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ROMPETROL RAFINARE S.A. - RRC

Preliminary financial results for 2017

Release Date: 2/15/2018 7:01:10 PM

IRIS Code: CCA88

15 February 2018 Contact: Bogdan Urzica Telephone: 021/305.77.45

Rompetrol Rafinare - USD 22 million net profit* and historical production records in 2017

Consolidated indicator*

2017

2016

%

Gross turnover

USD

4,151,088,337

3,566,449,386

16%

EBITDA

USD

210,724,926

186,548,315

13%

Net result

USD

21,924,527

57,145,367

-62%


Rompetrol Rafinare, a KMG International Group member, has once again confirmed its profitability in 2017, obtaining a net consolidated* result of approximately USD 22 million, in the context of historical production records accomplished by the Petromidia Navodari refinery and by the Vega Ploiesti refinery.

“The Petromidia Refinery has reached last year a new historical daily processing record since the incorporation of the industrial platform (1979), 5.66 million tons per year, the equivalent of 16,800 tons per day, up by 5% than the level of 2016. The main technological and operational parameters have reached unprecedented levels, such as the motor gasoline quantity produced by the refinery (1.46 million tonnes) or the diesel quantity (2.74 million tonnes), as well as the propylene quantity – 133,000 tons. The company’s constant performances, both the operational and financial ones, prove once again that the investments supported by KMG International and by its sole shareholder KazMunayGas - Kazakhstan’s national gas and petroleum company, amounting to over USD 1.4 billion since the taking over of the business, have transformed this business into a competitive, dynamic and sustainable one "said Yetil Utekov, General Manager of Rompetrol Rafinare.

The EBITDA amounted to over USD 210 million, up by 13% as compared to 2016 level, and the company gross turnover exceeded the value of USD 4 billion (+16%).

The company’s financial results were also positively influenced by the gross refining margin which in 2017 has improved by 20% against the 2016 one, as well as due to the production process optimisation programs.

The 2017 exports of Rompetrol Rafinare, carried on through the refining and petrochemicals divisions, amounted to USD 1.34 billion, up by 22% as compared to the year 2016, being mainly exported to Rompetrol gas stations from Moldova, Bulgaria and Georgia, but also to the partners in the Black Sea region. Rompetrol Rafinare is Romania’s greatest petroleum products exporter.

The company has continued to be an important taxpayer to Romania’s state budget, to which it transferred over USD 1.2 billion in 2017. The value of the state budget contribution exceeded USD 13.7 billion from 2007 to 2017.

The main shareholders of Rompetrol Rafinare SA are the KMG International (54.63%; directly and indirectly) and the Romanian state through the Ministry of Energy (44.69%).

The refining segment

Financial indicator

2017

2016

%

Gross turnover

USD

3,479,314,807

2,898,959,937

20%

EBITDA

USD

164,429,049

124,717,672

32%

Net result

USD

9,073,806

45,542,814

-80%

Operational indicator

Processed raw materials - Petromidia

kt

5,662

5,408

5%

Processed raw materials - Vega

kt

373

354

5%

Internal fuel sales

kt

2,128

1,884

13%

Export fuel sales

kt

2,111

2,118

0%

Note: The refining segment includes the results of Rompetrol Rafinare SA, referring to the activity of the Petromidia and Vega refineries

For the refining segment, the gross turnover amounted to over USD 3.47 billion in 2017, up by 20% as compared to the similar period of the previous year, being influenced by a growth in the volume of processed and sold products on the domestic and external market, as well as by the international quotations of the petroleum products.

In the context of the record processed raw materials, the Petromidia refinery has obtained unprecedented production figures for white products (gasoline, diesel and jet fuel) i.e. 4.88 million tonnes, while the energy intensity index raised to 99.9%, the mechanical availability index to 96.47%, and the operational availability to 93.3%.

Last year, the refinery use capacity of Petromidia unit was of 86%, similar level to the 2016 indicator.

The oldest processing unit in Romania – commissioned in 1905, Vega refinery has processed a record quantity of raw material amounting to 373,000 tonnes in 2017, up by 5.3% as compared to last year. The Vega refinery is the only domestic producer of bitumen and hexane and in 2017 achieved a historical record as well regarding the bitumen production (96,000 tons).

The Vega refinery use capacity was 113% in 2017, up by 5.65% as compared to the level reached in 2016.

The petrochemicals segment

Financial indicator

2017

2016

%

Gross turnover

USD

191,326,498

180,271,804

6%

EBITDA

USD

(5,304,452)

6,320,969

N/A

Net result

USD

(12,977,684)

(11,264,121)

15%

Operational indicator

Processed propylene

kt

134

124

9%

Processed ethylene

kt

64

65

-2%

Total sales

Kt

191

190

1%

Note: the petrochemicals segment includes the petrochemicals activity of Rompetrol Rafinare SA and of Rompetrol Petrochemicals SRL

In relation to the petrochemicals segment, the production unit has processed a propylene quantity of 134,000 tons in 2017, up by 9% as compared to 2016, and the total volume of processed raw material reached 198,500 tons. Also, the petrochemicals division produced a record quantity of polymerizable propylene – 20.000 tons and recorded the lowest energy index in the history - 18.7 GJ/tonne.

Rompetrol Rafinare is the only polypropylene producer in Romania, managing, on a consistent basis, to increase its market share for the secondary product categories. The strategic development strategy ensures the company a competitive position across the domestic market, as well as on the regional market, in the Black Sea, the Mediterranean, and the Central and Eastern European areas.

The distribution segment

Financial indicator

2017

2016

%

Gross turnover

USD

2,453,396,882

2,196,231,269

12%

EBITDA

USD

52,903,438

55,320,629

-4%

Net result

USD

28,413,464

24,119,283

18%

Operational indicator

Fuel quantities - retail

kt

693

636

9%

Fuel quantities - wholesale

kt

1,191

1,126

6%

LPG quantities sold

Kt

363

273

33%

Note: The distribution segment includes the results of the subsidiaries: Rom Oil, Rompetrol Downstream, Rompetrol Quality Control, Rompetrol Logistics and Rompetrol Gas

The consolidated gross turnover pertaining to the distribution segment amounted to over USD 2.45 billion in 2017, up by 12% as compared to 2016.

As a volume, in 2017 the fuel sales have increased by 9% on the retail segment, as compared to 2016, and the sales on the wholesale segment by 6%. The greatest sales growth was achieved on the LPG segment, up by 33% in 2017 as compared to 2016.

The positive financial results on the distribution segment are due both to the company investments in the fuel distribution network development, and in the business process optimisation. Moreover, the financial results were influenced by evolution of the international quotations, expressed in the USD - reference currency. The 6% increase of RON in relation to the American dollar, occurred in the 4th quarter of 2017, has caused an effective appreciation, in the national currency, of the two quotations, i.e. approximately 9% for gasoline and 14% for diesel.

At the end of December 2017, the Rompetrol Downstream distribution segment included 807 sale points, including its own station network, the partner stations and the mobile stations: express, internal bases of 9 and 20 cubic meters.

* The Consolidated financial statements of Rompetrol Rafinare include the results of Rompetrol Rafinare S.A. and those of its subsidiaries: Rompetrol Quality Control S.R.L., Rom Oil S.A., Rompetrol Downstream S.R.L., Rompetrol Logistics S.R.L., Rompetrol Gas S.R.L. and Rompetrol Petrochemicals S.R.L.

* The results presented are not audited and consolidated, and the reporting was prepared according to the International Financial Reporting Standards (IFRS).

The Public Relations and Communication Department

KMG International

____________________________

The complete version of the preliminary annual financial results of Rompetrol Rafinare S.A. for 2017 is available for shareholders, investors and general public starting with February 15th, 2018, 6:30 PM. The printed version is available at RRC’s headquarters, located in Navodari, 215 Navodari Blvd, Administrative Facility, room 104, Constanta County, and the online version shall be available on our website www.rompetrol-rafinare.ro under the Investors Relations/Financial Results and Reporting section, Annual Reports, respectively Interim Reports and Presentations/Presentations of the consolidated financial statements in accordance with IFRS subsections or on the Bucharest Stock Exchange website, at the link below.



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