KMG International summarized the results at half year-end 2018
At the first half year-end 2018 KMG International Group (KMGI) has increased operating profit (EBITDA) by 114.6 million dollars, which is by 60% more than in 2017 when this indicator reached 71.3 million dollars. Net profit has amounted to 30.6 million dollars against 5.2 million dollars at half year-end 2017.
According to a newsperson of Kapital.kz business information center the following factors has had an impact on operating performance at the first half year-end 2018: higher throughput by 27% and significant oil product sales growth by 80% in Romania and in the region at the first half year-end 2018. Maximum net profit has been reached mainly because of internal growth programs and cost-cutting projects.
Production has been boosted
KMG International owns three production facilities in Romania — Petromidia and Vega refineries and Petrochemicals petrochemical complex. In total, these facilities refined and processed around 3.4 million tonnes of feedstock at the first half year-end 2018 (plus 27% against the same period of 2017 ).
Petromidia refinery is the largest asset of the group and one of the technologically advanced refineries within Black Sea region. At the first half year-end 2018 it has refined 3.1 million tonnes of feedstock which is a record throughout history of the plant.
Average daily refining has showed the maximal result — 17 ktonnes of feedstock; in general, over the last decade this indicator has significantly increased — from 10.8 ktonnes in 2007 to 16.8 ktonnes in 2017. At the first half year-end 2018 the refinery produced around 2.42 million tonnes of commercial oil products, where over 64% out of this volume is diesel fuel and kerosene-based aviation fuel. Plant availability factor has increased by 28% (up to 98,45%).
Production of products other than fuel has also been boosted
Vega refinery is the oldest refinery in Romania. Feedstock and half products for production of special value-added products such as bitumen, solvents, hexane are supplied here from Petromidia refinery. At the first half year-end 2018 this refinery has also refined more feedstock than in the first half year-end 2017 — around 194 ktonnes (+28%). Moreover, this May the refinery has reached an all-time high of 42 ktonnes in feedstock refining and 13 ktonnes in bitumen production. Plant availability factor has increased by more than 25% (117,53%).
In the period under review KMG International has also boosted total volume of polymer production at the petrochemical complex: at the first half year-end 2018 it has produced 81.6 ktonnes which is by 26% more than in the first half year-end 2017.
Sales — oil product trading is growing in Romania and in the region
In Bulgaria, Moldova and Georgia subsidiaries of KMGI Group sold 1.5 million tonnes of oil products — by 5% more than in the first half year-end 2017. The largest volume of oil products has been sold in Romania – 1.4 million tonnes, 15% growth. Direct sales of Petromidia and Vega refineries and Petrochemicals petrochemical complex has grown at the first half year-end 2018 by 37% - up to 372 ktonnes.
In general, the refineries and the petrochemical complex of the Group has increased the volume of exported oil products by 34%. Total cost of products sold was over 926 million dollars — by about 80% more than in the same period of 2017.
How much oil products have been exported?
At the first half year-end 2018 KMGI has transshipped 11.5 million tonnes of feedstock and oil products through its trading channels (plus 35% as compared to the same period of 2017). This volume includes the feedstock supplied for production units of the Group as well as supply/sales of oil products to its own regional subsidiaries and external partners.
At a level of the Group 4,45 million tonnes of oil products have been exported including 2.2 million tonnes to external partners through KazMunayGasTrading (KMGI trading business unit and supply chain), 1.4 million tonnes have been sold in Romania, 830 ktonnes — in Black Sea region (including supplies to subsidiaries of the Group in Bulgaria, Moldova and Georgia).
The company uses ships, barges, rail tankers and road tankers as means of transportation. At the first half year-end 2018 over 3.6 million tonnes of oil products have been shipped from Petromidia and Vega refineries.
The total volume of feedstock supplied to Petromidia refinery between the beginning of 2009 and the first half year-end 2018 was about 40 million tonnes.
MidiaMarineTerminal served over 300 ships and barges and 30 oil tankers were unloaded through the marine terminal. It’s worth noting that the company built the marine terminal in 2009 and invested 102 million dollars into it; buoy, designed to ease and cut costs of logisctics, had already paid itself back after 4.5 years of its operation.
Sales opportunities are on the rise
According to Kapital.kz in KMGI the Group keeps on expanding its regional distributor network which includes its own fuel filling stations and those of the partners, or sales outlets as they have come to be called in Romania (sales of food in outlets are just as important in terms of gaining profit as sales of fuel). For instance, in Romania alone gross profit from sales of goods other than fuel at fuel filling stations has reached 9 million dollars which is by 2 million dollars (+29%) more than the indicator in the similar period of the last year.
Since the beginning of 2018 three new fuel filling stations have been opened in Moldova and two new fuel filling stations have been started up in Romania – in Bacau and Baia-Mare.
New concepts have also been implemented— Express station and internal depots which are designed to have 20 cubic meter fuel tanks within areas of companies with own vehicle fleet (this year 14 such internal depots have been opened in Georgia).
In total, if we look at statistics at the first half year-end 2018 then the number of sales outlets of motor fuels produced by Petromidia refinery has reached 1094 (own fuel filling stations and those of the partners, Express stations, internal depots), which is by 88 facilities more than in June 2017 .
Moreover, KMGI’s subsidiary in Bulgaria has taken control of five fuel filling stations in Sofia, Plovdiv, Pleven, Sivlievo and Borovo (Ruse region). In the medium term these stations will be included into the programme for expanded upgrade and bringing up to Rompetrol standards and this would help the Group to increase its presence at local market.