OIL REFINERIES LTD 
By HAIFA, Israel, Nov. 29, 2013 /PRNewswire/ -- Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter "the Group," "ORL"), Israel's largest integrated refining and petrochemical group, announced its financial results for the third quarter ending September 30, 2013. The Company will be hosting its earnings call for the third quarter 2013 on Monday, December 2, 2013 at 14:00 UK (9:00 ET, 16:00 Israel time). Results are reported in US Dollars and under International Financial Reporting Standards (IFRS).
2013 THIRD QUARTER AND FIRST NINE MONTH HIGHLIGHTS
-- The third quarter was characterized by lower benchmark refining margins,
which is the main area of operation for the Company.
-- In the third quarter of 2013, the adjusted refining margin totaled $5.5
per barrel, as compared with the average Reuter's quoted Mediterranean
Ural Cracking Margin of $1.1 per barrel. In the third quarter of 2012,
the adjusted refining margin totaled $5.3 per barrel as compared with
the Reuter's quoted Mediterranean Ural Cracking Margin of $5.1 per
barrel. The refining margin for the first nine months of 2013 totaled
$5.4 per barrel as compared with the average Reuter's quoted
Mediterranean Ural Cracking Margin of $2.1 per barrel.
-- Revenues for third quarter totaled $2.6 billion compared with $2.4
billion in the second quarter last year.
-- Adjusted operating income across all sectors totaled $33 million
compared with $24 million in the same quarter last year. Adjusted
operating income across all sectors for the first nine months totaled
$102 million compared with $5 million in the same period last year.
-- Adjusted EBITDA totaled $71 million compared with $53 million in the
same quarter last year. Adjusted EBITDA for the first nine months
totaled $214 million compared with $94 million in the same period last
year.
-- Net loss for the quarter totaled $70 million compared with a net loss of
$21 million in the same quarter last year. This can be mainly
attributable mainly to one-off tax expense recorded in the quarter of
$57 million attributable to a change in tax rates, as amended during the
third quarter in the Capital Investments Law.
-- Net financing expenses for the quarter totaled $48 million compared with
$47 million in the same quarter last year.
-- Since the beginning of this year the Company paid of $247 million of its
debt.
-- During the quarter the Company succeeded in raising $116 million in
bonds, which extends the average maturity of the debt, improves
liquidity and increases the Company's financial flexibility.
Mr. Arik Yaari, CEO of Oil Refineries: "We are currently implementing an action plan formulated by the Group to improve the Company's liquidity, profitability and competitive ability while ensuring debt repayment and financial strength. The plan is based on three main components:
-- A capital raising in the amount of $150 million, backed by support from
the controlling shareholders, for the participation in a rights issue.
-- Improving liquidity with an additional $200-250 million, through
agreements with the banks and financial institutions..
-- Implementing efficiency measures and improving profitability, in full
cooperation with the Company's employees, totaling at least $100
million.
"These measures will enhance the Company's ability to operate successfully even during a challenging business environment with low margins.
"It is important to emphasize that the Group, even during this quarter, continues to demonstrate improvements in its operating profit across all areas of its operations. The ongoing contribution of the natural gas supply and hydrocracker enable the Company to produce refining margin higher than the benchmark margin, which is at an all time - almost unprecedented - low. We believe that ORL will continue to produce this premium for quite some time."
RESULTS ACCORDING TO SECTORS:
Refining
-- The Company continues to generate higher refining margins than the
benchmark average due to the optimal utilization of the Company's
upgraded refining capabilities. The transition to natural gas and the
contribution of the hydrocracker since the first quarter of 2013,
enabled the Company to demonstrate ongoing higher refining margins,
reducing the impact of the historically low benchmark average margins.
-- In the third quarter of 2013, the adjusted refining margin totaled $5.5
per barrel, as compared with the average Reuter's quoted Mediterranean
Ural Cracking Margin of $1.1 per barrel. In the third quarter of 2012,
the adjusted refining margin totaled $5.3 per barrel as compared with
the Reuter's quoted Mediterranean Ural Cracking Margin of $5.1 per
barrel.
-- In the first nine months of 2013, the adjusted refining margin totaled
$5.4 per barrel, as compared with the average Reuter's quoted
Mediterranean Ural Cracking Margin of $2.1 per barrel. In the first nine
months of 2012, the adjusted refining margin totaled $5.2 per barrel as
compared with the Reuter's quoted Mediterranean Ural Cracking Margin of
$4.6 per barrel.
Polymers
-- In looking at the Company's results over the first nine months of 2013,
the improvement in polymers can be attributed to improved polymer
spreads over Naphtha and the Company's transition to natural gas.
-- Operating income for the third quarter totaled $10 million, a similar
result in the corresponding quarter last year. For the first nine
months of 2013 operating income totaled $26 million, compared with an
operating loss of $44 million in the corresponding period last year.
-- EBITDA for the third quarter totaled $23 million, compared with $21
million in the corresponding quarter last year. EBITDA in the first
nine months of 2013 totaled $62 million, compared with a negative EBITDA
of $10 million in the corresponding period last year.
Aromatics and Oils
-- Operating income for the third quarter totaled $10 million, compared
with $7 million in the corresponding quarter last year. For the first
nine months of 2013 operating income totaled $17 million, compared with
an operating loss of $1 million in the corresponding period last year.
-- EBITDA for the third quarter totaled $12 million, compared with $9
million in the corresponding quarter last year. EBITDA in the first
nine months of 2013 totaled $24 million, compared with $6 million in the
corresponding period last year.
Environmental & Social Responsibility
Maintaining compliance within the social and environmental realm, while maintaining good relations with the relevant authorities, is a strategic goal for ORL. In the Company's facilities there are numerous environmental projects underway, with two major projects cited as a top priority:
-- A large project, expected to be completed in the coming months, involves
installing advanced systems for odors, a technology approved by the
Ministry of Environment. This operating system is expected to
significantly lower the emissions of volatile organic compounds and be
another step in improving the air quality of the Group's facilities.
-- Another project is the purchase and installation of a complex and
innovative system which will enable advanced treatment of ethylene
emissions from the Group's facilities.
THIRD QUARTER RESULTS 2013 ($ millions)
Adjusted Operating Income by Sector
Q1-Q3 '13 Q1-Q3 '12 Q3 '13 Q3 '12
--------- --------- ------ ------
Operating Income Reported Adjusted Reported Adjusted Reported Adjusted Reported Adjusted
-------- -------- -------- -------- -------- -------- -------- --------
Refining 50 59 33 58 24 15 24 16
--- --- --- --- --- --- --- ---
Polymers (CAOL) 26 26 (44) (44) 10 10 10 10
--- --- --- --- --- --- --- ---
Aromatics (Gadiv) 22 22 3 3 12 12 8 8
--- --- --- --- --- --- --- ---
Lube-Oils (HBO) (5) (5) (4) (4) (2) (2) (1) (1)
--- --- --- --- --- --- --- ---
Trade (2) (2) (6) (6) - - (5) (5)
--- --- --- --- --- --- --- ---
Adjusted Consolidated 2 2 (2) (2) (2) (2) (4) (4)
--- --- --- --- --- --- --- ---
Operating Income Sectors 93 102 (20) 5 42 33 32 24
------------------------ --- --- --- --- --- --- --- ---
EBITDA by Sector
Q1-Q3 '13 Q1-Q3 '12 Q3 '13 Q3 '12
--------- --------- ------ ------
EBITDA Reported Adjusted Reported Adjusted Reported Adjusted Reported Adjusted
-------- -------- -------- -------- -------- -------- -------- --------
Refining 119 128 82 107 47 38 41 33
--- --- --- --- --- --- --- ---
Polymers (CAOL) 62 62 (10) (10) 23 23 21 21
--- --- --- --- --- --- --- ---
Aromatics (Gadiv) 28 28 9 9 14 14 10 10
--- --- --- --- --- --- --- ---
Lube-Oils (HBO) (4) (4) (3) (3) (2) (2) (1) (1)
--- --- --- --- --- --- --- ---
Trade (2) (2) (6) (6) - - (5) (5)
--- --- --- --- --- --- --- ---
Adjusted Consolidated 2 2 (3) (3) (2) (2) (5) (5)
--- --- --- --- --- --- --- ---
EBITDA 205 214 69 94 80 80 61 53
------ --- --- --- --- --- --- --- ---
Conference Call
The conference call will take place on Monday December 2, 2013 at 14:00 UK (9:00 ET, 16:00 Israel time). On the call, management will review and discuss the third quarter 2013 financial results and will be available to answer questions.
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: 1-866-744-5399
UK Dial-in Number: 0-808-101-2717
Israel Dial-in Number: 03-918-0663
International Dial-in Number: +972-3-918-0663
at: 14:00 UK Time, 9:00 ET, 6:00 PT, 16:00 Israel time. A replay of the call will be available after the call on the Company's website at www.orl.co.il.
The conference call will be accompanied by a presentation available for download from the Company's website, www.orl.co.il, under investor relations.
Oil Refineries' earnings press release and financial statements will be available on the Company's website - www.orl.co.il for the call.
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
Condensed Consolidated Interim Statement of Financial Position
USD thousands
-------------
September 30, September 30, December 31,
2013 2012 2012
---- ---- ----
(Unaudited) (Audited)
---------- --------
Current assets
Cash and cash
equivalents 94,110 205,294 256,521
Deposits 5,757 5,271 12,647
Trade receivables 735,178 822,903 721,601
Other receivables 132,928 111,763 88,727
Financial derivatives 44,521 36,294 38,670
Inventory 970,774 1,013,860 1,049,037
Current tax assets 3,477 3,294 388
----- ----- ---
Total current assets 1,986,745 2,198,679 2,167,591
--------- --------- ---------
Non-current assets
Investments in equity-
accounted investees 4,886 4,935 4,557
Investments in
financial assets at
fair value through 1,344 3,450 5,584
other comprehensive
income
Loan to Haifa Early
Pensions Ltd. 68,638 64,968 68,445
Long term loans and
debit balances 85,896 59,585 83,374
Financial derivatives 68,749 118,350 103,596
Employee benefit
assets, net 6,106 5,905 7,374
Deferred tax assets,
net 4,888 6,182 34,451
Property, plant and
equipment, net 2,380,540 2,376,363 2,419,231
Intangible assets, net 43,785 2,997 51,582
Deferred expenses, net 2,783 54,939 1,861
----- ------ -----
Total non-current
assets 2,667,615 2,697,674 2,780,055
--------- --------- ---------
Total assets 4,654,360 4,896,353 4,947,646
========= ========= =========
Condensed Consolidated Interim Statement of Financial Position
USD thousands
-------------
September 30, September 30, December 31,
2013 2012 2012
---- ---- ----
(Unaudited) (Audited)
---------- --------
Current
liabilities
Loans and
borrowings 765,963 965,683 966,284
Trade payables 1,486,523 1,295,349 1,424,317
Other payables 119,770 133,198 139,703
Current tax
liability 10,994 19,481 20,576
Financial
derivatives 47,285 52,891 49,898
Provisions 32,080 18,678 21,214
------ ------ ------
Total current
liabilities 2,462,615 2,485,280 2,621,992
--------- --------- ---------
Non-current
liabilities
Liabilities to
banks 847,481 852,704 898,678
Debentures 522,429 524,449 518,879
Liabilities for
finance lease 9,953 8,980 9,282
Financial
derivatives 4,404 13,655 9,578
Employee
benefits, net 86,107 70,863 80,446
Deferred tax
liabilities,
net 26,883 16,859 --
------ ------ ---
Total non-
current
liabilities 1,497,257 1,487,510 1,516,863
--------- --------- ---------
Total
liabilities 3,959,872 3,972,790 4,138,855
--------- --------- ---------
Capital
Share capital 586,390 586,390 586,390
Share premium 100,242 100,242 100,242
Reserves 88,796 131,022 93,100
Retained
earnings
(losses) (80,940) 105,909 29,059
------- ------- ------
Total capital 694,488 923,563 808,791
------- ------- -------
Total
liabilities
and capital 4,654,360 4,896,353 4,947,646
========= ========= =========
The attached notes are an integral part of the condensed consolidated interim financial statements
Condensed Consolidated Interim Statement of Comprehensive Income
USD thousands
-------------
Nine months ended Three months ended Year ended
----------------- ------------------ ----------
September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012 December 31, 2012
------------------ ------------------ ------------------ ------------------ -----------------
(Unaudited) (Unaudited) (Audited)
---------- ---------- --------
Revenue 7,425,305 7,298,371 2,623,009 2,398,437 9,673,156
Cost of sales 7,220,759 7,211,308 2,542,251 2,333,464 9,570,259
--------- --------- --------- --------- ---------
Gross profit 204,546 87,063 80,758 64,973 102,897
Selling and marketing expenses 84,514 81,266 28,067 28,362 112,924
General and administrative expenses 45,996 46,045 16,671 11,441 63,310
Early retirement expenses -- -- -- -- 17,168
--- --- --- --- ------
Operating profit (loss) 74,036 (40,248) 36,020 25,170 (90,505)
Financing income 20,561 20,261 7,565 8,091 13,317
Financing expenses (156,508) (134,701) (56,170) (55,766) (182,184)
-------- -------- ------- ------- --------
Financing expenses, net (135,947) (114,440) (48,605) (47,675) (168,867)
Company's share in earnings (losses) of equity 524 (4,685) 205 (2,139) (4,567)
accounted investees
Loss before income tax (61,387) (159,373) (12,380) (24,644) (263,939)
Tax benefits (income tax) (48,612) 33,161 (57,499) 3,156 65,491
------- ------ ------- ----- ------
Loss for the period (109,999) (126,212) (69,879) (21,488) (198,448)
======== ======== ======= ======= ========
Items of other comprehensive income (loss)
transferred to profit or loss
Foreign currency translation differences for foreign (508) (51) (672) (264) (246)
operations
Effective share of the change in fair value of cash flow -- (104) -- -- (104)
hedging, net of tax
Other comprehensive loss for the period, (508) (155) (672) (264) (350)
transferred to profit or loss, net of tax
Items of other comprehensive income (loss) not
transferred to profit or loss
Actuarial losses from a defined benefit plan, net of tax -- -- -- -- (4,614)
Net change in fair value of debentures at fair value 24,903 (9,369)
through profit or loss, attributable to change in credit
risk, net of tax
(488) 30,549 10,572
Change in fair value of financial assets at fair value (2,160) 109
through other comprehensive income, net of tax
(3,459) (1,769) (786)
------ ------ ----
Other comprehensive income (loss) for the period, 22,743 (13,874)
not transferred to profit or loss, net of tax
(3,947) 28,780 9,786
------ ------ -----
Comprehensive income(loss) for the period (114,454) (97,587) (60,765) 991 (212,672)
======== ======= ======= === ========
The attached notes are an integral part of the condensed consolidated interim financial statements
Company Contact: Investor Relations Contact:
Rony Solonicof Ehud Helft / Porat Saar
Chief Economist and Head of
Investor Relations CCG Israel
Tel. 972 4 878 8152 Tel. (US) 1 646 233 2161 /(Int.) 972 52 776
3687
Contact IREn@orl.co.il info@ccgisrael.com
SOURCE Oil Refineries Ltd.
