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Oil Refineries Announces Results For Second Quarter And First Half 2014

August 21, 2014

HAIFA, Israel, Aug. 21, 2014 /PRNewswire/ – Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter “the Company,” “ORL” or “BAZAN”), Israel’s largest integrated refining and petrochemical group, announced its financial results for the second quarter and first half 2014.

The Company will be hosting its earnings call today, August 21, 2014. The conference call will take place at 13:30 UK (08:30 ET, 15:30 Israel time). On the call, management will review and discuss the financial results and will be available to answer questions. To participate, please call one of the following teleconferencing numbers:


    US Dial-in Numbers:                   1-888-407-2553

    UK Dial-in Number:                    0-800-917-9141

    Israel Dial-in Number:                03-918-0685

    International Dial-in Number:         +972-3-918-0685

The conference call will be accompanied by a presentation available for download from the Company’s website, www.orl.co.il, under investor relations.

SECOND QUARTER 2014 HIGHLIGHTS

    --  Net profit for the quarter totaled $4 million
    --  The Cash Flow from operating activities was $232 million
    --  Adjusted EBITDA totaled $95 million
    --  The operating income totaled $60 million
    --  The adjusted refining margin totaled $5.6 per barrel, as compared with
        the average Reuter's quoted Mediterranean Ural Cracking Margin of $0.4
        per barrel.

Mr. Arik Yaari, CEO: “The business environment in which the company operates was challenging in the second quarter. Despite this, the company continued the improvement trend. This is due mainly to better refining margins despite the weak market, polymers contribution, the efficiency program generating the rewards promised and higher utilization of our production units. We continue to pursue the fullest realization of our operating and commercial capabilities in order to strengthen the company in any business environment. Recently refining margins have increased and if this trend continues, we expect that it will also have a positive impact on the future financial results. “

Mr. Israel Lederberg, CFO: “We believe that the improvement in the second quarter financial results, our better liquidity, strong cash flow and the recent increase in refining margins should strengthen the confidence of the capital market. As we announced previously, we intend to raise new debt to replace old, with a view to improving the company’s debt structure, while extending the duration and further improving liquidity. This is also expected to improve the company’s longer term financial flexibility. “

SECOND QUARTER AND FIRST HALF 2014 RESULTS

    --  The second quarter was characterized by challenging benchmark refining
        margins, which affect the main area of operation for the Company. The
        average Reuter's quoted Mediterranean Ural Cracking Margin in the second
        quarter was just $0.4 per barrel compared with $2.5 per barrel in same
        period of 2013. Despite the lower benchmark margin, ORL's own adjusted
        refining margin totaled $5.6 per barrel compared with $4.2 per barrel in
        same period of 2013.The average Reuter's quoted Mediterranean Ural
        Cracking Margin in the first half was $0.4 per barrel compared with $2.6
        per barrel in same period of 2013. ORL's own adjusted refining margin in
        the first half was $5.3 per barrel compared with $4.2 per barrel in same
        period of 2013.
    --  Revenues for second quarter totaled $2.5 billion, similar to the same
        quarter last year. Revenues in the first half totaled $4.7 billion
        compared with $4.8 billion in the same period last year.

    --  Adjusted Operating Income across all sectors totaled $60 million in the
        second quarter compared with $16 million in the same quarter last year.
        Adjusted Operating Income across all sectors totaled $96 million in the
        first half compared with $69 million in the same period last year

    --  Adjusted EBITDA totaled $95 million in the second quarter compared with
        $54 million in the same quarter last yearAdjusted EBITDA totaled $166
        million in the first half compared with $143 million in the same period
        last year
    --  In the second quarter of 2014 the company repaid long-term financial
        liabilities to banks and bondholders totaling $149 million, and $209
        million from the beginning of the year.

RESULTS ACCORDING TO SECTORS:

Refining

    --  The Company continues to generate higher refining margins than the
        benchmark average due to the Company's upgraded refining capabilities
        and logistical position. 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 benchmark margins which are at historically
        low levels.

    --  In the second quarter the adjusted refining margin averaged $5.6 per
        barrel, as compared with the average Reuter's quoted Mediterranean Ural
        Cracking Margin of $0.4 per barrel. In the first half the adjusted
        refining margin averaged $5.3 per barrel, as compared with the average
        Reuter's quoted Mediterranean Ural Cracking Margin of $0.4 per barrel.

Petrochemicals

The improvement in the Company’s polymers results over the last quarter can be attributed to improved polymer spreads over Naphtha and the Company’s transition to natural gas.

During the second quarter there was a decrease in Gadiv’s aromatics output, mainly due to a partial stoppage after a fire in a furnace. The repair is underway and the company is working with its insurers for compensation for damages arising.

Adjusted EBITDA according to sectors ($ millions)


                      Q2 2014 Q2 2013  Difference
                      ------- -------  ----------

    Refining               57       28           29
    --------              ---      ---          ---

    Polymers (CAOL)        36       26           10
    --------------        ---      ---          ---

    Aromatics (Gadiv)       3        5          (2)
    ----------------      ---      ---          ---

    Lube-Oils (HBO)         -     (1)           1
    --------------        ---     ---          ---

    Trade                   -     (1)           1
    -----                 ---     ---          ---

    Consolidation         (1)     (3)           2
    -------------         ---      ---          ---

    Total                  95       54           41
    -----                 ---      ---          ---


                      H1 2014     H1 2013      Difference
                      -------     -------      ----------

    Refining                   93           91               2
    --------                  ---          ---             ---

    Polymers (CAOL)            60           39              21
    --------------            ---          ---             ---

    Aromatics (Gadiv)           8           14             (6)
    ----------------          ---          ---             ---

    Lube-Oils (HBO)             -         (2)              2
    --------------            ---         ---             ---

    Trade                       2          (2)              4
    -----                     ---          ---             ---

    Consolidation               3            3               -
    -------------             ---          ---             ---

    Total                     166          143              23
    -----                     ---          ---             ---

Environmental & Social Responsibility

Maintaining social and environmental compliance, while building on our good relations with the relevant authorities, is a strategic goal for ORL. In the Company’s facilities there are numerous environmental projects, including the transition to Natural Gas which has significantly reduced the Company’s emissions

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 and petrochemical complexes in the Eastern Mediterranean area. 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 operations, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries a range of Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lubricant base oils (through Haifa Basic Oils Ltd). The Company’s shares are listed on the Tel Aviv Stock Exchange under the ticker symbol 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 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


    Company Contact:                    Investor Relations Contact:

    Rony Solonicof                      Jonathan Eilat

    Chief Economist and Head of         The Investor

    Investor Relations                  Tel. 972 54268 1977

    Tel. 972 4 878 8152                 Contact john@theinvestor.co.il

    Contact IREn@orl.co.il

SOURCE Oil Refineries Ltd.


Source: PR Newswire



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