Oil Refineries Q2 results

Oil Refineries Ltd (ORL), Israel’s largest integrated refining and petrochemical group has announced its financial results for the second quarter and first half of 2014.

Highlights

• Net profit for the quarter totalled US$ 4 million.
• The cash flow from operating activities were US$ 232 million.
• Adjusted EBITDA totalled US$ 95 million.
• The operating income totalled US$ 60 million.
• The adjusted refining margin totalled US$ 5.6 /bbl.

Refining

The company is continuing to generate higher refining margins than the benchmark average due to the company’s upgraded capabilities and logistical position. The transition to natural gas and the contribution of the hydrocracker, since the first quarter of last year has enabled ORL to demonstrate ongoing higher refining margins, reducing the impact of the benchmark margins which are at historically low levels.

The second quarter has seen the adjusted refining margin average at US$ 5.6 /bbl. In the first half of 2014, the adjusted refining margin averaged US$ 5.3 /bbl.

Petrochemicals

The improvement in the company’s polymers results over the last three months can be attributed to improved polymer spreads over naphtha and ORL’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 currently underway and ORL is working with the insurers for compensation for damages arising.

Comments

Arik Yarri, ORL, CEO said, ‘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 utilisation of our production units. We continue to pursue the fullest realisation 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.’

Israel Lederberg, CFO said, ‘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.’

Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/21082014/oil-refineries-q2-2014-results/