1st Quarter Results

Helleniq Energy Holdings S.A.
16 May 2024
 

Maroussi, 16 May 2024

 

First Quarter 2024 financial results

 

Strong profitability driven by positive refining environment, operational performance and exports - Continued progress in strategic initiatives implementation

 

HELLENiQ ENERGY Holdings S.A. ("Company") announced its 1Q24 financial results, with Adjusted EBITDA amounting to €338m and Adjusted Net Income coming in at €164m.

1Q24 Reported EBITDA stood at €350m, with Reported Net Income amounting to €179m, higher y-o-y, mainly due to the impact of international prices on inventory valuation.

The results were primarily shaped by the favorable international refining environment, the improved operation of our refineries, with increased units' availability, the particularly strong exports, reaching a 3-year historical high, and the improved contribution from the petrochemicals and RES businesses.

Downstream production in 1Q24 increased by 5% y-o-y to 3.8m MT, the highest since 1Q20. This performance led to increased sales volume across all markets, reaching 4m MT (+8% y-o-y), with exports accounting for 62% of total.

 

Strategy implementation - Vision 2025

During 1Q24, the Group continued to implement its strategy across all operations, undertaking initiatives that are expected to strengthen our profitability in the medium term, while improving our environmental footprint.

In our core business, we focus on operational excellence, as well as emissions reduction, with projects that contribute to energy autonomy and efficiency and the implementation of Carbon Capture, Utilization and Storage (CCUS) technologies. At the same time, the expansion of the polypropylene production plant is also in progress. In terms of the development of alternative fuels with a low carbon footprint, a Hydrotreated Vegetable Oil (HVO) co-processing unit is being developed and at the same time, we are assessing potential investments in the production of Sustainable Aviation Fuel (SAF), green hydrogen, and synthetic fuels.

In Fuels Marketing, our objective is to improve offered services by leveraging our extensive network and technology. We are focusing on rationalizing the domestic market network, increasing the share of company-operated petrol stations, as well as strategically expanding our international footprint. At the same time, we work on improving our sales mix, with an increased contribution from premium products and non-fuel sales, which has already yielded tangible results.

The commencement of commercial operations by EKO Energy in Cyprus earlier this year, has further enhanced the Group's successful presence in the country. EKO Energy aspires to cater to the energy requirements of eligible commercial and industrial consumers, serving as the first fully integrated and vertically aligned energy provider in Cyprus. EKO Energy leverages on EKO Cyprus' leading position in the fuel market, facilitated by its extensive retail network and allowing for an extended product portfolio, incorporating electricity generation from RES. The total capacity of the Group's operational RES projects in Cyprus currently accounts for c.15% of PVs participating in the local electricity market, with expectations for further growth in the coming years.

In our RES business, HELLENiQ RENEWABLES has been actively expanding its portfolio, reaching a total installed capacity of 381 MW by the end of 1Q24. Furthermore, there are currently 0.7 GW of projects under construction or in advanced development stages. It is worth noting that the overall portfolio of projects under development amounts to 4.3 GW. The Company's objective is to operate RES projects with a capacity of over 1 GW by 2025 and more than 2 GW by 2030.

In the E&P business, the processing of 3D seismic data in offshore areas, specifically the "Ionian", "Block 2" and "Block 10" areas, has been successfully concluded. Additionally, the processing of 2D seismic data in two offshore areas in Crete has been completed, while their interpretation is in progress. In the "Southwest of Crete" offshore area, a 3D seismic acquisition has also been completed, followed by data processing and interpretation.

 

Slightly higher crude oil prices - Reduced benchmark refining margins

Crude oil (Brent) prices in 1Q24 were slightly higher y-o-y, at $83/bbl. Accordingly, Euro strengthened slightly against the US dollar, averaging 1.09 vs 1.07 in 1Q23.

In 1Q24, natural gas and electricity prices continued to decline, by around 50% y-o-y. Accordingly, EUAs recorded a decrease of 31%, on average, compared to the corresponding period last year.

Refining margins declined from the particularly high levels of 1Q23, but remained higher than the most recent five-year cycle (2015-2019), prior to the pandemic. Our refineries' system benchmark margin averaged $8.8/bbl in 1Q24, compared to $10.6/bbl in 1Q23.

 

Increased demand in the domestic market

Domestic market demand reached 1.6m MT in 1Q24, +2% y-o-y, driven by a +4% y-o-y increase in the automotive fuel consumption. Aviation and marine fuel demand increased by 19% and 9% y-o-y respectively.

 

Balance sheet and capital expenditure

Operating cash flows in 1Q24 amounted to €83m, despite the repayment of the last installments of the solidarity contribution. Additionally, there was a temporary working capital increase, due to the disruption in trade flows in the Middle East, as a result of the ongoing geopolitical events in the Red Sea. Capital expenditure amounted to €93m, primarily directed to refinery maintenance and RES capacity expansion.

Net Debt stood at €1.75bn, slightly up q-o-q, with Gearing (Net Debt to Capital Employed) unchanged, at 36%.

In addition, bank loan refinancing amounting to €1bn is expected to be completed in the coming weeks, improving commercial terms and interest cost, and reducing dependence on base interest rates volatility. Additionally, the refinancing will extend the overall maturity profile by one year. The Group is currently considering its options around the €600m Eurobond, which matures in October 2024.


Andreas Shiamishis, Group CEO, commented on the results:

"2024 started on a positive note, reporting strong financial performance, with improved refinery products sales (+8%) and Adj. EBITDA profitability of €338m. In addition to the positive refining environment, the key performance drivers include high exports, improved refinery operations and international business expansion.

Strategically, we are progressing with the implementation of "Vision 2025", which aims to strengthen our core activities and establish a new, material pillar in the renewable energy sector. At the same time, we remain committed to investing in operational excellence and the development of our human capital.

Considerable emphasis has been placed on expanding our operations in international markets, either through growing local footprint or through increasing exports and international trading business. In RES, we are implementing our growth strategy but remain cautious, as challenges related to grid constraints and storage technologies remain unresolved. Nevertheless, we are maturing our portfolio, which currently stands at 4.3 GW, and have visibility to 1 GW being operational within the next 18 months.

In terms of 2Q24 prospects, refining margins, albeit lower compared to 1Q24, are still on positive ground. Domestic market demand remains strong, predominantly for auto-fuels, while the outlook for the tourist season looks promising."

 

Key highlights and contribution for each of the main business units in 1Q24 were:

 

Refining, Supply & Trading

Refining, Supply & Trading Adjusted EBITDA came in at €289m, supported by increased sales (+8%) due to improved availability and higher production from the 3 refineries, high refining margins and system overperformance.

Production reached 3.8m MT, +5% y-o-y, while contribution of high value-added products in the product mix was maintained above 80%.

 

Petrochemicals

1Q24 Adjusted EBITDA improved by 56% y-o-y to €23m due to higher sales and a recovery in polypropylene (PP) margins.

 

Marketing

-     Domestic Marketing recorded a 2% increase in sales volume, with improved market shares and greater contribution from premium products for yet another quarter. Aviation sales increased by 21%, while bunkering sales remained stable y-o-y. Profitability improved, supported by inventory valuation gains. However, regulatory constraints on the retail gross margin continue to remain in place.

-     International Marketing recorded improved performance, with increased retail sales, higher market shares and a greater contribution from premium products. Profitability was primarily affected by costs associated with network expansion.

 

Renewables

-     RES EBITDA amounted to €11m in 1Q24. Power generation remained at the same levels as last year, while the installed capacity increased to 381 MW (+40 MW compared to the corresponding period in the previous year), as at the end of 1Q24 26 MW of PV parks were successfully installed in Cyprus.

 

Associate companies

-     In 1Q24 the contribution from associate companies, which are consolidated using the equity method, was negative and came in at €-4m, compared with €31m in 1Q23.

-     Elpedison's profitability was adversely affected by the reduced availability of the Thisvi power plant and the decrease in electricity prices in the wholesale market. However, it is worth noting that The Thisvi plant resumed its normal operations earlier than scheduled, towards the end of 1Q24.

 

 

HELLENiQ ENERGY Holdings S.A.

Key consolidated financial indicators for 1Q 2024

(prepared in accordance with IFRS)

 

1Q23

1Q24

% Δ

P&L figures




Refining Sales Volumes ('000 ΜΤ)

3,688

3,987

8%

Sales

3,113

3,278

5%

EBITDA

279

350

25%

Adjusted EBITDA 1

404

338

-16%

Operating Profit

202

268

33%

Net Income

155

179

16%

Adjusted Net Income 1

252

164

-35%

Balance Sheet Items

 

 

 

Capital Employed

4,331

4,887

13%

Net Debt

1,454

1,750

20%

Gearing (ND/ND+E)

34%

36%

     +2 pps2

 

 

Note 1: Adjusted for inventory effects and other non-operating/one-off items, as well as the IFRS accounting treatment of the EUAs deficit.

Note 2: pps stands for percentage points

 

Further information:

Investor Relations

8A Chimarras str., 151 25 Maroussi, Greece

Tel: 210-6302526, 210-6302305

Email: ir@helleniq.gr

 

 

Interim Condensed Consolidated Statement of Financial Position



As at


Note

31 March 2024

31 December 2023

Αssets




Non-current assets




Property, plant and equipment

10

                                                                 3,643,111  

                      3,643,045 

Right-of-use assets

11

                        231,605

                        232,189

Intangible assets

12

                        390,235 

                        333,692 

Investments in associates and joint ventures

7

                        401,663 

                       404,743 

Deferred income tax assets


                         99,356 

                         95,546 

Investment in equity instruments

3

                            471

                            514

Derivative financial instruments


                             - 

                            746 

Loans, advances and long term assets

13

                         60,256 

                          57,771



                     4,826,697 

                     4,768,246 

Current assets




Inventories

14

                      1,706,128

                      1,472,536

Trade and other receivables

15

                       909,275 

                       880,986 

Income tax receivable


                         66,709 

                         66,148

Derivative financial instruments


                          2,194

                            930 

Cash and cash equivalents

16

                       479,302 

                        919,457



                      3,163,608 

                     3,340,057 

Total assets


                     7,990,305 

                      8,108,303 





Equity




Share capital and share premium

17

                      1,020,081

                      1,020,081

Reserves

18

                       304,293 

                        291,010

Retained Earnings


                      1,746,439

                      1,568,384

Equity attributable to the owners of the parent


                      3,070,813 

                     2,879,475 





Non-controlling interests


                         66,991

                         66,916





Total equity


                      3,137,804 

                      2,946,391 





Liabilities




Non- current liabilities




Interest bearing loans and borrowings

19

                       1,153,836

                      1,388,010

Lease liabilities


                        183,393

                        182,335

Deferred income tax liabilities


                        176,434

                        174,063

Retirement benefit obligations


                        177,265

                        176,305

Derivative financial instruments


                          2,566

                                     1,541  

Provisions


                         33,815

                         33,835

Other non-current liabilities


                         34,975

                         25,348 



                      1,762,284

                      1,981,437

Current liabilities




Trade and other payables

20

                       1,745,561

                      1,598,726

Derivative financial instruments


                             - 

                         13,333

Income tax payable


                       236,674 

                        285,570 

Interest bearing loans and borrowings

19

                       1,075,518

                      1,158,495

Lease liabilities


                         30,760 

                         32,220

Dividends payable

25

                          1,704

                          92,131



                      3,090,217 

                      3,180,475 

Total liabilities


                      4,852,501 

                       5,161,912

Total equity and liabilities


                     7,990,305 

                      8,108,303 

 

 

Interim Condensed Consolidated Statement of Comprehensive Income



For the period ended


Note

31 March 2024

31 March 2023





Revenue from contracts with customers

4

3,278,481

3,113,343

Cost of sales


(2,869,817)

(2,778,127)

Gross profit / (loss)


408,664

     335,216    





Selling and distribution expenses


(100,756)

(93,808)

Administrative expenses


(43,784)

(40,483)

Exploration and development expenses


(1,387)

(4,244)

Other operating income and other gains

5

8,504

7,403

Other operating expense and other losses

5

(3,436)

(2,551)





Operating profit / (loss)


267,805

     201,533    





Finance income


3,439

1,326

Finance expense


(33,444)

(32,124)

Lease finance cost


(2,436)

(2,325)

Currency exchange gains / (losses)

6

5,824

558

Share of profit / (loss) of investments in associates and joint ventures

7

(3,650)

31,289





Profit / (loss) before income tax


237,538

     200,257





Income tax (expense) / credit

8

(58,270)

(44,491)





Profit / (loss) for the period


179,268

     155,766    





Profit / (loss) attributable to:




     Owners of the parent


179,172

155,276

     Non-controlling interests


96

490



179,268

155,766





Other comprehensive income / (loss):




Other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax):




Changes in the fair value of equity instruments

18

(34)

-



(34)

-

Other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax):




Share of other comprehensive income / (loss) of associates

18

570

(1,117)

Fair value gains / (losses) on cash flow hedges

18

12,709

(921)

Currency translation differences and other movements

18

17

(782)



13

(3)





Other comprehensive income / (loss) for the period, net of tax


13

(3)





Total comprehensive income / (loss) for the period


193

153





Total comprehensive income / (loss) attributable to:




Owners of the parent


192,455

152,572

 Non-controlling interests


75

374



193

153





Εarnings / (losses) per share (expressed in Euro per share)

9

0.59

0.51

 

 

Interim Condensed Consolidated Statement of Cash Flows

 

 

For the period ended


Note

31 March  2024

31 March 2023

Cash flows from operating activities

 

 

 

Cash generated from operations

21

197,298

615,161

Income tax (paid) / received


(114,148)

(2,365)

Net cash generated from/ (used in) operating activities

 

83,150

612,796





Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment & intangible assets

10,12

(93,124)

(45,617)

Proceeds from disposal of property, plant and equipment & intangible assets

 

326

97

Acquisition of share of associates and joint ventures

 

1

(1)

Cash and cash equivalents of acquired subsidiaries

 

1,639

-

Grants received


10,000

1

Interest received


3,439

1,326

Prepayments for right-of-use assets

 

-

(27)

Dividends received


-

31,715

Net cash generated from/ (used in) investing activities

 

(77,719)

(12,507)





Cash flows from financing activities

 

 

 

Interest paid on borrowings


(27,595)

(26,484)

Dividends paid to shareholders of the Company

25

(90,425)

(75,779)

Proceeds from borrowings

19

205,000

435,211

Repayments of borrowings

19

(525,397)

(855,611)

Payment of lease liabilities - principal

 

(10,634)

(9,192)

Payment of lease liabilities - interest

 

(2,436)

(2,325)

Net cash generated from/ (used in) financing activities

 

(451,487)

(534,180)





Net increase/ (decrease) in cash and cash equivalents

 

(446,056)

66,109





Cash and cash equivalents at the beginning of the year

16

919,457

1,052,618

Exchange (losses) / gains on cash and cash equivalents

 

5,901

(278)

Net increase / (decrease) in cash and cash equivalents

 

(446,056)

66,109

Cash and cash equivalents at end of the period

16

479,302

1,118,449

 

 

Interim Condensed Statement of Financial Position of the Company

 

 

As at


Note

31 March 2024

31 December 2023

Assets




Non-current assets




Property, plant and equipment


             668

             673

Right-of-use assets

11

           8,870

            9,155

Intangible assets


              48

              63

Investments in subsidiaries, associates and joint ventures

7

         1,837,615

         1,785,115

Deferred income tax assets


           8,454

            8,416

Loans, advances and long term assets

13

           59,045

          242,249



         1,914,700

         2,045,671 

Current assets




Trade and other receivables

15

          207,774

           26,101

Income tax receivables


            2,625

            2,625

Cash and cash equivalents


            6,016

          150,528



          216,415

          179,254

Total assets


          2,131,115

        2,224,925





Equity




Share capital and share premium

17

         1,020,081

         1,020,081

Reserves

18

          292,638

          292,638

Retained Earnings


          786,825

          784,155

Total equity


        2,099,544

        2,096,874





Liabilities




Non-current liabilities




Lease liabilities


            6,591

            6,973



            6,591

           6,973

Current liabilities




Trade and other payables


           19,600

           24,597

Income tax payable


            1,128

            1,928

Lease liabilities


            2,546

            2,422

Dividends payable

25

            1,706

           92,131



          24,980

          121,078

Total liabilities


           31,571

          128,051

Total equity and liabilities


          2,131,115

        2,224,925

​ 

 

Interim Condensed Statement of Comprehensive Income of the Company

 

 

For the period ended


Note

31 March 2024

31 March 2023





Revenue from contracts with customers

 

           8,660

           7,457

Cost of sales


          (7,873) 

          (6,779)

Gross profit / (loss)


             787

             678





Administrative expenses


           (1,443)

           (3,275)

Other operating income and other gains

5

           4,664

           3,686

Other operating expense and other losses

5

          (4,547)

          (2,820)

Operating profit /(loss)


            (539)

           (1,731)





Finance income


           4,060

           4,584

Finance expense


              (4)

              (3)

Lease finance cost


             (84)

             (93)

Dividend income

25

              -

         126,081

Currency exchange gain / (loss)


              (2)

              -

Profit / (loss)  before income tax

 

           3,431 

         128,838





Income tax (expense) / credit

8

            (761)

           (1,236)





Profit / (loss) for the period

 

           2,670

         127,602





Other comprehensive income / (loss) for the year, net of tax

 

              -

              -





Total comprehensive income / (loss) for the period

 

           2,670

         127,602

​ 

 

Interim Condensed Statement of Cash Flows of the Company

 

 

For the period ended


Note

31 March 2024

31 March 2023





Cash flows from operating activities

 

 

 

Cash generated from / (used in) operations

21

(3,025)

(10,880)

Income tax (paid) / received


(1,599)

-

Net cash generated from / (used in) operating activities

 

(4,624)

(10,880)





Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment & intangible assets

 

-

(18)

Participation in share capital increase of subsidiaries, associates and joint ventures

 

(52,500)

(18,650)

Loans and advances to Group Companies

13

(2,500)

(126,600)

Interest received


6,229

6,852

Dividends received


-

32,979

Net cash generated from / (used in) investing activities

 

(48,771)

(105,437)





Cash flows from financing activities

 

 

 

Dividends paid to shareholders of the Company

25

(90,425)

(75,779)

Payment of lease liabilities - principal, net

 

(608)

(578)

Payment of lease liabilities - interest

 

(84)

(461)

Net cash generated from / (used in) financing activities

 

(91,117)

(76,818)





Net increase / (decrease) in cash and cash equivalents

 

(144,512)

(193,135)





Cash and cash equivalents at the beginning of the period

 

150,528

209,054

Net increase / (decrease) in cash and cash equivalents

 

(144,512)

(193,135)

Cash and cash equivalents at end of the period

 

6,016

15,919

 

 

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