as well as
increased contribution from new businesses.
During the last 3 years, the challenging landscape on account of the pandemic
and the energy crisis led us to adjust our business, prioritizing safety,
uninterrupted market supply while, at the same time, stepping up to support
the society. While these attracted a significant part of our attention and
efforts, we remained focused on the Company's future, with emphasis on
accelerating the implementation of our holistic energy transition plan VISION
2025.
In addition to the improved operating performance, we continued to develop our
RES business through a series of projects, including: a) expansion of RES
asset base in operation or under construction capacity with projects over 400
MW, b) entry into new international markets with RES assets and set-up of
green energy commercial business, c) participating in the newly-formed energy
storage market following the successful bid in the recent tender for the
development of energy storage projects (batteries) with a total capacity of
100 MW, and d) signing an innovative financing framework agreement of up to
€766m for RES investments in Greece.
Our goal for 2023 is to deliver strong profitability and respective
shareholders' cash returns through dividends, along with a further strategic
strengthening of the Company through its targeted Green Energy transition."
Key highlights and contribution for each of the main business units in 2Q23
were:
Refining, Supply & Trading
- Refining, Supply & Trading 2Q23 Adjusted EBITDA came in at
€114m. Despite the significant decline in international refining margins
compared to the 2Q22 historic highs, increased availability of the Group's all
3 refineries leading to higher exports as well as product mix improvement,
resulted in substantial overperformance vs benchmark refining margins.
- Production reached 3.6 mt, +13% y-o-y, as maintenance turnarounds
had been implemented at the Aspropyrgos and Elefsina refineries in 2Q22.
Petrochemicals
- 2Q23 Adjusted EBITDA came in at €12m, lower y-o-y on weak PP
margins.
Marketing
- In 2Q23, Domestic Marketing recorded higher sales volume (+3%
y-o-y), driven by 3% y-o-y increase in the automotive sales. Despite improved
contribution from Aviation, profitability was impacted by regulatory gross
margin caps and lower inventory valuation due to falling prices. Excluding the
inventory impact, Comparable EBITDA came in at €14m vs with €9m in 2Q22.
- International Marketing recorded slightly lower profitability
compared with 2Q22 despite inflationary pressures on costs.
Renewables
- Higher RES operating capacity (356 ΜW) compared with 2Q22 (285 MW)
led to increased power production (+39%), with Adjusted EBITDA coming in at
€11m (+82%).
Associate companies
- The contribution of associate companies was negative. Specifically,
a) Elpedison's profitability was negatively affected by lower demand, due to
weather conditions, as well as the scheduled maintenance at Thisvi and
Thessaloniki power plants, b) DEPA's contribution was mainly affected by the
valuation of safety stocks of natural gas, due to falling international
prices, as well as increased costs for securing capacity in the gas network,
for national security of supply purposes.
HELLENiQ ENERGY Holdings S.A.
Key consolidated financial indicators for 2Q / 1H 2023
(prepared in accordance with IFRS)
€ εκατ. 2Q22 2Q23 % Δ 1H22 1H23 % Δ
P&L figures
Refining Sales Volume ('000 ΜΤ) 3,418 3,951 16% 6,710 7,639 14%
Sales 3,974 2,978 -25% 6,777 6,091 -10%
EBITDA 738 121 -84% 1,239 400 -68%
Adjusted EBITDA (1) 535 164 -69% 633 568 -10%
Adjusted Net Income (1) 364 26 -93% 369 277 -25%
Operating Profit 668 43 -94% 1,088 244 -78%
Net Income 524 7 -99% 869 162 -81%
Balance Sheet Items
Capital Employed 4,835 4,283 -11%
Net Debt 1,967 1,553 -21%
Gearing (ND/ND+E) 41% 36% -5 pps(2) π.μ.pps(2) (2)
Note 1: Adjusted for inventory effects and other non-operating/one-off items,
as well as the IFRS accounting treatment of the EUAs deficit.
Note 2: pps stands for percentage points
Further information:
Investor Relations
8A Chimaras str., 151 25 Maroussi, Greece
Tel: 210-6302526, 210-6302305
Email: ir@helleniq.gr (mailto:ir@helleniq.gr)
Group Consolidated statement of financial position
As at
Note 30 June 2023 31 December 2022
Αssets
Non-current assets
Property, plant and equipment 10 3.642.566 3.639.004
Right-of-use assets 11 231.393 233.141
Intangible assets 12 283.866 518.073
Investments in associates and joint ventures 7 408.424 402.101
Deferred income tax assets 101.423 91.204
Investment in equity instruments 3 482 490
Derivative financial instruments 944 958
Loans, advances and long term assets 61.172 64.596
4.730.270 4.949.567
Current assets
Inventories 14 1.465.151 1.826.242
Trade and other receivables 15 861.342 866.109
Income tax receivable 12.538 14.792
Derivative financial instruments - 5.114
Cash and cash equivalents 16 737.382 900.176
3.076.413 3.612.433
Total assets 7.806.683 8.562.000
Equity
Share capital and share premium 17 1.020.081 1.020.081
Reserves 18 295.348 297.713
Retained Earnings 1.350.377 1.341.908
Equity attributable to the owners of the parent 2.665.806 2.659.702
Non-controlling interests 64.742 67.699
Total equity 2.730.548 2.727.401
Liabilities
Non- current liabilities
Interest bearing loans and borrowings 19 1.516.711 1.433.029
Lease liabilities 178.516 177.745
Deferred income tax liabilities 189.273 202.523
Retirement benefit obligations 177.572 175.500
Derivative financial instruments - -
Provisions 35.544 36.117
Other non-current liabilities 25.737 22.662
2.123.353 2.047.576
Current liabilities
Trade and other payables 20 1.521.737 1.835.957
Derivative financial instruments 808 1.761
Income tax payable 8 472.738 432.385
Interest bearing loans and borrowings 19 773.820 1.409.324
Lease liabilities 30.573 30.372
Dividends payable 153.106 77.224
2.952.782 3.787.023
Total liabilities 5.076.135 5.834.599
Total equity and liabilities 7.806.683 8.562.000
Group Consolidated statement of comprehensive income
For the six-month period ended For the three month period ended
Note 30 June 2023 30 June 2022 30 June 2023 30 June 2022
Revenue from contracts with customers 4 6.091.369 6.777.314 2.978.026 3.974.379
Cost of sales -5.571.296 -5.426.818 -2.793.169 -3.167.066
Gross profit / (loss) 520.073 1.350.496 184.857 807.313
Selling and distribution expenses -195.019 -169.684 -101.211 -87.296
Administrative expenses -88.798 -85.592 -48.316 -48.942
Exploration and development expenses -4.659 -7.332 -415 -957
Other operating income and other gains 5 17.576 14.332 10.174 9.141
Other operating expense and other losses 5 -4.918 -14.085 -2.367 -10.953
Operating profit / (loss) 244.255 1.088.135 42.722 668.306
Finance income 3.105 1.105 1.779 567
Finance expense -64.377 -51.052 -32.253 -26.498
Lease finance cost -4.643 -4.704 -2.318 -2.342
Currency exchange gains / (losses) 6 687 1.239 129 5.509
Share of profit / (loss) of investments in associates and joint ventures 7 7.168 68.161 -24.122 21.809
Profit / (loss) before income tax 186.195 1.102.884 -14.063 667.351
Income tax 8 -23.512 -230.571 20.979 -141.668
Profit / (loss) for the period 162.683 872.313 6.916 525.683
Profit / (loss) attributable to:
Owners of the parent 162.008 869.117 6.732 523.912
Non-controlling interests 675 3.196 184 1.771
162.683 872.313 6.916 525.683
Other comprehensive income / (loss):
Other comprehensive income / (loss) that will not be reclassified to profit or
loss (net of tax):
Actuarial gains / (losses) on defined benefit pension plans -1.711 0 -1.711 0
Changes in the fair value of equity instruments -8 -13 -8 3
-1.719 -13 -1.719 3
Other comprehensive income / (loss) that may be reclassified subsequently to
profit or loss (net of tax):
Share of other comprehensive income / (loss) of associates -1.019 -9.636 98 8.091
Fair value gains / (losses) on cash flow hedges -1.422 5.844 -501 578
Recycling of (gains) / losses on hedges through comprehensive income 1.991 -4.941 1.991 -4.941
Currency translation differences and other movements -299 66 483 233
-749 -8.667 2.071 3.961
Other comprehensive income / (loss) for the period, net of tax -2.468 -8.680 352 3.964
Total comprehensive income / (loss) for the period 160.215 863.633 7.268 529.647
Total comprehensive income / (loss) attributable to:
Owners of the parent 159.643 860.447 7.070 527.875
Non-controlling interests 572 3.186 198 1.772
160.215 863.633 7.268 529.647
Εarnings / (losses) per share (expressed in Euro per share) 9 0,53 2,8 0,02 1,7
Group Consolidated statement of cash flows
For the six-month period ended
Note 30 June 2023 30 June 2022
Cash flows from operating activities
Cash generated from operations 21 664.325 362.945
Income tax received / (paid) (4.474) (3.202)
Net cash generated from/ (used in) operating activities 659.851 359.743
Cash flows from investing activities
Purchase of property, plant and equipment & intangible assets 10, 12 (146.688) (219.598)
Proceeds from disposal of property, plant and equipment & intangible 1.973 172
assets
Acquisition of share of associates and joint ventures (175) -
Purchase of subsidiary, net of cash acquired 101 404
Grants received 2.996 -
Interest received 3.105 1.105
Prepayments for right-of-use assets (117) (468)
Dividends received 7 31.715 -
Net cash generated from/ (used in) investing activities (107.090) (218.385)
Cash flows from financing activities
Interest paid on borrowings (61.571) (45.278)
Dividends paid to shareholders of the Company 25 (76.348) (91.951)
Dividends paid to non-controlling interests - (2.061)
Proceeds from borrowings 19 546.867 376.400
Repayments of borrowings 19 (1.102.296) (13.991)
Payment of lease liabilities - principal (17.906) (19.055)
Payment of lease liabilities - interest (4.643) (4.704)
Net cash generated from/ (used in) financing activities (715.897) 199.360
Net increase/ (decrease) in cash and cash equivalents (163.137) 340.719
Cash and cash equivalents at the beginning of the year 16 900.176 1.052.618
Exchange (losses) / gains on cash and cash equivalents 343 1.494
Net increase / (decrease) in cash and cash equivalents (163.137) 340.719
Cash and cash equivalents at end of the period 16 737.382 1.394.831
Parent Company Statement of Financial Position
As at
Note 30 June 2023 31 December 2022
Assets
Non-current assets
Property, plant and equipment 683 671
Right-of-use assets 11 9.674 10.817
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Intangible assets 95 138
Investments in subsidiaries, associates and joint ventures 7 1.710.182 1.654.517
Deferred income tax assets 11.213 11.020
Investment in equity instruments 38 38
Loans, advances and long term assets 13 279.043 230.243
2.010.928 1.907.444
Current assets
Inventories - -
Trade and other receivables 15 38.046 86.159
Income tax receivables - -
Derivative financial instruments - -
Cash and cash equivalents 188.398 209.054
226.444 295.213
Total assets 2.237.372 2.202.657
Equity
Share capital and share premium 17 1.020.081 1.020.081
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Reserves 18 280.069 281.104
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Retained Earnings 743.164 765.156
Total equity 2.043.314 2.066.341
Liabilities
Non-current liabilities
Interest bearing loans & borrowings - -
Lease liabilities 7.425 9.611
Deferred income tax liabilities - -
Retirement benefit obligations 7.852 7.977
Provisions - -
Other non-current liabilities 174 174
15.451 17.762
Current liabilities
Trade and other payables 17.758 36.491
Derivative financial instruments - -
Income tax payable 8 5.500 3.582
Interest bearing loans & borrowings - -
Lease liabilities 2.243 1.257
Dividends payable 25 153.106 77.224
178.607 118.554
Total liabilities 194.058 136.316
Total equity and liabilities 2.237.372 2.202.657
Parent Company Statement of Comprehensive Income
For the six-month period ended For the three month period ended
Note 30 June 2023 30 June 2022 30 June 2023 30 June 2022
Sale proceeds 0 1.919.699 0
Sales taxes, excise duties and similar levies 15.172 (735) 7.715
---- ---- ---- ----
Revenue from contracts with customers 15.172 15.162 7.715 9.122
Cost of sales (13.792) (13.785) (7.014) (8.294)
Gross profit / (loss) 1.380 1.377 701 828
Administrative expenses (4.572) (3.407) (1.297) (1.992)
Other operating income and other gains 5 9.764 11.044 6.078 7.359
Other operating expense and other losses 5 (9.494) (9.245) (6.674) (5.894)
Operating profit /(loss) (2.922) (231) (1.192) 301
Finance income 9.865 2.738 5.281 1.323
Finance expense (6) (509) (3) (4)
Lease finance cost (174) (264) (81) (129)
Dividend income 25 126.081 - - -
Profit / (loss) before income tax 132.844 1.734 4.005 1.491
Income tax credit / (expense) 8 (2.017) (432) (781) (401)
Profit / (loss) for the period 130.827 1.302 3.224 1.090
Other comprehensive income / (loss):
Other comprehensive income / (loss) that will not be reclassified to profit or
loss (net of tax):
Actuarial gains / (losses) on defined benefit pension plans (1.034) - (1.034) -
Other comprehensive income / (loss) for the year, net of tax (1.034) - (1.034) -
Total comprehensive income / (loss) for the period 129.793 1.302 2.190 1.090
Parent Company Statement of Cash flows
For the six-month period ended
Note 30 June 2023 30 June 2022
Cash flows from operating activities
Cash generated from / (used in) operations 21 (6.179) 44.890
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Income tax received / (paid) - -
Net cash generated from / (used in) operating activities (6.179) 44.890
Cash flows from investing activities
Purchase of property, plant and equipment & intangible assets (18) -
Participation in share capital increase of subsidiaries, associates and joint (54.665) (16.609)
ventures
Loans and advances to Group Companies 13 (48.800) (18.302)
Interest received 8.003 1.118
Dividends received 7, 25 158.532 -
Proceeds from disposal of assets held for sale - -
Net cash generated from / (used in) investing activities from discontinued - -
operations
Net cash generated from / (used in) investing activities 63.052 (33.793)
Cash flows from financing activities
Interest paid - -
Dividends paid to shareholders of the Company 25 (76.348) (91.951)
Payment of lease liabilities - principal, net (1.007) (1.494)
Payment of lease liabilities - interest (174) (264)
Net cash generated from / (used in) financing activities from discontinued - -
operations
Net cash generated from / (used in) financing activities (77.529) (93.709)
Net increase / (decrease) in cash and cash equivalents (20.656) (82.612)
Cash and cash equivalents at the beginning of the period 209.054 843.493
Exchange gain / (loss) on cash and cash equivalents - -
Net cash outflow due to demerger - (713.493)
Net increase / (decrease) in cash and cash equivalents (20.656) (82.612)
Cash and cash equivalents at end of the period 188.398 47.388
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