Romania’s Rompetrol Rafinare 2016 Net Profit Falls Due To Lower Oil Prices
Romanian oil refiner Rompetrol Rafinare [BSE:RRC] reported a consolidated net profit of $49.8 million (46.8 million euro) in 2016, down 23% year-on-year, negatively impacted by international quotations for oil products.
Rompetrol Rafinare’s consolidated operating result (EBITDA) rose by 62% on the year to over $182.5 million in 2016, due to historical operational performances registered by the two refineries operated by the company – Petromidia Navodari and Vega Ploiesti, the company said in a press release on Wednesday.
Its gross turnover was 7% down on the year to $3.56 billion due to a decline of international prices of oil products.
“The operational results marked by historical records of Petromidia and Vega refineries were achieved further to the constant programs for modernizing production installations, and those to optimize industrial processes and cut operation costs. The constant performances of Rompetrol Rafinare were made further to the investments supported by KMG International and its sole shareholder, the national oil and gas company in Kazakhstan, KazMunayGas, which amounted to $1.4 billion starting from 2007, the takeover time,” the company’s general manager, Yedil Utekov, said in the statement.
Petromidia, one of the company’s two refineries in Romania, processed a historical level of 5.4 million tons of raw material in 2016, up by 9% compared to the same period of last year. The increase was due to the improvement of the energetic intensity index and the cutting of processing costs to the lowest level in the last 10 years, of $16.7per tonne. The refinery operated at reduced capacity after a fire broke out on August 26 in the area of the vacuum distillation plant, killing one worker and injuring another three.
The refining capacity of Petromidia was 83.96% in 2016, higher by 9.78% as compared to the previous year.
Rompetrol Rafinare’s other refinery in Romania, Vega, processed over 354,000 tons of raw material in 2016, up by 7.78% compared to 2015. The refining capacity of Vega platform was 107% in 2016, up by 7.7% year-on-year.
In addition to production records for bitumen and hexane, the Vega refinery registered the highest production of ecological solvents in 2016, of 40,000 tones.
Rompetrol Rafinare is the core asset of Dutch-based KMG International, formerly The Rompetrol Group, which is fully owned by Kazakhstan’s state-owned energy company KazMunaiGaz Group.
Through its two refineries, Petromidia and Vega, Rompetrol Rafinare accounts for over 40% of Romania’s refining capacity and is the only producer of polymers in the country.
Rompetrol Rafinare ended 2015 with a consolidated net profit of $62 million, its first positive result in 11 years.
In December 2016, KMG International NV (KMGI), the major shareholder of Romania’s Rompetrol Rafinare, said that negotiations between the National Company KazMunayGas of Kazakhstan (KMG NC) and China Energy Company Limited (CEFC) for the purchase of 51% of KMGI’s shares have reached the final stage.
In July, KMGI said it is seeking international arbitration against Romania over the seizure of 3 billion lei ($738 million/671 million euro) of assets in May in a tax fraud probe. Romania’s anti-organised crime investigation unit DIICOT seized the assets as part of an investigation into suspected violations related to the privatisation of Rompetrol group.
Rompetrol was privatised in 1993 by Management and Employee Buy Out (MEBO) and in 1998 it was bought by a local investor group led by Dinu Patriciu. In August 2007, KazMunayGas acquired 75% of the Rompetrol shares from Patriciu for around 2.5 billion euro.
Rompetrol Rafinare shares were trading 3.78% lower at 0.560 lei at 1629 CET on the BVB.
($ = 0.9269 euro)