SLOVNAFT Group sharply increases investment in the first half to almost €100 million

• Capital investments in the petrochemical segment and to raise production efficiency and quality as part of a general overhaul
• Refinery performance affected mainly by turnarounds, profits hit by worsening pricing conditions in commodity markets
• Petroleum product sales and production fall, while exports to foreign markets dominate

BRATISLAVA, 1 August 2014 - SLOVANAFT continued its strong investment in the first half of 2014, with capital expenditures reaching EUR 99 million. More than threefold year-to-year growth has been supported by investments in the petrochemical segment, especially into the construction of the new LDPE 4 polyethylene production plant and spending on planned turnarounds to increase production efficiency and quality and maintain operational reliability. An extensive shutdown of production units led to a drop in production volume and consequently also petroleum product sales, resulting in a 19% decline in first half sales revenue at the SLOVNAFT Group to EUR 1.89 billion. A loss was reported in the first six months of this year of EUR 18 million.

“Slovnaft’s refinery performance in the second quarter was affected by planned turnarounds carried out on key production units in the company,” said SLOVNAFT, a.s. Chairman and CEO Oszkár Világi. As a result, crude oil processing reduced and as a consequence both production and sales of finished products decreased, which was partially compensated by higher sale of inventories. Besides operation, our financial performance was influenced by shrinking difference between the quoted price of diesel, which represents half of the Bratislava refinery's production, and the price of crude oil on international commodity exchanges.”

In the first six months of this year, Slovnaft’s Bratislava refinery processed 2.37 million tonnes of crude oil, a 17% drop compared to the same period in 2013 and caused by the general overhaul. Automotive diesel production in the first half fell to 538 thousand tonnes, a 22% drop compared to the same time last year. Production of diesel fuel fell 17% year-to-year to 1.25 million tonnes, while a 5% decline was also reported in production of petrochemical products, to 148 thousand tonnes.

SLOVNAFT Group's sales of petroleum products for the period from January to the end of June decreased 15% year-to-year to 2.48 tonnes. Of this volume, nearly three-quarters was destined for export. There was a drop in foreign market sales, while domestic sales rose 4% to 707,000 tonnes.

Almost half of total investment volume went to the refinery segment. “The successfully finished plant overhaul, as well as further investments upgrade of one of our key production units, additionally created a space for SLOVNAFT to operate at full capacity in the upcoming period,” added SLOVNAFT, a.s. Chairman and CEO Oszkár Világi.

At the end of June, the company was operating 212 service stations in Slovakia. The first half of the year saw the completion of a new motorway service station, which is expected to open in the third quarter. As part of the MOL Group, Slovnaft also operates almost 150 petrol stations in the Czech Republic under the PAP OIL and Slovnaft brands.

About SLOVNAFT Group

SLOVNAFT Group is an integrated refinery-petrochemical group. It´s key company is SLOVNAFT, a.s. dealing mainly with refining in one of the most complex European refineries and with the wholesale and retail sale of motor fuels. Other members of the Group are SLOVNAFT MONTÁŽE A OPRAVY a.s., SLOVNAFT TRANS a.s., VÚRUP, a.s., CM European Power Slovakia, s.r.o. and other companies. Slovnaft operates the largest network of filling stations in Slovakia. The company is a leader in Slovakia in the field of CSR and corporate philanthropy, significantly supports sport, culture, education, youth and revitalizing of environment. SLOVNAFT Group is a member of international MOL Group. Further information available at www.slovnaft.sk

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