KMG International – A Growth in the Financial and Operational Results of Q1 2018

This year’s first quarter brought an improvement for KMG International, in terms of its operational and financial results, in the context of a development in their trading and retail activity related to petroleum products in Romania and the Black Sea region.

“For 2018, we intend to focus on extending the Group trading and retail activities but also to continue the implementing of the internal programmes for a staged development and subsequent diversification of our business. Therefore, the basic growth factor consists in obtaining new record results in operational performance and maximum productivity over the reporting period, results which exceed the figures reached at the end of 2017” stated Alexey Golovin, Vicepresident of Corporate Development and Strategy of KMG International.

Thus, in Q1 2018, KMGI recorded an operational result (EBITDA) of approximately USD 47 million, up by 12% as compared to the index recorded in the similar period of 2017, but also an increase by 70% of the net profit, up to a level of USD 8.5 million. At the same time, the gross turnover reached USD 2.76 billion, exceeding the result of Q1 2017 by 40%.

These figures have also been supported by the 27% increase in the raw material volumes processed within the production units of the Group: – the Petromidia Năvodari and Vega Ploiesti refineries, but also within the petrochemicals division. The largest profile unit in Romania - Petromidia Năvodari - has processed, in Q1 2018, a record quantity of 1.52 million tons of raw materials (+27%) and has reached a 98.5% degree of capacity use (an increase by 25%).

The financial results of the refining segment were positively influenced by favourable market conditions (the refining margin: 44.5 USD/ton), as well as by continuing the programs launched in 2014, aiming at improving the production processes (increase of the white product share out of the total finite products) and the energy consume, but also at rendering the operation costs more efficient.

In Romania, the total sales of petroleum products increased in the first quarter by approximately 3%, up to a level of 576,000 tons; the Petromidia Refinery direct sales to the non-Group customers increased by 40%. At the same time, the Vega Ploiesti refinery and the petrochemicals division have improved the deliveries of products on the internal market by approximately 22%, respectively 11%.

The retail division of the Group in Romania, Rompetrol Downstream, has obtained in Q1 2018 a total fuel sale volume of 487,000 tons, a slight decrease as compared to the volume of last year’s first quarter, influenced by severe weather conditions in March. Out of this quantity, approximately 30% was traded through the Rompetrol stations, this index indicating a 3% growth against last year’s similar period.

Over the first quarter, the company has continued the extension of its activity at national level but also the program of station rebranding (LPG, Rompetrol Partner, Rompetrol Express) and interior rebranding.

At the end of March, the distribution segment of Rompetrol Downstream included 818 fuel distribution units (own stations, partner stations, mobile stations, internal bases of 9 and 20 cubic metres), up by 66 units as compared to March 2017.

Rompetrol Downstream registered a significant increase of dry sales in gas stations, by 34% vs Q1 2017.

At regional level, the total fuel quantities traded through the Group’s subsidiaries in Bulgaria, Georgia and the Republic of Moldova in Q1 2018 have exceeded 216,000 tons, up by 3% as compared to the level reached last year in January - March.

With a share of 48%, the Group is the greatest petroleum product supplier in Moldova, being, at the same time, an important player on the retail sector, where it owns 25% share of the market, i.e. 85 Rompetrol stations. KMG International objective for the following 4 years is to reach a 24% market share in Romania, 25% in Georgia, 30% in the Republic of Moldova, and 12% in Bulgaria.

In Q1 2017, the Trading division of the Group has recorded a total volume of traded raw materials and petroleum products of approximately 6.7 million tons, up by 18% against the level of Q1 2017. These also included raw materials delivered for the supply of the Group’s production units but also the transfer/sale of petroleum products to the subsidiaries in the region and to external partners.

The export of petroleum products sold by KMGT in Q1 2018 has reached 1.3 million tons - a double quantity as compared to the level attained in the similar period of 2017. Furthermore, wholesale and retail sales though the internal and external channels increased in January - March by approximately 60%, up to a level of 1.9 million tons.

Also, KMGT is the only operator of the crude oil volumes produced by KazMunayGas for export. Therefore, KMGT performs deliveries of crude oil to the Petromidia refinery and trading operations for sale of crude oil on the international markets.

In the future, KMG International will continue to implement its programs for optimizing and rendering the processing, logistic and distribution expenses more efficient, but also for transforming the current activities in view of improving operational costs and increase profitability.

Currently, certain projects and programs are in advanced phases of deployment: the complex digitization of the production processes, the commissioning of the high-density polyethylene unit, the upgrading and extension of the crude oil and petroleum product tank park, the increase of the energy efficiency but also extension of the distribution network in Romania and in other countries in which the Group is present.     

The Communication and Public Relation Department

KMG International