On 14 November, Greece’s biggest refiner, Hellenic Petroleum, said positive third quarter results, on Elefsina refinery optimisation, increased exports and improved operational performance across the company’s businesses, despite the challenging international refining environment.
Hellenic Petroleum posted third quarter net income of €70 million – up from €2 million a year ago – while earnings before interest, tax, depreciation and amortisation rose to €123 million from €75 million.
The company also noted that increased tourism had a positive effect on transport and aviation fuels sales, leading EBITDA to €20 million, the best performance since the first quarter of 2010.
The European refining environment has deteriorated further in the third quarter of 2013 as, in addition to the sanctions on Iranian crude sales, developments in Iraq and Libya have led to reduced crude exports from these countries, the company said. At the same time, Russian crude flows to Europe remained low, leading its price to historical highs vs Brent, and resulting to a higher cost of feedstocks for refineries in the Mediterranean region.
Record low benchmark refining margins: High crude prices and cost of energy have created a significant competitive disadvantage for European refineries compared to their US and Asian peers and, combined with reduced final products demand, have led to significantly weaker refining margins vs last year, Hellenic Petroleum said.
Following the sharp demand drop due to recession and excise duty increase during the last few years, the last two quarters show clear signs of stabilisation.
Hellenic Petroleum also noted that the Court of Audit has approved the proposed transaction, clearing the way for the signing of the Share Purchase Agreement for the 66% of DESFA share capital, for €400 million. Hellenic Petroleum share of the consideration for its 35% interest in DESFA amounts to €212 million. The transaction is subject to regulatory approvals from Energy and Competition Authorities in Greece and the EU. The Group will apply the proceeds from the sale of its participation in DESFA to reduce its leverage and funding cost, Hellenic Petroleum said.
“The already challenging environment has deteriorated in 3Q13. Crude supply was further curtailed with a negative impact on our margins. Despite the adverse external environment, the Group recorded a positive result, achieving improvement in all controllable areas,” Hellenic Petroleum CEO John Costopoulos said.
“The performance of our refineries is constantly improving; the yield of high value products ranks among the top in the European refining sector, highlighting the competitiveness of our asset base, following the significant investments of the 2007-2012 period. Our sales to international markets are consistently increasing, enhancing our export orientation,” he added.
The Group CEO said Hellenic Petroleum’s strategy and efforts in its Marketing business, both domestic and international, as well as in Petchems are yielding improved results. “Furthermore, focus on our efforts to improve competitiveness continues to produce significant tangible benefits, with increased contribution vs previous quarters and a positive effect on performance across our activities,” Costopoulos said.