HELLENiQ ENERGY_Annoucement 4Q/FY23 Fin. Results

Helleniq Energy Holdings S.A.
29 February 2024
 

Maroussi, 29 February 2024

 

Fourth Quarter / Full Year 2023 financial results

 

Strong profitability on increased production and exports, amid a favorable refining environment - Total DPS of €0.90 - First wave of transformation efforts close to completion

 

HELLENiQ ENERGY Holdings S.A. ("Company") announced its FY23 financial results, with Adjusted EBITDA coming in at €1,237m and Adjusted Net Income amounting to €606m.

Results were mainly driven by strong international industry backdrop, higher refinery availability and increased exports, improved performance from our international portfolio as well as higher contribution from RES.

Downstream production in FY23 was up by 13% to 14.6m MT and sales volume reached 15.5m MT; exports accounted for 54% of total sales volume, one of the highest on record.

FY23 Reported Net Income amounted to €478m, reflecting a negative impact from crude and products inventory valuation following a decline of international prices since 2022.

Considering the strong performance and outlook, the Board of Directors will propose to the AGM the distribution of a final dividend of €0.60 per share. This will add to the interim dividend of €0.30 per share, which has already been distributed, resulting in a total FY23 dividend of €0.90 per share. Using the 2023 year-end share price, the total dividend represents a higher than 12% dividend yield.

 

Strategy Implementation - Vision 2025

During 2023, the Group recorded progress in all strategic areas and has implemented significant initiatives that will deliver value upon their completion in the coming years.

The objective in our core business, is to further enhance financial performance and accelerate projects that profitably promote energy transition. In this context, we are progressing projects that improve energy efficiency and increase energy autonomy in the downstream business, aiming for both improved economics, as well better environmental footprint. As part of the energy transition process, we are implementing a Hydrotreated Vegetable Oil (HVO) co-processing unit in Thessaloniki, an investment that will initiate the substitution of a small part of the fossil fuels output. Additionally, investments are being evaluated for the first Greek Sustainable Aviation Fuel (SAF) production unit in Aspropyrgos, the implementation of a CO2 capture project in Elefsina, a project that is highly dependent upon regulatory framework and EU/national strategy, as well as the production of green hydrogen and synthetic fuels in Elefsina and Thessaloniki. These solutions are of great significance, as they support the reduction of the Company's carbon footprint and help transition the transportation fuels sector to a greener future. Finally, the expansion of the polypropylene production plant is already in progress, which, further to economic value increase, it reduces our reliance on fuel sales and further improves environmental impact of our business.

In Fuels Marketing, the continuous expansion of the international network, the promotion of e-mobility and the ongoing improvement of our service stations, which are key to the delivery of our value proposition to the end-consumer, remain a key priority.

In the RES business, HELLENiQ Renewables has significantly accelerated the expansion of its portfolio in 2023, positioning itself as a leading player in both the Greek market and selected international markets. Specifically, through the completion of a series of agreements in Greece, Cyprus and Romania, it had achieved an installed capacity of 356 MW by the end of 2023, along with projects under construction or in advanced stages of development with a total capacity of 0.7 GW. The current pipeline has increased further to 4.3 GW, with growing aspirations for our international footprint as well. The progress achieved to date credibly supports our claim of attaining an operational capacity of over 1 GW by 2025 and more than 2 GW by 2030.

In the E&P business, the acquisition of 3D seismic data in three offshore areas ("Ionian", "Block 2", "Block 10") was completed. Furthermore, the acquisition of 2D seismic data in two offshore areas in Crete has been finalized, with data processing currently under way. In Crete, 3D seismic surveys are ongoing and are expected to contribute to further evaluation and the final decisions for next steps.

The implementation of the digital transformation program is ongoing, with an investment of €50m to date and an annualized benefit of €44m in 2023, which is expected to exceed €50m in 2025.

 

Normalization of crude oil prices and refining margins in 2023

Despite the recovery of international crude oil prices during 2H23, primarily due to the reduction of OPEC+ output, crude oil prices for FY23 normalized compared to the particularly high average prices of 2022. Specifically, the Brent crude averaged $83/bbl, down by 18% y-o-y. In 4Q23 the average price was $84/bbl, 12% lower y-o-y.

The Euro strengthened against the US dollar by 3% averaging 1.08 in 2023, up from 1.05 in 2022.

Refining margins in 2023 declined from FY22 all-time highs, but remained strong compared to the most recent five-year cycle (2015-2019), prior to the pandemic. They were primarily driven by demand for main products, as well as the sanctions imposed on Russia and the geopolitical tensions in Middle East in 4Q23. Our refineries' system benchmark margin averaged $9.8/bbl in 2023 compared to $11.8/bbl in 2022, while for 4Q23 it averaged $8.2/bbl vs $13.3/bbl in 4Q22.

 

Improved demand for motor, aviation and marine fuels

Domestic market demand reached 6.6m MT in 2023, -3% y-o-y, due to a drop in heating oil demand. Excluding heating oil, demand rose by 4%, with gasoline and diesel consumption improving by 3% to 4.91m MT. Aviation and marine fuel demand reached 1.45m MT (+7%) and 2.7m MT (+3%) respectively.

 

Balance sheet and capital expenditure

Thanks to a strong financial performance in FY23, operating cash flows amounted to €965m, while capital expenditure reached €291m, primarily directed to refinery maintenance and infrastructure upgrading projects, with a smaller portion allocated to Marketing and RES. It is anticipated that total capital expenditure for 2024 will increase, mainly due to the acceleration of RES capacity development.

As a result of significant free cash flow generation and despite the gradual payment of the solidarity contribution (€200m in 2023 out of a total amount of €267m) and the distribution of dividends totaling €229m, Net Debt decreased by €0.3bn to €1.63bn, while Gearing (Net Debt to Capital Employed) fell to 36% compared to 42% in 2022.

Furthermore, in 2023 the refinancing of debt totaling €1.2bn was successfully completed, improving the maturity profile, while available credit lines as at the end of 2023 amounted to €1.1bn.


Andreas Shiamishis, Group CEO, commented on the results:

 

"The Group concluded 2023 as yet another successful year, with the first phase of the Vision 2025 strategic plan almost completed and having a positive impact in terms of operational performance and profitability. Following the unprecedented and exceptional highs of last year, 2023 results, albeit lower than last year, are still very good and the qualitative analysis supports an optimism about the next few years.

Initially, a substantial portion of the 2023 profitability was driven by improvements in the Company's operations and the execution of the strategic transformation program and operational excellence. These are factors that are more controllable and predictable than a volatile international commodity environment which, nevertheless, can have a material impact on the results of the Company. Our efforts include the strengthening of the International Marketing business, expansion into new markets for either fuels products or RES projects, and a substantial renewal and development of our human capital, supporting an ongoing cultural shift across the organization.

An even more important point to note is the gradual departure from a more extreme, if not condemning, approach towards the energy sector, with a shift towards realism. This shift acknowledges that fossil fuels are part of the solution and should contribute to the energy transition in a more environmentally friendly manner. Highlighting this message is the official conclusion, for the first time at the recent COP28, that extreme and unfeasible solutions have a detrimental impact on the environment. They hinder medium-term investments which would otherwise improve existing energy sector performance in the medium term and pave the road towards the future state, while at the same time compromising energy cost and security, particularly in Europe.

Referring to our financial performance, 2023 strong profitability, with Adjusted EBITDA and Adj. Net Income of €1.24bn and €0.6bn respectively, has further solidified the Group's position and based on that, the Board of Directors will propose to the AGM a final dividend of €0.60 per share, resulting in a total dividend of €0.90 per share.

Moreover, alongside the positive financial results, notable progress has been made in ESG matters, including advancements in ESG Key Performance Indicators (KPIs), such as a reduction of over 7% in the CO2 emission index (per activity level), as well as an improvement in ESG ratings with increased participation and contribution to society's needs.

In conclusion, I would like to thank our colleagues, who actively participated in this effort, as well as the shareholders for their trust in the Company throughout the years. I would also like to extend my appreciation to the new shareholders who appreciated in the Group's prospects and participated in the recent placement of 11% of the Company's shares, in an effort undertaken by our main shareholders to expand the investor base."


Key highlights and contribution for each of the main business units in 4Q/FY 23 were:

 

Refining, Supply & Trading

-       Refining, Supply & Trading Adjusted EBITDA came in at €236m in 4Q23 and at €1,043m in FY23, supported by high international refining margins, the system's overperformance and increased sales volume (+8% in FY23) on the back of increased refineries' availability. Exports accounted for 54% of total sales, up from 49% in FY22.

-       Production came in at 16.2m MT in FY23, +14% y-o-y, while contribution of high-value-added products in the product mix surpassed 80%.

 

Petrochemicals

-       FY23 Adjusted EBITDA came in at €43m, lower y-o-y, on weak PP margins.

 

Marketing

-       Despite a 2% decline in Domestic Marketing's total sales volume in 2023, automotive sales volume increased by 4%, with improved market shares and higher contribution from premium products. Aviation and bunkering sales volume rose by 2% and 1% respectively. Excluding the impact from inventory valuation and the pricing timing on aviation fuels, profitability was broadly stable y-o-y, with regulatory constraints on retail gross margin remaining in place.

-       International Marketing recorded higher sales volume in 4Q23 and FY23, with profitability at slightly lower levels y-o-y on lower margins at some markets.

 

Renewables

-      Higher RES operating capacity (356 ÌW) led to 8% increase in power generation in 4Q23 and by 39% in FY23, with Adjusted EBITDA coming in at €8m and €42m (+44%) respectively.

 

Associate companies

-      In FY23 the contribution from associate companies, which are consolidated using the equity method, came in at €18m, lower y-o-y. Specifically, a) Elpedison's profitability was adversely affected by the lower availability of the Thisvi power plant, while b) DEPA's contribution was primarily impacted by lower domestic market demand, reduced margins and increased costs associated with securing capacity in the gas network.



HELLENiQ ENERGY Holdings S.A.

Key consolidated financial indicators for 4Q/FY 2023

(prepared in accordance with IFRS)

 

€ million

4Q22

4Q23

% Ä

FY22

FY23

% Ä

P&L figures







Refining Sales Volumes ('000 ÌÔ)

3,685

3,956

7%

14,284

15,438

8%

Sales

3,542

3,304

-7%

14,508

12,803

-12%

EBITDA

149

147

-1%

1,717

1,053

-39%

Adjusted EBITDA 1

465

269

-42%

1,601

1,237

-23%

Operating Profit

75

67

-11%

1,413

736

-48%

Net Income

-232

13

-

890

478

-46%

Adjusted Net Income 1

257

111

-57%

1,006

606

-40%

Balance Sheet Items

 

 

 

 

 

 

Capital Employed




4,669

4,573

-2%

Net Debt




1,942

1,627

-16%

Gearing (ND/ND+E)




42%

36%

-6pps2

 

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 Chimaras str., 151 25 Maroussi, Greece

Tel: 210-6302526, 210-6302305

Email:

 


Group Consolidated statement of financial position



 

As at

 

Note

31 December 2023

31 December 2022

Ássets

 



Non-current assets

 



Property, plant and equipment

6

3.643.045

3.639.004

Right-of-use assets

7

232.189

233.141

Intangible assets

8

333.692

518.073

Investments in associates and joint ventures

9

404.743

402.101

Deferred income tax assets

19

95.546

91.204

Investment in equity instruments

3

514

490

Derivative financial instruments

23

746

958

Loans, advances and long term assets

10

57.771

64.596

 

 

4.768.246

4.949.567

Current assets

 

 

 

Inventories

11

1.472.536

1.826.242

Trade and other receivables

12

880.986

866.109

Income tax receivable

29

66.148

14.792

Derivative financial instruments

23

930

5.114

Cash and cash equivalents

13

919.457

900.176

 

 

3.340.057

3.612.433

Total assets

 

8.108.303

8.562.000


 

 


Equity

 



Share capital and share premium

14

1.020.081

1.020.081

Reserves

15

291.010

297.713

Retained Earnings

 

1.568.384

1.341.908

Equity attributable to the owners of the parent

 

2.879.475

2.659.702


 



Non-controlling interests

 

66.916

67.699

 

 



Total equity

 

2.946.391

2.727.401


 



Liabilities

 



Non- current liabilities

 



Interest bearing loans and borrowings

17

1.388.010

1.433.029

Lease liabilities

18

182.335

177.745

Deferred income tax liabilities

19

174.063

202.523

Retirement benefit obligations

20

176.305

175.500

Derivative financial instruments

23

1.541

-

Provisions

21

33.835

36.117

Other non-current liabilities

22

25.348

22.662

 

 

1.981.437

2.047.576

Current liabilities

 

 

 

Trade and other payables

16

1.598.726

1.835.957

Derivative financial instruments

23

13.333

1.761

Income tax payable

0

285.570

432.385

Interest bearing loans and borrowings

17

1.158.495

1.409.324

Lease liabilities

18

32.220

30.372

Dividends payable

31

92.131

77.224

 

 

3.180.475

3.787.023

Total liabilities

 

5.161.912

5.834.599

Total equity and liabilities

 

8.108.303

8.562.000

 

Group Consolidated statement of comprehensive income

 


For the year ended

 

For the three-month period ended

 

Note

31 December 2023

31 December 2022

 

31 December 2023

31 December 2022








Revenue from contracts with customers

5

12.803.061

14.508.068

 

3.304.010

4.189.237

Cost of sales

24

(11.474.830)

(12.580.489)


(3.066.811)

(3.867.099)

Gross profit / (loss)


1.328.231

1.927.579

 

237.199

322.138








Selling and distribution expenses

24

(415.225)

(393.350)


(113.297)

(100.638)

Administrative expenses

24

(185.877)

(176.345)


(53.430)

(40.091)

Exploration and development expenses

25

(6.707)

(26.548)


(897)

(1.064)

Other operating income and other gains

26

65.203

134.393


39.550

77.356

Other operating expense and other losses

26

(49.400)

(53.109)


(41.710)

(8.580)


 

 





Operating profit / (loss)

 

736.225

1.412.620

 

67.415

249.121


 

 





Finance income

27

11.918

3.315


5.754

91

Finance expense

27

(133.944)

(108.233)


(36.660)

(25.631)

Lease finance cost

20, 27

(9.669)

(9.261)


(2.644)

(2.172)

Currency exchange gains / (losses)

28

(4.743)

2.499


(10.100)

21.476

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

9

4.272

120.042


3.148

50.617


 

 





Profit / (loss) before income tax

 

604.059

1.420.982

 

26.913

293.502


 

 





Income tax (expense) / credit

29

(123.450)

(526.004)


(12.181)

(38.506)


 






Profit / (loss) for the period

 

480.609

894.978

 

14.732

254.996

 

 

 





Profit / (loss) attributable to:

 

 





     Owners of the parent

 

477.732

889.501


15.458

252.169

     Non-controlling interests

 

2.877

5.477


(726)

2.827


 

480.609

894.978

 

14.732

254.996


 

 





Other comprehensive income / (loss):

 

 





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

 

 





Actuarial gains / (losses) on defined benefit pension plans

20

(10.746)

29.709


(9.035)

-

Changes in the fair value of equity instruments

15

97

14


107

(21)


 

(10.649)

29.723


(8.928)

(21)

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

 

 





Share of other comprehensive income / (loss) of associates

15

1.460

658


759

12.323

Fair value gains / (losses) on cash flow hedges

15

6.615

5.733


(36.700)

(1.393)

Recycling of (gains) / losses on hedges through comprehensive income

15

(17.725)

(4.941)


-

-

Currency translation differences and other movements

15

(404)

(278)


(71)

(127)

 

 

(10.054)

1.172


(36.012)

10.803

 

 

 





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

 

(20.703)

30.895


(44.940)

10.782

 

 

 





Total comprehensive income / (loss) for the period

 

459.906

925.873

 

(30.208)

265.778

 

 

 





Total comprehensive income / (loss) attributable to:

 

 





     Owners of the parent

 

457.160

920.330


(32.580)

262.927

     Non-controlling interests

 

2.746

5.543


2.372

2.851


 

459.906

925.873

 

(30.208)

265.778


 






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

30

1,56

2,91

 

0,05

0,83


Group Consolidated statement of cash flows

 

 

For the year ended

 

Note

31 December 2023

31 December 2022

Cash flows from operating activities

 

 

 

Cash generated from operations

32

1.315.349

630.118

Income tax (paid) / received

29

(350.782)

(6.499)

Net cash generated from/ (used in) operating activities

 

964.567

623.619

 

 



Cash flows from investing activities

 



Purchase of property, plant and equipment & intangible assets

 6, 8

(291.035)

(512.175)

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


5.630

14.167

Acquisition of share of associates and joint ventures


(174)

-

Cash and cash equivalents of acquired subsidiaries


101

3.053

Grants received


2.832

-

Interest received

27

11.918

3.315

Prepayments for right-of-use assets


(2.710)

(748)

Dividends received


34.980

-

Proceeds from disposal of assets held for sale


-

265.516

Net cash generated from/ (used in) investing activities

 

(238.458)

(226.872)

 

 


 

Cash flows from financing activities

 


 

Interest paid on borrowings


(128.277)

(101.565)

Dividends paid to shareholders of the Company

31

(229.006)

(244.983)

Dividends paid to non-controlling interests


(3.707)

(2.240)

Proceeds from borrowings

17

1.519.407

1.102.636

Repayments of borrowings

17

(1.816.846)

(1.259.597)

Payment of lease liabilities - principal

18

(33.505)

(36.522)

Payment of lease liabilities - interest

18

(9.669)

(9.261)

Net cash generated from/ (used in) financing activities

 

(701.603)

(551.532)

 




Net increase/ (decrease) in cash and cash equivalents

 

24.506

(154.785)

 

 


 

Cash and cash equivalents at the beginning of the year

13

900.176

1.052.618

Exchange (losses) / gains on cash and cash equivalents


(5.225)

2.343

Net increase / (decrease) in cash and cash equivalents


24.506

(154.785)

Cash and cash equivalents at end of the period

13

919.457

900.176

 

Parent Company Statement of Financial Position


 

 

As at

 

Note

31 December 2023

31 December 2022

Assets

 



Non-current assets

 

 

 

Property, plant and equipment


673

671

Right-of-use assets

7

9.155

10.817

Intangible assets


63

138

Investments in subsidiaries, associates and joint ventures

9

1.785.115

1.654.517

Deferred income tax assets


8.416

11.020

Investment in equity instruments


-

38

Loans, advances and long term assets

10

242.249

230.243



2.045.671

1.907.444

Current assets

 



Trade and other receivables

12

26.101

86.159

Income tax receivables


2.625

-

Cash and cash equivalents


150.528

209.054



179.254

295.213

Total assets

 

2.224.925

2.202.657





Equity

 



Share capital and share premium

14

1.020.081

1.020.081

Reserves

15

292.638

281.104

Retained Earnings


784.155

765.156

Total equity

 

2.096.874

2.066.341





Liabilities

 



Non-current liabilities

 



Lease liabilities

18

6.973

9.611

Retirement benefit obligations


-

7.977

Other non-current liabilities


-

174



6.973

17.762

Current liabilities

 



Trade and other payables


24.597

36.491

Income tax payable

0

1.928

3.582

Lease liabilities

18

2.422

1.257

Dividends payable

31

92.131

77.224



121.078

118.554

Total liabilities

 

128.051

136.316

Total equity and liabilities

 

2.224.925

2.202.657

 

        Parent Company Statement of Comprehensive Income

 

 

For the year ended

 

For the three-month period ended

 

Note

31 December 2023

31 December 2022

 

31 December 2023

31 December 2022

 

 

 

 

 

 

 

Revenue from contracts with customers

 

39.473

38.167

 

15.173

8.073

Cost of sales


(35.885)

(34.697)


(13.793)

(7.338)

Gross profit / (loss)

 

3.588

3.470

 

1.380

735








Administrative expenses


(7.512)

(7.628)


(1.386)

(22)

Other operating income and other gains

26

28.043

180.131


11.000

147.287

Other operating expense and other losses

26

(27.420)

(21.373)


(10.814)

(3.536)

Operating profit /(loss)

 

(3.301)

154.600

 

180

144.464








Finance income


17.474

6.761


2.733

1.566

Finance expense


-

(513)


8

(2)

Lease finance cost


(380)

(461)


(93)

(89)

Currency exchange gain / (loss)


47

-


(5)

-

Dividend income

31

267.785

234.069


-

202.354

Profit / (loss)  before income tax

 

281.625

394.456

 

2.823

348.293








Income tax (expense) / credit

29

(4.249)

(3.558)


(1.037)

(193)








Profit / (loss) for the period

 

277.376

390.898


1.786

348.100








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

 






Actuarial gains / (losses) on defined benefit pension plans


(2.335)

917


(1.300)

-

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

 

(2.335)

917

 

(1.300)

-








Total comprehensive income / (loss) for the period

 

275.041

391.815


486

348.100

 

Parent Company Statement of Cash flows

 

 

For the year ended

 

Note

31 December 2023

31 December 2022

 

 

 

 

Cash flows from operating activities

 



Cash generated from / (used in) operations

32 

2.528

8.122

Income tax (paid) / received


(4.799)

-

Net cash generated from / (used in) operating activities

 

(2.271)

8.122

 

 

 


Cash flows from investing activities

 

 


Purchase of property, plant and equipment & intangible assets


(24)

(112)

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


-

10.960

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

 

(132.362)

(41.142)

Loans and advances to Group Companies

10

(8.500)

(128.197)

Interest received

 

16.079

3.713

Dividends received

 

300.236

208.354

Net proceeds from disposal of assets held for sale

 

-

265.516

Net cash generated from / (used in) investing activities

 

175.429

319.092

 

 

 


Cash flows from financing activities

 

 


Interest paid

 

-

(513)

Dividends paid to shareholders of the Company

31 

(229.006)

(244.984)

Payment of lease liabilities - principal, net

18 

(2.298)

(2.202)

Payment of lease liabilities - interest

18 

(380)

(461)

Net cash generated from / (used in) financing activities

 

(231.684)

(248.160)

 

 

 


Net increase / (decrease) in cash and cash equivalents

 

(58.526)

79.054

 

 

 


Cash and cash equivalents at the beginning of the period

 

209.054

843.493

Net cash outflow due to demerger

 

-

(713.493)

Net increase / (decrease) in cash and cash equivalents

 

(58.526)

79.054

Cash and cash equivalents at end of the period

 

150.528

209.054

 

 

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