Rompetrol Rafinare's results in the first quarter of the year, influenced by market volatility and the turnaround of the Petromidia refinery

Consolidated indicator*		Q1 2024	Q1 2023
Gross turnover	USD	1,093,551,498	1,284,180,516
EBITDA	USD	33,206,567	100,895,549
Net result	USD	(23,820,498)	14,449,232

*Note: The consolidated financial statements of Rompetrol Rafinare include the results of Rompetrol Rafinare S.A. and those of the subsidiaries Rompetrol Quality Control S.R.L., Rom Oil S.A., Rompetrol Downstream S.R.L., Rompetrol Logistics S.R.L., Rompetrol Gas S.R.L. and Rompetrol Petrochemicals S.R.L.

Rompetrol Rafinare, member company of the KMG International Group (Rompetrol), recorded in the first quarter of 2024 a gross turnover of about 1.1 billion USD, down 15% compared to the same period last year. At the same time, the operational profit (EBITDA) recorded by the company was 33.2 million dollars, the net result having a negative value of 23.8 million dollars.

The operational and financial results were influenced by the volatility of international quotations for raw materials (crude oil, bio components) an§d petroleum products. Also, a major impact was determined by the stoppage of production activities in order to carry out the planned general turnaround of the Petromidia Năvodari and Vega Ploieşti refineries, but also by the costs and investments programmed within them. The utilization rate of the Petromidia refinery was 68.9% in the first quarter, amid the scheduled shutdown of the units.

With an estimated total investment of 85 million USD in the implemented development projects, plus funds for maintenance and recertification works, the turnaround was a necessary effort for the optimal and safe operation of the largest refinery in the country.

The Petromidia refinery fully secures its crude oil requirements from external sources, especially from Kazakhstan. In the first quarter, the commodity appreciated by 2% from the average level of Q1 2023 and by 15% in the January-March period, from 75.7 USD/barrel (Brent crude oil) in early January to 86.9 USD/barrel, at the end of March.

Despite the non-operation of the installations during the turnaround period, Rompetrol Rafinare was consistent in supplying fuels to the domestic market, with 66% of the total supplied domestically. This business strategy aims to maximize sales returns in Romania, where the company is a factor of stability on the energy market.

At the same time, Rompetrol Rafinare supported, with important volumes of oil products, the subsidiaries of the KMG International Group, Rompetrol being the most important fuel supplier in the Republic of Moldova, Georgia and with a significant presence in Bulgaria.

The total value of exports made by Rompetrol Rafinare (through the refining and petrochemical divisions) in the first quarter of the year, amounted to 240 million USD, based on a volume of 312 thousand tons of petroleum products exported in January - March 2024.

Rompetrol Rafinare is one of the most important contributors to Romania's state budget, paying over 316 million USD in Q1 2024.

Refining segment*

Financial indicator		Q1 2024	Q1 2023
Gross turnover	USD	937,716,632	1,117,123,660
EBITDA	USD	28,509,947	100,061,689
Net result	USD	(4,766,418)	22,246,781
Operational indicator
Raw materials processed – Petromidia	kt	943	1,279
Raw materials processed – Vega	kt	61	76
Gasoline production	kt	274	343
Diesel & Jet production	kt	508	620
Fuel sales – internal	kt	482	572
Fuel sales – export	kt	251	329

*Note: The refining segment includes the results of the Petromidia Navodari and Vega Ploiesti refineries. Rompetrol Rafinare calculates the gross refining margin as follows - (Sales of petroleum products – Cost of raw materials)/Sales volume. Net refining margin is operating profit (EBITDA) divided by sales volume.

In the first three months of 2024, the Petromidia refinery processed 943 thousand tons of raw materials, mostly crude oil of Kazakhstan origin. The Navodari facility has a stable flow of raw material, mainly due to purchases of Kazakh crude oil made with the support of KazMunayGas, Kazakhstan's national oil and gas company.

From the total volumes of raw materials processed, the refinery obtained 274 thousand tons of gasoline and 508 thousand tons of diesel fuel. Fuel sales were oriented towards the domestic market, with two thirds of the total sold in Romania.

In the first quarter of 2024, the total supply of raw materials of the Petromidia refinery was decreasing, as a result of the suspension of operational processes on March 8 - the beginning of the general turnaround. However, the refinery managed to achieve an increasing white product yield – 90.3%wt, and the technological loss recorded a decrease of 0.18%wt, due to the purchase of diesel component and A1 Jet fuel.

Regarding the Vega refinery (the only domestic producer of bitumen and hexane), total raw material processing was around 61 thousand tons in the first quarter of 2024, down 20% compared to the same period last year, as a result of the lower volumes of raw materials and semi-finished products supplied by the Petromidia refinery.

The Vega refinery recorded good operational parameters, with a technological consumption of 0.59%, energy consumption of 2.89 GJ/t and mechanical availability of 98.78%.

Against the background of the decrease in utilization of the Petromidia and Vega refineries, the refining segment recorded a gross turnover of 937 million USD, an operational profit (EBITDA) of 28.5 million USD and a negative net result of 4.7 million USD.

Petrochemicals segment*

Financial indicator		Q1 2024	Q1 2023
Gross turnover	USD	27,464,059	41,519,090
EBITDA	USD	(16,285,915)	(19,723,976)
Net result	USD	(19,601,107)	(19,902,393)
Operational indicator
Processed propylene	kt	23	32
Total polymer production	kt	16	26
Total sales	kt	25	36

*Note: The petrochemical segment includes the petrochemical activity of Rompetrol Rafinare and the activity of Rompetrol Petrochemicals SRL.

In the first quarter of 2024, the total production of polymers in the petrochemical segment was 16 thousand tons, down from the same period last year, when 26 thousand tons were produced.

The operational results were influenced, mainly, by the non-operation of the Low-Density Polyethylene (LDPE) plant, caused by the unfavorable conditions on the petrochemical products market, but also by the scheduled general turnaround period, which started in March 2024.

Despite the current market conditions, the only petrochemical division in Romania continued to honor its deliveries to partners in the relevant industries, thus supporting several production segments in the country.

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*
 

Financial indicator		Q1 2024	Q1 2023
Gross turnover	USD	759,103,151	792,860,536
EBITDA	USD	24,499,644	20,684,522
Net result	USD	4,816,638	12,987,743
Operational indicator
Fuel sales – retail	kt	270	242
Fuel sales – wholesale	kt	141	195
LPG quantities sold	kt	50	68

*Note: The distribution segment includes the results of the subsidiaries Rompetrol Downstream, Rom Oil, Rompetrol Quality Control, Rompetrol Logistics and Rompetrol Gas.

In the first quarter of the year, the distribution segment's consolidated gross turnover was 759 million USD, down slightly compared with January – March 2023.

The international quotations related to petroleum products recorded in Q1 a slight decrease compared to the same period last year, by 1% for gasoline and 2% for diesel. Domestically, the evolution of fuel prices was influenced by the change in the excise tax from January 1, which was reflected in an increase of 29 bani per liter of gasoline and 26 bani for diesel. From July 1, the excise duty will register a new increase (including the related VAT), which will add 43 bani per liter of gasoline and 40 bani per liter of diesel.

In Romania, the main trading market for fuels produced in Petromidia, sales increased by 12% in Q1 2024 (270 thousand tons), compared to Q1 2023 (242 thousand tons). The growth came from the company's strategy to prioritize the needs of the country's market.

At the end of March 2024, the distribution network in Romania reached 1,328 sales points, an increase of 44 points compared to March 2023. The network includes own stations, partner stations and mobile stations: express, internal bases of 9 and 20 cubic meters.

 

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