Capital Markets presentation

Transcription

1 Capital Markets presentation

2 The information included in the presentation and any other information communicated by the Company while the presentation is being given (all such information as aforesaid or any part thereof the "Information") is presented for convenience purposes only. The Information does not constitute a basis for investment decision, or replace the need for carrying out independent collection of information and analysis of the Information nor does the Information purport to make or give any recommendation and/or opinion and/or to substitute for the independent judgment of any potential investor. Disclaimer The Company does not warrant the completeness or accuracy of the Information or of its the translation into English and it disclaims any responsibility for any damages and/or losses whatsoever resulting from the use of the Information. In case of contradiction or inconsistency between the Information and information recorded in the Company's ledgers and/or appearing in official publications, such recorded information will prevail. The Information may contain various forward looking statements based on current data and expectations. Actual operations, results and other data may differ materially from those stated in such forward looking statements, owing to various uncertainties and risks, including the risk factors referred to and discussed in the Company's financial statements and Management Discussion and Analysis as published by the Company. The Company assumes no obligation to update the said data and expectations or any other part of the Information. 2

3 An excellent quarter Strong performance in operating and financial parameters Financial improvements Net debt to EBITDA ratio X1.9 Net financial debt decreased $ 126 million from the beginning of the year Excellent quarter Net Profit $ 16 million Adj. EBITDA $ 123 million Polymers sector EBITDA $ 44 million Strong operating results Successful completion of the periodic maintenance cycle Adj. refining Margin (*) $/bbl 8.1 (*) $/Bbl 8.6 without the periodic maintanace 3

4 Business Environment 4

5 Brent, $/Bbl Price increased from $/Bbl 78 to 84 OPEC is still committed to production cuts Other countries joined OPEC policy Expected sanctions on Iranian oil exports In October and November, supply increases lead to a drop in prices to $ 68 a barrel 30 12/16 03/17 06/17 09/17 03/18 12/16 03/17 06/17 09/17 12/17 06/18 09/18 12/17 03/18 06/18 09/18 5

6 Reuters - Ural Med Margin, $/Bbl Avg $/bbl 5.3 Avg Q1 18 $/Bbl 4.0 Avg Q2 18 $/Bbl 4.4 Avg Q3 18 $/Bbl Margin increase from the beginning of the year High volatility and increase in middle distillated margins 2 12/ /17 06/17 09/17 12/17 03/18 06/18 09/18 12/16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 6

7 Bloomberg - Ural Med HY/FC Margin, $/Bbl Avg $/Bbl 6.0 Avg Q1 18 Avg Q2 18 Avg Q3 18 $ /Bbl 5.4 $/Bbl 6.0 $/Bbl 6.2 The weighted Ural Bloomberg margin is the weighted average of two refining margins in the Mediterranean Sea, hydrogen cracking and catalytic cracking. The weighted Bloomberg margin includes 50% hydrogen cracking capability, 50% catalytic cracking capability and full use of natural gas as an energy source 2 12/ /17 06/17 09/17 12/17 03/18 06/18 09/18 12/16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 7

8 Products margin (CIF Med) vs Brent, $/Bbl Diesel crack increased during the quarter to $/Bbl 16 Gasoline crack stable on $/Bbl /17 04/17 07/17 12/16 03/17 06/17 10/17 09/17 01/18 12/17 04/18 03/18 07/18 06/18 10/18 09/18 Gasoline Prem Unl CIF Med Diesel ULSD CIF Med Fuel Oil 1% CIF Med Source: REUTERS 8

9 Polymers prices above Naphtha, $/Ton 1,100 Avg 2017 Polypropylene 754 $/T Polyethylene 887 $/T Avg Q1 18 Polypropylene 831 $/T Polyethylene 824 $/T Avg Q2 18 Polypropylene 751 $/T Polyethylene 662 $/T Avg Q3 18 Polypropylene 729 $/T Polyethylene 608 $/T /16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 12/16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 Margin decreased moderately due to Naphtha hike Polyethylene (LDPE FD NEW Spot Naphtha CIF NEW) Polypropylene (PP FD NEW Spot Naphtha CIF NEW) Polypropylene prices above Propylene, $/Ton Avg 2017 Q1 18 Avg Q2 18 Avg Q3 18 Avg $/T 283 $/T 234 $/T 190 S/T PP FD NEW Spot Propylene FD NEW Contract 0 12/16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 12/16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 9

10 Paraxylene prices above Xylene, $/Ton Avg Avg Q1 18 Avg Q2 18 Avg Q $/T 141 $/T 120 $/T 276 $/T 400 Paraxylene FOB ARA Solvent Xylene FOB ARA /16 03/17 06/17 09/17 12/16 03/17 06/17 09/17 12/17 03/18 06/18 06/18 09/18 Source: ICIS,PLATTS 10

11 Transportation Fuels Local consumption- KTon % -2% Distillates Local Consumption Down 6% Q3 18 vs Q % 331 Transportation Fuels Local consumption Down 6% Q3 18 vs Q3 17 High demand for Jet fuel! דס Fuel "לJet בנזין Gasoline סולר Diesel Q Q Source : Infrastructure ministry 11

12 Other Fuels Local consumption- KTon % Distillates Local Consumption Down 6% Q3 18 vs Q3 17 Stable consumption of Bitumen and Fuel Oil גפ LPG "מ Oil מזוט Fuel ביטומן Bitumen Q Q Source : Infrastructure ministry 12

13 IMO 2020 International product Light-Heavy spreads* 70 Spread, Constant 2016 dollars per Post IMO *L/H spread = 0.5 * (Gasoline price + Diesel price) HSFO price 2018 IHS Markit At the beginning of 2020, a new standard for sulfur content in marine fuel fuels will take effect BAZAN examined the implications of the standard change with the assistance of IHS Markit According to the IHS forecast, BAZAN will be able to adjust refining operations to market conditions and needs, without makinginvestmentsinitsfacilitiesandmayevenbenefit from improved margins According to the IHS estimate, the expected impact of the new standard on Company's refining margins is an addition totherefiningmarginintherangeof0to4dollarsper barrel Note: These charts are part of a presentation published by the Company on in order to examine the full analysis, please review the full presentation as published In October 2018, the Carriage Ban was approved commencing March 1,

14 Financial Results Q3 2018

15 Consolidated Results Q $ Millions Consolidated Adj. EBITDA by Segments Consolidated Net Profit Other Segments Fuels Polymers Carmel & Ducor Q3.17 Q3.18 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q

16 Bazan Adj. Refining Margin Vs. Reuters Ural & Vs. Weighted Bloomberg Ural $ / barrel 9.3 (*) 8.6 Bazan Adj Margin. Weighted Ural Bloomberg Ural Reuters Q Q Q3 17 Q3 18 (*) Adj. margin proforma as defined in the Company s Board Of Directors Report. The actual refining margin for the third quarter of 2018 is $/bbl

17 Polymer Segment Results* $ Millions EBITDA Net Profit Q3 17 Q318 (*) Carmel & Ducor 17

18 Net Financial (*) Debt Millions $ 1,935 1,411 1,437 1,193 1,150 1,024 12/13 12/14 12/15 12/16 12/17 09/ *Debt to Financial Institutions and Bond Holders

19 Net Financial Debt to Adj. EBITDA Ratio 7.4X 3.4X 2.8X 2.8X 2.1X 2.1X 2.1X 1.9X / / / / / /18 Net Financial Debt to Financial Institutions and Bond Holders Adj. EBITDA as defined in the Company s Board Of Directors Report

20 Consolidated Cash Flow 9m 2018 $ millions (*) (*) Cash Profit on cash basis Changes in fixed deposits Bonds issue Derivatives Dicrease in working capital Short term loans & deposits Lease liabilities Interest paid Net Loans repayments Dividend Bonds repayments Capex Tax Cash (*) Including payment of principal and interest in respect of a judgment given in respect of development levies in the amount of $ 67 million and $ 14 million, respectively 20

21 Main Balance Sheet Parameters Net Working Capital ($ M) Shareholders Equity ($ M) ,037 1,204 1,359 12/13 12/14 12/15 12/16 12/17 09/ /13 12/14 12/15 12/16 12/17 09/18 Liquid Financial Assets ($ M) Equity to Assets Ratio % 18% 25% 28% 30% 32% /13 12/14 12/15 12/16 12/17 09/ /13 12/14 12/15 12/16 12/17 09/18 21

22 Bazan in the Capital Market 33.0% Israel Corp. Ltd Listed on TASE (ORL) TA 35, TA 125 Market Cap: Nis 5.9/ $ 1.6 bn November 2018 Bonds traded on TASE Telbond index Nis 4.4 bn in bonds traded November 2018 Shareholders as of Dividend yield 3.7% November % Free Float 15.5% IPE

23 70% (*) +55% 60% 50% 40% 30% 20% 10% 0% 10% 12/16 03/17 06/17 09/17 12/17 03/18 06/18 09/18 31/12/ /03/ /06/ /09/ /12/ /03/ /06/ /09/2018 Bazan Share TA 35 (*) for the period

24 Thank you!