Thursday, August 16, 2012

Slovnaft with lower sales and higher investments in the first half of 2012

The decrease in demand for oil products and lower sales reduced net sales of the SLOVNAFT Group by 7 % in the first half of 2012. They reached €2.13 billion year-on-year bassis. Operating profit adjusted for current cost of supplies (CCS) decreased by 78 % percent to €9 million year-on-year.

“The situation in the European refining sector did not change dramatically in the second quarter of 2012.  The decreased demand for fuels continued, the market was even under the pressure caused by high oil prices, energy and biocomponents costs and by weakening of the Euro against the Dollar...The SLOVNAFT Group did not avoid these influences,“ Oszkár Világi, the Chairman of the Board of Directors and CEO of SLOVNAFT, a.s., company said.

Only one positive figure

Slovnaft company processed 2,63 million tons of oil in the first half of 2012 in Bratislava refinery, which was around 12 % less than in the same period last year. 

The gasoline production decreased by 7 %, diesel production by 15 % and the decline also influenced the production of petrochemical products in the first half of the year. The majority of Slovnaft's products continue to be exported.

The company operated 209 filling stations as by the end of June. The total sale of fuels at filling stations in Slovakia decreased by 6.7 %. The decrease constituted 10.2 % for gasoline and 5.4 % for diesel. On the other hand, sale of LPG was marked by nearly 15 % increase.

The capital expenditures of SLOVNAFT Group were €90 million and increased by more than 50 percent year-on-year mainly due to general revisions in months of April and May and also by the catalysts replacement.

More investments to come

In the coming years Slovnaft plans, together with the parent group MOL, to carry out investments amounting to several hundred million euros. (See EBRD will finance …)

"Although we cannot predict further developments of the oil processing sector, we maintain our strong investment program and ... we are focusing on the construction of a new petrochemical unit producing polyethylene,“ Világi added. 

The company will also participate in reconstruction and increasing the transport capacity of the connection of Slovakia to the international pipeline Adria. 

The length of this section is only 8.5 km with annual capacity of 3,5 Mt. The current capacity is enough to cover the Slovak oil demand, but not the pro-export processing capacity of Slovnaft refinery. This route is not used on a permanent basis and serves only as a back-up solution in case of oil supply disruptions form Ukraine. Based on the initial estimates the modernization might cost around € 80 million.

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