Petroplus Holdings AG (SWX: PPHN) today reported net income of
$74.1 million, or $1.81 per share, from continuing operations for the
year ended December 31, 2006. These results compare to a net loss of
$28.1 million for the period ended December 31, 2005. Discontinued
operations, which include gains and losses on the disposal of non-core
assets and businesses, resulted in net income for the year ended
December 31, 2006 of $369.4 million, or $9.08 per share, compared to
net income of $26.5 million for discontinued operations, for the
period ended December 31, 2005.
Results for 2006 include only seven months of operations of the
BRC refinery since its June 2006 acquisition. Results for 2005 include
only nine months of operations of the company's refineries due to the
April 2005 privatization of the company.
Thomas D. O'Malley, Petroplus's Chief Executive Officer, commented
on the company's results, "The reorganization that took place during
2006 was extensive and designed to concentrate our business around
refining crude oil and wholesaling the resulting oil products. Results
for 2006 are not a good guide for the company's future performance.
The new Petroplus is concentrated in the business of refining and
wholesale marketing."
In July of 2006 Petroplus announced that it had signed a purchase
agreement for the Ingolstadt refinery and its associated businesses
from the ExxonMobil Corporation. The Ingolstadt refinery has a
throughput capacity of approximately 110,000 barrels per day. In
December the EU competition authority cleared the transaction.
On February 1, 2007, Petroplus announced that it signed a purchase
agreement for the BP PLC owned Coryton refinery located approximately
30 miles southeast of London on the Thames estuary. Coryton is a major
supplier of petroleum products in the region. The Coryton refinery has
a total nameplate crude capacity of approximately 172,000 barrels per
day and up to an additional 70,000 barrels per day of other
feedstocks.
O'Malley commented on the pending acquisitions of both the
Ingolstadt and Coryton refineries, "We hope to maintain the current
schedule and close the Ingolstadt refinery purchase on April 1, 2007.
This refinery will be a valuable addition to our inland system. The
Coryton purchase, which was announced February 1, 2007 will be the
largest unit within our system and will have great positive
synergistic effects on our other North Sea units in Antwerp, Belgium
and Teesside, UK. We believe Coryton will close during the second
quarter subject to review by various governmental agencies."
Commenting on the improved financial position of the company,
Karyn F. Ovelmen, Petroplus's Chief Financial Officer, said
"Petroplus's financial position has improved dramatically. In November
of 2006, Petroplus launched a public offering on the Swiss Stock
Exchange. The offering consisted of 46 million shares, including 20.7
million shares from the company, with a fully exercised
over-allotment. Net proceeds for the company were approximately $1.2
billion, including a fully repaid note from the selling-shareholder of
$225 million. The proceeds from the offering were used to pay down
100% of existing debt. Petroplus further increased its financial
flexibility in December by successfully completing a $1.2 billion
Revolving Credit Facility with an option to increase the facility to
$2.0 billion."
Regarding the balance sheet, Ovelmen, said, "As of December 31,
2006, with all of the previous indebtedness repaid and the new credit
facilities in place, we ended the year with approximately $92 million
in cash, $1.6 billion of shareholders' equity and approximately $2.3
billion of available credit. We have ample liquidity and will fund our
2007 capital program with cash on hand and available cash flows from
operations."
Bruce Jones, Petroplus's Chief Operating Officer said, "Operations
in 2006 were reasonable at both Teesside and Cressier which ran at
approximately 90,000 and 64,000 barrels per day respectively. BRC ran
at slightly less than 80,000 barrels per day. Upon take-over,
Petroplus management decided that the BRC maintenance program did not
meet Petroplus standards. Petroplus management made the decision to
run at lower throughput rates post the acquisition and carried out an
extensive program of catch-up maintenance and enhanced training. We do
not expect optimal operations at the BRC refinery until we complete
the turnaround in the second quarter of 2007."
Pertaining to the outlook for 2007, Jones said, "The Cressier and
BRC refineries have scheduled turnarounds in the second quarter which
are estimated to last about 45 days each. The 2007 results will
include a full year of operations of the BRC refinery, potentially
three quarters of operations of the Ingolstadt refinery and the
operations of the Coryton refinery for about six months. Throughput
rates for 2007, including intermediate feedstocks, should average
approximately as follows: Teesside at 95,000 to 105,000 bpd for the
first quarter and 105,000 to 115,000 bpd for the year; Cressier at
61,000 to 64,000 bpd for the first quarter and 58,000 to 63,000 for
the year; and BRC at about 80,000 bpd for the first quarter and 80,000
to 90,000 bpd for the year. Pending the successful completion of the
acquisitions, we expect Ingolstadt to run about 100,000 to 110,000 bpd
and Coryton to run 200,000 to 210,000 bpd of total throughput for the
year."
The company's conference call concerning the full year results
will be webcast live today, February 12, 2007, at 2:00 p.m. CET on the
investor relations section of the Petroplus Holdings AG website at
www.petroplusholdings.com.
Petroplus Holdings AG is one of the largest independent refiners
and wholesalers of petroleum products in Europe. Petroplus focuses on
refining and currently owns and operates three refineries across
Europe: the Cressier refinery in the canton of Neuchatel, Switzerland,
the Teesside refinery in Teesside, United Kingdom and the Belgium
Refining Company ("BRC") refinery in Antwerp, Belgium. Petroplus has
entered into an agreement with ExxonMobil Central Europe Holding GmbH
("ExxonMobil CE") to purchase a refinery in Ingolstadt, Germany and
with BP PLC to purchase the Coryton refinery in the United Kingdom.
The existing refineries have a combined crude oil volume processing
capacity, known as throughput capacity, of approximately 295,000 bpd,
and the Ingolstadt refinery has a throughput capacity of approximately
110,000 bpd. The Coryton refinery has a total nameplate crude capacity
of approximately of 172,000 barrels per day and up to an additional
70,000 barrels per day of other feedstocks.
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. Information herein regarding the Coryton refinery
has been provided to the company by the current owner of the refinery
and reflects the company's analysis of such information but has not
been verified by the company. Factors that could cause actual results
to differ materially from expectations include, but are not limited
to, operational difficulties, varying market conditions, potential
changes in gasoline, crude oil, distillate, and other commodity
prices, government regulations, and other factors contained from time
to time in the Petroplus's annual and interim reports.
This announcement does not constitute an offer of securities for
sale in any jurisdiction. Securities may not be offered or sold in the
United States except pursuant to registration under the US securities
laws or an exemption from such registration. The Company does not
intend to register any such securities.
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Petroplus Holdings AG and Subsidiaries
Earnings Release
For the Years Ended
(in millions of USD, except for per share amounts) December 31,
-------------------
2006 2005(1)
--------- ---------
INCOME STATEMENT DATA:
Revenue $6,923.0 $4,188.3
Materials cost 6,376.8 3,977.3
--------- ---------
Gross Margin $ 546.2 $ 211.0
Personnel expenses 115.5 56.1
Operating expenses 139.6 66.5
Depreciation and impairments 74.9 39.0
Other administrative expenses 36.5 13.1
--------- ---------
Operating income $ 179.7 $ 36.3
Financial expense, net (85.5) (51.3)
Financial currency exchange gains (losses) 4.8 (2.9)
Share of income from equity investments 0.3 -
--------- ---------
Net income (loss) before income taxes $ 99.3 $ (17.9)
Income tax expense (25.2) (10.2)
--------- ---------
Income (loss) from continuing operations $ 74.1 $ (28.1)
Discontinued operations, net of tax 369.4 26.5
--------- ---------
Net income (loss) $ 443.5 $ (1.6)
========= =========
Net income attributable to minority interests $ 0.3 $ 1.1
Net income attributable to shareholders of parent $ 443.2 $ (2.7)
Net income (loss) per common share:
Basic
Income (loss) from continuing operations $ 1.81 $ (1.01)
Discontinued operations 9.08 0.92
--------- ---------
Net income (loss) $ 10.89 $ (0.09)
Weighted average shares outstanding (in
millions)(2) 40.7 28.8
========= =========
Diluted:
Income (loss) from continuing operations $ 1.75 $ (1.01)
Discontinued operations 8.76 0.92
--------- ---------
Net income (loss) $ 10.51 $ (0.09)
Weighted average shares outstanding (in
millions)(2) 42.2 28.8
========= =========
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(1) In April 2005, RiVR Acqusition B.V. purchased Petroplus
International B.V. Therefore the period ended December 31, 2005
includes only nine months of operations for Petroplus
International B.V. In August 2006, RiVR Acquisition, B.V.
subsequently merged with Argus Atlantic Energy, Ltd. forming
Petroplus Holdings AG.
(2) Under IFRS, earnings per share is calculated using a weighted
average shares outstanding. In 2006, the weighted average share
calculation was impacted by the November public offering. In
2005, the weighted average share calculation was impacted by the
May privatization of the company.
OTHER FINANCIAL DATA:
EBITDA(3) $ 259.7 $ 72.4
Hedging gain/(loss)(4) $ 182.6 $ (31.3)
---------------------------------------------------
(3) EBITDA means net income/(loss) before interest, income taxes,
depreciation, impairment and amortization. We are not presenting
EBITDA here as a measure of our operating results. Our management
believes that the presentation of EBITDA is helpful to investors
as a measure of our operating performance and ability to service
debt. However, you should not construe EBITDA as an alternative
to net income determined in accordance with IFRS or to cash flows
from operations, investing activities or financing activities.
Our EBITDA measure may not be comparable to similarly titled
measures used by other companies.
(4) Represents the gains and losses on commodity instruments recorded
to materials cost
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Petroplus Holdings AG and Subsidiaries
Earnings Release
For the Years Ended
December 31,
-------------------
(unaudited) 2006 2005(1)
--------- ---------
Selected Volumetric and Per Barrel Data
Total Production (Mbbls per day) 201.0 159.7
Total crude throughput (Mbbls per day):
Teesside 89.9 105.3
Cressier 62.1 53.4
BRC(4) 40.9 **
--------- ---------
Total crude throughput (Mbbls per day) 192.9 158.7
========= =========
Total other throughput (Mbbls per day):
Teesside 0.3 -
Cressier 1.7 1.0
BRC(4) 6.1 **
--------- ---------
Total other throughput (Mbbls per day) 8.1 1.0
========= =========
Total throughput (millions of barrels) 73.4 58.3
Gross margin (USD per barrel of total
throughput):(2)(3)
Teesside 2.53 3.23
Cressier 4.99 6.22
BRC(4) 4.35 **
Operating expenses (USD per barrel of total
throughput):(2)
Teesside 1.36 1.05
Cressier 2.25 2.56
BRC(4) 2.20 **
Market Indicators (USD per barrel)(6)
Dated Brent 65.41 54.51
Benchmark Refining Margins(5)
5-1-2-2 (Teesside) 2.50 3.79
7-2-4-1 (Cressier) 6.67 7.79
6-1-2-2-1 (BRC)(4) 1.55 **
Crude Oil Differentials
Brent less Urals 4.12 **
---------------------------------------------------
(1) For comparability, the Company included a full twelve months of
operations in 2005 for refining operations. The above figures are
not indicative of the operating results included in the income
statement shown on the prior page.
(2) 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.
(3) Excludes minimum operating stock and refining margin hedging
activities that are not expected to occur in the future.
(4) We acquired the BRC refinery effective June 1, 2006 and the total
throughput for the year ended December 31, 2006 reflects reflect
214 days of operations over that period. Total throughput
averaged 80,200 bpd during the 214 days of operations in 2006.
(5) Per barrel margin indicator for the conversion of crude oil into
finished products. 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). 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 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.
(6) Source: Bloomberg
** Not relevant
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Petroplus Holdings AG and Subsidiaries
Earnings Release
December 31,
-------------------
(in millions of USD) 2006 2005
--------- ---------
BALANCE SHEET DATA: (end of period)
Cash and short-term deposits $ 91.6 $ 65.9
Total assets $3,015.0 $2,452.2
Total interest-bearing loans and short-term
borrowings $ - $ 555.3
Shareholder's equity $1,555.1 $ 29.9
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