AB Klaipėdos nafta interim financial information regarding the twelve months of 2018
AB Klaipėdos nafta (hereinafter – KN, the Company) announces the unaudited financial results for the year ended as at 31 December 2018.
- KN revenues for the 12 months of 2018 comprised EUR 100.0 million, 6.1 per cent less compared to the same period of 2017 (EUR 106.5 million).
- Net profit of the Company for the 12 months of 2018 amounted to EUR 11.5 million, 32.2 per cent less compared to the 12 months of 2017 (EUR 17.0 million). Net profit margin for the 12 months of 2018 comprised 11.5 per cent (12 months of 2017 – 16.0 per cent).
- Company’s EBITDA for the 12 months of 2018 amounted to EUR 26.9 million, i.e. 14.1 per cent less compared to the same period of 2017 (EUR 31.3 million), EBITDA margin for the 12 months of 2018 was 26.9 per cent (at 12 months of 2017 – 29.4 per cent).
Management comment on the results of the year 2018
The year 2018 has been challenging for KN due to tense and dynamic situation in the market, intense geopolitical environment and the trends of rising costs. Nevertheless, the flow of oil products and natural gas cargos remained almost the same level during the year2018 compared to 2017.
During 2018 Company’s Klaipėda and Subačius oil terminals handled 6.69 million tons of oil products in total (7.18 million tonnes during 2017). Company’s Klaipėda and Subačius oil terminals sales revenue reached EUR 35.2 million which has decreased by 7.1 percent compared to the same period of 2017 (EUR 37.9 million). The overall decrease in loading volumes for the year 2018 was mainly affected by the lower quantities of light oil products from ORLEN Lietuva refinery.
“Despite the tense situation in oil and oil products logistics between neighbouring countries during the year 2018, KN managed to maintain stable flow of transit cargos. Overall decrease in transit was only 5,3 percent”, - says Mindaugas Jusius, KN CEO[RŠ1]
“Nonetheless, that in 2018 in business logic of oil and oil products between neighbouring countries was under tension, we still managed to maintain stable levels of transit cargoes flows. Total transit freights in 2018 year declined by 5,3 per cent”, - says Mindaugas Jusius, KN CEO.
During the year 2018 KN focused on increase of Klaipėda oil terminal competitiveness. The Company invested into overall terminal infrastructure also the second stage of oil terminal investment continues (construction of 10 new oil tanks is in progress) and new unloading place with new railway track are in progress. All previously mentioned projects would be finished during the year 2019. As a result, Klaipėda oil terminal will be able to reload higher quantities and wider range of oil and oil products.
During the fourth quarter of 2018, two gas carriers delivered cargo to LNG terminal two small scale operations of LNG reloading were carried out. Total volume of re-gasified and reloaded LNG for the twelve months of 2018 comprise MWh 9.2 million and is still substantially lower compared to the same period of 2017 (MWh 12.6 million). LNG terminal operation extent decreased due to the diminution in reserved annual capacities. During 2018 LNG terminal revenue comprises of EUR 64.5 million and declined by 5.4 per cent, compared to the same period of the year 2017. At the end of the year 2017, LNG chain in Klaipėda was expanded by starting operations of LNG small scale terminal, where 64 thousand MWh of LNG have been reloaded during the year 2018. In the first days of the year 2019, LNG logistic chain in Baltic Sea region was strengthen by LNG bunker supply vessel Kairos which is operated by KN together with project partners. Vessel Kairos ensures transportation of LNG from Klaipėda LNG terminal to Klaipėda small-scale LNG terminal and during the first month of 2019 have made two small-scale reloading operations.
The activity of LNG terminal is regulated therefore revenue of LNG activity does not depend on re-gasification volume.
During this year, KN will pay a lot of attention on purification of regulated activities, ensure of long term LNG import decision and on development of LNG related activities.
KN has submitted to environmental authorities and Klaipėda City communities the Plan of Environmental Measures, which provides for the measures and commitment to further perform sustainable activities and ensure the highest level of environmental standards. KN investments into the environmental field are expected to reach EUR 8 million by the end of 2021. By following long-term business goals, KN was attentive to the overall organizational culture of the Company during the previous year. KN continued the implementation of values project, signed Company’s standard of conduct which was prepared in accordance with values. Additionally, KN decided to pay part of yearly bonus to its employees in company shares.
According to Mr. Jusius, the aim of this decision is to strengthen the motivation of employees to achieve long-term goals of the organization and to promote responsibility for overall performance.
Approved Financial plan for the Year 2019
As to the financial year 2019 Financial plan, approved by the Board of the Company, AB Klaipedos nafta will implement ambitious business plans: in 2019 oil transshipment will increase until 7.2 million tons (7.6 per cent larger compared to the same period of 2018), 5,0 million MWh is planned to be re-gasified at LNG terminal. Projected income for the year 2019 should comprise EUR 105.9 million (5.9 per cent larger compared to the same period of 2018), net profit should comprise EUR 11.4 million. Earnings before interest, tax and depreciation (EBITDA) should comprise EUR 26.5 million, return on equity (ROE) – 5.8 per cent. The importance of international LNG terminal project development and participation in mentioned projects is being highlighted in the long-term strategy of the Company, which is planned to be presented in public in the first quarter of the year 2019. The Company seeks to use its experience in the development, jointly with reliable partners, of international projects on LNG terminals and distribution stations, in order to become the owner or operator of LNG terminals based on floating storage and regasification technology.
Undoubtedly, one of the essential long term strategic objectives and aims for the Company is environmental safety. In 2019 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.
In an energy sector as well as in a whole market, there is decrease in demand of services and increase in costs. Therefore, in 2019, KN will focus on reduction and on saving of all possible costs in all business areas. Until the end of the year 2018, the Company started cost saving related actions by revising all processes and making them more effective. Furthermore, budget for the year 2019 is with the lower costs level.
In 2019 KN will continue proceeding changes in Company’s organizational culture. The Company will focused on leadership development, strengthening of leader role.
- Interim condensed Financial Statements of AB Klaipėdos nafta for the twelve months period ended 31 December, 2018.
- Presentation of the financial results for the 12 months period of 2018.
Jonas Lenkšas, Chief Financial Officer, +370 694 80594