REG - Helleniq Energy - 1st Quarter Results
16/05/2024 16:15
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RNS Number : 7903O Helleniq Energy Holdings S.A. 16 May 2024
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 pps(2)
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 (mailto: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 3,643,045
3,643,111
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 326 97
assets
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 (52,500) (18,650)
ventures
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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