Hellenic Petroleum Group on Tuesday said it will distribute a pre-dividend worth 0.25 euro per share in January 2020 after the company announced a significant increase in its operating profits in the third quarter of 2019, along with lower financial cost and high production volume despite maintenance works in the Aspropyrgos refinery.
Andreas Shiamishis, Group CEO, commented on the results: "Improved third-quarter 2019 results, the strongest of last 3 quarters, are particularly encouraging, on the back of a material improvement in environment. We are operating in a highly cyclical industry, without the ability to influence international developments. As a result, it is important to focus on issues we can control through strategic direction, managing and operating our business units and improving competitiveness."
"Despite 2019 being the most challenging refining environment in the last few years," he noted, "our results and financial position are strong. On a positive note, domestic fuels market recorded a 3 pct growth. We consider the short-term outlook to be positive, with the introduction of new bunkering fuel specs; our recent performance in capital markets, with the successful Eurobond issue in 3Q19, further confirms the confidence of the domestic and international investor community in Hellenic Petroleum. I would like to thank once again the management and employees for their significant contribution to our successful performance."
Hellenic Petroleum Group said its adjusted EBITDA came in at 201 million euros, a notable improvement vs last quarters, while Adjusted Net Income amounted to 90 million. Higher total production, at 4.3 million MT and good operations at refining units, despite end of run performance ahead of scheduled shut-downs and IMO test runs, resulted to sales exceeding 4 million MT. Equally, improved performance in Domestic and International Fuels Marketing had a positive contribution.
Performance was also positively affected by improved refining environment, despite weaker benchmark refining margins compared to historical highs recorded in recent years, as well as the restoration of the Russian crude oil supply infrastructure in Central Europe and a strong US dollar vs the Euro.
IFRS Reported Results were affected by crude price movements, which in 3Q19 dropped to the lower levels of the last two years, leading to a 12 pct drop in revenues to 2.3 billion euros. Equally, impact on Net Income was also negative, with inventory valuation losses of 43 million euros, vs 53 million gains recorded in the same period last year, as prices then increased. It should be noted that the results include for the first time the impact of new IFRS 16 on operating leases of retail fuel stations and other equipment.
The Group continued to improve its financial position, with finance cost further dropping by 25 pct y-o-y in the third quarter, at 27 million euros, mainly on account of repayment of the 325 million Eurobond issued in 2014. Furthermore, during the quarter, the Group proceeded to the successful issue of a new 500 million euros, 2 pct Eurobond, with partial refinancing of existing bonds maturing in 2021. The transaction is expected to lead to an additional annual decrease in finance costs of approximately 15 million euros, with total reduction exceeding 50 pct in the last 3 years, with a notable impact on the Group’s cash flow profile and dividend distribution capacity.