First Quarter 2010 Financial Results

 

Key figures for the 1Q 2010 (1Q09 refers to IFRS published accounts) are:

GROUP
First quarter performance has been affected by the adverse macroeconomic environment and the slow recovery in International markets, leading to lower demand for energy products and thus softer international benchmark refining margins. In addition, macroeconomic and fiscal issues affecting Greece have had a serious impact on the Group’s performance, as fuels market demand was affected by the overall economic slowdown and by the significant increase in excise duties on fuels.

Within this environment, Hellenic Petroleum financial performance has been positive with reported results reflecting the benefit from efficient refinery operations, the acquisition of Hellenic Fuels (ex BP Hellas) operations in December 2009, tight cost control as well as gains from transformation initiatives. Finally, it should be noted that 1Q results include an additional provision for Income Tax of €20m as a result of the recently enacted special tax-contribution on 2009 results.

Upgrade projects for Thessaloniki and Elefsina refineries are in line with plans and account for most of the capital investment of €97m. in Q1. Specifically, Thessaloniki refinery will be commissioned at the end of 2010 while the Elefsina upgrade, the largest industrial project in progress in Greece, is due for completion in 2H11.

In line with its funding plans and despite the adverse environment, the Group has secured additional medium term credit facilities of €750m during this quarter, supporting the implementation of its strategy and its investment plans.

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

REFINING, SUPPLY & TRADING
Domestic market sales volume declined mainly due to the adverse economic environment and warmer weather impact on heating gasoil sales.

Adjusted EBITDA at €93m (1Q09: €104m), affected by lower volumes and weaker refining margins vs 1Q09.

 

DOMESTIC MARKETING
Increase of sales volumes due to acquisition of BP’s Ground Fuels business, however, on a like-for-like basis the combined petrol stations network sales volumes declined by 9%.

Effective cost control and the absence of inventory devaluation led to EBITDA of €27m (1Q09: €20m including Hellenic Fuels results).

 

INTERNATIONAL MARKETING
New petrol stations added in 2009 and improved retail margins in Serbia and Montenegro led to increased contribution to Group results, with EBITDA at €8m, up 26% y-o-y.

Investment plans are prudent as Group closely monitors macroeconomic developments and market conditions in countries where it operates.

 

PETROCHEMICALS
Despite lower sales volumes, improved international margins allow Petrochemicals to report EBITDA of €8m (1Q09: -€1m).

 

ASSOCIATED COMPANIES
The ELPEDISON joint venture’s second gas fired power generation unit construction in Thisvi is progressing and the plant is expected to be commissioned in 2H10, as originally planned.

DEPA’s contribution to Group’s results of €14m. reflects higher sales volume due to the increase contribution of natural gas –fired plants in the power generation mix.