Rompetrol Rafinare, record operational and financial results in 2015

Rompetrol Rafinare, company member of KMG International Group, registered a net consolidated result* amounting to USD 62 million in 2015, thus marking the shift on profit of the Petromidia and Vega refineries, an historical record of the last 11 years. The operational consolidated result (EBITDA) amounted to USD 112 million in 2015, increasing by 30% compared to the one related to the year 2014 (USD 86 millions).

“The record operational and financial results reached in 2015 by Rompetrol Rafinare confirm the success of the investment policies achieved by KMG International and by the sole shareholder by KazMunayGas, national oil and gas company from Kazakhstan, starting from the moment of the acquisition. On Petromidia platform, the investments made between 2007 – 2015 for the modernization and increase of the production capacities, as well as for the alignment of the products to the international environment and quality standards, exceed the value of USD 1.4 milliard. By the performances of the production entities, KMG International reconfirms the role of important player in the region of the Black Sea and of strategic partner for Romania in the energy sector”, stated Azamat Zhangulov, Senior Vice-President KMG International.

Petromidia, that ensures more than 40% of Romania’s capacity of refinery, processed 4.95 million tons raw material in 2015, a level similar to the record reached in 2014 (5.05 million tons) in conditions in which the production installations were temporary stopped for the general scheduled revision for 40 days, operation that was completed successfully, in safety conditions. Over 15,000 tons of raw materials were processed every day in 2015, the biggest quantity processed since the commissioning of the refinery (1979). For the second consecutive year, the refinery reached to a record level of the productiveness for white products (gas, Diesel oil, Jet), of 85.7%, and the EII index, measuring the energetic intensity, was of 98.6 points, the best level recorded until now by Petromidia. At the same time, the mechanic availability of the refinery reached the record level of 96.9%, in 2015. Petromidia produced the biggest quantity off Diesel oil from its history (2.47 million tons) in 2015, at the best productiveness (50%, compared to 48.8% in 2014 and 46% in 2013). Also, Vega Refinery processed record quantities of bitumen (80,000 tons) and of hexane (71,000 tons), due to the improved quality of the raw material an increase of the demand on the regional market. The exports of Rompetrol Rafinare maintained the ascending trend from quantitative point of view in 2015, being more with 2% compared to those in 2014. The value of the exports raised too approximately 1.3 billion USD in 2015, lower level compared to the year 2014. Rompetrol Rafinare continued to be an important payer to the state budget of Romania, paying for the refining activities over USD 284 million in the 4^th quarter of the year 2015 and almost USD 1.4 milliard in the year 2015. The significant decrease of the international quotation of the oil products determined a descending evolution of the gross consolidated turnover from 2015 (-32%), of which value reached to USD 3.8 milliards. In the 4^th quarter of 2015, the general turnaround of the refineries and also the international quotations of the oil products the raw material influenced the financial and operational indicators for the period. Thus, the quantity processed by Petromidia Refinery was of more than 0.8 million tons, decreasing by 37% compared to the similar period of the past year, when over 1.3 million tons were processed. The turnover from the 4^th quarter of 2015 was of USD 740 million (-43%), the EBITDA indicator situated at the level of USD 21 million USD (-11%), and the net negative result to approximatively USD 3.7 million.

Refinery segment 

Note: The refinery and petrochemistry segment comprises the result of the company Rompetrol Rafinare SA (operating the Petromidia and Vega Refineries) together with the petrochemical activity.

On the refinery segment, the company’s results were positively influenced by production processes optimization products – increase of the capacity of processing and increase of the weight of the white products from the total end products. Also the decrease of the operating costs as well as the reduction of the power consumption had a favorable influence. The operational result (EBITDA) reached to USD 63 million in 2015, and the net result to 119 million. The gross turnover exceeded the value of USD 3 milliard in the year 2015, decreasing by 35% compared to the year 2014, being influenced by the decrease of the international quotations and temporary stopping of the activity of two refinery, Petromidia and Vega, for carrying out the scheduled revision from October – November 2015. The quantity of processed raw material was of 4.95 million tons in 2015, decreasing by 2% compared to the last year. The rate of use of the refinery capacity was of 76.48% in 2015. In the 4^th quarter of the year 2015, Petromidia processed 831 thousand tons of raw materials, decreasing by 37% compared to the similar period of the last year, when 1.3 million tons were processed. The rate of use of the refinery capacity was of 46% in the 4^th quarter of the year 2015, decreasing 46% compared to the similar period of the last year. Vega Refinery processed 328 thousand tons in 2015, increasing by 6% compared to the last year, when 308 thousand tons were processed. Also the rate of use of the capacity of Vega Refinery was of 99.6% in 2015, more by 6% compared to the last year. In the 4^th quarter of the year 2015, the quantity of raw materials processed by the Vega Refinery was almost 77 thousand tons, decreasing by 11% compared to the similar period of the last year when 87 thousand tons were processed, and the rate of use of the refining capacity (93%) decreased by 12% in 2015 compared to the one in 2014.

Petrochemistry segment 

 The quantity of raw materials processed by the petrochemistry division of the company Rompetrol Rafinare in 2015 was of more 142 thousand tons, decreasing by 4.5% compared to the previous year, when 149 thousand tons were produced. In the 4^th quarter of the year 2015, the total production of polymers in Petrochemistry was of 28 thousand tons, decreasing by 29% compared to the similar period of the last year, when 39 thousand tons were produced, decrease determined especially in the period of general scheduled revision. The petrochemistry segment is the sole polypropylene producer from Romania, succeeding constantly to increase its market share and by secondary categories of products. Its dynamic strategy of development ensures for the company a competitive position on the internal and on the regional market in the area of the Black Sea and of the Mediterranean Sea, Central and Eastern Europe.

Distribution segment 

Note: The distribution segment comprises the results of the subsidiaries Rom Oil, Rompetrol Downstream, Rompetrol Quality Control, Rompetrol Logistics and Rompetrol Gas

The financial results of the year 2015 for the distribution segment were negatively influenced by the depreciation of the USD/RON exchange rate, but also by smaller margins, expressed in USD, for the oil products, on the Romanian market. The positive effects due to optimization of costs and distribution channels were thus counterbalanced, and the operational profit (EBITDA) in 2015 decreased by 20%, compared to the year 2014. The turnover of the distribution segment amounting to USD 2.3 milliard was by 28% lower than the one recorded last year. The decrease to a larger extent of the income, compared to the volume of sales is determined by the decrease of the international quotations, but also by the increase of the USD/RON exchange rate by 15% in the 4^thquarter of the year and by 20% in the year 2015, compared with the same periods of the year 2014. An ascending trend of the sales was maintained in the retail area. The total volume of the sales increased by 52 thousand tons or by 2.7% compared to the year 2014. The decrease of the wholesales was influenced by the diminution of the production of the Petromidia refinery during the general scheduled revision. The net result (USD -18 million) was negatively impacted by the recognition of the provision in relationship with the fine received by the Competition Council, representing following the legal steps made and of the decision of the High Court of Cassation and Justice, representing 2% of the turnover of the year 2010. The fine aims an alleged violation of the law on competition and of the treaty establishing the European Union and was applied to all the large players on the Romanian oil market. The decision of the High Court is irrevocable, but extraordinary attack means may be exercised after the communication of the grounded decision. Rompetrol Downstream, the retail division of KMG International in Romania, continued the optimization of the fuel distribution channels, but also the reduction of the operational costs and the implementation of the some flexible commercial client-oriented policies. The company continued in the year 2015 the program of improvement of its activities and operations by the transfer of the Rompetrol gas stations from under the company’s administration to the one of the partners/dealers, as well as the extension and modernization of the fuel distribution station network, of adjustment to the new Rompetrol concept, both in Romania, and in Georgia, Bulgaria and in Moldova. At the end of September 2015, the distribution segment of Rompetrol Downstream comprised over 700 fuel distribution points (own stations, partner stations, Rompetrol Express, internal bases of 9 and 20 cubic meters) 230 car LPG distribution stations, 9.000 bottles distribution points and 3 LPG bottling stations at Constanţa, Arad and Bacău.

* The financial consolidated statements of Rompetrol Rafinare include the results of Rompetrol Rafinare S.A. included the petromchemistry activity and the activity of the subsidiaries 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.

** The presented results are not audited and consolidated and the reporting was made according to the International Financial Reporting Standards (IFRS).

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