ELPE: Improved operating results thanks to higher refining margins

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A significant increase of 54% was recorded by the comparable EBITDA profits of the Hellenic Petroleum Group in the first quarter of 2022, amounting to € 99 million, while the corresponding net profits amounted to € 4 million.

The positive results mainly reflect the improvement of performance of the Refining, Supply & Trade sector, due to the higher international refining margins and the increased fuel demand in the domestic market, which offset the negative impact of the energy crisis on operating costs. The production of the refineries amounted to 3.1 million tons (-16% compared to the first quarter of 2021), as the program of extended maintenance (Full turnaround) was implemented at the Elefsina refinery, which was completed safely and successfully at the beginning of the second quarter.

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Sales amounted to 3.3 million tonnes (-4%), with increased trading operations, which partially offset the production loss. The recovery of demand in all the markets in which we operate, which in the first quarter of 2021 was affected by the measures of restriction of movements, led to an increase in volumes and contribution, both for Domestic and International Trade.

In terms of EFITDA-Announced Earnings EBITDA, amounted to € 501 million, with the corresponding Net Profits amounting to € 347 million, as they were affected by the increase in international oil prices in the stock valuation, but also by the accounting for CO2 emission allowances in accordance with IFRS, an impact that is reversed in the coming quarters.

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REFINING, SUPPLY & TRADE: In the first quarter of 2022, the Comparable EBITDA Profits of the Refining, Supply and Trading sector amounted to € 44 million compared to € 9 million in the first quarter of 2021.

The margin of the Group’s refinery system was set at $ 9.0 / barrel, with a significant overperformance compared to the indicative margins, but also compared to $ 6.8 / barrel in the first quarter of 2021.

PETROCHEMICALS: The Comparable EBITDA Profits of the Petrochemicals sector amounted to € 28 million, as the normalization of the global polypropylene market against the deficit observed in the first quarter of 2021, led to lower international margins of polypropylene.

MARKETING: The Domestic Trade sector recorded improved results, mainly due to higher sales volume (+ 20% on an annual basis), as demand recovered. EBITDA Comparable Earnings amounted to € 18 million.

Respectively, in International Trade, the recovery of demand in all countries and the higher number of service stations led to increased sales volumes (+ 32% compared to the first quarter of 2021) and improved profitability, with the Comparable EBITDA Profits amounting to € 13 million.

RES: The highest installed capacity of RES, due to the contribution of wind farms in N. Evia, led to increased electricity production (43 GWh compared to 10 GWh in the first quarter of 2021), with Comparable EBITDA Earnings increasing to € 1 million against € 3 million. million of the first quarter 2021.

After the completion of the PV project in Kozani with a capacity of 204 MW at the beginning of the 2nd Quarter 2022, the total installed capacity today amounts to 285 MW.

PARTICIPATIONS: The contribution of the DEPA Group to the consolidated Net Profits of the Group for the First Quarter 2022, amounted to € 5 million.

Elpedison’s EBITDA increased to € 46 million in the first quarter of 2022, due to an upward trend in electricity demand and, respectively, the production of Elpedison plants.

Commenting on the results, the CEO of Hellenic Holdings Petroleum SA, Andreas Siamisiis“The situation in the energy market deteriorated in the first quarter of 2022, with rising prices for consumers and industry in gas and electricity. In the fuel market, Russia’s invasion of Ukraine has led to a change in many data, especially for our region, as crude and crude products from Russia are an important source of supply. and good cooperation with other producing countries.

In terms of financial results, the strengthening of international refining margins, combined with the recovery of demand in the domestic market, led to a recovery of operating profitability in all activities and especially in export or international markets where we operate.

In the RES sector, the 204 MW photovoltaic park in Kozani was completed in a short time and started operating, which is the largest RES project in operation in our country to date. We are in the process of expanding our portfolio, so that we have a significant additional activity for the Group. ”

Developments in Ukraine and market implications

Russia’s invasion of Ukraine has exacerbated the energy crisis in Europe, further boosting gas and electricity prices, with a negative impact on both consumers and industry. In addition, it affected the supply of crude oil and fuels, mainly diesel, to the region, as Russia accounted for about 25% of European crude imports and 50% of the corresponding diesel imports. It is noted that in Greece, Russian crude accounted for 10-15% of imports. The gradual imposition of sanctions by the EU and the possible embargo on oil, have led most European refineries to reduce or even suspend imports of Russian crude and products, resulting in an imbalance in supply and demand. The above developments 2 contributed to the significant rise in crude oil prices, which reached levels above $ 100 / barrel since March, with increased volatility, while product margins, mainly diesel, were affected, leading to an increase in international refining margins.

Strategy Implementation – Vision 2025

Within the first quarter of 2022, the construction of the 204 MW photovoltaic park in Kozani was completed, the largest with double-sided frames in Europe, whose commercial operation started immediately after, in the second quarter. The Group upgraded the medium-term target for an operating capacity of 1 GW by the end of 2026 and over 2 GW by 2030.

The sale of DEPA Infrastructure (65% HRD – 35% HELLENIC PETROLEUM Holdings) to Italgas for € 733 million, corresponding to € 256 million for the participation of HELLENIC PETROLEUM Holdings, is expected to be completed by relevant supervisory approvals.

In the field of hydrocarbon exploration and production, on March 3, 2022, the Group completed the execution of 1,600 km of two-dimensional seismic records in the sea area “Ionion”, where it holds rights (100%) for an area of ​​6,700 square km.

Crude oil prices recovery to the highest levels since 2014, strengthening of international refining margins

International crude oil prices rose in the first quarter of 2022 compared to the corresponding quarter of 2021, due to the recovery of economic activities, the easing of mobility restrictions and the reduction of the supply of crude oil after the Russian invasion of Ukraine. As a result, Brent prices in the first quarter of 2022 averaged $ 97 / barrel, a high of eight years, compared to $ 61 / barrel in the first quarter of 2021.

The dollar strengthened against the euro due to the monetary policy of the Central Banks and averaged 1.12 in the first quarter of 2022, compared to 1.21 in the corresponding period last year.

In the first quarter of 2022, diesel refining margins recovered significantly, leading to improved international Hydrocracking and FCC margins, at $ 6.7 / barrel and $ 3.6 / barrel respectively.

Increased demand in the domestic fuel market

Total domestic demand for land-based fuels was 16% higher, reaching 1.7 million tonnes, while motor fuel consumption increased by 17% year-on-year in the first quarter of 2022, as a result of the lifting of restrictions due to COVID-19 pandemic and increased economic activity. Demand for heating oil also increased by 15% year-on-year due to adverse weather conditions. Aircraft fuel consumption increased significantly by 160% due to increased flight activity and passenger traffic, while marine fuel consumption increased by 4%.

Balance sheet and investment expenses

Net financial costs recorded a new decrease of 1% in the first quarter of 2022, compared to the same period last year, at € 24 million. Net Lending amounted to € 2.3 billion, increased compared to the previous quarter, as The escalation of international prices due to the Ukrainian crisis has led to an increase in working capital needs. The Group has a strong balance sheet and sufficient credit lines to finance the additional needs.

Investment costs amounted to € 84 million, increased compared to the first quarter of 2021, due to the full turnaround of the Elefsina refinery, as well as the new acquisition of 16 MW PV projects in Boeotia.

Source: Capital

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