Corral Q May 2017

Transcription

1 Corral Q May 2017

2 Disclaimer This presentation has been prepared by Corral Petroleum Holdings AB (publ) and/or its subsidiaries and affiliates ( Corral ). The information contained in this presentation is for information purposes only. Among other things, this presentation is intended to be used in connection with a scheduled international conference call for investors and analysts to be held on June 1, 2017 at 3:00 pm CET. The call-in number is and the meeting code is Preem. The conference call will also be available for replay for a limited time beginning on June 2, 2017 with access information to be posted via the "Press and Notices" heading of the Corral investors section of Preem's website at The information contained in this presentation is not intended to be used as the basis for making an investment decision. You are solely responsible for seeking independent professional advice in relation to the information. This presentation is not and does not constitute an offer to sell or the solicitation, invitation or recommendation to purchase any securities in the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration under the Securities Act of 1933 (the Securities Act ) or an exemption from registration. This presentation may not be reproduced, disseminated, quoted or referred to, in whole or in part. This presentation speaks as of the date of this presentation. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. Neither the shareholders of Corral nor any directors, officers, employees, agents or representatives of Corral, provide, grant or state, any representation, warranty, guarantee, undertaking or obligation, whether express or implied and whether by operation of law or otherwise, regarding or in relation to the completeness or the accuracy of the information contained in this presentation, and they are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in this presentation are subject to change without notice. No liability whatsoever for any loss, howsoever arising, from any use of this presentation or its contents is accepted by any such person in relation to such information. Certain financial data included in the presentation are non-ifrs financial measures. These non-ifrs financial measures may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with International Financial Reporting Standards ( IFRS ). Although Corral believes these non-ifrs financial measures provide useful information to users in measuring the financial performance and condition of its business, users are cautioned not to place undue reliance on any non-ifrs financial measures and ratios included in this presentation. This presentation contains forward-looking statements. Examples of these forward-looking statements include, but are not limited to statements of plans, objectives or goals and statements of assumptions underlying those statements. Words such as may, will, expect, intend, plan, estimate, anticipate, believe, continue, probability, risk and other similar words are intended to identify forward-looking statements but are not the exclusive means of identifying those statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that such predictions, forecasts, projections and other forward-looking statements will not be achieved. A number of important factors could cause our actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. Past performance of Corral cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation. Corral, its agents and advisors and all of their employees expressly disclaim any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As such, undue influence should not be placed on any forwardlooking statement. By attending this presentation or by reading the presentation slides, you are agreeing to be bound by the foregoing limitations and restrictions and, in particular, will be deemed to have represented, warranted and undertaken that you have read and agree to comply with the contents of this disclaimer. 2

3 First Quarter Market and Market Outlook

4 Source: Pira 4

5 OPEC key objectives: o reduce crude inventory surplus. o o move the market to backwardation. reach 60+ USD/bbl Brent. OPEC to continue cuts since Inventory Objective not achieved Source: Pira Avg export MBD only -- and from an extremely high level +0.1 MBD per month since October 2016 Source: Pira Source: DNB 5

6 6

7 US + Europe Combined Diesel/Gasoil Stocks Russian Fuel Oil Exports F cast Source: Pira 7

8 Product Crack Spreads $/bbl 35 Gasoline cracks $/bbl 30 Diesel cracks $/bbl Fuel oil cracks Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5 yr Range ( ) yr Average ( ) 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5 yr Range ( ) yr Average ( ) yr Range ( ) yr Average ( ) Source: Platts 8

9 First quarter Highlights Market and Operation European refining margins were stable at a healthy level during the first quarter of The support for the margins came mainly from the strong demand globally for gasoline reducing the gasoline inventory levels and from unusual strength in fuel oil. Financial Adjusted EBITDA for the first quarter 2017 was MSEK, compared to MSEK in the first quarter 2016 and operating profit was MSEK compared to 775 MSEK in the first quarter On March 31, 2017 Preem satisfied the cash flow test and on May 29, 2017 Preem satisfied the minimum liquidity test under the Credit Facilities to upstream cash to Corral Petroleum Holdings for the July 1, 2017 scheduled interest payment on the 2021 Notes. 9

10 Projects and Activities Preem has agreed with YX Norge to acquire its bulk sales business in Norway. The transaction consists mainly of sales agreements with 15 resellers and approximately 600 direct customers, with the acquired business currently generating approximately 200,000 m3 of annual fuel sales. Investment in a Vacuum Distillation Unit in Lysekil with a total capital expenditure plan of MSEK during the period 2016 to The project is progressing according to plan. All major mechanical items and works have been contracted. Site preparation work has been completed Investment in a Hydrogen Production Unit in Gothenburg with a total capital expenditure plan of 635 MSEK which is expected to be mechanically complete by the end of Strategic upgrade of IT systems with a total capital expenditure budget of 500 MSEK, mainly in 2016 and 2017, with planned implementation in Implementation is now expected stepwise in 2017 and The Gothenburg refinery is back in operation after the scheduled shutdown. All units except the Fluid catalytic cracking unit ( FCC ) in the Lysekil refinery are now back in operation. All mechanical work on the FCC is completed and startup is ongoing. 10

11 First Quarter Financial Summary

12 Refining Margin and Production Q1 Refining margin Production LTM Q yr yr 4.61 LTM Q yr yr *Rolling 12 months 12

13 Group First Quarter 2017 Results Revenue (MSEK) Revenue Change Q1 55% LTM 2.2% Comments Revenue The increase is a result of higher crude and product prices as well as higher sales volumes. Adjusted EBITDA * Adjusted EBITDA Improved Adjusted EBITDA is driven by higher margins and increased production volumes. Q1 36% LTM -26% Adj EBITDA Margin (% of Revenue) 7.4% 8.2% 6.5% 5.9% *As defined in the Corral Petroleum Holdings AB (publ) report for the first quarter ended 31 March

14 Supply & Refining Segment Throughput (000 bbls) Comments 5% -4% Average Brent Crude Price ($/bbl) 59% -16% Throughput The refineries in Lysekil and Gothenburg had good operational performance and high utilization in the first quarter of 2017 with a throughput of 4.9 (4.7) million m3. Average Brent Crude Price During the first quarter of 2017, the price of Dated Brent traded in a range between 49 $/bbl to 56 $/bbl. The price fell to 49 $/bbl in the middle of March but climbed back up to 52 $/bbl by the end of the quarter. Refining Margin European refining margins were stable at a healthy level during the first quarter of The support for the margins came mainly from the strong demand globally for gasoline reducing gasoline the inventory levels and unusual strength in fuel oil. Average Refining Margin($/bbl) 4,27 37% 43% -30% 6,10 6,41-29% 4,50 Q4 15 Q4 16 FYE 15 FY16 14

15 Marketing Segment Revenue (MSEK) 38% -5% Comments Revenue Sales volumes were 4% higher in the first quarter of 2017 compared to the first quarter of the previous year. Marketing EBITDA (MSEK) Marketing EBITDA The decrease in operating profit is mainly attributable to higher selling expenses compared to the first quarter in the previous year. 34% -4% EBITDA Margin (% of Revenue) 5.0% 3.5% 3.3% 4.7% 15

16 Capital Expenditures Capex by Purpose (MSEK) (a) Q1 16 Q Recurring maintenance Incremental improvements Specific projects Comments Specific Projects The VDU investment in Lysekil, 74 MSEK Q Strategic IT project. 51 MSEK Q Specific projects in Q includes a 5 MSEK in a Green Hydro Treater. Recurring maintenance Increased capex in Q vs Q driven by scheduled maintenance (12MSEK) and planned maintenance (16 MSEK). Regulatory/Environmental maintenance increased by 9 MSEK Safety/Risk maintenance increased by 4 MSEK Future investments In November 2016 the Preem Board approved a 635 MSEK investment in a Hydrogen Production Unit at the Gothenburg refinery. This attractive investment, which we expect will be mechanically complete by the end of 2018, is designed to further increase the refinery s desulphurization capacity. The investment has an estimated pay-back time of less than two years. Approximately 150 MSEK planned capital expenditure will be reallocated to Total capex in 2016 was MSEK compared to plan 1,500 MSEK. Total capex in 2017 is estimated at 2,550 MSEK. (a) Shown on a gross basis. 16

17 Cash Flow (MSEK) Q1 16 Q1 17 LTM Q1 16 LTM Q1 17 Profit before taxes Adjustments for items not included in cash flow Tax paid Decrease(+)/Increase(-) in inventories Decrease(+)/Increase(-) in operating receivables Decrease(-)/Increase(+) in operating liabilities Changes in working capital Cash flow from operating activities Cash flow used in investing activities Amortization/Raising of loans Loan expenditure Cash flow used in financing activities Cash flow for the period Comments Adjustments not included in cash flow are primarily deprecation, unrealized FX effects, write downs of inventory (or reversals) and reservations for Preem s receivable on Corral Morocco Oil&Gas. Cash flow was negatively impacted by movements in working capital of 270 MSEK for the first quarter of 2017 compared to a positive impact of 2,204 MSEK for the first quarter of Cash flow used in inventories amounted to 66 MSEK for the first quarter of 2017, primarily due to the increase in the price of crude oil. Cash flow from operating receivables amounted to 320 MSEK for the first quarter of 2017, primarily due to an increase in sales. Cash flow used in operating liabilities for the first quarter of 2017 amounted to 523 primarily due to the increase in the price of crude oil. The loan expenditure of 679 MSEK relates to the refinancing of both Preem AB and Corral Petroleum Holdings. Cash flow used in financing activities is the reduced utilization of Preem s revolving credit facility 17

18 Simplified Capital Structure Cap Structure at the end of Q MSEK $M USD xebitda Cash (382) (43) RCF Other interest bearing liabilities and transaction expenses (348) (39) Comments Continued deleveraging through reduced utilization of Preem s RCF Continued strong focus on paying cash coupons on the 2021 Notes Net debt Preem x 2021 Corral Notes Transaction expenses (250) (28) Cash (452) (51) Total Corral Group 3rd part debt (a) x Adj EBITDA USD:SEK Exchange rate 8.93 *Cash and debt figures exclude deeply subordinated debt held by our ultimate shareholder. **Exchange rate (SEK/USD) as of March 31,

19 Liquidity Reserves Higher availability due to higher average prices and higher average inventory levels. Note: Drawdown and availability figures are not IFRS measures and are based on month end values averaged over the course of the year. In part, these values are internal calculations based on variables that are subjectively determined and which may not be comparable in approach to similar calculations of other companies 19

20 QUESTIONS?