TRADITION, SOUL, ENERGY! REPORT MONTHS RESULTS

Transcription

1 TRADITION, SOUL, ENERGY! REPORT MONTHS RESULTS November 15, 2017

2 ANNOTATIONS REGARDING THE DOCUMENT This presentation ( Presentation ) was prepared by CONPET S.A. ( CONPET or the Company ). This document was prepared for the presentation of the operational and financial results of CONPET to the investing public (shareholders, creditors, analysts, financial media), thus bearing a strictly informative nature. The presentation was realized exclusively for information and is not a buy/sale offer, nor an inquiry for the buy/sale of the shares or the financial instruments, nor an invitation to take part to a commercial partnership. The presentation does not stand for an offer or a buy invitation or shares subscription and no information contained herein shall set the grounds the conclusion of an agreement, engagement or investment decision. The detailed financial statements and the report prepared pursuant to the requirements of FSA (The Financial Supervision Authority) are made available on the company s website The reporting period is January 1, September 30, The financial statements at June 30, 2017 have not been audited and have been prepared in compliance with the international Standards of Financial Reporting (IFRS) adopted by the European Union. The Presentation or any copy thereof may not be copied, distributed, directly or indirectly delivered to any person for any purpose, in absence of CONPET s knowledge and consent. The copy, submission, distribution or delivery of this Presentation to any person of any jurisdiction is subject to certain lawful restrictions and the persons who might have received or have received this presentation shall become acquainted with these restrictions and comply therewith. The failure to comply with these restrictions may be interpreted as breach of the applicable laws. The attached presentation, slides and descriptions may and do contain forward-looking statements. Nevertheless, such statements must not be construed as CONPET s assurances or projections concerning future expected results thereof. The Presentation is not and shall not be construed as a forecast of future results of CONPET. This Presentation contains neither a complete, nor a comprehensive financial or commercial analysis of CONPET, nor does it present its position or prospects in a complete or comprehensive manner. CONPET has prepared the Presentation with due care, however certain inconsistencies or omissions might have appeared herein. Therefore, it is recommended that any person who intends to undertake any investment decision regarding any security issued by CONPET or its subsidiaries shall rely exclusively on the information released as an official communication by CONPET in accordance with the legal provisions that are binding for CONPET. CONPET and the managers or the representatives thereof shall have no liability in relation to the Presentation. Moreover, no information contained in the Presentation shall constitute an obligation or legal engagement of CONPET, its managers or shareholders

3 REPORT 9 months 2017 RESULTS page 1. Key Indicators 4 2. Operating Results 5 3. Financial Results Cash Flow Financial Indicators Investments Stock Performance Annexes 20 3

4 OPERATING REVENUES 0.9% mron 9 months KEY INDICATORS 9 months 2017 / 9 months 2016 OPERATING EXPENSES 1.8% mron 9 months 2017 EBIT 10.9% 72.3 mron 9 months 2017 Transport Revenues mron Other Operating Revenues + 5,2 mron Operating Revenues mron EBITDA 9.9% mron 9 months 2017 NET PROFIT 11.2% 63.1 mron 9 months 2017 Rail Transport mron Personel mron Other Expenses mron Operating Expenses before Amortization mron MARKET CAPITALIZATION AT mron (105 RON/share) STOCK YIELDS 31.6% ( ) EBIT mron Amortization mron EBITDA mron The Financial Statements at Months have not been audited and have not been revised 4

5 2. OPERATING RESULTS 2.1 TRANSPORTED QUANTITIES BY SUBSYSTEMS ACHIEVED 9 months 2017 / Budget 9 months 2017 / ACHIEVED 9 months ,7% -4,3% +1,0% -4,1% +11,7% -4,5% 4,739 5, , ,935 5, ,862 2,095 2,644 2,670 2, ,192 IMPORT TRANSPORT SUBSYSTEM (ktons) DOMESTIC TRANSPORT SUBSYSTEM (ktons) OTHER CRUDE OIL TRANSPORT OPERATIONS (ktons) TOTAL TRANSPORT (ktons) 2,783 2, ,152 2,670 2, ,192 Budget 9 months 2017 ACHIEVED 9 months 2017 ACHIEVED 9 months 2016 ACHIEVED 9 months

6 OPERATING RESULTS 2.2 MONTHLY EVOLUTION OF THE TRANSPORTED QUANTITIES 9 months 2017 / 9 months JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. IMPORT TRANSPORT (THOUSAND TONES) NATIONAL TRANSPORT (THOUSAND TONES) During , Lukoil refinery was closed for scheduled technical overhaul. 6

7 2. OPERATING RESULTS 2.3 TRANSPORT REVENUES BY SUBSYSTEMS ACHIEVED 9 months 2017 / Budget 9 months 2017 / ACHIEVED 9 months % BUDGET 9 months % +2.8% ACHIEVED 9 months 2017 IMPORT TRANSPORT SUBSYSTEM (mron) DOMESTIC TRANSPORT SUBSYSTEM (mron) OTHER TRANSPORT OPERATIONS (mron) TOTAL TRANSPORT (mron) % % -0.9% ACHIEVED 9 months ACHIEVED 9 months REVENUES FROM TRANSPORTED VOLUME 2.8% mron 9 months 2017, o/w: - DOMESTIC SUBSYSTEM 1.0% mron 9 months IMPORT SUBSYSTEM 8.9% 64.6 mron 9 months 2017 REVENUES FROM TRANSPORTED VOLUME 0.9% mron 9 months 2017, o/w: - DOMESTIC SUBSYSTEM 4.2% mron 9 months SUBSISTEM IMPORT 12.1% 64.6 mron 9 months

8 2. OPERATING RESULTS 2.4 PROFITABILITY OF THE TRANSPORT SUBSYSTEMS 9 months 2017 / 9 months 2016 DOMESTIC SUBSYSTEM IMPORT SUBSYSTEM 17.2% 16.4% 26.9% 35.4% 2,783 2,670 38, Operating Margin (%) 2,452 2,340 Total transported quantities (thousand tons) Transport Result (mron) Transport Expenses (mron) Transport Revenues (mron) months months months months 2017 Transport Profit 8.7% Transport Revenues 4.2% Transport Expenses 3.3% Operating Margin p.p. 8 Transport Profit 47.4% Transport Revenues 12.1% Transport Expenses 0.9% Operating Margin p.p.

9 2. OPERATING RESULTS 2.5 TURNOVER - CLIENTS 9 months 2017 / 9 months 2016 TURNOVER - CLIENTS (mron) SHARE IN TURNOVER (%) CLIENTS 9 months months 2017 VARIATION abs. % % 1.3% 18.7% 15.7% % % 80.7% 83.0% OTHER CLIENTS % TOTAL TURNOVER % The financial statements at 9 months 2017 have not been audited and have not been revised 9 months 2016 Turnover (mron) Other clients Petrotel Lukoil OMV Petrom 9 months

10 3. FINANCIAL RESULTS 3.1 RESULTS FROM THE OPERATING AND FINANCIAL ACTIVITY ACHIEVED 9 months 2017 / BUDGET 9 months 2017 / ACHIEVED 9 months 2016 Indicators (mron) BUDGET ACHIEVED 9 months 9 months Variation abs. % Indicators (mron) ACHIEVED 9 months 2016 ACHIEVED 9 months 2017 Variation abs. % Operating Revenues, o/w: % Transport Revenues % Operating Expenses % EBIT (operating profit) % Amortization % EBITDA % Financial Result % EBT (gross profit) % NET PROFIT % Operating Revenues, o/w: % Transport Revenues % Operating Expenses , % EBIT (operating profit) % Amortization % EBITDA ,5 9,9% Financial Result % EBT (gross profit) % NET PROFIT % CONCLUSION: Within the first nine months of 2017, EBIT (the operating profit) registered 19.7% increase (11.9 mron) as compared to budget provisions, due to: The increase of the operating revenues by 2.5% (7.4 mron); The decrease of the operating expenses by 1.9% (-4.5 mron). CONCLUSION: Within the first nine months of 2017, EBIT (the operating profit) registered 10.9% increase (7.1 mron) as compared to 9 months 2016, due to: The increase of the operating revenues by 0.9% (2.7 mron); The decrease of the operating expenses by 1.8% (-4.4 mron). The financial statements at 9 months 2017 have not been audited and have not been revised 10

11 3. FINANCIAL RESULTS 3.2 OPERATING EXPENSES ACHIEVED 9 months 2017 / BUDGET 9 months 2017 / ACHIEVED 9 months 2016 BUDGET ACHIEVED OPERATING 9 months 9 months VARIATION EXPENSES mron % ACHIEVED ACHIEVED OPERATING 9 months 9 months VARIATION EXPENSES mron % Share of main types of expenses in total operating expenses Share of main types of expenses in total operating expenses BUDGET ACHIEVED INDICATOR 9 months 9 months VARIATION Personnel 35.5% 35.7% +0.2 p.p. Rail Transport Services 16.9% 17.8% +0.9 p.p. Modernization Quota 15.7% 16.6% +0.9 p.p. Amortization 14.0% 14.2% +0.2 p.p. Oil Royalty 8.7% 9.1% +0.4 p.p. Other Expenses 9.2% 6.6% -2.6 p.p. ACHIEVED ACHIEVED INDICATOR 9 months 9 months VARIATION Personnel 34.7% 35.7% +1.0 p.p. Rail Transport Services 18.1% 17.8% -0.3 p.p. Modernization Quota 16.9% 16.6% -0.3 p.p. Amortization 12.9% 14.2% +1.3 p.p. Oil Royalty 9.0% 9.1% +0.1 p.p. Other expenses 8.4% 6.6% -1.8 p.p. The financial statements at 9 months 2017 have not been audited and have not been revised 11

12 Operating Revenues Operating Expenses EBITDA Amortization EBIT Financial Result EBT Income Tax Net Profit Operating Revenues Operating Expenses EBITDA Amortization EBIT Financial Result EBT Income Tax Net Profit 3. FINANCIAL RESULTS 3.3 EBITDA EVOLUTION 9 months months months 2016 mron 9 months ,2 216,1 The financial statements at 9 months 2017 have not been audited and have not been revised 12

13 mron Cash flows out of operating activities (CFO) direct method 9 months months 2017 VARIATION + Proceeds from services supply % + Proceeds from interests related to bank investments % + Other proceeds % - Payments to the goods and services suppliers (88.2) (84.8) 3.8% - Payments to and on behalf of the employees (79.1) (80.8) 2.1% - VAT payments (37.2) (37.7) 1.7% - Income tax payments (10.9) (11.7) 7.3% - Other payments related to operating activities (27.6) (32.0) 15.9% A Net cash from operating activities % Cash flows from investment activities: + Proceeeds from sale of tangible assets Proceeds from modernization quota % + Proceeds from short-term financial investments % + Proceeds from interests related to government securities % - Payments for purchase of tangible assets (40.3) (27.8) 31.2% - Payments for purchase of short-term investment (172.1) (74.1) 57.0% B Net cash from investment activities % Net cash from financing activities 4. CASH FLOW 9 months 2017 / 9 months Proceeds from dividends tranferred to Depozitarul Central % - Dividends paid (60.4) (139.3) 130.3% C Net cash flow from financing activities % Net increase of cash and cash equivalents r=a+b+c=d2-d % D1 Cash and cash equivalents at the beginning of the period % D2 Cash and cash equivalents at the end of the period % Government securities as government bonds and treasury bills % Total cash at the end of the period % The financial statements at 9 months 2017 have not been audited and have not been revised 13 1 The modernization quota is included in the transport tariff and is being acknowledged in the moment of collection in the profit and loss account at the Other expenses position.

14 5. FINANCIAL INDICATORS INDICATOR BUDGET 9 months 2017 ACHIEVED 9 months 2017 Achievement rate% In the Administration Plan have been established the annual performance indicators with the following objectives: PERFORMANCE INDICATORS EBITDA (mron) % Operating expenses (% Turnover) Labour productivity (RON/employee) INDICATOR OPERATING INDICATORS BUDGET 9 months 2017 ACHIEVED 9 months 2017 Total transported quantities (thousand tons) % Operating expenses (RON/ton) % FINANCIAL INDICATORS Operating revenues (mron) % Operating expenses (mron) % Operating profit margin (% operating income) 87.5% 83.7% 104.4% % Number of technical breakdowns % Visibility at BSE 100% 100% 100% 20.1% 23.5% p.p. Net profit margin (% total revenues) 17.4% 20.3% p.p. EBIT (mron) % EPS (net profit /share) % EBITDA growth by 2.5% annually; The decrease of share in the operating expenses in the turnover by 1.5%; Increase of labour productivity by 3%; Decrease of the number of technical breakdowns by 4%; The increase of visibility at BSE, respectively the conservation of the company s position in Top 25 of issuers after capitalization. Within the first nine months of 2017, the performance indicators registered values above the annual targets proposed by the Administration Plan, as follows: The indicator EBITDA has registered an increase by 12.5% mainly due to the increase of the operating profit by 19.7%; The decrease of operating expenses in the turnover by 3.8 p.p. as compared to the planned value, generated by the increase in turnover by 2.5% and reduction of operating expenses by 2.0% as compared to the budgeted level; The labour productivity has registred an increase by 2.8% achieved out of operating revenues increasing by 2.5% and from the decrease of the number of personnel by 9 persons; CONPET ranks 17 in Top 25 issuers according to market capitalization. During the 9 months of 2017, three analysis reports were issued by two top intermediaries. The number of technical failures has been estimated at approx. 86%. The financial statements at 9 months 2017 have not been audited and have not been revised 14 The overall performance of performance indicators over the period was %.

15 6. INVESTMENTS mron INVESTMENTS SCHEDULED IN 2017 IMPORTANT INVESTMENT OBJECTIVES Pipeline Replacements Safe Disposal Works Modernization and Monitoring of the Cathodic Protection System Pilot system for the detection and localisation of product leaks from the major pipelines system Tanks modernization 15

16 7. STOCK PERFORMANCE 7.1 LATEST PROGRESS AND CORPORATE EVENTS The share price evolution in the last 15 months (RON) vs. BET index (rebased) Stock performance in the last 12 months: CONPET: % BET index: % CONPET shares volume BET (rebased) Market Capitalization Cover achieved by analysts Sep Sep Ranks 17 in Top Capitalization BVB Financial analyst (Company) Recommendation Last report Stock price : 73,8 RON Stock price: 105 RON Mihaela Podgorski (SWISS CAPITAL) HOLD January 23, 2017 Market Capitalization: 639 mron Market Capitalization: 909 mron Lucian Albulescu (WOOD&CO.) HOLD Target Price: RON February 8, mron 16 Lucian Albulescu (WOOD&CO.) HOLD Target Price: 108 lei June 29, 2017

17 7. STOCK PERFORMANCE 7.2 COTE SHARE EVOLUTION VS. MARKET INDICES (REBASED) WHERE IS INCLUDED COTE BET-BK (rebased) BET-NG (rebased) BETPlus (rebased) BET-TR (rebased) BET-XT (rebased) BET-XT-TR (rebased) Dividends granted (RON/share) Top dividends distributed by the companies for year 2016 (RON) S.N.T.G.N. TRANSGAZ S.A. PRACTIC SA Bucuresti CONPET SA Ploiesti CONPET S.A. STK Emergent S.N.G.N. ROMGAZ S.A. UNIVERS SA Rm. Valcea C.N.T.E.E. TRANSELECTRICA BUCUR OBOR SA BUCURESTI GASTRONOM SA BUZAU UL SA MEDIAS NAPOTEX SA CLUJ 24 IANUARIE SA PLOIESTI ,

18 January 26, 2017 Publication of the preliminary annual financial results 2016 March 03, 2017 The Bucharest Stock Exchange announced their decision to include CONPET S.A. company in BET and BET-TR indices 7. STOCK PERFORMANCE 7.3 RECENT AND FUTURE EVENTS May 11, 2017 The Bucharest Stock Exchange published the second edition of the White Paper of communication of the listed companies, CONPET S.A. obtaining a scoring of 9.5 out of 10. June 22, 2017 CONPET S.A. joined the project Investing Romania, which promotes the companies applying the highest corporate governance standards in communication with the investors. October 25, 2017 CONPET S.A. announces the distribution and payment of dividends in amount of 85 million RON related to the distribution of certain amounts from reserves representing own financing sources and from the retained earnings January 27, 2017 CONPET S.A. signed with OMV Petrom S.A. the 2017 transport contract (271 mron) April 26, 2017 The annual OGMS approved the administrators report and the financial statement for the year 2016 of CONPET S.A. June 8, 2017 Market release for the distribution of 2016 related dividends: RON/share; ex-date; registration date date of payment. October 9, 2017 Bucharest Stock Exchange publishes the 3 rd edition of the Whitebook on Communication of Listed Companies. Following the assessment made, the company CONPET S.A. obtained one of the highest scores, respectively 9.75 out of 10 November 9, 2017 CONPET S.A. wins the prize for the highest dividend yield at the BSE awarded by Topul Național al Firmelor 18

19 7. STOCK PERFORMANCE 7.4 CONPET S.A. / TOPUL NAȚIONAL AL FIRMELOR The company CONPET S.A. was present, this year as well, at the Gala event Topul Național al Firmelor, organized on November 9, by the Romanian Chamber of Industry and Trade. CONPET ranked among the most important winners of the Gala, being awarded the trophy The highest dividend yield at the BSE, for business excellence. Moreover, the company CONPET S.A. also ranked second, as services provider, at the category Very Big Enterprises - Pipeline Transport. Topul Național al Firmelor, having reached the 24 th edition, awards the proficient companies in 7 activity areas: industry, services, trade, tourism, researchdevelopment and high-tech, agriculture, forestry and fishing, construction. 19

20 8. ANNEXES

21 The financial Statements at 9 months 2017 have not been audited and have not been revised 21 mron PROFIT AND LOSS ACCOUNT 9 months 2017 / 9 months months months 2017 VARIATION Q Q Q Sales revenues % Other operating revenues % out of which rev. from modernization quota % TOTAL OPERATING REVENUES % Inventories Expenses (4.7) (4.7) 0.3% (1.5) (1.7) (1.5) Outside expenses energy and water (6.8) (7.1) 4.1% (3.1) (2.1) (1.9) Personnel expenses (83.2) (84.1) 1.0% (24.8) (32.8) (26.5) Value adjustments on tangible and intangible assets (31.0) (33.4) 7.7% (11.1) (11.2) (11.1) Current assets adjustments (0.1) Third party expenses (77.9) (74.3) 4.7% (24.3) (25.1) (24.9) Other operating expenses (modernization quota expenses. etc.) (46.7) (41.6) 10.9% (13.3) (14.5) (13.8) Provisions adjustments % (0.7) TOTAL OPERATING EXPENSES % OPERATING RESULT % Operating profit margin (% in turnover) 23.1% 25.6% p.p 24.3% 25.0% 27.4% Financial revenues % Financial expenses (0.07) (0.03) 54.1% (0.01) (0.01) (0.01) FINANCIAL RESULT % GROSS RESULT % Income tax expenses (11.2) (11.8) 5.4% (3.5) (3.9) (4.4) NET RESULT % Net profit margin (% in turnover) 20.0% 22.3% p.p 21.5% 21.8% 23.6% EPS (net profit/no. of shares) % EBITDA % EBITDA margin (% turnover) 34.0% 37.4% p.p. 36.4% 36.8% 39.0%

22 ACCOUNTING BALANCE 9 months 2017 mron September 30, 2017 June 30, 2017 March 31, 2016 December 31,2016 Tangible assets Non-tangible assets Financial investments TOTAL FIXED ASSETS Inventories Trade receivables and other receivables Short-term investments Cash and cash equivalents Prepaid expenses TOTAL CURRENT ASSETS TOTAL ASSETS Share capital o/w Subscribed and paid-up share capital Legal Reserves Revaluation Reserves Other Reserves Retained Earnings Result for the period Profit Allocation (1.7) TOTAL EQUITY Investment Subsidies Prepaid Revenues TOTAL PREPAID REVENUES Deferred income tax liabilities Long-term provisions TOTAL LONG-TERM LIABILITIES Trade liabilities Current income tax Other liabilities Short-term provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES The financial Statements at 9 months 2017 have not been audited and have not been revised 22

23 CONPET BUSINESS Company s Brief Overview Operator of the national crude oil, rich gas and condensate transport network; Natural monopoly position on the Romanian market; 30 years concession agreement to operate the transport network, concluded, in July 2002 with the National Agency for Mineral Resources; Core business includes: transport of crude oil, rich gas and condensate via the Domestic transport subsystem (75.8 % in turnover for 9 months 2017) Transport of crude oil via the Import subsystem from Oil Terminal, Constanta to two refineries in Romania (22.9% in turnover for 9 months 2017) Company s business is regulated by NAMR, which sets tariffs for: The transport of domestic crude oil, rich gas and condensate (last update in February 2016) Import crude transport (last update in February 2016) Shareholding Structure Ministry of Energy 58.72% Legal Persons 30.86% Transport Network Overview CONPET S.A. operates 3,800 km of pipelines with a total transport throughput of 18.5 million tons/year, the system being divided into three main subsystems: 1. Subsystem for domestic crude and condensate transport eases transport from the extraction fields to Petrobrazi, Arpechim and Petroltel Lukoil refineries; it is 1,540 km in length, 6.5 million tons/year transport throughput and 126k m3 storage capacity; 2. Subsystem for rich gas transport eases the products transport from the extraction fields to Petrobrazi and Arpechim refineries; it is 920 km in length, 0.2 million tons/year transport throughput; 3.Subsystem for imported crude transport, eases transport from Oil Terminal, Constanta to Petrobrazi, Arpechim, Petrotel Lukoil and Petromidia refineries; it is 1,350 km in length, 11.8 million tons/year transport throughput and 45k m3 storage capacity; For the railway transport of crude oil, condensate and rich gas to Petrobrazi and Lukoil refineries, CONPET has the following facilities: 12.7 km of railway, 13 loading/unloading ramps, 13 locomotives, 40 tank cars for crude, 29 tank cars for rich gas. This supporting infrastructure provides the transport services to OMV PETROM and LUKOIL refineries. Natural Persons 10.42%

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25 THE BOARD OF ADMINSTRATION Liviu ILAŞI Oil Engineer Director General/ Member of the Board of Administration since December 2012 Dan WEILER Independent adviser involved in several M&A, Capital Markets and Restructuring projects Chairman of the Board of Administration since November 2013 Cristiana CHIRIAC Jurist Member of the Board of Administration since April 2013 Roxana Elena GHEORGHE Economist Member of the Board of Administration since November 2013 Darius Dumitru MEŞCA Engineer Member of the Board of Administration since April 2013 Răzvan LEFTER Economist Radu BUGICĂ Economist Member of the Board of Administration since October 2013 Member of the Board of Administration since October

26 2015 CALENDAR FINANCIAR Thank you for your kind attention!