Unaudited financial information for the year 2017
AB Klaipedos nafta (hereinafter – KN, the Company) announces the unaudited condensed financial statements for the financial year 2017. A summary of the results accompanied with management comment is provided below.
AB Klaipedos nafta sales revenue for the year 2017 comprise of Eur 106.5 million, which is 2.6% higher compared to the same period of 2016, – Eur 103.8 million. The net profit for the year 2017 amounts Eur 17.0 million or 23.2% larger compared to the same period of 2016, – Eur 13.8 million. Profit before tax, interest, depreciation and amortization (EBITDA) for 2017 conclude Eur 31.3 million, or 9.5% more, compared to the year 2016 when EBITDA reached Eur 28.6 million.
Management comment on the results of the year 2017
According to the management of the Company, AB Klaipedos nafta financial and operating activity results are delighting, despite the influence of strong external factors, which had a significant impact on the decrease of oil product transshipment, compared to the record breaking transshipment quantity for the year 2016. KN managed to stabilize the flow of the cargo and to ensure decent yearly ratios.
Good results of the year 2017 were achieved with a help of a remarkable effort made and concentration of internal resources for the management of the risks, creating of competitive and attractive conditions of oil terminal and both technological and commercial decisions made in a timely manner.
During the year 2017 AB Klaipedos nafta reloaded 7.2 million tons of oil products into its storage tanks located in Klaipėda and Subačius oil terminals, i.e. less by 1.4 per cent compared to the year 2016, when 7.3 million tons were handled. Despite the negative impact on the transshipment results of the year 2017 due to unfavorable geopolitical situation in the first half of the year, Company’s ability to make timely decisions enabled KN to offer more flexible infrastructure utilization possibilities and to point out the advantages of newly operated infrastructure objects to the present and potential customers in the second half of the year. All of this enabled the Company to build the competitive advantage among the other oil terminals, operating in Baltic region nearby.
AB Klaipedos nafta managed to re-gasify and reload total of 12,646 thousand MWh of the natural gas in 2017 (during 2016 – 14,611 thousand MWh). Klaipeda LNG terminal enabled Lithuania and other Baltic countries to acquire natural gas from the suppliers providing the most competitive market price. This is perfectly illustrated by the fact that during the year 2017 gas, handled via LNG terminal, operated by the Company, was delivered from 4 different continents and reached household and commercial users from 7 different countries.
During the year 2017, AB Klaipedos nafta continued to consistently pursuit its determined objectives, which include the increase of the economic value generated by the Company and implementation of national strategic objectives. Accomplishment of mentioned objectives is attained with the help of highly motivated and skilled personnel and by implementing transparent and efficient management structure of the Company and permanently improving operating efficiency. LNG reloading station, which was symbolically opened last year, is one of the main examples of successful improvement of KN operating efficiency. This object has strengthened LNG logistics chain, developed by the Company, and herewith is integrated into the operating processes of functioning oil terminal. On the other hand, during the year 2017 AB Klaipedos nafta accelerated the realization of specific LNG related knowledge in order to gain additional income by consulting LNG terminal developers operating in other markets.
The efficiency of Company’s operating activities is also proved by the financial results of the year 2017, which ensures significant financial return to the shareholders of the Company. Return on Company’s own capital for the year 2017 reaches 8.7%, EBITDA margin – 29.4% and gross profit margin – 16%.
The key factors that had a positive impact over the Company’s financial results for the year 2017 include one-off realization of oil products accumulated over time in Klaipeda oil terminal (Eur 1,2 million), additional revenue for the adjustment of consumption capacities for the year 2016 (Eur 2,2 million) and finally, financial corrections due to the change in profit tax law (Eur 1 million positive impact from the change in deferred tax asset calculation).
Approved budget and objectives for the year 2018
As to the financial year 2018 budget, approved by the Board of the Company, oil transshipment shall remain at the similar level as during the year 2017 – 7.2 million tons, meanwhile, 10.6 million MWh is planned to be re-gasified at LNG terminal. Projected income for the year 2018 should comprise Eur 102.6 million, which would lead to Eur 10.2 million net profit. Earnings before interest, tax and depreciation (EBITDA) should comprise Eur 26.9 million.
Company’s budget for the year 2018 is based more on conservative operating assumptions considering all potential risks that might occur in KN operating market. Essential threats, which were taken into account during the budgeting process, are dynamic global geopolitical situation, which is the main factor that causes deviation of oil transshipment quantities and constant change in crude oil market price. Also, one-off items, as mentioned earlier, that are able to improve financial results of the Company, were not taken into account during the preparation of budget for the year 2018.
Undoubtedly, one of the essential long term strategic objectives and aims for the Company during the year 2018 is environmental safety. AB Klaipedos nafta is seeking to assure sustainable growth of the business, therefore, environmental and social aspects are one of the Company’s top priorities. The goal of the management of the Company is to conciliate the aims of KN shareholders with society or other stakeholders.
Interim condensed Financial Statements of AB Klaipėdos nafta for the 12 months period ended 31 December 2017.
Presentation of the financial results for the 12 months period of 2017.
Marius Pulkauninkas, Chief Financial Officer, tel. +370 52 502 879