Oil Refineries Announces Results For First Quarter 2014

HAIFA, Israel, May 21, 2014 /PRNewswire/ -- Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter "the Group," "ORL"), Israel's largest integrated refining and petrochemical group, announced its financial results for the first quarter 2014.

The Company will be hosting its earnings call today, May 21, 2014. The conference call will take place at 13:30 UK (08:30 ET, 15:30 Israel time). On the call, management will review and discuss the first quarter 2014 financial results and will be available to answer questions. To participate, please call one of the following teleconferencing numbers:

US Dial-in Numbers:                                  1-888-668-9141
UK Dial-in Number:                                   0-800-917-5108
Israel Dial-in Number:                                   03-918-0699
International Dial-in Number:                 +972-3-918-0699

The conference call will be accompanied by a presentation available for download from the Company's website, www.orl.co.il, under investor relations.

FIRST QUARTER 2014 HIGHLIGHTS

• Net profit for the quarter totaled $4 million
• The Cash Flow from operating activities was $488 million
• Adjusted EBITDA totaled $70 million
• The operating income totaled $42 million
• The adjusted refining margin totaled $5.0 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $0.4 per barrel.

Mr. Arik Yaari, CEO: "The improvement in operating results is encouraging, while the company is pressing on with its efficiency program. Despite the current weak margin environment in the Mediterranean, our refining unit continues to achieve consistently higher refining margins relative to the benchmark. Our polymers unit has also shown improved operating results."  

• Mr. Israel Lederberg, CFO: "This quarter the Company successfully completed the financial moves announced in the fourth quarter 2013, improving financial flexibility and reflecting the confidence of both our shareholders and bond investors. The Cash Flow from Operating Activities was $488 million compared with $221 million in the same quarter last year. This cash flow enabled us to lower net financial debt and to improve our financial flexibility; we believe that this will also allow us to diversify our funding sources in the future.

FIRST QUARTER RESULTS

• The first quarter was characterized by challenging benchmark refining margins, which affect the main area of operation for the Company. The average Reuter's quoted Mediterranean Ural Cracking Margin in the first quarter 2014 totaled $0.4 per barrel compared with $2.7 per barrel in same period of 2013. Despite these lower benchmark margins, ORL's adjusted refining margin totaled $5.0 per barrel compared with $6.5 per barrel in same period of 2013. 
• Revenues for first quarter totaled $2.2 billion compared with $2.3 billion in the same quarter last year.
• Adjusted Gross Income totaled $72 million in the fourth quarter compared with $90 million in the same quarter last year.
• Adjusted Operating Income across all sectors totaled $35 million in the first quarter compared with $53 million in the same quarter last year.
• Adjusted EBITDA totaled $70 million in the first quarter compared with $90 million in the same quarter last year.
• Net financing expenses for the quarter totaled $33 million compared with $49 million in the same quarter last year.
• Net Profit for the quarter totaled $4 million compared with a net loss of $3 million in the same quarter last year.
• In the first quarter of 2014 the Group repaid long-term financial liabilities to banks and bonds totaling $60 million. Also during the quarter a $90 million bond was issued, completing the immediate financial moves previously announced by the company.

RESULTS ACCORDING TO SECTORS:

Refining

• The Company continues to generate higher refining margins than the benchmark average due to the Company's upgraded refining capabilities and logistical position. The transition to natural gas and the contribution of the hydrocracker, since the first quarter of 2013, enabled the Company to demonstrate ongoing higher refining margins, reducing the impact of the benchmark margins which are at historically low levels.  
• In the first quarter the adjusted refining margin totaled $5.0 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $0.4 per barrel.
• Adjusted Operating Income for the first quarter totaled $14 million, compared with $41 million in the corresponding period last year.
• Adjusted EBITDA for the first quarter totaled $35 million, compared with $63 million in the corresponding period last year. 

Polymers

• The improvement in the Company's polymers results over the last quarter can be attributed to improved polymer spreads over Naphtha and the Company's transition to natural gas.
• Operating income for the first quarter totaled $12 million, compared with $2 million in the corresponding period last year.
• EBITDA for the first quarter totaled $23 million, compared with $14 million in the corresponding period last year.

Aromatics and Base Oils

• Operating income for the first quarter totaled $5 million, similar to the corresponding quarter last year.
• EBITDA for the first quarter totaled $6 million, compared with $8 million in the corresponding quarter last year. 

Environmental & Social Responsibility         
Maintaining social and environmental compliance, while building on our good relations with the relevant authorities, is a strategic goal for ORL. In the Company's facilities there are numerous environmental projects, including the transition to Natural Gas, which significantly lowers the Company's emissions

FIRST QUARTER 2014 RESULTS  ($ millions)

Operating Income by Sector

EBITDA by Sector

About Oil Refineries Ltd.         
Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries and petrochemical complexes in the Eastern Mediterranean area. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 9, providing a variety of quality products used in industrial operations, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries a range of Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lubricant base oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit www.orl.co.il.

ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.

The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's report.

SOURCE Oil Refineries Ltd.