Hellenic Petroleum group: Record-breaking profits in H1 2018

31 August 2018
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Hellenic Petroleum group (Hel.Pe), the biggest petrochemical concern in Greece and one of the largest in SE Europe, on Thursday reported EBITDA up by 25 percent in H1 2018, standing at 475 million euros, as well as net profits of 225 million euros, up 34 percent from the corresponding half-year results in 2017. Total turnover over the first six months of 2018 reached 4.7 billion euros (up 15 percent), while production reached 7.65 million tons, with the sales volume at 8.27 million tons.

In a press release https://www.helpe.gr/en/media-center/press-releases/news-apotelesmata-b-trimhnoy-ejamhnoy-2018, the group notes:

“HELLENIC PETROLEUM Group announced its 2Q/1H18 financial results. IFRS Reported EBITDA came in at €307m in 2Q18 vs €152m in 2Q17, with 1H18 Reported EBITDA at €473m (+25%). 2Q18 IFRS Reported Net Income amounted to €151m (vs €44m in 2Q17) and €225m (+34%) in 1H. Sales Revenues were €2.5bn in 2Q18 and €4.7bln in 1H18, reflecting increased prices and high sales volumes.

Excluding the crude oil price effect on inventory valuation and other non-recurring items, Adjusted results were as follows:

2Q18 Adjusted EBITDA at €187m, vs €228m in 2Q17, with 1H18 at €336m vs €457m.

2Q18 Adjusted Net Income at €66m, vs €98m in 2Q17, with 1H18 at €128m vs €224m.

Operating results in 2Q and 1H reflect the deterioration in the industry environment, with weaker benchmark margins and a significant negative impact from a stronger Euro vs USD. Profitability was also affected by the increased provisions for CO2 emission rights and the scheduled maintenance at Elefsina and Thessaloniki refineries, which was successfully completed in 2Q, with further improvement in the performance of production units and a significant positive impact in 3Q18 operations.

In 1H18, production remained at high levels, amounting to 7.65m MT, while sales volumes reached 8.27m MT, with exports up by 10% to 5m MT, accounting for 60% of total sales. Conversely, sales in the domestic market were lower, mainly due to PPC sales volumes and bunkering.

The Group’s financial position strengthened further, with an additional improvement in funding costs, which in 1H18 were 14% lower, also as a result of the completion of the 2018 refinancing.

Finally, the formal initiation and implementation of a number of Digital Transformation actions in, as well as the improvement of Group’s energy efficiency, are important initiatives improving our competitive position in the medium term.

Higher crude oil prices and stronger EUR

The resumption of US sanctions on Iran resulted in a further increase in crude oil prices in 2Q18, despite the production output control by OPEC, Brent averaging $75/bbl in 2Q18, +10% vs 1Q18, and significantly higher vs 2Q17 ($51/bbl).

Macro and political developments in Eurozone and the US led to the strengthening of Euro vs USD, averaging 1.19 vs 1.10 in 2Q17.

Stronger diesel cracks and normalization of FO spreads compared to last year were the key drivers of benchmark refining margins, with Med Hydrocracking higher at $5.7/bbl vs $4.4/bbl in 2Q17, while FCC was lower at $5.4/bbl vs $6.1/bbl.”

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