Consolidated Financial Results of the LOTOS Group Q (IFRS)

Transcription

1 Consolidated Financial Results of the LOTOS Group Q (IFRS) Management Board of Grupa LOTOS 15th February 2011

2 Summary and key achievements Main investments update Market Conditions Upstream Downstream Overall financial results Management Board 2/35

3 KEY 2010 ACHIEVEMENTS Strong EBIT at PLN 769m (+83% yoy) Strong net profit at PLN 653m Successful completion of 10+ Programme all works within schedule Crude oil throughput increased according to set target over 8m tonnes Approval of the new strategy for LOTOS Group Management Board 3/35

4 Q4 10 OVERALL FIGURES Record high crude oil throughput amounted to 2,223.9 thousand tonnes (+42,7%) Highest ever consolidated sales (+20.1% to the level of 2,487 thousand tonnes) Crude oil production amounted to 34.1 thousand tonnes Strong operating profit in Q at PLN 229.8mln, while net profit was equal to PLN mln Average benchmark refining margin increased signifcantly yoy from 0.93 to 3.19 USD/bbl Average Brent dtd price amounted to USD/bbl (+16.0% yoy) Brent/Ural differential increased from 0.32 USD/bbl to 1.31 USD/bbl (yoy) Management Board 4/35

5 1 Summary and key achievements 2 Main investments update Market Conditions Upstream Downstream Overall financial results Management Board 5/35

6 MAIN INVESTMENTS UPDATE FINALISATION OF GEONAFTA ACQUSITION On February 3rd LOTOS has gained full control of AB Geonafta acquiring the remaining stake in the company (previously an equity shareholding of 40.59%) The price of acqusition of UAB Meditus, which owns 59.41% stake of AB Geonafta consists of: EUR 56.8m adjustment on net debt part of potential former shareholder s obligations According to the agreement setting of the final price shall occur not later than 90 days from the date of finalisation of the transaction The deal is partly financed with a loan not higher than EUR 43m AB Geonafta is the only Lithuanian entity engaged in onshore crude oil production Management Board 6/35

7 MAIN INVESTMENTS UPDATE STRUCTURE OF THE TRANSACTION The transaction has been executed through LOTOS PETROBALTIC 100% UAB LOTOS BALTIJA 100% separate Lithuanian subsidiary UAB Lotos Baltija Acquisition of a 100% stake in UAB Meditus, whose only asset is 59,41% stake in AB Geonafta 40,59% UAB MEDITUS 59,41% Planned restructuring of the capital group aiming at optimalisation of capital structure AB GEONAFTA 50% 50% 100% The capital group of AB Geonafta consists of 4 companies engaged in oil production: UAB Minijos Nafta UAB Genciu Nafta UAB Manifoldas AB Geonafta explorating 3 fields UAB Minijos Nafta explorating 7 fields UAB Genciu Nafta explorating 1 field UAB Manifoldas explorating 1 field Management Board 7/35

8 MAIN INVESTMENTS UPDATE KEY CONSOLIDATED DATA ON AB GEONAFTA Net sales (LTLm) Net profit (LTLm) Oil production (t tonnes) Consolidated annual production of 94 ths tonnes in 2009 Consolidated net sales of LTL 115m (2009 figures) Proved oil reserves (2P) of 1,0m tonnes Management Board 8/35

9 MAIN INVESTMENTS UPDATE 10+ PROGRAMME AT 100% TECHNICAL COMPLETION LEVEL ROSE Units reached Ready For Start Up Status in Q4 MHC test production ongoing All 10+ Programme units are operational or reached RFSU Status Management Board 9/35

10 Summary and key achievements Main investments update Market Conditions Upstream Downstream Overall financial results Management Board 10/35

11 MARKET CONDITIONS KEY FACTORS Refining margin Crude oil prices Positive impact of increase in Brent/Ural differential in comparison with Q4 09 Positive impact of increase in refining margin qoq and yoy Increase in crude oil prices qoq and yoy Management Board 11/35

12 MARKET CONDITIONS KEY FACTORS FX rate LIBOR 3M USD The EUR/USD FX rate slightly decreased qoq (end of Q4 10 to end of Q3 10), while the USD/PLN rate increased Downward trend of 3M USD LIBOR rate from beginning of October 2008 Management Board 12/35

13 Summary and key achievements Main investments update Market conditions Upstream Downstream Overall financial results Management Board 13/35

14 UPSTREAM CRUDE OIL PRODUCTION AND SALES QUARTERLY VIEW Crude oil production ( 000t) Crude oil sales ( 000t) -44% -54% Production yoy decreased by 44% The production figures qoq remain stable Qoq crude oil sales remain stable Management Board 14/35

15 UPSTREAM CRUDE OIL PRODUCTION AND SALES FULL YEAR Crude oil production ( 000t) Crude oil sales ( 000t) +6% +7% Production yoy increased by 6%, due to production from B8 field (in the first quarter of 2010) Management Board 15/35

16 UPSTREAM FINANCIAL RESULTS QUARTERLY VIEW Net sales (PLN m) EBIT (PLN m) EBITDA (PLN m) -41% -49m -53m Net sales lower due to decreased volume of Rozewie crude oli EBIT and EBITDA decreased due to impairment losses on fixed assets under construction in the amount of 48.3 m PLN (investment in fields B4 and B6) The impairment is due to lengthening of time gap between CAPEX and the development of the field. Management Board 16/35

17 UPSTREAM FINANCIAL RESULTS FULL YEAR Net sales (PLN m) EBIT (PLN m) EBITDA (PLN m) +39% +33m +83% Financial results improvement triggered by the increase of crude oil market price Management Board 17/35

18 Summary and key achievements Main investments update Market conditions Upstream Downstream Overall financial results Management Board 18/35

19 DOWNSTREAM CRUDE OIL THROUGHPUT +1% +43% Q08 1Q09* 2Q09* 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 * Lower throughput in Q1 and Q2 09 due to maintenance shutdown Significant increase in crude oil throughput due to operating new units Management Board 19/35

20 DOWNSTREAM PRODUCTION OF PRODUCTS AND GOODS Q ( 000 t) FY 2010 ( 000 t) In Q total production reached 2,569 thousand tonnes (+29% yoy) For the full year 2010 total production reached 9,088 thousand tonnes (+28% yoy) Management Board 20/35

21 DOWNSTREAM SALES OF PRODUCTS AND GOODS Q ( 000 t) FY 2010 ( 000 t) In Q sales volumes were higher by +20% comparing to the Q4 2009, mainly due to HSFO increase For the full year 2010 the sales volumes increased by +16% yoy Higher dynamics of production growth comparing with sales dynamics is a consequence of replacing import with Gdańsk refinery products * Naphtha starting from 2010 Management Board 21/35

22 DOWNSTREAM MARKET SHARE AND RETAIL NETWORK Total market share Retail Network +1.5 pp. In comparison with 4Q 09 the number of CODO and DOFO stations increased by 10 and 11 respectively, whereas 1 DODO station contract has expired As of Dec 31th franchise agreements were signed Management Board 22/35

23 DOWNSTREAM RETAIL SALES Q4 Retail Sales (PLN m) Full Year Retail Sales (PLN m) +22% +21% Quarterly retail sales increased by 22% yoy Annual retail sales increased by 21% yoy EBIT in Q was at -3.8m PLN; for the full year 2010 the result was equal to +13.9m PLN Management Board 23/35

24 DOWNSTREAM FINANCIAL RESULTS QUARTERLY VIEW Net sales (PLN m) EBIT (PLN m) EBITDA (PLN m) +42% +193% +134% EBIT increase following better product prices, supported strongly by positive crack development (+65% yoy on diesel) Management Board 24/35

25 DOWNSTREAM FINANCIAL RESULTS FULL YEAR Net sales (PLN m) EBIT (PLN m) EBITDA (PLN m) +36% +60% +52% Financial results of the downstream segment are positively impacted by more favorable market conditions and sales volume increase due to newly functioning units Management Board 25/35

26 Summary and key achievements Main investments update Market conditions Upstream Downstream 6 Downstream Overall financial results Management Board 26/35

27 OVERALL FINANCIAL RESULTS Q4 10 FINANCIAL RESULTS 4Q10 4Q09 Management Board 27/35

28 OVERALL FINANCIAL RESULTS 2010 FINANCIAL RESULTS Management Board 28/35

29 OVERALL FINANCIAL RESULTS OPERATING PROFIT ACCORDING TO LIFO INVENTORY VALUATION QUARTERLY VIEW LIFO effect = -178 LIFO effect = -97 As a result of increasing crude oil prices the LIFO effect was negative and amounted to -178 m PLN Management Board 29/35

30 OVERALL FINANCIAL RESULTS OPERATING PROFIT ACCORDING TO LIFO INVENTORY VALUATION FULL YEAR LIFO effect = -419 LIFO effect = -448 As a result of increasing crude oil prices the LIFO effect was negative and amounted to -419 m PLN Management Board 30/35

31 Liabilities Assets OVERALL FINANCIAL RESULTS BALANCE SHEET Management Board 31/35

32 OVERALL FINANCIAL RESULTS Q4 10 RESULT ON HEDGING Negligible impact of hedging transactions on the results Management Board 32/35

33 OVERALL FINANCIAL RESULTS 2010 RESULT ON HEDGING Low level of interest reference rates in enitre 2010 causing negative impact on the hedging transactions result Management Board 33/35

34 OVERALL FINANCIAL RESULTS Q4 10 RATIOS EBITDA margin EBIT margin Net margin Gearing ratio Management Board 34/35

35 OVERALL FINANCIAL RESULTS 2010 RATIOS EBITDA margin EBIT margin Net margin Gearing ratio Management Board 35/35