AB Klaipėdos nafta interim financial information

AB Klaipėdos nafta (hereinafter – KN, the Company) announces the unaudited financial results for the six months ended 30 June 2017.

• AB Klaipėdos nafta revenues for the first half of 2017 comprised EUR 52,341 thousand, 8.7 per cent less compared to the same period of 2016 (EUR 57,348 thousand), however, compared to the second half of 2016 (EUR 46,491 thousand), revenues of this year increased by 12.6 per cent.  
• Net profit of the Company for the six months of 2017 amounted to EUR 7,389 thousand, 37.0 per cent less compared to the first six months of 2016 (EUR 11,722 thousand). Net profit margin for the first half of 2017 comprised 14.1 per cent (6 months of 2016 – 20.4 per cent). Net profit for the first half of 2017 is 2.5 times higher than the net profit of the second half of 2016.
• Company’s EBITDA for the six months of 2017 amounted to EUR 15,207 thousand, i.e. 21.9 per cent less compared to the same period of 2016 (EUR 19,477 thousand), however, compared to the second half of 2016, EBITDA margin increased 69.6 per cent. EBITDA margin for the first half of 2017 was 29.1 per cent (first half of 2016 – 34.0 per cent).

Management comment:

Performance results for the first half of 2017 are in line with the Company’s objectives and expectations. Through our consistent work and performance results, we made a solid foundation for achieving strategic goals. Experience shows that having a clear strategy and consistently implementing it is possible to create sustainable results and more value for our partners as well as shareholders.

On the one side, due to uncertainty of the global oil transhipment market, political decisions impact for the transit cargos volumes the Company has started to seek of the alternative transit cargos to maintain required portfolio. Certain efforts were concentrated to optimize utilization of the oil products transhipment capacities. In April when Russia and Belorussia have agreed for the renewal of crude oil supply and Belorussia refineries have gradually returned to the regular refining volumes transhipment volumes has risen in KN as well.

Total transhipment in KN’s oil terminals of Klaipėda and Subačius in the first half of 2017 comprised 3.3 million tons of petroleum products or by 26.3 per cent less compared to the same period of 2016 when 4.4 million tons had been transhipped. The transhipment of oil products in the first half of 2017, compared to the second half of 2016, increased by 12.0 per cent.

On the other side, in order to increase oil terminal’s activity volumes, its flexibility and adoption to the market needs we implement investment projects set out in the strategy of the Company and part of them already started giving results. In the beginning of this year auto carriers loading unit was modernized that enabled to increase loading volumes through this loading unit by 52 per cent and to conclude long term contracts.

In the LNG terminal of the Company one of the major Company’s goals is consistently fulfilled – assurance of effective LNG terminal operation and goal to reduce LNG terminal costs for the gas consumers. LNG terminal regasification volume and reloading in the first half of 2017 was 4.9 million MWh or less by 47.1 per cent compared to the same period of 2016 when 9.2 million MWh had been regasified. Compared the first half of 2017 to the second half of 2016, decrease comprised 9.9 per cent. The volume of regasification has decreased, however in the second quarter of 2017, 70 per cent of total gas consumption of Lithuania was supplied through the Klaipeda LNG terminal. We constantly do our best to create as much value as possible for our terminal users by creating an option of choice from who and in what terms acquire gas in the open market and to supply them to the gas consumers.

KN Oil terminals’ revenues in 2017 have reduced in connection with the transhipment volumes decrease and for the first half of this year comprised EUR 16.2 million, i.e. reduced by 25.7 per cent compared to the same period of 2016. However revenues for the first half of 2017 increased by 33.0 per cent compared with the second half of 2016 (EUR 12.2 million).

The revenues of the KN LNG terminal for the reporting period comprised EUR 35.0 million when in the same period of 2016 – EUR 34.1 million.

Despite the fact that activity volumes and revenues have decreased in a light of record 2016, KN activity in the first half of 2017 ensures stable, effective activity results that allow to expect a stable performance in the future.

Enclosed:

1. Interim condensed Financial Statements and interim report of AB Klaipėdos nafta for the six months period ended 30 June 2017.
2. Presentation of the financial result for the 6 months period of 2017.

         Marius Pulkauninkas, Chief Financial Officer, tel. +370 46 391763