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Good operational results for Rompetrol Rafinare, in the first half of 2023
Rompetrol Rafinare, member company of the KMG International Group, recorded, in the first semester of this year, good operational results, against the background of a higher degree of utilization of the Petromidia and Vega refineries, compared to the same period last year.
Petromidia, the largest profile unit in Romania, directed to the domestic market two thirds of the total production obtained between January and June 2023. Overall, from almost 2.7 million tons of raw materials processed in S1 2023, the refinery produced more than 2 million tons of fuels (petrol, diesel and jet fuel A1).
However, the company registered declining financial results with a gross turnover of 2.7 billion USD (down 9%), operational profit (EBITDA) of nearly 117 million USD (down 33%) and a negative net result of 34 million USD.
The financial results were significantly influenced by the volatility of international quotations, both for raw materials and for finished products. At European level, refining margins decreased by 125.2 USD/MT (-64%) in the second quarter of 2023, compared to the second quarter of 2022, respectively by 22.8 USD/MT (-18.3%) in the first semester of 2023, compared to the first semester of 2022.
Rompetrol Rafinare continued to be an important contributor to Romania's state budget, with a contribution of 539 million USD in the second quarter of the year. Also, the contribution in the first half of 2023 was more than 907 million USD, with 128 million USD representing the solidarity tax contribution for the year 2022.
For the first semester of 2023, the company estimated a contribution of 17.7 million USD, taking into account the current rules of OUG 186 - the solidarity contribution, intended to apply a tax of 60% on profit. The company is also considering steps to analyze the tax level from a legal perspective.
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
In the second quarter and the first semester of 2023, the total raw material of the Petromidia refinery was 1.4 million tons, respectively 2.68 million tons, increasing by 5% and 16%, respectively, compared to the similar periods of last year.
The increase is explained by the refinery’s operation for a greater number of days in the first semester of 2023, compared to a discontinuous operation in 2022, caused by the scheduled shutdown for 24 days, in the months of March - April 2022.
Compared to the first 6 months of the year, Petromidia recorded an increase of 19% in gasoline production - 717 thousand tons and 12% in diesel production - 1.33 million tons. Out of the total volume, 64% of the production was intended for the domestic market, a level similar to the January-June 2022 period.
On June 21, 2023, a technical incident, followed by an ignition, occurred in the Diesel Hydrocracking (MHC) unit. In close collaboration with the authorities, the company made every effort to immediately remedy the situation.
Despite the incident, all the installations of the Petromidia refinery are in operation, the exception being the MHC unit, so Rompetrol Rafinare continues to provide the oil products needed on the Romanian market. The rehabilitation work is being carried out by the general contractor of the KMG International Group, Rominserv, with the support of specialized subcontractors from the region, with the unit expected to be restarted in the autumn.
However, the Navodari unit managed to achieve good operational results in terms of white product yield – 84.39%wt and energy intensity index – 96.06%.
Petrochemical segment
At the moment, the activity of the Petrochemical Division is carried out in the polypropylene (PP) and low density polyethylene (LDPE) units. PP works with raw material produced and delivered internally by the Petromidia refinery, and LDPE uses imported ethylene as raw material.
In the second quarter and the first semester of 2023, the total polymer production of the Petrochemical Division was 31.3 thousand tons, respectively 57.6 thousand tons, down by 9.3% and 8%, respectively, compared to the similar periods of last year.
The results of the petrochemical division were impacted by unfavorable market conditions for the segment's products. Gross turnover was nearly 71 million USD, and operational profit (EBITDA) and net result were negative, at 37.7 million USD and 40.3 million USD, 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
Consolidated gross turnover for the distribution segment was 1.63 billion USD in the first half of the year. Operational profit (EBITDA) recorded a value of 40 million USD in S1 2023, while the net result was a positive one of more than 20 million USD.
The total quantities of fuel sold by Rompetrol Downstream in the January-June period were 1.08 million tons, a level in slight increase compared to the volume recorded in the similar period from 2022.
Wholesale fuel sales decreased compared to the same period last year, but in the retail segment, the company managed to sell 18% higher volumes compared to the same period in 2022.
Recently, the new concept of motorway stations has been launched, which includes a varied range of services with the integration of several facilities. The first 10 stations, built under the umbrella of the Kazakh-Romanian Energy Investment Fund (KREIF), were opened on the A1 highway, the Nadlac - Sibiu section.
At the end of June 2023, Rompetrol Downstream's distribution segment comprised 1,305 sales points, including the network of own stations, partner stations and mobile stations (expres, internal bases of 9 and 20 cubic meters), increasing by 83 units compared to the number recorded at the end of June 2022.