HAIFA, Israel, March 18, 2013 (GLOBE NEWSWIRE) -- Oil Refineries Ltd. (TASE:ORL) (hereinafter "the Group," "ORL"), Israel's largest integrated refining and petrochemical group, announced today its financial results for the fourth quarter and full year ending December 31, 2012. Results are reported in US Dollars and under International Financial Reporting Standards (IFRS).
Highlights:
- Adjusted EBITDA for 2012 increases by 27%
- Cash Flow from operating activities for 2012 totaled $620 million
- Adjusted Operating Income for 2012 from Operating Sectors broke even compared with an adjusted Operating Loss of $17 million in 2011
- Despite strong improvements in Refining and Trade Sectors, the Company presents an adjusted loss of $163 million in 2012, due to weaknesses in the Petrochemical Sector, financing expenses and non-recurring provisions for early retirement
- Combined, the hydrocracker, natural gas, and efficiency program are expected to contribute $300 million to the Company's yearly EBITDA
Mr. Pinhas Buchris, CEO of Oil Refineries: "We concluded 2012 as a very intense and difficult transitional year at the end of which we successfully implemented the multi year strategic plan, as outlined by our Board of Directors, to improve Oil Refineries' profitability and competitiveness. We invested $1 billion over the past five years and we are now ready to reap the rewards of our efforts.
"Together, the completion of the strategic plan, hydrocracker commissioning, expected increased supply of natural gas and efficiency plan are expected to contribute more than $300 million to the Company's annual EBITDA. We are working towards fully implementing the announced efficiency plan in order to improve the financial structure of the Company and support further efficiency. The plan includes cutting fixed costs, early retirement for employees, operational improvement initiatives, reducing labor costs and increasing control and use of performance indicators.
ORL prioritized its compliance with applicable environmental and safety standards. The Company has invested many resources in this area in order to advance various environmental measures at the highest international environmental standards and we will continue to do so as an integral part of our business program in the future."
In the Refining Sector, adjusted EBITDA totaled $118 million in 2012 compared with $1 million in 2011. Adjusted Operating Income totaled $54 million compared with an adjusted Operating Loss of $53 million in 2011, an increase of $107 million. The Company continues to generate higher refining margins than the other comparable refiners in the area. In 2012, the adjusted refining margin totaled $4.9 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $4.2 per barrel.
In the Trade Sector performance improved significantly in 2012, mainly due to reduction in Operating Losses in tankers chartering. For 2012, adjusted Operating Loss totaled $9 million, compared with a loss of $19 million in 2011.
With a backdrop of depressed global petrochemical margins, performance in the Petrochemical Sector overshadowed the Company's results. For 2012, adjusted EBITDA totaled $12 million, compared with $109 million in 2011.
Oil Refineries ended 2012 with an adjusted Net Loss of $163 million compared with an adjusted net loss of $120 million in 2011.
Key 2012 Fourth Quarter Highlights
- Adjusted EBITDA totaled $23 million compared with a negative adjusted EBITDA of $18 million, in the corresponding period last year.
- Revenues totaled $2.4 billion compared with $2.1 billion in the corresponding period last year.
- Adjusted operating loss in the Sectors totaled $5 million compared with a loss in the sectors of $48 million, in the corresponding period last year.
- Net consolidated financing expenses amounted to $54 million compared with $20 million in the corresponding period last year.
- Adjusted net loss totaled $57 million compared with a net loss of $58 million, in the corresponding period last year.
Key 2012 Highlights
- Cash flow from operating activities for 2012 totaled $620 million
- Adjusted EBITDA totaled approximately $117 million compared with about $92 million in 2011.
- Revenues totaled $9.7 billion, compared with $9.6 billion in 2011.
- Adjusted Operating Profit broke even on the operating level from Sectors compared with a loss of $17 million in 2011.
- Financing expenses totaled $169 million compared with $89 million in the corresponding period last year.
- The annual report includes a special one-off expense of about $17 million for a far reaching early retirement program for employees.
- During the year, the Company repaid loans, bonds and interest payments totaling about $505 million.
Refining Margins
- The Group continues to generate higher refining margins than the other comparable refiners in the area.
- In 2012, the adjusted refining margin totaled $4.9 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $4.2 per barrel.
- In the fourth quarter of 2012, the adjusted refining margin totaled $4.1 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $3.1 per barrel.
Quantity Refined & Petrochemical Production
- Refining: Quantity refined for 2012 totaled 8,577 thousand tons, an increase of about 351 thousand tons, compared with 2011. The utilization rate of 2012 stood at 88.3% compared with 84.7% in 2011.
- Petrochemicals: Polymers (CAOL) decreased by about 53 thousand tons totaling 677 thousand tons. Aromatics (Gadiv) increased by about 15 thousand tons totaling 603 thousand tons. Oils and Aromatics (HBO) increased by about 2 thousand tons totaling 74 thousand tons.
- In January, the Company completed a $45 million synergetic investment project for optimal extraction of existing streams in the refinery and for which an estimated cash flow of $30 million a year is expected, working on the basis that a full gas supply is available.
Key Points for 2013
- In the first quarter of 2013, the availability of natural gas partially met the Company's needs. From the second quarter of 2013, the expected availability natural gas will meet, according to the Tamar partnership, 100% of the Company's needs.
- $90 million project for increasing propylene production capacity – once completed it is expected to bring in an estimated cash flow of $55 million a year. In order to continue with this investment project, the Group is currently waiting for the granting of the necessary permits needed for its erection and the Group hopes to receive these permits soon.
- The Company continues to implement the organizational restructuring and efficiency program in order to make ORL a more globally competitive, advanced and dynamic Company while significantly streamlining and integrating all Group activities in order to maximize the Company's value chain.
Environmental & Social Responsibility
- Environmental Safety and Security: ORL prioritized its adherence to compliance with applicable environmental and safety standards, keeping close contact with the relevant authorities in this area. ORL produces products according to the EURO 5 standard and thus contributes to improving the environment in Israel. As part of the strategic plan, ORL invested more than $161 million dollars in this area in order to meet the most advanced international standards.
- In 2012, the Company continued its commitment to the community, with an emphasis on the advancement of education and youth projects.
| FOURTH QUARTER RESULTS 2012 ($ millions) | ||||
| Results by Sector | ||||
| Q4 12 | Q4 11 | |||
| Accounting | Adjusted | Accounting | Adjusted | |
| Refining | (25) | (4) | (43) | (19) |
| Polymers (CAOL) | 6 | 6 | (34) | (34) |
| Aromatics (GADIV) | -- | -- | 4 | 4 |
| Lube oils (HBO) | (4) | (4) | (1) | (1) |
| Trade | (2) | (2) | -- | -- |
| Consolidation diff. | (1) | (1) | 2 | 2 |
| Total | (26) | (5) | (72) | (48) |
| EBITDA by Sector | ||||
| Q4 12 | Q4 11 | |||
| Accounting | Adjusted | Accounting | Adjusted | |
| Refining | (10) | 11 | (26) | (2) |
| Polymers (CAOL) | 16 | 16 | (23) | (23) |
| Aromatics (GADIV) | 2 | 2 | 7 | 7 |
| Lube oils (HBO) | (3) | (3) | (1) | (1) |
| Trade | (2) | (2) | -- | -- |
| Consolidation diff. | (1) | (1) | 1 | 1 |
| Total | 2 | 23 | (42) | (18) |
| FULL YEAR RESULTS 2012 ($ millions) | ||||
| Results by Sector | ||||
| 2012 | 2011 | |||
| Accounting | Adjusted | Accounting | Adjusted | |
| Refining | 8 | 54 | 5 | (53) |
| Polymers (CAOL) | (38) | (38) | 6 | 6 |
| Aromatics (GADIV) | 3 | 3 | 39 | 39 |
| Lube oils (HBO) | (7) | (7) | 9 | 9 |
| Trade | (9) | (9) | (19) | (19) |
| Consolidation diff. | (3) | (3) | 1 | 1 |
| Total | (46) | -- | 41 | (17) |
| EBITDA by Sector | ||||
| 2012 | 2011 | |||
| Accounting | Adjusted | Accounting | Adjusted | |
| Refining | 72 | 118 | 59 | 1 |
| Polymers (CAOL) | 7 | 7 | 52 | 52 |
| Aromatics (GADIV) | 11 | 11 | 47 | 47 |
| Lube oils (HBO) | (6) | (6) | 10 | 10 |
| Trade | (9) | (9) | (19) | (19) |
| Consolidation diff. | (4) | (4) | 1 | 1 |
| Total | 71 | 117 | 150 | 92 |
Conference Call
The Group will also be hosting a conference call today, March 18, 2013, at 15:00 UK time, 11:00 ET, 8:00 PT and 17:00 Israeli Time.
On the call, management will present a presentation reviewing the fourth quarter and full year 2012 highlights and industry trends. The presentation is available for download from the Group's website www.Bazan.co.il: Investor Relations > Financial Reports.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
| US Dial-in Numbers: | 1-888-407-2553 |
| UK Dial-in Number: | 0-800-917-5108 |
| Israel Dial-in Number: | 03-918-0610 |
| International Dial-in Number: | +972-3-918-0610 |
A replay of the call will be available after the call on the Group's website at www.orl.co.il.
About Oil Refineries Ltd.
Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 9, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit www.orl.co.il.
ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.
The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's report
| Consolidated Statements of Financial Position | |||
| USD thousands | |||
| December 31 | |||
| Note | 2012 | 2011 | |
| Current assets | |||
| Cash and cash equivalents | 5A | 256,521 | 20,465 |
| Deposits | 5B | 12,647 | 2,666 |
| Trade receivables | 6 | 721,601 | 561,403 |
| Other receivables | 7 | 88,727 | 147,328 |
| Financial derivatives | 29 | 38,670 | 45,958 |
| Investments in financial assets at fair value through profit or loss | 5C | -- | 73,680 |
| Inventories | 8 | 1,049,037 | 1,083,037 (*) |
| Current tax assets | 16 | 388 | 3,528 |
| Total current assets | 2,167,591 | 1,938,065 | |
| Non-current assets | |||
| Investments in equity accounted investees | 9 | 4,557 | 4,238 |
| Investments in financial assets at fair value through other comprehensive income | 5,584 | 5,460 | |
| Loan to Haifa Early Pensions Ltd. | 18 | 68,445 | 69,130 |
| Long term loans and debit balances | 10 | 83,374 | 21,148 |
| Financial derivatives | 29 | 103,596 | 139,687 |
| Employee benefit assets, net | 18 | 7,374 | 6,111 |
| Deferred tax assets | 16E | 34,451 | 2,893 |
| Property, plant and equipment, net | 11 | 2,419,231 | 2,245,194 |
| Intangible assets, net | 12 | 51,582 | 65,145 |
| Deferred costs, net | 12 | 1,861 | 11,267 |
| Total non-current assets | 2,780,055 | 2,570,273 | |
| Total assets | 4,947,646 | 4,508,338 | |
| (*) Retrospective application of accounting policy – see Note 2H | |||
|
Akiva Mozes Chairman, Board of Directors |
Pinhas Buchris CEO |
Yisrael Lederberg CFO |
Date of approval of the financial statements: March 17, 2013
The attached notes are an integral part of these consolidated financial statements
| Consolidated Statements of Financial Position | |||
| USD thousands | |||
| December 31 | |||
| Note | 2012 | 2011 | |
| Current liabilities | |||
| Loans and borrowings | 13 | 966,284 | 844,349 |
| Trade payables | 14 | 1,424,317 | 780,458 |
| Other payables | 15 | 139,703 | 73,490 |
| Current tax liability | 16 | 20,576 | 21,663 |
| Financial derivatives | 29 | 49,898 | 42,990 |
| Provisions | 17 | 21,214 | 9,121 |
| Total current liabilities | 2,621,992 | 1,772,071 | |
| Non-current liabilities | |||
| Liabilities to banks | 13 | 898,678 | 915,359 |
| Debentures | 13 | 518,879 | 665,147 |
| Liabilities for finance lease | 13 | 9,282 | 8,991 |
| Financial derivatives | 29 | 9,578 | 12,198 |
| Employee benefits, net | 18 | 80,446 | 78,413 |
| Deferred tax liabilities | 16E | -- | 36,328 (*) |
| Total non-current liabilities | 1,516,863 | 1,716,436 | |
| Total liabilities | 4,138,855 | 3,488,507 | |
| Capital | 21 | ||
| Share capital | 586,390 | 586,390 | |
| Share premium | 100,242 | 100,242 | |
| Reserves | 93,100 | 101,078 | |
| Retained earnings | 29,059 | 232,121 (*) | |
| Total capital | 808,791 | 1,019,831 | |
| Total liabilities and capital | 4,947,646 | 4,508,338 | |
| (*) Retrospective application of accounting policy – see Note 2H | |||
The attached notes are an integral part of these consolidated financial statements.
| Consolidated Statements of Comprehensive Income | ||||
| USD thousand | ||||
| Year ended December 31 | ||||
| Note | 2012 | 2011 | 2010 | |
| Revenue | 22 | 9,673,156 | 9,561,601 | 6,791,809 |
| Cost of sales | 23 | 9,570,259 | 9,389,677 (*) | 6,603,476 (*) |
| Gross profit | 102,897 | 171,924 | 188,333 | |
| Selling and marketing expenses | 24 | 112,924 | 104,493 | 99,282 |
| General and administrative expenses | 25 | 63,310 | 53,534 | 57,955 |
| Early retirement expenses | 18C | 17,168 | ---- | ---- |
| Operating profit (loss) | (90,505) | 13,897 | 31,096 | |
| Financing income | 26 | 13,317 | 34,574 | 89,330 |
| Financing expenses | 26 | (182,184) | (123,692) | (140,439) |
| Financing expenses, net | (168,867) | (89,118) | (51,109) | |
| Company's share in earnings (losses) of equity accounted investees, net of tax, including impairment losses | (4,567) | (21,932) | 476 | |
| Loss before income tax | (263,939) | (97,153) | (19,537) | |
| Tax benefit | 16(B) | 65,491 | 20,687 (*) | 85,048 (*) |
| Profit (loss) for the year | (198,448) | (76,466) | 65,511 | |
| Items of other comprehensive income (loss) | ||||
| Actuarial losses from a defined benefit plan, net of tax | 18 | (4,614) | (7,222) | (5,724) |
| Foreign currency translation differences for foreign operations | (246) | 238 | (309) | |
| Effective share of the change in fair value of cash flow hedging, net of tax | (104) | (3,425) | 3,529 | |
| Net change in fair value of debentures at fair value through profit or loss, attributable to change in credit risk, net of tax | (9,369) | 48,871 | ---- | |
| Change in fair value of financial assets at fair value through other comprehensive income, net of tax | 109 | (10,772) | 6,143 | |
| Other comprehensive income (loss) for the year, net of tax | (14,224) | 27,690 | 3,639 | |
| Comprehensive income (loss) for the year | (212,672) | (48,776) | 69,150 | |
| Earnings (loss) per share (USD) | ||||
| Basic and diluted earnings (loss) per ordinary share | (0.082) | (0.031) (*) | 0.027 (*) | |
| (*) Retrospective application of accounting policy – see Note 2H | ||||
The attached notes are an integral part of these consolidated financial statements.