Company Announcements

Half-year Report

Source: RNS
RNS Number : 3779X
Hellenic Petroleum S.A.
27 August 2020
 

PRESS RELEASE

27 August 2020

 

Second quarter / first half 2020 financial results

 

Positive operational performance and high utilization sustained amid significant deterioration of the international oil market due to COVID-19

 

HELLENIC PETROLEUM Group announced its 2Q20 consolidated financial results, with Adjusted EBITDA coming in at €63m in 2Q20 and €191m in 1H20.

The last few months have been marked by a significant decline in global economic activity, while mobility restriction measures in response to the COVID-19 pandemic have led to a corresponding reduction in fuel demand. The crisis particularly affected the aviation sector with the air traffic reduction in the 2Q20 reaching 81%, while in Greece, tourist arrivals for the 1H20 were down by 77%. The significant drop in global product demand, combined with the agreement by OPEC++ to limit crude oil production resulting in an increase in crude oil prices, led to a decline of refining margins at historically low levels.

An important challenge faced by many refineries in the area, was the continuous operation of the units in an environment of significant challenges and the lack of product storage capacity. Despite the adverse conditions, the Group maintained high operating levels, with the production amounting to 3.7m MT, at the same levels vs 2Q19, utilizing the large storage capacity of its refineries, while, at the same time, proceeded with contango trades, avoiding excessive exposure to price risk and took advantage of the market structure to improve results from international trading.

With regards to the financial results in accordance with IFRS, the gradual recovery of crude oil and product prices, from the lows recorded in the beginning of 2Q, resulted to inventory valuation gains of €26m, partially offsetting the significant loss recorded in the 1Q20 and led Reported EBITDA to €76m.

 

Strategy and main developments

The gradual lifting of the COVID-19 measures from the middle of 2Q, both in our country and in the Mediterranean region, led to a recovery of economic activity and fuel consumption, which however is still lagging last year levels, especially in sectors such as tourism, air transport and coastal marine. The Group closely monitors developments, with main priority the health and safety of its staff and contractors in its facilities, especially ahead of the turnaround of the Aspropyrgos Refinery and adjusts its operations accordingly.

On 28 August, the full turnaround of the Aspropyrgos Refinery begins with the gradual temporary shut-down of the main units. The program will last 9 weeks, two more than planned, to include additional safety measures for COVID-19. The turnaround, with a total budget of €130m, is the largest similar project in the Group's history. In addition to the maintenance at all units, it includes investments of €60m of projects focused on safety and environment, which will be implemented during the shut-down and are expected to further reduce the refinery's particulate emissions (PMs) by 50%.

Regarding the implementation of the Group's strategy, in relation to the 204MW PV project in Kozani, for which the transaction is expected to be completed in the 3Q20, the technical configuration has been finalised, while the financing is expected to be arranged during 2020.

Regarding the sale procedures of DEPA Commercial and Infrastructure, in which HELLENIC PETROLEUM participates, due diligence procedures are underway.

Finally, the digital transformation program was officially launched with total annual EBITDA benefits expected to exceed €50m in the next three years.

 

Significant decline in refining margins and recovery of crude oil prices

Crude oil prices reached their lowest levels since 2003, with Brent prices at $30/bbl on average, dropping below $20/bbl during April, a $45/bbl decline since the beginning of the year. However, since May they recorded a gradual recovery, following the OPEC++ countries agreement.

Diesel and gasoline cracks, the main output of the Group's refineries, fell to multi-year lows due to the collapse of demand, especially in the first half of the 2Q20 and the high global inventories. Combined with the strengthening of Urals prices to higher levels than those of Brent, led benchmark refining margins to historically low levels. Specifically, the FCC margins averaged at $0.5/bbl, with Hydrocracking margins at $0.1/bbl.

The €/$ exchange rate remained at the same levels vs the previous quarter, as well as y-o-y, at an average of 1.10 for the 2Q20.

 

Domestic fuel market demand decline

The domestic ground fuels demand remained at the same level as last year, at 1.6m MT, as the fivefold increase in heating oil market, due to mobility restrictions and low prices, offset the large decline of 24% in motor fuels consumption. The aviation and shipping fuels market recorded an even larger decline (-58%), due to a collapse in aviation fuel demand (-94%) and a reduction in shipping fuels demand of more than 40% in 2Q20.

 

Strong balance sheet, reduced financing cost

The Group continues its balance sheet management policy for maximization of liquidity and sufficient funding. Discussions are underway for the refinancing of credit lines that mature in the coming months, in order to improve the maturity profile of the Group's debt liabilities.

Financing cost remains at the lowest levels in recent years, down 15% from last year. Net Debt in the 2Q20 stood at €1.8b, with the Gearing Rate at 48%, recording a decrease compared to the previous quarter.

 

Andreas Shiamishis, Group CEO, commented on results:

"We faced unprecedented conditions during 2Q20, affecting mainly oil products market, as mobility restrictions and air traffic drop led to significantly lower demand.

As expected, our efforts focused mainly on managing this crisis and adjusting our business model to the new reality. Results are positive, as we safely maintained high levels of operation, uninterrupted supply for all markets, while taking advantage of commercial opportunities with positive contribution.

We also continued on our strategy implementation, with progress on the Kozani renewable project, the start of an integrated digital transformation program for the Group, as well as launching new high value products at our network.

Our key objectives in the coming months are the successful implementation of the Aspropyrgos turnaround, as well as the acceleration of our growth strategy."

 

 

Key highlights and contribution for each of the main business units in 2Q20 were:

 

REFINING, SUPPLY & TRADING

-     Refining, Supply & Trading 2Q20 Adjusted EBITDA at €40m.

 -    Production amounted to 3.7m MT, at levels similar to last year, allowing the use of storage capacity for contago transactions, while sales amounted to 3.6m MT (-12%).

High value-added products yield maintained at high levels, while the crude oil slate was significantly differentiated, due to the IMO operating model of the Aspropyrgos refinery.

 

PETROCHEMICALS

Adjusted EBITDA amounted to €16m (-43%) in the 2Q20, mainly due to weak polypropylene benchmark margins.

 

MARKETING

In Domestic Marketing, the collapse of the aviation & bunkering market and the of demand drop in ground fuels, due to mobility restrictions, led to a significant decline in sales volumes and profitability with 2Q20 Adjusted EBITDA to €-1m.

In International Marketing, respectively, a decrease in volumes and contribution was recorded, with the Adjusted EBITDA of the 2Q20 at €10m (-30%).

 

ASSOCIATED COMPANIES

DEPA Group contribution to 2Q20 consolidated Net Income (excluding the positive impact of BOTAS case arbitration) came in at €1m.   

Elpedison's EBITDA for the second quarter of 2020 amounted to €11m, significantly improved compared to last year, due to increased production.

 

 

 

 

 

HELLENIC PETROLEUM GROUP

Key consolidated financial indicators (prepared in accordance with IFRS) for 2Q/1H20 are shown below:

€ million

2Q19

2Q20

% Δ

1H19

1H20

% Δ

P&L figures

 

 

 

 

 

 

Refining Sales Volumes ('000 ΜΤ)

4,139

3,623

-12%

7,690

7,506

-2%

Sales

2,465

1,067

-57%

4,457

2,986

-33%

EBITDA

187

76

-60%

323

-341

-

Adjusted EBITDA 1

130

63

-52%

252

191

-24%

Net Income

75

5

-93%

121

-336

-

Adjusted Net Income 1

33

-22

-

70

21

-70%

Balance Sheet Items

 

 

 

 

 

 

Capital Employed

 

 

 

3,766

3,658

-3%

Net Debt

 

 

 

1,398

1,752

25%

Debt Gearing (ND/ND+E)

 

 

 

37%

48%

-

 

Notes:

1. Calculated as Reported adjusted for inventory effects and other non-operating items.

 

 

Further information:

V. Tsaitas, Investor Relations Officer

Tel.:      +30-210-6302399

Email:   vtsaitas@helpe.gr

 

 

 

 

 

 

 

 

 

 

Group Consolidated statement of financial position

 

 

As at

 

Note

30 June 2020

31 December 2019

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

10

3.270.843

3.297.668

Right-of-use assets

11

236.648

242.934

Intangible assets

12

105.274

104.426

Investments in associates and joint ventures

7

403.365

384.747

Deferred income tax assets

 

68.991

59.358

Investment in equity instruments

3

906

1.356

Loans, advances and long term assets

 

44.187

55.438

 

 

4.130.214

4.145.927

Current assets

 

 

 

Inventories

13

631.536

1.012.802

Trade and other receivables

14

606.557

748.153

Income tax receivables

 

91.587

91.391

Assets held for sale

 

2.209

2.520

Derivative financial instruments

3

5.830

3.474

Cash and cash equivalents

15

1.128.570

1.088.198

 

 

2.466.289

2.946.538

Total assets

 

6.596.503

7.092.465

 

 

 

 

EQUITY

 

 

 

Share capital and share premium

16

1.020.081

1.020.081

Reserves

17

270.958

276.972

Retained Earnings

 

552.465

964.972

Equity attributable to equity holders of  the parent

 

1.843.504

2.262.025

Non-controlling  interests

 

63.173

64.548

Total equity

 

1.906.677

2.326.573

 

 

 

 

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Interest bearing loans & borrowings

18

1.231.906

1.610.094

Lease liabilities

 

169.564

169.357

Deferred income tax liabilities

 

51.926

213.495

Retirement benefit obligations

 

183.253

180.398

Provisions

 

25.485

25.625

Other non-current liabilities

 

28.102

28.376

 

 

1.690.236

2.227.345

Current liabilities

 

 

 

Trade and other payables

19

1.237.498

1.401.732

Income tax payable

 

7.975

7.147

Interest bearing loans & borrowings

18

1.649.190

1.022.270

Lease liabilities

 

27.986

30.537

Dividends payable

 

76.941

76.861

 

 

2.999.590

2.538.547

Total liabilities

 

4.689.826

4.765.892

Total equity and liabilities

 

6.596.503

7.092.465

 

Group Consolidated statement of comprehensive income

 

 

For the 6 month period ended

For the 3 month period ended

 

Note

30 June 2020

30 June 2019

30 June 2020

30 June 2019

Revenue from contracts with customers

4

2.986.016

4.456.629

1.067.051

2.465.413

Cost of sales

 

(3.233.578)

(4.037.224)

(946.485)

(2.232.323)

Gross profit / (loss)

 

(247.562)

419.405

120.566

233.090

Selling and distribution expenses

 

(158.445)

(157.434)

(77.599)

(81.887)

Administrative expenses

 

(67.680)

(65.660)

(33.243)

(31.696)

Exploration and development expenses

 

(2.337)

(1.712)

(1.033)

(1.262)

Other operating income / (expenses) and other gains / (losses) - net

5

9.589

13.080

3.920

10.164

Operating profit / (loss)

 

(466.435)

207.679

12.611

128.409

Finance income

 

2.725

2.956

1.664

1.956

Finance expense

 

(54.932)

(66.444)

(28.225)

(33.149)

Finance expense - lease finance cost

 

(5.435)

(4.705)

(2.687)

(2.432)

Currency exchange gain / (loss)

6

4.254

743

1.992

(512)

Share of profit / (loss) of investments in associates and joint ventures

7

18.398

14.445

(27.009)

(3.646)

Profit / (loss) before income tax

 

(501.425)

154.674

(41.654)

90.626

Income tax credit (expense)

8

165.646

(33.313)

46.571

(15.881)

Profit / (loss) for the period

 

(335.779)

121.361

4.917

74.745

Profit / (loss) attributable to:

 

 

 

 

 

     Equity holders of the parent

 

(335.841)

121.321

3.966

74.205

     Non-controlling interests

 

40

951

540

 

 

(335.779)

121.361

4.917

74.745

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

17

-

(56)

-

-

Share of other comprehensive income / (loss) of associates

17

217

(41)

441

(41)

Changes in the fair value of equity instruments

17

(348)

700

88

704

Net other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax):

 

(131)

603

529

663

Other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax):

 

 

 

 

 

Recycling of (gains) / losses on hedges through comprehensive income

17

25.077

1.501

-

-

Fair value gains / (losses) on cash flow hedges

17

(31.140)

5.186

19.411

(1.202)

Currency translation differences and other movements

17

145

66

361

36

Net other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax):

 

(5.918)

6.753

19.772

(1.166)

Other comprehensive income / (loss) for the period, net of tax

 

(6.049)

7.356

20.301

(503)

Total comprehensive income / (loss) for the period

 

(341.828)

128.717

25.218

74.242

Total comprehensive income / (loss) attributable to:

 

 

 

 

 

     Equity holders of the parent

 

(341.855)

128.683

24.249

73.695

     Non-controlling interests

 

27

34

969

547

 

 

(341.828)

128.717

25.218

74.242

Basic and diluted earnings / (loss) per share
(expressed in Euro per share)

9

(1,10)

0,40

0,01

0,24

 

 

Group Consolidated statement of cash flows

 

 

For the 6 month period ended

 

Note

30 June 2020

30 June 2019

Cash flows from operating activities

 

 

 

Cash generated from / (used in) operations

20 

16.386

228.949

Income tax received / (paid)

 

(6.533)

(3.052)

Net cash generated from / (used in) operating activities

 

9.853

225.897

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment & intangible assets

10,12

(78.583)

(78.262)

Proceeds from disposal of property, plant and equipment & intangible assets

 

3.382

363

Share capital issue expenses

 

(30)

(342)

Purchase of subsidiary, net of cash acquired

25

-

(5.341)

Grants received

 

174

199

Interest received

 

2.725

2.956

Prepayments for right-of-use assets

 

(218)

(463)

Dividends received

 

-

1.347

Proceeds from disposal of investments in equity instruments

 

-

21

Net cash generated from / (used in) investing activities

 

(72.550)

(79.522)

 

 

 

 

Cash flows from financing activities

 

 

 

Interest paid

 

(47.946)

(63.127)

Dividends paid to shareholders of the Company

 

(76.381)

(122)

Dividends paid to non-controlling interests

 

-

(2.246)

Participation of minority shareholders in share capital increase of subsidiary

 

34

-

Proceeds from borrowings

 

267.927

10.000

Repayments of borrowings

 

(21.820)

(27.671)

Payment of lease liabilities - principal

 

(16.877)

(19.729)

Payment of lease liabilities - interest

 

(5.435)

 

Net cash generated from / (used in) financing activities

 

99.502

(102.895)

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

36.805

43.480

 

 

 

 

Cash and cash equivalents at the beginning of the period

15

1.088.198

1.275.159

Exchange gain / (loss) on cash and cash equivalents

 

3.567

1.049

Net increase / (decrease) in cash and cash equivalents

 

36.805

43.480

Cash and cash equivalents at end of the period

15

1.128.570

1.319.688

 

 

 

 

 

 

Parent Company Statement of Financial Position

 

 

 

As at

 

Note

30 June 2020

31 December 2019

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

9

2.672.864

2.693.794

Right-of-use assets

10

28.684

32.084

Intangible assets

11

7.868

8.704

Investments in subsidiaries, associates and joint ventures

 

1.053.138

1.045.138

Investment in equity instruments

3

530

965

Loans, advances and long-term assets

 

10.424

22.089

 

 

3.773.508

3.802.774

Current assets

 

 

 

Inventories

12

535.205

899.760

Trade and other receivables

13

527.275

791.257

Income tax receivable

 

87.955

87.616

Derivative financial instruments

3

5.830

3.474

Cash and cash equivalents

14

930.271

888.564

 

 

2.086.536

2.670.671

Total assets

 

5.860.044

6.473.445

EQUITY

 

 

 

Share capital and share premium

15

1.020.081

1.020.081

Reserves

16

276.712

283.106

Retained Earnings

 

541.403

935.648

Total equity

 

1.838.196

2.238.835

 

 

 

 

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Interest bearing loans and borrowings

17

1.082.618

1.607.838

Lease liabilities

 

19.755

21.264

Deferred income tax liabilities

 

21.258

182.065

Retirement benefit obligations

 

149.537

147.074

Provisions

 

22.797

22.797

Other non-current liabilities

 

13.049

13.620

 

 

1.309.014

1.994.658

Current liabilities

 

 

 

Trade and other payables

18

1.122.853

1.271.809

Income tax payable

 

5.767

5.785

Interest bearing loans and borrowings

17

1.499.498

875.576

Lease liabilities

 

7.775

9.919

Dividends payable

 

76.941

76.863

 

 

2.712.834

2.239.952

Total liabilities

 

4.021.848

4.234.610

Total equity and liabilities

 

5.860.044

6.473.445

 

 

Parent Company Statement of Comprehensive Income

 

 

 

For the 6month period ended

For the 3month period ended

 

Note

30 June 2020

30 June 2019

30 June 2020

30 June 2019

Revenue from contracts with customers

4

2.690.940

4.087.415

950.340

2.263.042

Cost of sales

 

(3.036.594)

(3.826.905)

(862.662)

(2.123.081)

Gross profit / (loss)

 

(345.654)

260.510

87.678

139.961

Selling and distribution expenses

 

(51.922)

(49.637)

(24.369)

(25.343)

Administrative expenses

 

(41.058)

(39.110)

(20.446)

(18.067)

Exploration and development expenses

 

(1.066)

(52)

(49)

(23)

Other operating income/(expenses) & other gains/(losses)

5

7.282

(485)

2.818

(3.336)

Operating profit / (loss)

 

(432.418)

171.226

45.632

93.192

Finance income

 

4.910

5.509

2.690

3.121

Finance expense

 

(52.066)

(60.605)

(26.674)

(30.038)

Lease finance cost

 

(692)

(464)

(334)

(245)

Dividend income

 

-

7.917

-

7.917

Currency exchange gains/(losses)

6

4.316

1.032

2.021

(531)

Profit / (Loss) before income tax

 

(475.950)

124.615

23.335

73.416

Income tax credit / (expense)

7

158.114

(28.666)

39.472

(13.522)

Profit / (Loss) for the period

 

(317.836)

95.949

62.807

59.894

Other comprehensive income/(loss):

 

 

 

 

 

Other comprehensive income/(loss), that will not be reclassified to profit or loss (net of tax):

 

 

 

 

 

Changes in the fair value of equity instruments

16

(331)

651

7

668

 

 

(331)

651

7

668

Other comprehensive income/(loss), that may be reclassified subsequently to profit or loss (net of tax):

 

 

 

 

 

Fair value gains / (losses) on cash flow hedges

16

(31.140)

5.186

(5.666)

(2.703)

Recycling of losses / (gains) on hedges through comprehensive income

16

25.077

1.501

25.077

1.501

 

 

(6.063)

6.687

19.411

(1.202)

Other Comprehensive income/(loss) for the period, net of tax

(6.394)

7.338

19.418

(534)

Total comprehensive income / (loss) for the period

 

(324.230)

103.287

82.225

59.360

Basic and diluted earnings / (losses) per share
(expressed in Euro per share)

8

(1,04)

0,31

0,21

0,20

 

 

 

 

 

 

 

 

 

 

Parent Company Statement of Cash flows

 

 

For the 6month period ended

 

Note

30 June 2020

30 June 2019

Cash flows from operating activities

 

 

 

Cash generated from / (used in) operations

19

(13.243)

172.120

Income tax received / (paid)

 

(4.843)

(1.768)

Net cash generated from / (used in) operations

 

(18.086)

170.352

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment & intangible assets

9,11

(58.706)

(55.856)

Proceeds from disposal of property, plant and equipment & intangible assets

 

4.846

1.074

Dividends received

 

150.000

6.571

Interest received

 

4.910

5.509

Participation in share capital increase of subsidiaries, associates and joint ventures

 

(10.000)

(10.014)

Net cash generated from / (used in) investing activities

 

91.050

(52.716)

Cash flows from financing activities

 

 

 

Interest paid

 

(49.633)

(66.132)

Dividends paid

 

(76.385)

(122)

Proceeds from borrowings

 

265.010

10.067

Repayments of borrowings

 

(168.278)

(302.423)

Payment of lease liabilities - principal

 

(4.866)

(3.063)

Payment of lease liabilities - interest

 

(692)

(464)

Net cash generated from /(used in) financing activities

 

(34.844)

(362.137)

Net increase / (decrease) in cash and cash equivalents

 

38.120

(244.501)

Cash and cash equivalents at the beginning of the period

14

888.564

1.070.377

Exchange gains / (losses) on cash and cash equivalents

 

3.587

1.999

Net increase / (decrease) in cash and cash equivalents

 

38.120

(244.501)

Cash and cash equivalents at end of the period

14

930.271

827.875

 

 

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