AB Klaipėdos nafta (hereinafter – KN, the Company) announces the unaudited financial results for the nine months ended 30 September 2018.
Management comment:
Total oil product transshipment volume diminution during three quarters of the year was influenced by several unfavorable factors which emerged at the same time. The first half-year of 2018 has been a financial success for KN mostly because the majority of clients have reloaded more oil products than was planned and significantly exceeded their initial transhipment liabilities, therefore, the need for oil product handling to vessels slightly decrease during the third quarter of the year. Annual negotiations between Russia and Belarus regarding gas, oil and oil product trade have also had negative impact on transit oil cargo flow. Furthermore, diesel fuel demand has increased in Poland; therefore, “Orlen Lietuva” has redirected part of the diesel fuel flow straight to its domestic market during the third quarter of the year.
During three quarters of 2018 Company’s Klaipėda and Subačius oil terminals in total handled 5.03 million tons of oil products (5.23 million t during three quarters of 2017). Company’s Klaipėda and Subačius oil terminals sales revenue reached EUR 27.2 million which has decreased by 2.2 percent compared to the same period during the year 2017 (EUR 27.8 million). Oil product handling business is quite cyclic; therefore, oil product transhipment results are affected by seasonality. Usually, cargo transhipment volume increases during cold season; consequently, handling volumes are expected to increase in the fourth quarter of the year.
KN continues to improve its oil terminal competitiveness by investing into infrastructure which could be operatively adapted to constant market changes. Completion of II stage LFO park expansion project will enable to reload higher volume and different kinds of oil products and its components.
During the third quarter of 2018, three gas carriers delivered cargo to LNG terminal four small scale operations of LNG reloading were carried out. Total volume of re-gasified and reloaded LNG for the nine months of 2018 comprise MWh 7,1 million and is still substantially lower compared to the same period of 2017 (MWh 10,67 million). LNG terminal operation extent decreased due to the diminution in reserved annual capacities. LNG terminal revenue for three quarters of the year comprises of EUR 48.51 million and declined by 6.2 per cent, compared to the same period of the year 2017. The activity of LNG terminal is regulated therefore revenue of LNG activity does not depend on re-gasification volume.
The importance of international LNG terminal project development and participation in mentioned projects is being highlighted in the long-term strategy of the Company, which is planned to be presented in public in the first quarter of the year 2019.
In the end of September, KN has finished the arrangement of Environmental safety measures plan, which was then submitted to Environmental safety institutions. According to the plan, the Company has obliged to continue sustainable operation and compliance of highest environmental safety standards. KN is planning to reach an investment to environmental safety in total of EUR 8 million by the end of 2021.
In order to remain competitive as a Company we have not only invest into the new infrastructure but also we need to change ourselves. This year we continue proceeding changes in Company’s organizational culture. We focused on leadership development, strengthening of leader role.
Enclosed:
Jonas Lenkšas, Chief Financial Officer, +370 694 80594
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