Petroplus Announces Fourth Quarter and Full Year 2007 Results and Board Proposal of CHF 1 Per Share Dividend to Shareholders
Regulatory News:
Petroplus Holdings AG (SWX: PPHN) today reported net income from
continuing operations of $310.4 million, or $4.68 per share, and net
income from continuing operations of $74.1 million, or $1.82 per share
for the years ended December 31, 2007 and 2006, respectively. Net
income from continuing operations of $137.1 million, or $2.00 per
share, and a net loss from continuing operations of $3.2 million, or
$(0.07) per share was reported for the quarters ended December 31,
2007 and 2006, respectively. The financial and operational results for
the year ended December 31, 2007 are not comparable to the
corresponding period in 2006. Excluding prior period hedging activity,
2006 would have resulted in a net loss from continuing operations of
$108.5 million for the year.
For the year ended December 31, 2007, refining and marketing
EBITDA (refining and marketing "earnings before interest, taxes,
depreciation and amortization") was approximately $629 million. The
2007 refining and marketing EBITDA does not reflect a full year of
operations for our five refineries as operations were impacted by the
timing of acquisitions and significant planned and unplanned
maintenance at the refineries.
Commenting on the year, Thomas D. O´Malley, Petroplus´s Chairman
and Chief Executive Officer, said, "2007 was a transformational year
for Petroplus. We added two significant refineries, Coryton and
Ingolstadt, to our portfolio of assets, and essentially rebuilt the
BRC refinery to bring it up to our standards of safety and operational
reliability while improving its yield. While we have experienced
unplanned downtime at our refineries during the year, the contribution
of these refineries has exceeded our expectations and the true
earnings power of the five refinery assets is still to be seen in
2008. With all five of our refining assets and with the expected
acquisition of the French refineries early this year, Petroplus is in
a firm position to capitalize on the favourable market conditions we
see for 2008."
Regarding the pending Shell acquisitions, Robert Lavinia,
Petroplus´s President, said, "We expect to close on our announced
acquisition of the Petit Couronne and Reichstett refineries early in
the second quarter as planned. As part of the acquisition, we intend
to enter into a partial processing arrangement at the Petit Couronne
refinery with the seller, whereby Petroplus will process material
owned by Shell and provide the resulting products to Shell. Under the
terms of the arrangement, Shell will compensate Petroplus for the
processing of the raw material and related operating expenses through
December 2008. In 2009, post completion of the processing arrangement
we plan to operate the site as a combined lubes and traditional fuels
refinery. We are excited to bring these two refineries into our
portfolio and bring the expertise of the operational and other
professional staff to our group."
Looking forward at the market, Mr. O´Malley remarked, "The same
supply and demand fundamentals that have contributed to the favourable
markets for refiners over the last four years continue to remain in
play today. We expect to see the global supply of petroleum products
remaining relatively in balance with global demand. This will continue
to put pressure on the limited capacity cushion in place today. On the
supply side, we expect that continued project delays, changing fuels
specifications and utilization rates at or near sustainable maximums
will continue to put pressure on efforts to increase supply. On the
demand side, perhaps the largest variable is the potential impact of a
global recession on petroleum product demand. However, worldwide GDP
is expected to continue its trend of above average growth, lead by
developing regions such as India and China. If recessionary pressures
in the United States continue to develop there could be an impact to
demand in the region but U.S. petroleum product demand is less a
function of GDP, as the transportation sector in the United States is
already fully developed and will continue to need support, even
through a period of decreased demand. The growth in developing regions
is where we expect to see the meaningful impact of increased
transportation infrastructure and this will continue to support the
globally tight petroleum products market.
During 2007, despite the 50% increase in crude oil prices from the
start of 2007, the impact to global demand for petroleum products has
been minimal with demand growing approximately 1.7% in 2007 and
expected to remain relatively the same in 2008. Barring a severe
global recession, that impacts the robust economies of both China and
India, we believe that consumption growth will meet or outpace the
expected additions of refining capacity well into the start of the
next decade."
Commenting on the balance sheet at year end, Karyn F. Ovelmen,
Petroplus´s Chief Financial Officer, said, "During the fourth quarter
of 2007 our debt level climbed slightly due to temporary increases in
working capital partly related to builds in inventory, primarily at
the Coryton refinery as a result of the incident in October. We ended
the period with a net debt-to-net capitalization ratio at December 31
of approximately 34 percent. Today our working capital levels have
returned to more normalized levels. We ended the year with
approximately $63 million in cash, $1.3 billion of debt outstanding
and $2.5 billion of shareholders´ equity. We are in excellent
financial health and expect to fund our pending refinery acquisitions
of the French assets with a combination of cash on hand and debt. Post
acquisition, we expect the net debt-to-net capitalization to be below
40 percent. Our 2008 capital structure even post the Shell acquisition
will leave us in a solid position to continue our growth strategy."
Commenting on the continuous capital structure improvement in
2007, Ms. Ovelmen said, "In 2007 we exemplified our disciplined
capital strategy with the successful execution of the High Yield
Corporate Bond and Rights Offering in April of 2007 and the
significant working capital improvements made through the year. In
view of the extraordinary improvement in the company´s balance sheet
and the bright prospects for the future, Petroplus´s Board of
Directors intends to propose to shareholders for resolution, at the
Annual General Meeting in May 2008, a dividend of one Swiss Franc per
share. The payment of such dividend will be effected through a
reduction of the nominal share value. The dividend payment will likely
occur during the third quarter of this year. Petroplus´s Board
believes that the institution of a regular annual dividend is
important for our shareholders and, while modest at the start, our
goal is to grow the dividend over the coming years."
Throughput rates by refinery for the first quarter and full year
2008, including intermediate feedstocks, should average approximately
as follows: Coryton at 170,000 to 180,000 bpd for the first quarter
and 200,000 to 210,000 for the year; Ingolstadt at 90,000 to 95,000
bpd for the first quarter and 100,000 to 110,000 for the year; BRC at
90,000 to 100,000 bpd for the first quarter and 100,000 to 110,000 bpd
for the year; Cressier at 45,000 to 50,000 bpd for the first quarter
and 58,000 to 63,000 bpd for the year; and Teesside at 80,000 to
90,000 bpd for the first quarter and 90,000 to 95,000 bpd for the
year. Pending the successful completion of the acquisitions,
throughput rates at Petit Couronne are expected to be about 120,000 to
130,000 bpd and Reichstett at about 70,000 to 80,000 bpd for the year.
The Cressier refinery throughput for first quarter reflects planned
maintenance originally scheduled for the fourth quarter brought
forward. The BRC and Teesside refineries have scheduled maintenance in
the second quarter which is estimated to last about 30 days and 25
days, respectively.
The company´s conference call concerning the year end results will
be webcast live today, February 7, 2007, at 3:00 p.m. CET on the
investor relations section of the Petroplus Holdings AG website at
www.petroplusholdings.com.
Petroplus Holdings AG is the largest independent refiner and
wholesaler of petroleum products in Europe. Petroplus focuses on
refining and currently owns and operates five refineries across
Europe: the Coryton refinery on the Thames Estuary in the United
Kingdom, the Ingolstadt refinery in Ingolstadt, Germany, the Belgium
Refining Company refinery in Antwerp, Belgium, the Cressier refinery
in the canton of Neuchatel, Switzerland, and the Teesside refinery in
Teesside, United Kingdom. The refineries have a combined throughput
capacity of approximately 625,000 bpd. Petroplus has signed a letter
of intent to acquire the Petit Couronne and Reichstett refineries,
located in France, from Shell International Petroleum Company Limited.
The refineries have a total nameplate crude capacity of 239,000
barrels per day.
This press release contains forward-looking statements, including
the company´s current expectations with respect to future market
conditions, future operating results, the future performance of its
refinery operations, and other plans. Words such as "expects,"
"intends," "plans," "projects," "believes," "estimates," "may,"
"will," "should," "shall," and similar expressions typically identify
such forward-looking statements. Even though Petroplus believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations
will be attained.
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Petroplus Holdings AG and Subsidiaries
Earnings Release
(in millions of For the Three For the Year Ended
USD, except for per Months Ended December 31,
share amounts) December 31,
----------------- -------------------
2007 2006 2007 2006
-------- -------- --------- --------
INCOME STATEMENT DATA:
Revenue $5,013.3 $1,747.1 $13,905.1 $6,923.0
Materials cost 4,548.0 1,586.8 12,739.3 6,376.6
-------- -------- --------- --------
Gross Margin $465.3 $160.3 $1,165.8 $546.4
Personnel expenses 76.6 34.2 237.9 115.5
Operating expenses 123.1 44.7 319.2 139.3
Depreciation and amortization 57.2 31.9 164.3 74.9
Other administrative expenses 20.3 18.0 59.3 36.5
-------- -------- --------- --------
Operating profit $188.1 $31.5 $385.1 $180.2
Financial (expense), net (25.2) (40.9) (68.2) (85.5)
Financial currency exchange
(losses)/gains (13.6) 5.1 1.8 4.2
Share of income from associates 0.0 0.0 0.0 0.3
-------- -------- --------- --------
Profit/(loss) before income
taxes $149.3 $(4.3) $318.7 $99.2
Income tax (expense)/benefit (12.2) 1.1 (8.3) (25.1)
-------- -------- --------- --------
Net Income/(loss) from
continuing operations $137.1 $(3.2) $310.4 $74.1
Discontinued operations, net of
tax (0.2) 3.8 (7.1) 369.5
-------- -------- --------- --------
Net income $136.9 $0.6 $303.3 $443.6
======== ======== ========= ========
Minority Interests $- $- $0.0 $0.2
Net income attributable to
shareholders of parent $136.9 $0.6 $303.3 $443.4
Net income per common share:
Basic
Income from continuing
operations $2.00 $(0.07) $4.68 $1.82
Discontinued operations - 0.08 (0.11) 9.08
-------- -------- --------- --------
Net income $2.00 $0.01 $4.57 $10.90
Weighted average shares
outstanding (in millions) 68.6 47.4 66.3 40.7
======== ======== ========= ========
Diluted:
Income from continuing
operations $1.94 $(0.07) $4.54 $1.75
Discontinued operations - 0.08 (0.10) 8.77
-------- -------- --------- --------
Net income $1.94 $0.01 $4.44 $10.52
Weighted average shares
outstanding (in millions) 70.7 48.8 68.3 42.2
======== ======== ========= ========
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OTHER FINANCIAL DATA:
Hedging (losses)/gains(1) $(5.5) $54.7 $(4.0) $182.6
(1) Represents the gains and losses on refining
margin hedges recorded to materials cost
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Petroplus Holdings AG and Subsidiaries
Earnings Release
For the For the
Three Years
Months Ended
Ended December
December 31,
31,
------------------------
(unaudited) 2007 2006 2007 2006
----- ------ ----- -----
Selected Volumetric and Per Barrel Data
Total Production (Mbbls per day) 465.9 226.7 391.0 201.0
Total crude unit throughput (Mbbls per
day):
Coryton (3) 69.5 (A) 66.7 (A)
Ingolstadt (3) 70.3 (A) 63.5 (A)
BRC (3) 99.2 62.5 63.2 40.9
Cressier 61.3 61.2 52.8 62.1
Teesside 96.4 94.2 91.0 89.9
----- ------ ----- -----
Total crude unit throughput (Mbbls per day) 396.7 217.9 337.2 192.9
===== ====== ===== =====
Total other throughput (Mbbls per day):
Coryton (3) 40.5 (A) 30.1 (A)
Ingolstadt (3) 2.0 (A) 1.7 (A)
BRC (3) 15.2 11.0 14.3 6.1
Cressier 1.3 0.9 1.4 1.7
Teesside - 1.0 0.1 0.3
----- ------ ----- -----
Total other throughput (Mbbls per day) 59.0 12.9 47.6 8.1
===== ====== ===== =====
Total throughput (millions of barrels) 41.9 21.2 140.5 73.4
Gross margin (USD per barrel of total
throughput):(1) (2)
Coryton (3) 11.36 (A) 9.79 (A)
Ingolstadt (3) 12.55 (A) 7.99 (A)
BRC (3) 9.12 6.11 7.25 4.40
Cressier 10.92 4.32 6.97 4.83
Teesside 6.89 3.53 5.34 2.52
Operating expenses (USD per barrel of total
throughput):(1)
Coryton (3) 8.93 (A) 4.99 (A)
Ingolstadt (3) 4.84 (A) 3.35 (A)
BRC (3) 2.06 2.43 2.60 2.20
Cressier 2.73 2.50 2.69 2.25
Teesside 1.38 1.34 1.34 1.36
Market Indicators (USD per barrel)(5)
Dated Brent 88.77 59.60 72.71 65.41
Benchmark Refining Margins (4)
5-2-2-1 (Coryton) (3) 7.04 (A) 7.26 (A)
10-1-3-5-1 (Ingolstadt) (3) 10.95 (A) 11.00 (A)
6-1-2-2-1 (BRC) (3) 1.34 (0.43) 2.13 0.10
7-2-4-1 (Cressier) 8.42 5.69 7.65 6.67
5-1-2-2 (Teesside) 5.53 2.60 4.31 2.50
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(1)The Company manages its refinery business, including feedstock
acquisition and product marketing, on an integrated basis;
however, for analytical purposes the business results shown here
have been allocated to the individual refineries. Since crude oil
is often purchased and priced well in advance of the time that it
is consumed and the value of refinery production can be fixed
before or after it is produced, our actual results may
significantly vary from those that would be determined with
reference to benchmark market indicators. We manage this price
risk on a total Company basis and may purchase futures contracts
that correspond volumetrically with all or a portion of our fixed
price purchase and sale commitments. As a result, the individual
refinery realized gross margins presented here do not reflect the
results that would be reported if separately accounted for in
accordance with IFRS. The Company believes that this individual
refinery information is helpful in understanding our overall
operating results.
(2)Excludes minimum operating stock and refining margin hedging
activities that are not expected to occur in the future.
(3)We acquired the BRC refinery on May 31, 2006. We acquired the
Ingolstadt refinery on March 31, 2007. We acquired the Coryton
refinery on May 31, 2007. Benchmark indicators reflect the
applicable periods for each acquisition.
(4)Per barrel margin indicator for the conversion of crude oil into
finished products. For the Coryton refinery, the 5-2-2-1
represents five barrels of Dated Brent crude oil converted into
two barrels of gasoline, two barrels of heating oil and one
barrel of 3.5% fuel oil. For the Ingolstadt refinery, the 10-1-3-
5-1 represents 10 barrels of Dated Brent crude oil converted into
one barrel of naphtha, three barrels of gasoline, five barrels of
ULSD and one barrel of 3.5% fuel oil. For the BRC refinery, the
6-1-2-2-1 represents six barrels of Dated Brent crude oil
converted into one barrel of premium 95 gasoline, two barrels of
heating oil, two barrels of VGO and one barrel of 3.5% fuel oil.
For the Cressier refinery, the 7-2-4-1 represents seven barrels
of Dated Brent crude oil converted into two barrels of premium 95
octane gasoline, four barrels of heating oil and one barrel of 1%
fuel oil. For the Teesside refinery, the 5-1-2-2 represents five
barrels of Dated Brent crude oil converted into one barrel of
naphtha, two barrels of ULSD and two barrels of straight-run fuel
oil (low sulfur higher-value fuel oil).
(5)Source: Bloomberg
(A)Not relevant
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Petroplus Holdings AG and Subsidiaries
Earnings Release
(in millions of USD) December December
31, 2007 31,
2006
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BALANCE SHEET DATA: (end of period)
Cash and short-term deposits $62.5 $91.6
Total assets $7,466.8 $3,014.8
Total interest-bearing loans and short-term
borrowings $1,333.1 $-
Shareholder´s equity $2,501.5 $1,555.1
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