Rompetrol Rafinare – 48% turnover growth, due to the sales increase and positive operating results

 

Main financial indicators – Consolidated	Currency	Q1 - 2014	Q1 - 2013	%
Gross turnover	USD	1,306,748,884	884,337,090	48%
Operating profit (EBITDA)	USD	9,375,045	(119,038)	N/A
Net result	USD	(26,826,765)	(25,183,244)	N/A

During the first quarter of the year, the consolidated turnover of Rompetrol Rafinare, a member company of KMG International, was USD 1.3 billion, i.e. 48% higher compared to the same period of 2013, and its operating result was USD 9.3 million, compared to a negative value of USD 120,000.
 
The company’s consolidated financial results have been positively influenced by the increase in the quantities produced and sold, compared to the same period of last year, and negatively influenced by the evolution of international quotations for crude oil and oil products. Due to a 8% drop for gasoline and 5% for Diesel oil in Q1 2014, the crude oil dropped by 4%, the average quotations being above USD 108/bbl for the Brent-type crude oil and approx. USD 107.5/bbl for the Urals-type.
 
The investments made by KMG Internațional and its sole shareholder – KazMunayGas, have enabled Petromidia refinery to reach, during the period comprised between January and March 2014, record levels of production, energy efficiency and white product outputs (gasoline and Diesel oil). Thus, the average quantity processed in Q1 was, in winter conditions, 13,000 tons/day, i.e. the highest since its establishment (1979), and the output reached for gasoline and Diesel oil was above 86%, exceeding the level of 2013 – 85.6% - which was the highest in the history of the refinery.
 
Also, the drop in the operating costs, paralleled by an increase in the mechanical and operational availability, have led to an improvement of the Energy Efficiency Index, which was 101 points, i.e. the best quarterly level obtained by the refinery so far. In 2013, the record level of EEI was 104 points.
 
Also, exports had a positive evolution, their level exceeding USD 600 million in Q1 2014. The exports amounted to USD 1.7 billion in 2013, and the estimates show a 20-30% increase in their level in 2014.
 
For this year, the scheduled investments are estimated to exceed USD 35 million, mainly for continuing usual maintenance, operational support for improving the technological conditions and maximize returns from processing crude oil. Petromidia covers 43% of Romania's refining capacity, has a capacity of over 5 milion tones/year and total investment made ​​by KMG International and KazMunayGas for this platform amounts to over USD 1.3 billion.
 
Rompetrol Rafinare has remained an important taxpayer, contributing to Romania’s state budget with more than USD 319.6 million during the first quarter of 2014. In 2013, its contribution exceeded USD 1.4 billion.
 
The refinery and petrochemical segment
 

	Currency	Q1 - 2014	Q1 - 2013	%
Financial
Gross turnover	USD	1,212,993,490	778,884,387	56%
EBITDA	USD	(5,285,822)	(9,620,036)	N/A
Net result	USD	(30,204,897)	(25,168,151)	N/A
Operating
Processed raw materials	kt	1,189	621	91%
Internal fuel sales	kt	343	242	42%
Export fuel sales	kt	549	250	120%
Petrochemical product sales	kt	39	33	20%

Note: The refinery and petrochemical segment includes the results of Rompetrol Rafinare SA (which operates Petromidia and Vega refineries), together with the petrochemical activity and the results of Rompetrol Petrochemicals SRL. 
 
Rompetrol Rafinare’s turnover reached USD 1.21 billion during the 1^st quarter of 2014, i.e. 56% higher compared to the same period of 2013, being influenced by the sale of higher quantities of oil products, despite the drop in their international quotations.
 
In Q1 2014, the average quotation for gasoline dropped by 8%, and for Diesel oil by 5%, gasoline reaching a level of USD 961/t, and Diesel oil USD 919/t.
 
Fuel sales exceeded 892,000 tons in Q1 2014, i.e. 81% higher compared to the same period of last year (492,000 tons). Internal sales increased by 42%, while external fuel sales increased by 120% compared to Q1 2013.
 
The high sales level was due to the constant increase in the production of Petromidia refinery. During the 1^st quarter of 2014, the refinery’s total production of raw material was 1.18 million tons, i.e. 87% higher compared to the same period of last year, when the processed quantity was 0.63 million tons, due to the general overhaul scheduled between March and April 2013, for the execution of technological works.
 
Also, the utilization degree of the refining capacity was 90.51% in Q1 2014, i.e. 16% higher compared to the same period of last year.
 
As far as Vega refinery is concerned, the raw material processed during the 1^st quarter of 2014 exceeded 51,500 tons, i.e. 66% higher compared to the 1^st quarter of 2013 (approximately 32,000 tons).
 
Starting with January 1^st, 2014, the petrochemical activity has been taken over by Rompetrol Rafinare SA. For the first 3 months of 2014, compared to the same period of last year, the petrochemical segment output was influenced by the volatility of the relevant market, in particular in March 2014, when the petrochemical products’ margins dropped. Compared to the end of 2013, in March 2014, the propylene quotations increased by 7%, while the polypropylene quotations increased by merely 2%.
 
The petrochemical products sales increased by 20% in Q1 2014, compared to the same period of last year.
 
The plants existing on Petromidia and Vega industrial platforms are operated in accordance with the highest performance standards, and also in compliance with the environmental protection commitments.
 
Distribution segment
 

	Currency	Q1 -  2014	Q1 - 2013	%
Financial
Gross turnover	USD	645,882,243	503,210,849	28%
EBITDA	USD	12,819,513	7,384,694	N/A
Net result	USD	1,547,584	(1,067,617)	N/A
Operating
Retail sale of fuel quantities	kt	135	134	1%
Wholesale of fuel quantities	kt	194	117	65%

Note: The distribution segment includes the outputs of Rom Oil, Rompetrol Downstream, Rompetrol Quality Control, Rompetrol Logistics and Rompetrol Gas subsidiaries
In Q1 2014, the turnover related to the distribution segment reached USD 645.8 million, i.e. 28% higher compared to Q1 2013, being positively influenced by the wholesale volumes, which were 65% higher compared to the same period of 2013.
 
Although international quotations (FOB Med Italy) dropped, on the average, by 8% for gasoline and by 5% for Diesel oil, due to a 1% drop in the RON/USD exchange rate, during the 1^st quarter of 2014 compared to the same period of last year, the financial result of the distribution segment was positively influenced, mainly by the optimization of the sales channels and cost reduction program.
 
At the end of March 2014, Rompetrol Downstream’s distribution segment was comprised of more than 750 sale points, including the network of own stations, partner stations and mobile stations.
 
* Rompetrol Rafinare’s consolidated financial statements include the results of Rompetrol Rafinare S.A., including the petrochemical activity and those of Rompetrol Quality Control S.R.L, Rom Oil S.A., Rompetrol Downstream S.R.L., Rompetrol Logistics S.R.L. and Rompetrol Gas S.R.L. subsidiaries
** The results presented have not been audited and are consolidated, and the reporting has been made in accordance with the International Financial Reporting Standards (IFRS).
 
Public Relations and Communication Department
KMG International/Rompetrol