Oil Refineries Announces Results For Second Quarter 2013
Company announces improvements across all key parameters, significant improvements in the Polymers Sector, and full supply of its natural gas needs
HAIFA, Israel, Aug. 27, 2013 /PRNewswire/ -- Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter "the Group," "ORL"), Israel's largest integrated refining and petrochemical group, announced today its financial results for the second quarter ending June 30, 2013. Results are reported in US Dollars and under International Financial Reporting Standards (IFRS).
2013 SECOND QUARTER CONSOLIDATED RESULTS
- Revenues totaled $2.47 billion compared with $2.45 billion in the second quarter last year.
- Adjusted operating income totaled $16 million compared with an operating loss of $29 million in the same quarter last year.
- Adjusted EBITDA totaled $54 million compared with negative $2 million in the same quarter last year
- The Company reduced its adjusted second quarter 2013 net loss to $31 million compared with a net loss of $46 million in the second quarter last year. This is despite a malfunction in one of its facilities that cost the Company $15 million.
- Cash flow from operating activities totaled $55 million.
- Since the beginning of this year the Company paid of $158 million of its debt.
Mr. Arik Yaari, CEO of Oil Refineries: "In the first half of 2013 the Company successfully achieved key elements of its strategic plan. The hydrocracker facility was successfully launched and began operating. Likewise, during the second quarter of 2013 the natural gas supply met 100% of the Company's needs. This positively impacted the Company's results while minimizing the Company's environmental footprint. Additionally, significant advances were made in ORL's environmental initiatives.
RESULTS ACCORDING TO SECTORS:
Refining
- The Company continues to generate higher refining margins than the other comparable refiners in the area. The contribution of the hydrocracker since the first quarter of 2013, and the full supply of natural gas, which began at the start of the second quarter of 2013, had a positive effect on the Company's ability to demonstrate higher refining margins than the benchmark average.
- In the second quarter of 2013, the adjusted refining margin totaled $4.2 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $2.5 per barrel. In the second quarter of 2012, the adjusted refining margin totaled $6.1 per barrel as compared with the Reuter's quoted Mediterranean Ural Cracking Margin of $5.6 per barrel.
- In the first half of 2013, the adjusted refining margin totaled $5.3 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $2.6 per barrel. In the first half of 2012, the adjusted refining margin totaled $5.1 per barrel as compared with the Reuter's quoted Mediterranean Ural Cracking Margin of $4.3 per barrel.
Polymers
- The improvement in polymers can be attributed to improved polymer spreads over Naphtha and the Company's transition to natural gas use.
- Operating income for the second quarter totaled $14 million, compared with an operating loss of $49 million in the corresponding quarter last year. For the first half of 2013 operating income totaled $16 million, compared with an operating loss of $53 million in the corresponding period last year.
- EBITDA for the second quarter totaled $26 million, compare with a negative EBITDA of $40 million in the corresponding quarter last year. EBITDA in the first half of 2013 totaled $39 million, compared with a negative EBITDA of $31 million in the corresponding period last year.
Aromatics and Oils
- Operating income for the second quarter totaled $2 million, compared with an operating loss of $18 million in the corresponding quarter last year. For the first half of 2013 operating income totaled $7 million, compared with an operating loss of $7 million in the corresponding period last year.
- EBITDA for the second quarter totaled $4 million, compare with a negative EBITDA of $16 million in the corresponding quarter last year. EBITDA in the first half of 2013 totaled $12 million, compared with a negative EBITDA of $2 million in the corresponding period last year.
Environmental & Social Responsibility
- Environmental Safety and Security: ORL prioritized its adherence to compliance with applicable environmental and safety standards, keeping close contact with the relevant authorities in this area. ORL produces products according to the EURO 5 standard and thus contributes to improving the environment in Israel.
- Since the beginning of the second quarter the Company significantly reduced its air emissions, attributable to the full supply of natural gas required by the Company's activities. Likewise, ORL completed during the second quarter the cleaning of most of the sludge accumulated over the decades, from when the Company was still government owned.
SECOND QUARTER RESULTS 2013 ($ millions)
Adjusted Operating Income by Sector
| H1 '13 |
H1 '12 |
Q2 '13 |
Q2 '12 |
|
| Refining & Trade |
43 |
40 |
3 |
30 |
| Polymers |
16 |
(53) |
14 |
(49) |
| Aromatics & Lube Oils |
7 |
(7) |
2 |
(18) |
| Consolidation diff. |
3 |
1 |
(3) |
8 |
| Total |
69 |
(19) |
16 |
(29) |
EBITDA by Sector
| H1 '13 |
H1 '12 |
Q2 '13 |
Q2 '12 |
|
| Refining & Trade |
89 |
72 |
27 |
46 |
| Polymers |
39 |
(31) |
26 |
(40) |
| Aromatics & Lube Oils |
12 |
(2) |
4 |
(16) |
| Consolidation diff. |
3 |
1 |
(3) |
8 |
| Total |
143 |
40 |
54 |
(2) |
Conference Call
The conference call will take place at 14:00 UK (9:00 ET, 16:00 Israel time). On the call, management will review and discuss the second quarter 2013 financial results and will be available to answer questions.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
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
at: 14:00 UK Time, 9:00 ET, 6:00 PT, 16:00 Israel time. A replay of the call will be available after the call on the Company's website at www.orl.co.il.
The conference call will be accompanied by a presentation available for download from the Company's website, www.orl.co.il, under investor relations.
Oil Refineries' earnings press release and financial statements will be available on the Company's website – www.orl.co.il for the call.
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 in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. 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 operation, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-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
| Company Contact: |
Investor Relations Contact: |
| Condensed Consolidated Interim Statement of Financial Position |
|||
| USD thousands |
|||
| June 30, 2013 |
June 30, 2012 |
December 31, 2012 |
|
| (Unaudited) |
(Audited) |
||
| Current assets |
|||
| Cash and cash equivalents |
119,041 |
205,421 |
256,521 |
| Deposits |
6,606 |
12,550(*) |
12,647 |
| Trade receivables |
721,462 |
724,586 |
721,601 |
| Other receivables |
73,456 |
121,927 |
88,727 |
| Financial derivatives |
41,412 |
46,504 |
38,670 |
| Investments in financial assets at fair value through profit or loss |
-- |
3,281 |
-- |
| Inventory |
804,083 |
949,138 |
1,049,037 |
| Current tax assets |
813 |
3,158 |
388 |
| Total current assets |
1,766,873 |
2,066,565 |
2,167,591 |
| Non-current assets |
|||
| Investments in equity-accounted investees |
4,681 |
4,648 |
4,557 |
| Investments in financial assets at fair value through other comprehensive income |
2,547 |
5,905 |
5,584 |
| Loan to Haifa Early Pensions Ltd. |
66,394 |
63,417 |
68,445 |
| Long term loans and debit balances |
80,784 |
52,066(*) |
83,374 |
| Financial derivatives |
50,627 |
108,315 |
103,596 |
| Employee benefit assets, net |
9,577 |
5,920 |
7,374 |
| Deferred tax assets, net |
40,520 |
4,699 |
34,451 |
| Property, plant and equipment, net |
2,406,405 |
2,341,641 |
2,419,231 |
| Intangible assets, net |
45,860 |
58,257 |
51,582 |
| Deferred expenses, net |
2,362 |
4,137 |
1,861 |
| Total non-current assets |
2,709,757 |
2,649,005 |
2,780,055 |
| Total assets |
4,476,630 |
4,715,570 |
4,947,646 |
| (*) Reclassified |
|||
The attached notes are an integral part of the condensed consolidated interim financial statements.
| Condensed Consolidated Interim Statement of Financial Position |
||||
| USD thousands |
||||
| June 30, 2013 |
June 30, 2012 |
December 31, 2012 |
||
| (Unaudited) |
(Audited) |
|||
| Current liabilities |
||||
| Loans and borrowings |
786,524 |
900,112 |
966,284 |
|
| Trade payables |
1,357,264 |
1,281,389 |
1,424,317 |
|
| Other payables |
126,398 |
121,463 |
139,703 |
|
| Current tax liability |
10,974 |
21,199 |
20,576 |
|
| Financial derivatives |
40,161 |
37,733 |
49,898 |
|
| Provisions |
33,187 |
13,981 |
21,214 |
|
| Total current liabilities |
2,354,508 |
2,375,877 |
2,621,992 |
|
| Non-current liabilities |
||||
| Liabilities to banks |
839,154 |
769,272 |
898,678 |
|
| Debentures |
431,436 |
542,667 |
518,879 |
|
| Liabilities for finance lease |
9,619 |
8,891 |
9,282 |
|
| Financial derivatives |
5,309 |
12,134 |
9,578 |
|
| Employee benefits, net |
81,595 |
71,343 |
80,446 |
|
| Deferred tax liabilities, net |
-- |
13,000 |
-- |
|
| Total non-current liabilities |
1,367,113 |
1,417,307 |
1,516,863 |
|
| Total liabilities |
3,721,621 |
3,793,184 |
4,138,855 |
|
| Capital |
||||
| Share capital |
586,390 |
586,390 |
586,390 |
|
| Share premium |
100,242 |
100,242 |
100,242 |
|
| Reserves |
79,438 |
108,357 |
93,100 |
|
| Retained earnings (losses) |
(11,061) |
127,397 |
29,059 |
|
| Total capital |
755,009 |
922,386 |
808,791 |
|
| Total liabilities and capital |
4,476,630 |
4,715,570 |
4,947,646 |
|
The attached notes are an integral part of the condensed consolidated interim financial statements
| Condensed Consolidated Interim Statement of Comprehensive Income |
|||||
| USD thousands |
|||||
| Six months ended |
Three months ended |
Year ended |
|||
| June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
December 31, |
|
| (Unaudited) |
(Unaudited) |
(Audited) |
|||
| Revenue |
4,802,296 |
4,899,934 |
2,468,801 |
2,452,406 |
9,673,156 |
| Cost of sales |
4,678,508 |
4,877,844 |
2,423,226 |
2,517,773 |
9,570,259 |
| Gross profit (loss) |
123,788 |
22,090 |
45,575 |
(65,367) |
102,897 |
| Selling and marketing expenses |
56,447 |
52,904 |
30,415 |
27,833 |
112,924 |
| General and administrative expenses |
29,325 |
34,604 |
14,874 |
13,861 |
63,310 |
| Early retirement expenses |
-- |
-- |
-- |
-- |
17,168 |
| Operating profit (loss) |
38,016 |
(65,418) |
286 |
(107,061) |
(90,505) |
| Financing income |
12,996 |
12,170 |
1,041 |
7,189 |
13,317 |
| Financing expenses |
(100,338) |
(78,935) |
(39,164) |
(32,687) |
(182,184) |
| Financing expenses, net |
(87,342) |
(66,765) |
(38,123) |
(25,498) |
(168,867) |
| Company's share in earnings (losses) of equity accounted investees |
319 |
(2,546) |
211 |
(1,544) |
(4,567) |
| Loss before income tax |
(49,007) |
(134,729) |
(37,626) |
(134,103) |
(263,939) |
| Tax benefit |
8,887 |
30,005 |
89 |
35,298 |
65,491 |
| Loss for the period |
(40,120) |
(104,724) |
(37,537) |
(98,805) |
(198,448) |
| Items of other comprehensive income (loss) transferred to profit or loss |
|||||
| Foreign currency translation differences for foreign operations |
164 |
213 |
(295) |
115 |
(246) |
| Effective share of the change in fair value of cash flow hedging, net of tax |
-- |
(104) |
-- |
-- |
(104) |
| Other comprehensive income (loss) for the period, transferred to profit or loss, net of tax |
164 |
109 |
(295) |
115 |
(350) |
| Items of other comprehensive income (loss) not transferred to profit or loss |
|||||
| Actuarial losses from a defined benefit plan, net of tax |
-- |
-- |
-- |
-- |
(4,614) |
| Net change in fair value of debentures at fair value through profit or loss, attributable to change in credit risk, net of tax |
(11,060) |
5,646 |
(19,378) |
30,752 |
(9,369) |
| Change in fair value of financial assets at fair value through other comprehensive income, net of tax |
(2,673) |
391 |
(2,346) |
(1,764) |
109 |
| Other comprehensive income (loss) for the period, not transferred to profit or loss, net of tax |
(13,733) |
6,037 |
(21,724) |
28,988 |
(13,874) |
| Comprehensive loss for the period |
(53,689) |
(98,578) |
(59,556) |
(69,702) |
(212,672) |
| Loss per share (USD) |
|||||
| Basic and diluted loss per 1 ordinary share |
(0.016) |
(0.043) |
(0.015) |
(0.041) |
(0.082) |
| As from January 1, 2013, there was a change in the presentation of items of other comprehensive income - see Note 3A(5), Comparative figures will be restated accordingly. |
|||||
The attached notes are an integral part of the condensed consolidated interim financial statements
| Condensed Consolidated Interim Statement of Cash Flows |
|||||
| USD thousands |
|||||
| Six months ended |
Three months ended |
Year ended |
|||
| June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
December 31, |
|
| (Unaudited) |
(Unaudited) |
(Audited) |
|||
| Cash flows from operating activities |
|||||
| Loss for the period |
(40,120) |
(104,724) |
(37,537) |
(98,805) |
(198,448) |
| Adjustments to cash flows from operating activities: |
|||||
| Revenue and expenses not involving cash flows (Appendix A – section A) |
126,230 |
100,587 |
84,235 |
8,512 |
228,156 |
| 86,110 |
(4,137) |
46,698 |
(90,293) |
29,708 |
|
| Changes in assets and liabilities (Appendix A – section B) |
194,691 |
521,998 |
12,665 |
722,819 |
591,408 |
| Income tax received (paid), net |
(5,522) |
(216) |
(4,003) |
1,565 |
(1,555) |
| Net cash from operating activities |
275,279 |
517,645 |
55,360 |
634,091 |
619,561 |
| Cash flow for investment activities |
|||||
| Interest received |
554 |
151 |
363 |
147 |
465 |
| Decrease (increase) in deposit, net |
1,857 |
(27,420) |
242 |
(38,749) |
(34,199) |
| Dividend received from investees |
691 |
-- |
-- |
-- |
-- |
| Disposal of investments in financial assets, net |
-- |
70,088 |
-- |
70,088 |
71,422 |
| Repayment of long-term loans to others, net |
301 |
271 |
228 |
222 |
467 |
| Repayment of loan from Haifa Early Pensions Ltd. |
12,100 |
5,464 |
-- |
5,464 |
5,464 |
| Purchase of property, plant and equipment |
(75,422) |
(156,540) |
(18,391) |
(49,502) |
(280,635) |
| Purchase of intangible assets and deferred expenses |
(512) |
(218) |
(327) |
(6) |
(249) |
| Net cash used for investment activities |
(60,431) |
(108,204) |
(17,885) |
(12,336) |
(237,265) |
| Cash flow from financing activities |
|||||
| Short-term borrowing, net |
(199,133) |
(258,017) |
96,632 |
(339,925) |
82,079 |
| Deposits from customers, net |
(2,609) |
6,578 |
(3,160) |
545 |
8,067 |
| Interest paid |
(63,912) |
(46,581) |
(38,819) |
(24,677) |
(130,404) |
| Derivative transactions, net |
67,049 |
2,209 |
31,699 |
(359) |
41,785 |
| Long-term bank loans |
-- |
203,497 |
-- |
25,265 |
232,022 |
| Repayment of long-term bank loans |
(45,412) |
(89,626) |
(27,589) |
(71,935) |
(237,379) |
| Repayment of debentures |
(112,874) |
(36,184) |
(70,887) |
(7,042) |
(137,893) |
| Costs of raising credit |
-- |
(3,464) |
-- |
(1,600) |
(5,891) |
| Net cash used for financing activities |
(356,891) |
(221,588) |
(12,124) |
(419,728) |
(147,614) |
| Net increase (decrease) in cash and cash equivalents |
(142,043) |
187,853 |
25,351 |
202,027 |
234,682 |
| Effect of exchange rate fluctuations on cash and |
4,563 |
(2,897) |
1,509 |
(2,816) |
1,374 |
| Cash and cash equivalents at the beginning of the |
256,521 |
20,465 |
92,181 |
6,210 |
20,465 |
| Cash and cash equivalents at the end of the period |
119,041 |
205,421 |
119,041 |
205,421 |
256,521 |
The attached notes are an integral part of the condensed consolidated interim financial statements
| Condensed Consolidated Interim Statement of Cash Flows (Contd.) |
||||||
| USD thousands |
||||||
| Appendix A: Adjustments required to present cash flows from operating activities |
||||||
| Six months ended |
Three months ended |
Year ended |
||||
| June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
December 31, 2012 |
||
| (Unaudited) |
(Unaudited) |
(Audited) |
||||
| A. |
Income and expenses not included in cash flows |
|||||
| Depreciation and amortization |
87,283 |
72,278 |
44,506 |
33,988 |
144,694 |
|
| Financing expenses, net |
52,074 |
60,244 |
35,568 |
14,372 |
146,435 |
|
| Net changes in fair value of derivatives |
(6,307) |
514 |
1,405 |
(6,183) |
10,413 |
|
| Changes in fair value of the loan to Haifa Early Pensions Ltd. |
(3,699) |
(93) |
(2,546) |
2,722 |
(6,392) |
|
| Share in losses (profits) of equity-accounted investees, including impairment losses |
(319) |
2,546 |
(211) |
1,544 |
4,567 |
|
| Loss (profit) from deposits and investments in financial assets, net |
6,178 |
(6,030) |
6,063 |
(3,246) |
(7,702) |
|
| Share-based payments |
(93) |
1,133 |
(461) |
613 |
1,632 |
|
| Tax benefit |
(8,887) |
(30,005) |
(89) |
(35,298) |
(65,491) |
|
| 126,230 |
100,587 |
84,235 |
8,512 |
228,156 |
||
| B. |
Changes in assets and liabilities |
|||||
| Decrease (increase) in trade receivables |
403 |
(165,238) |
24,569 |
21,576 |
(160,984) |
|
| Decrease (increase) in other receivables |
11,721 |
8,133 |
(6,444) |
10,643 |
32,902 |
|
| Decrease in inventory |
244,765 |
133,566 |
130,844 |
459,288 |
32,515 |
|
| Increase (decrease) in trade payables |
(55,246) |
526,557 |
(138,954) |
217,097 |
641,842 |
|
| Increase (decrease) in other payables and provisions |
(8,383) |
22,542 |
11 |
17,329 |
46,061 |
|
| Increase (decrease) in employee benefits, net |
1,431 |
(3,562) |
2,639 |
(3,114) |
(928) |
|
| 194,691 |
521,998 |
12,665 |
722,819 |
591,408 |
||
The attached notes are an integral part of the condensed consolidated interim financial statements.
SOURCE Oil Refineries Ltd.
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