Petroplus announces a net profit of EUR 8.2 million over first quarter Strong recovery refining results

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1 Rotterdam, 21 May 2003 PRESS RELEASE Petroplus announces a net profit of EUR 8.2 million over first quarter 2003 Strong recovery refining results Petroplus International NV ( Petroplus ), Europe s leading midstream oil company today announces its first quarter 2003 results: Net sales up 45.1 % to EUR 1,691 million (Q1 2002: EUR 1,166 million) Gross profit up 46.6 % to EUR 61.1 million (Q1 2002: EUR 41.7 million) EBITDA up 400% to EUR 23.9 million (Q1 2002: EUR 4.8 million) Net operating income up to EUR 16.2 million (Q1 2002: EUR 0.9 million loss) A net profit of EUR 8.2 million (Q1 2002: EUR 8.7 million loss) A net profit per share of EUR 0.28 (Q1 2002: EUR 0.30 loss) Petroplus first quarter earnings reflect the significant improvement in refining margins. After the initially low refining margins in January, margins increased in February and March as a consequence of increase product demand. The increase was caused by low global stock levels and cold weather in the United States. In April, following the outbreak of the war in Iraq, both crude oil and product prices dropped significantly. Although margins also decreased, they stayed above the level of 2002 margins. The performance of the Marketing division continued to be effected by poor results from the German wholesale activities. The effect of the cost savings program in Germany is not fully anticipated until the second quarter Apart from the slight delay in Germany, the implementation of the cost savings program is on track and yielding the expected results. Refining Refining division: first quarter 2003 EBITDA amounted to EUR 17.3 million compared to a EUR 4.4 million loss in the first quarter of Net operating profit increased by EUR 20.4 million to EUR 12.5 million compared to a loss of EUR 7.9 million in the first quarter of The strong improvement in the refining division was fully attributable to the improvement in refining margins worldwide. Initially, the low December 2002 margins persisted into 2003, but in February and March, margins increased on the back of strong product demand. In Page 1 of 9

2 addition, strengthening Rhine freight tariffs as well as higher ULSD premiums contributed to the strong first quarter earnings. To limit the impact of the low margins in January, the Antwerp refinery was brought to an economic standstill over the second half of January. In February, the Teesside refinery experienced minor problems necessitating reduced run rates for most of the month. In the second half of March, the thermal cracker in Cressier was taken off- line resulting in suboptimal crude runs. Marketing Marketing division: first quarter 2003 EBITDA amounted to EUR 2.7 million compared to EUR 5.8 million in the first quarter of Net operating profit decreased by EUR 3.8 million to EUR 1.2 million compared to EUR 5.0 million in the first quarter of The results in the marketing division were realised in a difficult market. Most of the first quarter was characterised by high product prices in a strongly backwardated market. An important concern within the division continues to be the German wholesale activities. Due to the high commercial stock levels relative to the soft winter, the impact of the previously mentioned situation on the futures market was more severe and losses were sustained in Germany. In addition, the effect of the anticipated savings from consolidating the German wholesale activities at a single location as part of the previously announced cost savings program, is not expected to contribute until the second quarter Wholesale activities in Switzerland and the United Kingdom (UK) were better in comparison to the same period last year. The Swiss activities benefited from strengthening margins and strong sales in March on the back of increasing Rhine freight tariffs. UK sales also benefited from improved margins and a strengthening of ULSD premiums. The contribution of the bunkering activities of NSP and Frisol was good. Following the Nynas acquisition, Petroplus started to blend components from the former Nynas plant since mid-march into Marine Diesel Oil and Bunker Fuels. The performance of Tango continues to be good with first quarter earnings ahead of expectations despite a slowdown in the opening of new sites. Nonetheless, Tango has maintained its position as market leader in The Netherlands in the unmanned petrol station market and as of today, Tango has 52 stations operational in The Netherlands with a further 2 under construction. Tango is on track to meet its 2003 targets. In Belgium, a number of new sites are in the permitting phase. Although acquiring the necessary permits is proving more time consuming than anticipated, Petroplus remains optimistic about the market opportunities in Belgium. The performance of the single pilot site, operational since late October 2002, remains promising. Plans to open a pilot site in Spain in the second half of 2003 remain on track as commercial negotiations with supply partners and contracting firms continue. As stated in a previous press release on 2 April 2003, Petroplus has increased its total shareholding in Tango to 95% by acquiring 23.76% of the Tango shares from the Van den Donk family. Page 2 of 9

3 Logistics Logistics division: first quarter 2003 EBITDA amounted to EUR 3.7 million compared to EUR 4.3 million in the first quarter of Net operating profit decreased by EUR 0.9 million to EUR 2.7 million compared to EUR 3.6 in the first quarter of The decreased earnings reflect the strong backwardation during the first quarter compared to a slight contango in the same period in In light of the difficult market circumstances, performance within the division was otherwise good. LNG (Liquefied Natural Gas) Encouraging progress is being made on the LNG project in Milford Haven. On 14 February 2003, Petroplus was granted planning permission for the construction of two Liquefied Natural Gas tanks and on 24 April 2003 Petroplus applied for a permit for a possible third tank. Meanwhile, the tender period for commercial partners is well underway and discussions are very promising. In parallel, discussions are underway with numerous project financiers as well as construction & engineering firms. Negotiations with Transco on extending the national pipeline grid as far as Milford Haven and tariff negotiations are underway. Petroplus is on track to obtain full approval for the financing and construction of the entire project in the third quarter As previously indicated, it is the intention to finance the entire project on a non-recourse basis. Other Businesses (Central Overheads) Other Businesses contributed positively on EBITDA level in the first quarter of 2003 compensating Central Overheads. The EBITDA amounted to EUR 0.3 million compared to minus EUR 0.9 million in the first quarter of The net operating loss was reduced by EUR 1.2 million to minus EUR 0.3 million compared to minus EUR 1.5 million in the first quarter of Page 3 of 9

4 Outlook The Cressier refinery is currently in shutdown for planned maintenance for the entire month of May. The most important project within the maintenance program is a refurbishment of the crude furnace. In Cressier, this type of major shutdown is carried out every three years. The last major shutdown was carried out in the first quarter of 2000, just before Petroplus acquired the refinery. Petroplus continues to be cautious with regard to making forward looking statements following a very difficult refining year in Although refining margins improved in February and March, they continue to be very volatile. In view of this extreme volatility over the last 12 months, combined with the fragile situation in the Middle East, Petroplus will not provide an outlook for The strategy for the next few years is aimed at decreasing the relative impact of volatile refining margins on the consolidated earnings of Petroplus. The LNG project supports this objective. Petroplus reiterates its expectation that the growth opportunities in the European midstream market allow for a longer term (5 years) average growth target of 10-15% in earnings per share annually. Dividend Proposal 2002 The Executive Board of Petroplus proposes that a dividend of EUR 0.25 will be paid out in bonus shares from the share premium reserve. The Supervisory Board has approved this proposal. This proposal will be submitted to the Annual General Shareholder Meeting to be held on 27 May The bonus shares allocated will be based on the average closing price of the five trading days preceding the Annual General Shareholders Meeting to be held on Tuesday 27 May 2003 in the Westin hotel in Rotterdam. Rounding off will be done in cash. The Petroplus 2002 Annual Report was published last week. An electronic copy can be downloaded from the Investor Relations section on Petroplus website ( Analyst Conference Call: The first quarter analyst 2003 conference call will be held on 27 May 2003 at 09:30 CET. Page 4 of 9

5 Note to editors Profile of Petroplus International NV Petroplus International N.V. ( Petroplus ) is an oil company which focuses on the European midstream oil market. The core activities of Petroplus are oil (refining and marketing) and logistics (mainly storage). The company has set itself the goal of becoming the leading midstream oil company in Europe. Petroplus is the owner of a 65,000 bpd refinery in Antwerp, a 68,000 bpd refinery in Cressier and a 117,000 bpd refinery in Teesside, the largest producer of Ultra Low Sulphur Diesel (ULSD) in the United Kingdom. Petroplus has a sales volume of almost 20 million tonnes a year (primarily distillates) and a storage capacity of almost 5.0 million m³ throughout Western Europe. In addition, Petroplus also operates unmanned filling stations under the Tango brand. Petroplus, with its head office in Rotterdam and regional head offices in Zug and Hamburg, has branch offices in more than 20 countries and employs approx employees. Petroplus International NV has been listed on the Official Market of Euronext Amsterdam since 14 July Reuters: PPV.AS Bloomberg: PETR NA Midstream oil sector Midstream is the term used for that part of the oil supply chain engaged in crude oil refining, storage and oil product wholesale activities. The sector originated in the United States where independent refiners like Tosco, Valero Energy, Sunoco and Ultramar Diamond Shamrock have come into prominence in the past 10 years. The most important aspects of their approach was their taking optimum advantage of a rationalisation process in the fields of refining and marketing in the US and their acquisition of the midstream and retail marketing assets of the larger oil companies for a fraction of the replacement costs. Independent oil companies are able to operate their refineries and other assets at lower costs and thus boost their refining margins. These companies are particularly apt at improving margins by reducing overhead costs, boosting production and improving product yields. For further information, please contact: Petroplus International NV: Marcel van Poecke, Willem Willemstein Executive Board Martijn Schuttevâer, Investor Relations Manager tel: Page 5 of 9

6 SUMMARY CONSOLIDATED BALANCE SHEET EUR `000 (* unaudited) * * 31/12/2002 Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets Total fixed assets Current assets Stocks Debtors, prepayments and accrued income Cash at bank and in hand Total current assets Current liabilities Bank overdrafts Short-term borrowings from banks Other payables and accrued expenses Total current liabilities Net current assets/(liabilities) ( ) ( ) Total assets less current liabilities Financed by Long-term liabilities Provisions for liabilities and charges Minority shares 24 (1 163) ( 726) Shareholders' equity Page 6 of 9

7 SUMMARY CONSOLIDATED INCOME STATEMENT 1st quarter January to December EUR `000 (* unaudited) 2003* 2002* 2002 Operational income and (expenses) Net sales Cost of sales ( ) ( ) ( ) Gross profit Other income Cost and expenses Total costs and expenses ( ) ( ) ( ) EBITDA Depreciation/amortization ( 7 714) ( 5 642) ( ) Net operating income ( 851) Net financial expense ( 5 435) ( 7 524) ( ) Income before income taxes ( 8 375) ( ) Income taxes ( 1 808) ( 272) ( 608) Group income after income taxes ( 8 647) ( ) Minority interests ( 794) ( 42) ( 487) Net income ( 8 689) ( ) Weighted average number of ordinary shares outstanding Basic earnings per ordinary share in euro 0.28 (0.30) (0.85) (0.30) (0.85) Diluted earnings per ordinary share in euro 0.28 Page 7 of 9

8 INFORMATION BY BUSINESS UNIT OF PETROPLUS INTERNATIONAL N.V. Net sales EBITDA Net operating income 1st quarter January to December EUR `000 (* unaudited) 2003* 2002* 2002 Refining Marketing Logistics Other activities Refining (4 445) (13 282) Marketing Logistics Other activities 261 ( 907) (6 679) Refining ( 7 911) (29 180) Marketing Logistics Other activities ( 283) ( 1 501) (9 009) ( 851) SHAREHOLDERS' EQUITY EUR `000 (* unaudited) * * 31/12/2002 Balance at January Share issue Result for the year ( 8 689) ( ) Stock dividend Translation adjustment ( 4 065) 593 ( 1 311) Amortization of negative goodwill ( 391) ( 384) ( 1 564) Balance at March 31/December Page 8 of 9

9 SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS 1st quarter January to December EUR `000 (* unaudited) 2003* 2002* 2002 Net cash from operating activities (32 134) Net cash from investing activities (24 591) (12 419) (95 312) Net cash from financing activities (6 415) Net cash inflow/(outflow) (43 309) Exchange difference on cash at bank and in hand 382 ( 121) 243 Increase/(decrease) in cash at bank and in hand (43 430) Balance at January 1 ( ) ( ) ( ) Balance at March 31/December 31 ( ) ( ) ( ) Page 9 of 9