Maroussi, 16 May 2024
First Quarter 2024 financial results
Strong profitability driven by positive refining environment, operational performance and exports - Continued progress in strategic initiatives implementation
HELLENiQ ENERGY Holdings S.A. ("Company") announced its 1Q24 financial results, with Adjusted EBITDA amounting to €338m and Adjusted Net Income coming in at €164m.
1Q24 Reported EBITDA stood at €350m, with Reported Net Income amounting to €179m, higher y-o-y, mainly due to the impact of international prices on inventory valuation.
The results were primarily shaped by the favorable international refining environment, the improved operation of our refineries, with increased units' availability, the particularly strong exports, reaching a 3-year historical high, and the improved contribution from the petrochemicals and RES businesses.
Downstream production in 1Q24 increased by 5% y-o-y to 3.8m MT, the highest since 1Q20. This performance led to increased sales volume across all markets, reaching 4m MT (+8% y-o-y), with exports accounting for 62% of total.
Strategy implementation - Vision 2025
During 1Q24, the Group continued to implement its strategy across all operations, undertaking initiatives that are expected to strengthen our profitability in the medium term, while improving our environmental footprint.
In our core business, we focus on operational excellence, as well as emissions reduction, with projects that contribute to energy autonomy and efficiency and the implementation of Carbon Capture, Utilization and Storage (CCUS) technologies. At the same time, the expansion of the polypropylene production plant is also in progress. In terms of the development of alternative fuels with a low carbon footprint, a Hydrotreated Vegetable Oil (HVO) co-processing unit is being developed and at the same time, we are assessing potential investments in the production of Sustainable Aviation Fuel (SAF), green hydrogen, and synthetic fuels.
In Fuels Marketing, our objective is to improve offered services by leveraging our extensive network and technology. We are focusing on rationalizing the domestic market network, increasing the share of company-operated petrol stations, as well as strategically expanding our international footprint. At the same time, we work on improving our sales mix, with an increased contribution from premium products and non-fuel sales, which has already yielded tangible results.
The commencement of commercial operations by EKO Energy in Cyprus earlier this year, has further enhanced the Group's successful presence in the country. EKO Energy aspires to cater to the energy requirements of eligible commercial and industrial consumers, serving as the first fully integrated and vertically aligned energy provider in Cyprus. EKO Energy leverages on EKO Cyprus' leading position in the fuel market, facilitated by its extensive retail network and allowing for an extended product portfolio, incorporating electricity generation from RES. The total capacity of the Group's operational RES projects in Cyprus currently accounts for c.15% of PVs participating in the local electricity market, with expectations for further growth in the coming years.
In our RES business, HELLENiQ RENEWABLES has been actively expanding its portfolio, reaching a total installed capacity of 381 MW by the end of 1Q24. Furthermore, there are currently 0.7 GW of projects under construction or in advanced development stages. It is worth noting that the overall portfolio of projects under development amounts to 4.3 GW. The Company's objective is to operate RES projects with a capacity of over 1 GW by 2025 and more than 2 GW by 2030.
In the E&P business, the processing of 3D seismic data in offshore areas, specifically the "Ionian", "Block 2" and "Block 10" areas, has been successfully concluded. Additionally, the processing of 2D seismic data in two offshore areas in Crete has been completed, while their interpretation is in progress. In the "Southwest of Crete" offshore area, a 3D seismic acquisition has also been completed, followed by data processing and interpretation.
Slightly higher crude oil prices - Reduced benchmark refining margins
Crude oil (Brent) prices in 1Q24 were slightly higher y-o-y, at $83/bbl. Accordingly, Euro strengthened slightly against the US dollar, averaging 1.09 vs 1.07 in 1Q23.
In 1Q24, natural gas and electricity prices continued to decline, by around 50% y-o-y. Accordingly, EUAs recorded a decrease of 31%, on average, compared to the corresponding period last year.
Refining margins declined from the particularly high levels of 1Q23, but remained higher than the most recent five-year cycle (2015-2019), prior to the pandemic. Our refineries' system benchmark margin averaged $8.8/bbl in 1Q24, compared to $10.6/bbl in 1Q23.
Increased demand in the domestic market
Domestic market demand reached 1.6m MT in 1Q24, +2% y-o-y, driven by a +4% y-o-y increase in the automotive fuel consumption. Aviation and marine fuel demand increased by 19% and 9% y-o-y respectively.
Balance sheet and capital expenditure
Operating cash flows in 1Q24 amounted to €83m, despite the repayment of the last installments of the solidarity contribution. Additionally, there was a temporary working capital increase, due to the disruption in trade flows in the Middle East, as a result of the ongoing geopolitical events in the Red Sea. Capital expenditure amounted to €93m, primarily directed to refinery maintenance and RES capacity expansion.
Net Debt stood at €1.75bn, slightly up q-o-q, with Gearing (Net Debt to Capital Employed) unchanged, at 36%.
In addition, bank loan refinancing amounting to €1bn is expected to be completed in the coming weeks, improving commercial terms and interest cost, and reducing dependence on base interest rates volatility. Additionally, the refinancing will extend the overall maturity profile by one year. The Group is currently considering its options around the €600m Eurobond, which matures in October 2024.
Andreas Shiamishis, Group CEO, commented on the results:
"2024 started on a positive note, reporting strong financial performance, with improved refinery products sales (+8%) and Adj. EBITDA profitability of €338m. In addition to the positive refining environment, the key performance drivers include high exports, improved refinery operations and international business expansion.
Strategically, we are progressing with the implementation of "Vision 2025", which aims to strengthen our core activities and establish a new, material pillar in the renewable energy sector. At the same time, we remain committed to investing in operational excellence and the development of our human capital.
Considerable emphasis has been placed on expanding our operations in international markets, either through growing local footprint or through increasing exports and international trading business. In RES, we are implementing our growth strategy but remain cautious, as challenges related to grid constraints and storage technologies remain unresolved. Nevertheless, we are maturing our portfolio, which currently stands at 4.3 GW, and have visibility to 1 GW being operational within the next 18 months.
In terms of 2Q24 prospects, refining margins, albeit lower compared to 1Q24, are still on positive ground. Domestic market demand remains strong, predominantly for auto-fuels, while the outlook for the tourist season looks promising."
Key highlights and contribution for each of the main business units in 1Q24 were:
Refining, Supply & Trading
- Refining, Supply & Trading Adjusted EBITDA came in at €289m, supported by increased sales (+8%) due to improved availability and higher production from the 3 refineries, high refining margins and system overperformance.
- Production reached 3.8m MT, +5% y-o-y, while contribution of high value-added products in the product mix was maintained above 80%.
Petrochemicals
- 1Q24 Adjusted EBITDA improved by 56% y-o-y to €23m due to higher sales and a recovery in polypropylene (PP) margins.
Marketing
- Domestic Marketing recorded a 2% increase in sales volume, with improved market shares and greater contribution from premium products for yet another quarter. Aviation sales increased by 21%, while bunkering sales remained stable y-o-y. Profitability improved, supported by inventory valuation gains. However, regulatory constraints on the retail gross margin continue to remain in place.
- International Marketing recorded improved performance, with increased retail sales, higher market shares and a greater contribution from premium products. Profitability was primarily affected by costs associated with network expansion.
Renewables
- RES EBITDA amounted to €11m in 1Q24. Power generation remained at the same levels as last year, while the installed capacity increased to 381 MW (+40 MW compared to the corresponding period in the previous year), as at the end of 1Q24 26 MW of PV parks were successfully installed in Cyprus.
Associate companies
- In 1Q24 the contribution from associate companies, which are consolidated using the equity method, was negative and came in at €-4m, compared with €31m in 1Q23.
- Elpedison's profitability was adversely affected by the reduced availability of the Thisvi power plant and the decrease in electricity prices in the wholesale market. However, it is worth noting that The Thisvi plant resumed its normal operations earlier than scheduled, towards the end of 1Q24.
HELLENiQ ENERGY Holdings S.A.
Key consolidated financial indicators for 1Q 2024
(prepared in accordance with IFRS)
€ million |
1Q23 |
1Q24 |
% Δ |
P&L figures |
|
|
|
Refining Sales Volumes ('000 ΜΤ) |
3,688 |
3,987 |
8% |
Sales |
3,113 |
3,278 |
5% |
EBITDA |
279 |
350 |
25% |
Adjusted EBITDA 1 |
404 |
338 |
-16% |
Operating Profit |
202 |
268 |
33% |
Net Income |
155 |
179 |
16% |
Adjusted Net Income 1 |
252 |
164 |
-35% |
Balance Sheet Items |
|
|
|
Capital Employed |
4,331 |
4,887 |
13% |
Net Debt |
1,454 |
1,750 |
20% |
Gearing (ND/ND+E) |
34% |
36% |
+2 pps2 |
Note 1: Adjusted for inventory effects and other non-operating/one-off items, as well as the IFRS accounting treatment of the EUAs deficit.
Note 2: pps stands for percentage points
Further information:
Investor Relations
8A Chimarras str., 151 25 Maroussi, Greece
Tel: 210-6302526, 210-6302305
Email: ir@helleniq.gr
Interim Condensed Consolidated Statement of Financial Position
|
|
As at |
|
|
Note |
31 March 2024 |
31 December 2023 |
Αssets |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment |
10 |
3,643,111 |
3,643,045 |
Right-of-use assets |
11 |
231,605 |
232,189 |
Intangible assets |
12 |
390,235 |
333,692 |
Investments in associates and joint ventures |
7 |
401,663 |
404,743 |
Deferred income tax assets |
|
99,356 |
95,546 |
Investment in equity instruments |
3 |
471 |
514 |
Derivative financial instruments |
|
- |
746 |
Loans, advances and long term assets |
13 |
60,256 |
57,771 |
|
|
4,826,697 |
4,768,246 |
Current assets |
|
|
|
Inventories |
14 |
1,706,128 |
1,472,536 |
Trade and other receivables |
15 |
909,275 |
880,986 |
Income tax receivable |
|
66,709 |
66,148 |
Derivative financial instruments |
|
2,194 |
930 |
Cash and cash equivalents |
16 |
479,302 |
919,457 |
|
|
3,163,608 |
3,340,057 |
Total assets |
|
7,990,305 |
8,108,303 |
|
|
|
|
Equity |
|
|
|
Share capital and share premium |
17 |
1,020,081 |
1,020,081 |
Reserves |
18 |
304,293 |
291,010 |
Retained Earnings |
|
1,746,439 |
1,568,384 |
Equity attributable to the owners of the parent |
|
3,070,813 |
2,879,475 |
|
|
|
|
Non-controlling interests |
|
66,991 |
66,916 |
|
|
|
|
Total equity |
|
3,137,804 |
2,946,391 |
|
|
|
|
Liabilities |
|
|
|
Non- current liabilities |
|
|
|
Interest bearing loans and borrowings |
19 |
1,153,836 |
1,388,010 |
Lease liabilities |
|
183,393 |
182,335 |
Deferred income tax liabilities |
|
176,434 |
174,063 |
Retirement benefit obligations |
|
177,265 |
176,305 |
Derivative financial instruments |
|
2,566 |
1,541 |
Provisions |
|
33,815 |
33,835 |
Other non-current liabilities |
|
34,975 |
25,348 |
|
|
1,762,284 |
1,981,437 |
Current liabilities |
|
|
|
Trade and other payables |
20 |
1,745,561 |
1,598,726 |
Derivative financial instruments |
|
- |
13,333 |
Income tax payable |
|
236,674 |
285,570 |
Interest bearing loans and borrowings |
19 |
1,075,518 |
1,158,495 |
Lease liabilities |
|
30,760 |
32,220 |
Dividends payable |
25 |
1,704 |
92,131 |
|
|
3,090,217 |
3,180,475 |
Total liabilities |
|
4,852,501 |
5,161,912 |
Total equity and liabilities |
|
7,990,305 |
8,108,303 |
Interim Condensed Consolidated Statement of Comprehensive Income
|
|
For the period ended |
|
|
Note |
31 March 2024 |
31 March 2023 |
|
|
|
|
Revenue from contracts with customers |
4 |
3,278,481 |
3,113,343 |
Cost of sales |
|
(2,869,817) |
(2,778,127) |
Gross profit / (loss) |
|
408,664 |
335,216 |
|
|
|
|
Selling and distribution expenses |
|
(100,756) |
(93,808) |
Administrative expenses |
|
(43,784) |
(40,483) |
Exploration and development expenses |
|
(1,387) |
(4,244) |
Other operating income and other gains |
5 |
8,504 |
7,403 |
Other operating expense and other losses |
5 |
(3,436) |
(2,551) |
|
|
|
|
Operating profit / (loss) |
|
267,805 |
201,533 |
|
|
|
|
Finance income |
|
3,439 |
1,326 |
Finance expense |
|
(33,444) |
(32,124) |
Lease finance cost |
|
(2,436) |
(2,325) |
Currency exchange gains / (losses) |
6 |
5,824 |
558 |
Share of profit / (loss) of investments in associates and joint ventures |
7 |
(3,650) |
31,289 |
|
|
|
|
Profit / (loss) before income tax |
|
237,538 |
200,257 |
|
|
|
|
Income tax (expense) / credit |
8 |
(58,270) |
(44,491) |
|
|
|
|
Profit / (loss) for the period |
|
179,268 |
155,766 |
|
|
|
|
Profit / (loss) attributable to: |
|
|
|
Owners of the parent |
|
179,172 |
155,276 |
Non-controlling interests |
|
96 |
490 |
|
|
179,268 |
155,766 |
|
|
|
|
Other comprehensive income / (loss): |
|
|
|
Other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax): |
|
|
|
Changes in the fair value of equity instruments |
18 |
(34) |
- |
|
|
(34) |
- |
Other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax): |
|
|
|
Share of other comprehensive income / (loss) of associates |
18 |
570 |
(1,117) |
Fair value gains / (losses) on cash flow hedges |
18 |
12,709 |
(921) |
Currency translation differences and other movements |
18 |
17 |
(782) |
|
|
13 |
(3) |
|
|
|
|
Other comprehensive income / (loss) for the period, net of tax |
|
13 |
(3) |
|
|
|
|
Total comprehensive income / (loss) for the period |
|
193 |
153 |
|
|
|
|
Total comprehensive income / (loss) attributable to: |
|
|
|
Owners of the parent |
|
192,455 |
152,572 |
Non-controlling interests |
|
75 |
374 |
|
|
193 |
153 |
|
|
|
|
Εarnings / (losses) per share (expressed in Euro per share) |
9 |
0.59 |
0.51 |
Interim Condensed Consolidated Statement of Cash Flows
|
|
For the period ended |
|
|
Note |
31 March 2024 |
31 March 2023 |
Cash flows from operating activities |
|
|
|
Cash generated from operations |
21 |
197,298 |
615,161 |
Income tax (paid) / received |
|
(114,148) |
(2,365) |
Net cash generated from/ (used in) operating activities |
|
83,150 |
612,796 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment & intangible assets |
10,12 |
(93,124) |
(45,617) |
Proceeds from disposal of property, plant and equipment & intangible assets |
|
326 |
97 |
Acquisition of share of associates and joint ventures |
|
1 |
(1) |
Cash and cash equivalents of acquired subsidiaries |
|
1,639 |
- |
Grants received |
|
10,000 |
1 |
Interest received |
|
3,439 |
1,326 |
Prepayments for right-of-use assets |
|
- |
(27) |
Dividends received |
|
- |
31,715 |
Net cash generated from/ (used in) investing activities |
|
(77,719) |
(12,507) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Interest paid on borrowings |
|
(27,595) |
(26,484) |
Dividends paid to shareholders of the Company |
25 |
(90,425) |
(75,779) |
Proceeds from borrowings |
19 |
205,000 |
435,211 |
Repayments of borrowings |
19 |
(525,397) |
(855,611) |
Payment of lease liabilities - principal |
|
(10,634) |
(9,192) |
Payment of lease liabilities - interest |
|
(2,436) |
(2,325) |
Net cash generated from/ (used in) financing activities |
|
(451,487) |
(534,180) |
|
|
|
|
Net increase/ (decrease) in cash and cash equivalents |
|
(446,056) |
66,109 |
|
|
|
|
Cash and cash equivalents at the beginning of the year |
16 |
919,457 |
1,052,618 |
Exchange (losses) / gains on cash and cash equivalents |
|
5,901 |
(278) |
Net increase / (decrease) in cash and cash equivalents |
|
(446,056) |
66,109 |
Cash and cash equivalents at end of the period |
16 |
479,302 |
1,118,449 |
Interim Condensed Statement of Financial Position of the Company
|
|
As at |
|
|
Note |
31 March 2024 |
31 December 2023 |
Assets |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment |
|
668 |
673 |
Right-of-use assets |
11 |
8,870 |
9,155 |
Intangible assets |
|
48 |
63 |
Investments in subsidiaries, associates and joint ventures |
7 |
1,837,615 |
1,785,115 |
Deferred income tax assets |
|
8,454 |
8,416 |
Loans, advances and long term assets |
13 |
59,045 |
242,249 |
|
|
1,914,700 |
2,045,671 |
Current assets |
|
|
|
Trade and other receivables |
15 |
207,774 |
26,101 |
Income tax receivables |
|
2,625 |
2,625 |
Cash and cash equivalents |
|
6,016 |
150,528 |
|
|
216,415 |
179,254 |
Total assets |
|
2,131,115 |
2,224,925 |
|
|
|
|
Equity |
|
|
|
Share capital and share premium |
17 |
1,020,081 |
1,020,081 |
Reserves |
18 |
292,638 |
292,638 |
Retained Earnings |
|
786,825 |
784,155 |
Total equity |
|
2,099,544 |
2,096,874 |
|
|
|
|
Liabilities |
|
|
|
Non-current liabilities |
|
|
|
Lease liabilities |
|
6,591 |
6,973 |
|
|
6,591 |
6,973 |
Current liabilities |
|
|
|
Trade and other payables |
|
19,600 |
24,597 |
Income tax payable |
|
1,128 |
1,928 |
Lease liabilities |
|
2,546 |
2,422 |
Dividends payable |
25 |
1,706 |
92,131 |
|
|
24,980 |
121,078 |
Total liabilities |
|
31,571 |
128,051 |
Total equity and liabilities |
|
2,131,115 |
2,224,925 |
Interim Condensed Statement of Comprehensive Income of the Company
|
|
For the period ended |
|
|
Note |
31 March 2024 |
31 March 2023 |
|
|
|
|
Revenue from contracts with customers |
|
8,660 |
7,457 |
Cost of sales |
|
(7,873) |
(6,779) |
Gross profit / (loss) |
|
787 |
678 |
|
|
|
|
Administrative expenses |
|
(1,443) |
(3,275) |
Other operating income and other gains |
5 |
4,664 |
3,686 |
Other operating expense and other losses |
5 |
(4,547) |
(2,820) |
Operating profit /(loss) |
|
(539) |
(1,731) |
|
|
|
|
Finance income |
|
4,060 |
4,584 |
Finance expense |
|
(4) |
(3) |
Lease finance cost |
|
(84) |
(93) |
Dividend income |
25 |
- |
126,081 |
Currency exchange gain / (loss) |
|
(2) |
- |
Profit / (loss) before income tax |
|
3,431 |
128,838 |
|
|
|
|
Income tax (expense) / credit |
8 |
(761) |
(1,236) |
|
|
|
|
Profit / (loss) for the period |
|
2,670 |
127,602 |
|
|
|
|
Other comprehensive income / (loss) for the year, net of tax |
|
- |
- |
|
|
|
|
Total comprehensive income / (loss) for the period |
|
2,670 |
127,602 |
Interim Condensed Statement of Cash Flows of the Company
|
|
For the period ended |
|
|
Note |
31 March 2024 |
31 March 2023 |
|
|
|
|
Cash flows from operating activities |
|
|
|
Cash generated from / (used in) operations |
21 |
(3,025) |
(10,880) |
Income tax (paid) / received |
|
(1,599) |
- |
Net cash generated from / (used in) operating activities |
|
(4,624) |
(10,880) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment & intangible assets |
|
- |
(18) |
Participation in share capital increase of subsidiaries, associates and joint ventures |
|
(52,500) |
(18,650) |
Loans and advances to Group Companies |
13 |
(2,500) |
(126,600) |
Interest received |
|
6,229 |
6,852 |
Dividends received |
|
- |
32,979 |
Net cash generated from / (used in) investing activities |
|
(48,771) |
(105,437) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Dividends paid to shareholders of the Company |
25 |
(90,425) |
(75,779) |
Payment of lease liabilities - principal, net |
|
(608) |
(578) |
Payment of lease liabilities - interest |
|
(84) |
(461) |
Net cash generated from / (used in) financing activities |
|
(91,117) |
(76,818) |
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
|
(144,512) |
(193,135) |
|
|
|
|
Cash and cash equivalents at the beginning of the period |
|
150,528 |
209,054 |
Net increase / (decrease) in cash and cash equivalents |
|
(144,512) |
(193,135) |
Cash and cash equivalents at end of the period |
|
6,016 |
15,919 |
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