Cepsa prrofit falls on lower margins in 2019

MOSCOW (MRC) -- Cepsa achieved a net profit of 820 million euros in 2019, 1.2% less than a year earlier, while the adjusted net result CCS (discounting the variation in the value of inventories) fell 19%, to 610 million, due to the lower refining margins and the decrease in the price of crude oil, said the company.

On the other hand, the adjusted gross operating profit (ebitda) increased by 17% and stood at 2,058 million, thanks, fundamentally, to the good performance of the Exploration and Production and Marketing businesses, according to the accounts published this Friday by the oil company, controlled by Mubadala Investment Company.

The Exploration and Production business increased its adjusted EBITDA by 48%, to 963 million, driven by the start of operations of the SARB and Umm Lulu fields (in Abu Dhabi), acquired in 2018. These fields allowed to increase the production by 11%. Cepsa production, up to 92.6 million barrels per day.

On the other hand, the adjusted net profit fell 17% (194 million) due to the drop in Colombia’s contribution due to lower sales prices and higher depreciation and taxes.

Refining activity contributed an adjusted gross operating result of 433 million, 25% less, and cut its adjusted net profit by 52%, to 124 million.

According to Cepsa, this decrease, experienced by the market in general, was due to the lower refining margins, impacted by the cracks of light and medium distillates in the Mediterranean; as well as higher supply costs due to the rise in premiums for high sulfur crude.

The level of utilization of refinery distillation capacity was 89%, in line with 2018.

The Marketing business generated an adjusted EBITDA of 463 million, 35% more, thanks to the good performance of the service station network, the bioenergy business and the increase in sales volumes and margins in the asphalt business, as well as to the application of the new accounting standards on rentals (75 million).

The adjusted net profit of this area stood at 221 million euros, 17% higher than the previous year.

Chemistry activity achieved an adjusted gross operating result of 246 million, in line with 2018, while the adjusted net profit fell 3% (107 million) due to the deterioration of international margins of some products and despite the fact that it was recorded 26 million due to the entry into force of IFRS 16.

In 2019, Cepsa extended the average life of its debt to more than 5 years and managed to cut its net debt by 11%, to 2,746 million, thanks to the cash generation, according to the same source.

Investments during this period amounted to 924 million euros, compared to 2,255 million in 2018, and the free cash flow was 1,152 million euros (before the payment of interest and dividends).

As MRC informed earlier, Cepsa Quimica (Shanghai), a joint venture between CEPSA, a Spanish petrochemical company, and Japan’s Sumitomo Corp, has lowered phenol and acetone production in Shanghai, Shanghai, China. Capacity utilization at this enterprise with a capacity of 250 thousand tons of phenol and 150 thousand tons of acetone per year was reduced due to lack of raw materials.

Phenol is one of the main feedstocks for the production of bisphenol A (BPA), which, in its turn, is used for the production of polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 tonnes a year earlier).

Cepsa is controlled by Abu Dhabi’s Mubadala Investment. Since October last year, US private equity firm Carlyle Group holds a 37% minority stake in Cepsa.
MRC

Rotomolder Tank Holding buys Hoover Ferguson intermediate bulk container manufacturing assets

MOSCOW (MRC) -- Rotational molder Tank Holding, the parent company of intermediate bulk container (IBC) manufacturer Snyder Industries, has acquired the IBC manufacturing assets from material handling container provider Hoover Ferguson, said Canplastics.

The financial terms of the deal have not been disclosed. In a March 9 statement, Tank Holding said that the purchase “further strengthens [our] market position as the leading North American manufacturer of reusable and returnable IBCs, also known as portable tote tanks, used to transport chemicals and food products."

Headquartered in Houston, Hoover Ferguson is a global provider of material handling container solutions for the energy, petrochemical and general industrial markets, including the rental and other integrated services of IBC products, which is a market they will continue to serve, as a customer of the IBCs manufactured by Snyder Industries.

"We are excited about expanding our IBC manufacturing capacity and footprint, and look forward to serving Hoover Ferguson and their customers with the full breadth of our IBC product portfolio, as well as other Tank Holding products," Tank Holding COE Greg Wade said in the statement.

"The sale of Hoover Ferguson’s IBC manufacturing assets will enable our company to increase our strategic focus, energy, and resources on the rental and integrated services of IBC products,” said Kevin Friar, CEO of Hoover Ferguson.

The Hoover Ferguson announcement represents Tank Holding’s eighth acquisition in about 16 months, but it’s the first over this timeframe to involve another manufacturing process, besides rotational molding. The Hoover Ferguson plant is a steel manufacturing facility, located in Houston, TX, which reflects part of Tank Holding’s strategic desire to expand the company’s manufacturing process capabilities to better serve both new and existing customers.

"Strengthening our manufacturing platform and process knowledge is a part of our overall growth strategy, investing in our core product segments across multiple manufacturing platforms will allow us to deliver more value to our extensive customer base," said Wade.

Said to be North America’s largest polyethylene tank and container manufacturer, Tank Holding also includes the brands of Norwesco, Snyder Industries, Chemtainer, Bonar Plastics, Bushman, and Stratis Pallets. It currently operates 24 manufacturing plant locations and employs approximately 750 people throughout North America.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

Calumet retains bank to sell Montana refinery

MOSCOW (MRC) -- Calumet Specialty Products Partners LP has retained boutique energy bank Tudor, Pickering, Holt & Co to sell its small oil refinery in Great Falls, Montana, reported Reuters with reference to two people familiar with the talks.

The refinery has the capacity to process 30,000 barrels per day of crude, according to the company’s website. That puts it below the largest refineries on the U.S. Gulf Coast that can process ten times as much.

Still, its location and configuration may command a higher price than would otherwise be expected because the plant can process low-cost Canadian crudes and other types of deeply discounted oil, the people said, speaking on condition of anonymity because the talks are private.

Calumet bought the refinery from Connacher Oil and Gas in 2012 for about USD120 million, and has expanded its capacity from about 10,000 bpd at that time.

The company and the bank did not immediately comment.

The plant is the second Montana refinery currently on the block, joining Exxon Mobil Corp’s larger 61,500 bpd plant in Billings. Many US refineries are already for sale, but have struggled to find buyers.

Potential bidders for the Calumet plant could include refiners operating in the region such or smaller independents looking for growth.

Calumet sold its larger 50,000-bpd Superior, Wisconsin refinery to Husky Energy Inc in 2017 for USD435 million and last year sold its 21,000-bpd San Antonio, Texas plant for USD63 million.

Calumet’s shares have fallen from nearly USD40 in 2012 to USD2.35 on Wednesday. The company has spent the last few years stabilizing its earnings, selling under performing assets and paying down debt.

The company planned to expand its specialty products business, and to continue to rationalize lower-margin product lines, Chief Executive Tim Go said on a March 5 conference call following the company’s earnings release.

Go plans to resign effective June 1, and board member Steve Mawer has been appointed CEO.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

Saudi Kayan announces the annual financial results 2019

MOSCOW (MRC) -- Saudi Kayan swung to a net loss in 2019 following a drop in selling prices, despite a rise in sales volumes, said Tadawul.

The reason for achieving a net loss is due to the decrease in the average selling prices of the products, despite an increase in the quantities produced and sold and a decrease in the average cost of feedstock and general and administrative expenses.

Saudi riyals (SR) million 2019 2018 % change
Sales 9,536.40 12,263.15 -22.2
Operational profit 379 2,660.58 -85.8
Net profit -636.77 1,702.24

Full-year earnings were also weighed by the decrease in the average cost of feedstocks as well as higher general and administrative expenses, the company said in a filing to the Saudi bourse, Tadawul.

As MRC informed earlier, Saudi Kayan announced a 21-day scheduled maintenance shutdown for its ethylene glycol (EG) and ethylene oxide (EO) facilities at Jubail, Saudi Arabia, starting on 1 February. The company says that some of its other facilities that rely on EG and EO feedstocks will also undergo periodic maintenance and improvements.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic, 35%). Saudi Kayan is the fifth-largest petrochemical manufacturer by market value in Saudi Arabia.
MRC

ADNOC positioned to raise supply in April

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) aims to increase its supply of oil in April, 2020, reported Hydrocarbonprocessing.

ADNOC Group CEO, H.E. Dr. Sultan Ahmed Al Jaber comments on recent market developments:

"Today, as a result of the steps we’ve taken over the last four years, ADNOC is far stronger and better positioned to respond to current market conditions. Our focus on driving performance, profitability and efficiency has made us more resilient, agile and responsive to market dynamics. These guiding principles remain unchanged as we move forward with projects across our value chain.

"In line with our production capacity growth strategy announced by the Supreme Petroleum Council, we are in a position to supply the market with over 4 MMBPD in April. In addition, we will accelerate our planned 5 MMBPD capacity target.

"In response to market conditions, and to provide better forward visibility to our customers, ADNOC will shortly announce forward prices for the months of March and April 2020. This decision has been made to ensure that our customers have visibility of the price so they can plan accordingly.

"As announced in November 2019, ADNOC remains firmly committed to moving from its current retroactive pricing mechanism to a new forward pricing mechanism for its flagship Murban crude oil. This will be traded on a new independent exchange, ICE Futures Abu Dhabi (IFAD), which is expected to launch after the necessary regulatory approvals are obtained.

"As planned, we remain committed to creating and maximizing value from across our portfolio, while we advance our smart growth strategy."

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC