SLOVNAFT increased crude processing and production in Q3 2005
Despite high base figures in 2004 SLOVNAFT due to higher utilization and smooth operations of the key production units succeeded to further increase crude oil processing and production and sales of oil products in Q3 2005.
Crude oil processing was up by 36.7kt (2.5%) resulting in higher production of gasoline by 7.7kt and diesel by 15.5kt compared to the same period of 2004. Moreover, the total production volume was produced in the ultra-low-sulphur quality.
SLOVNAFT kept focusing on export markets maintaining profit contribution from export sales at the level of 80%. In Q3 2005 export revenues grew by almost 31% at practically the same high level of volumes sold as a year ago. “Continuous SCM measures within the MOL Group further strengthened SLOVNAFT Group export position, and also the profitability of export sales” added the SLOVNAFT CFO Peter Chmurčiak.
Total domestic volumes sold increased by 4.5% compared to Q3 2004. Higher sales of diesel and bitumen driven by high market demand outweighed a decrease in sales of gasoline, kerosene and lubricants. Domestic sales revenues increased by 26.4 %. Looking at the first three quarters of 2005, total crude oil product sales slightly decreased (by 3% on y/y basis) driven mainly by planned shutdowns and turnaround of key production units carried out in the Q2 2005.
In Q1-3 2005 the polymer sales volumes increased by 9% compared to the same period of the last year, driven mainly by higher export. The most significant increase was recorded in polypropylene products, mainly as a result of the start up of the new PP3 plant, which has increased the PP output of SLOVNAFT nearly three-times. However, full impact of new operations will be more visible in Q4 and next year results.
The retail performance was slightly below the 2004 results (98%) underlined by fewer filling stations in operations. Diesel sales exceeded the last year level, on the other hand gasoline sales decreased. SLOVNAFT continues its network reconstruction program. During Q1-3 2005 SLOVNAFT opened 3 new, closed 22 FS and started 3 reconstructions. At the end of September SLOVNAFT Group operated 261 retail service stations.
Like in 2004 the performance of SLOVNAFT practically followed the trends already reported by major oil companies. “Always when I am asked by the investors or journalist community to comment on the performance of the SLOVNAFT Group, I have to repeat: SLOVNAFT, fully utilizing its technological competitive advantage, continues to prove that strong performance has become its characteristic feature. Proper timing of investments into key technologies, enabling smooth operations and flexible reaction to the market demand, strengthening export sales performance, efficiency improvement programs and the synergies within the MOL Group have remained the key factors of this sustainable growth. While the performance of the company was negatively influenced by the penalty imposed by the Finance Ministry, SLOVNAFT has already appealed against it at the supreme court and the management is confident that a positive settlement of the issue will be reached” commented the Q3 2005 results SLOVNAFT CEO Vratko Kaššovic.
Operating profit of the SLOVNAFT Group reached SKK 8.33bn in Q1-3 2005, downy by 11% compared to the same period of 2004 influenced besides strengthening of SKK towards USD (SKK -1.5bn) also by the penalty imposed by the Ministry of Finance, already appealed by SLOVNAFT on the Supreme Court. Without this extraordinary item the performance of the company would be in line with the results reported by comparable oil companies. Influenced by the above mentioned factors, SLOVNAFT reported net profit of SKK 6.9bn in Q1-3 2005, what is a decline by about 12.7% y/y. Synergies and internal efficiency improvements supported the results by SKK 1.8bn.