Petrol Reports Q1 Revenue Down 15%, Net Profit Up 20%

By , 22 May 2020, 13:47 PM Business
Petrol Reports Q1 Revenue Down 15%, Net Profit Up 20% JL Flanner

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STA, 22 May 2020 - The energy group Petrol saw its sales revenue drop by 15% year on year to EUR 916 million in the first quarter, due to lower prices and a drop in the sale of petroleum products. Still, net profit of the group was up 20% to EUR 21.8 million, shows a report published on the website of the Ljubljana Stock Exchange.

Gross profit stood at EUR 105.3 million, which is on a par with the first three months of 2019.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 26% to EUR 46.5 million, mostly due to the balancing out of petroleum product price quotes, as diesel price quotes for the coming months at the beginning of the year were twice as high as at the end of March.

Excluding this effect, EBITDA for the period would be up just 2% to EUR 37.9 million, shows the report that was discussed by the supervisory board on Thursday.

"In March, the business environment deteriorated considerably as the pandemic began. Petrol Group companies ... have implemented the necessary measures to contain the spread of the virus and ensure uninterrupted energy-product supply," the group says, noting that no disruption in the energy-product supply had occurred though, and all points of sale had been operational.

The group generated 47% of its EBITDA through sales of petroleum products, 21% through sales of merchandise and related services, 18% through energy and environmental solutions, 12% through the sale of other energy products (natural gas, electricity, LPG), and 2% through renewable electricity production.

In the first three months of 2020, sales of petroleum products were down by 18% to 742,900 tonnes, mostly due to lower sales to the Agency for Commodity Reserves.

Some 43% of sales were generated on the Slovenian market, 24% in SE Europe, and 33% in EU markets.

At the end of March, the Petrol group's retail network consisted of 509 service stations, of which 318 were in Slovenia, 109 in Croatia, 42 in Bosnia-Herzegovina, 15 in Serbia, 15 in Montenegro and ten in Kosovo.

Sales revenue of merchandise and related services were down by 35% to EUR 127 million in the January-March period, and the sales of natural gas was up 15% to 6.4 TWh.

Because of the epidemic, the group's targets for 2020 will not be met and Petrol has prepared different scenarios for its operations until the end of the year, depending on the severity of the crisis.

If certain restrictions on transit traffic and tourism still remain in place in the next few months, it expects this to have a major impact on its operations in the summer months. The group is also preparing for the possibility of major restrictions on movement to be introduced again in the final quarter.

The group thus expects the sale of petroleum products to reach 83-86% of the 2019 figure. EBITDA for 2020 could amount to 73-79% of the 2019 figure.

Before the pandemic, Petrol's plans for this year included sales revenue of EUR 6.4 billion, EBITDA of EUR 214.8 million and EUR 109.8 million in net profit. It also planned to sell 3.4 million tonnes of petroleum products.

Investments will be limited to the most essential this year and the management will make decisions on this based on the pandemic-related developments.

The group will focus on cost optimisation and streamlining of operations until the end of the year, while securing uninterrupted energy-product supply.

The supervisory board assessed that the management had responded to the pandemic appropriately and has the situation under control.

An AGM has been scheduled for 23 July.

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