Rompetrol Rafinare results, in the first 9 months of 2023

* Note: The consolidated financial statements of Rompetrol Rafinare include the results of Rompetrol Rafinare S.A. and those of the 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.

Rompetrol Rafinare, member company of the KMG International Group, achieved good operational results in the first 9 months of 2023, with over 3.8 million tons of raw materials processed in the Petromidia refinery.

The largest profile unit in Romania continued to be a pillar of energy stability, by directing 66% of the total 2.9 million tons of fuels produced (petrol, diesel and jet A1) to the domestic market.

In the first 9 months of 2023, the company registered declining consolidated financial results, with a gross turnover of 4 billion USD (down 17%), an operational profit (EBITDA) of 214 million USD (down 35%) and a negative net result of 3.5 million USD.

The financial results were significantly influenced by the volatility of international quotations for crude oil and finished products. Quotations reached, in the first 9 months of the year, decreases of 16% for gasoline and 23% for diesel.

Also, at the European level, refining margins decreased by 14.6 USD/MT (-11%) in Q3 2023 compared to Q3 2022, respectively by 20 USD/MT (-15.8%) in January - September 2023, compared to the same period last year.

Rompetrol Rafinare continued to be one of the most important contributors to the state budget, paying over 378 million dollars in the third quarter of the year and over 1.2 billion dollars in the first 9 months of 2023, 128 million dollars representing the contribution to the solidarity tax for the year 2022.

For the period January - September 2023, the company has estimated a contribution of 34.1 million dollars, taking into account the current rules of GEO 186. The company is also considering steps, in the sense of analyzing from a legal perspective the level of the tax and in order to protect the interests of shareholders, Rompetrol Rafinare making considerable efforts to support this tax.

The significant shareholders of Rompetrol Rafinare SA are KMG International (54.63% - directly and indirectly) and the Romanian State through the Ministry of Energy (44.7%)

Refining segment*

* The refining activity includes the results of the Rompetrol Rafinare company regarding the Petromidia and Vega refineries. Rompetrol Rafinare calculates the gross refining margin as follows - (Sales of petroleum products – Cost of raw materials)/Sales volume. Net refining margin is operating profit (EBITDA) divided by sales volume.

In the first 9 months of 2023, the Petromidia refinery's total feedstock throughput was 3.84 million tons, similar to January – September 2022. In Q3, processing was down 23% compared to Q3 2022 .

The decrease in Q3 2023 was determined by the operation of the Petromidia refinery without the Diesel Hydrocracking (MHC) unit, taken out of flow following a technical incident that occurred in June 2023. The rehabilitation works of the unit are coordinated by Rominserv (the general contractor of the KMGI Group) and are scheduled to be completed by the end of November.

Despite the decrease in the total volumes of products obtained, Rompetrol Rafinare managed to ensure, without disruptions, the supplies of petroleum products needed in Romania. Petromidia had a stable flow of raw material, the processed crude mainly originating from Kazakhstan.

Compared to the first 9 months of the year, Petromidia recorded levels similar to those of 2022, with a production of about 1 million tons of gasoline, respectively 1.9 million tons of diesel. About 1.85 million tons of fuels were directed to the Romanian market, to ensure the supply of both Rompetrol gas stations and commercial partners.

In the first 9 months of 2023, the Petromidia refinery managed to achieve good operational results in terms of white products yield – 84.11%wt.

Vega Ploieşti refinery, the only domestic producer of bitumen and hexane, processed over 287 thousand tons of raw materials in the first 9 months of the year (over 7% increase). The Ploiesti unit recorded good results in terms of energy consumption (2.26 GJ/t) and mechanical availability (98.50%).

The refining segment gross turnover reached over 1.1 billion USD in Q3 2023 and 3.46 billion USD in January-September 2023, down 29% and 17%, respectively, from the same periods last year.

The operational profit (EBITDA) decreased by 38%, to 214 million dollars, and the net result of the segment was a positive one, of about 39 million dollars, for the period January - September 2023.

In the first 9 months of 2023, Rompetrol Rafinare made exports worth 947 million dollars, and the total quantities were at a level similar to last year, with 1.26 million tons in January - September 2023.

Petrochemicals segment*

*The petrochemical segment includes the petrochemical activity of the company Rompetrol Rafinare and the activity of the company Rompetrol Petrochemicals SRL.

In the third quarter and the first 9 months of 2023, the total polymer production of the Petrochemical Division was 21 thousand tons and 78 thousand tons, respectively, down 33% and 16% compared to the same periods last year.

The results of the petrochemical division were influenced by unfavorable market conditions (increasing quotations for raw materials and finished products, decreasing demand, the level of logistics costs) which determined a discontinuous operation of the Low Density Polyethylene (LDPE) plant. LDPE uses imported ethylene as a raw material.

The gross turnover, in the first 9 months of 2023, was 98 million dollars, and the operational profit (EBITDA) and the net result recorded negative values, of 58.6 million dollars and 64.5 million dollars, respectively.

The petrochemical segment is the only producer of polypropylene and polyethylene in Romania, with the ability to regain its competitive position on the domestic and regional market, with the stabilization of the profile market.

Distribution segment*

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

The consolidated gross turnover for the distribution segment was 2.6 billion dollars in January – September 2023. The operational profit (EBITDA) was 63.1 million dollars in the first 9 months of 2023, while the net result was a positive one, of over 28.4 million dollars.

The total quantities of fuel sold by Rompetrol Downstream in the January – September period were 1.67 million tons, a slightly decreasing level, compared to the volume recorded in the similar period of 2022.

Wholesale fuel sales decreased compared to the same period last year, but in the retail segment, the company managed to sell 17% higher volumes compared to the same period in 2022, as a result of the company's strategy to respond, with priority, to the needs of the Romanian market.

At the end of September 2023, Rompetrol Downstream's distribution segment included 1,312 sales points, including the network of own stations, partner stations and mobile stations (express and internal bases), increasing by 77 units compared to the number recorded at the end of September 2022.

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KMG International