Taking into account the upheaval caused by the coronavirus in the global and local market, during the first half of 2020 KN (AB Klaipėdos Nafta), the operator of oil and LNG terminals, mostly focused on efficient cost management and operational efficiency. Although the company managed to achieve the planned result of the net profit, the focus on the improvement of operational efficiency will remain throughout the second half of the year.
During the first half of 2020, KN group earned 8.1 million euros of adjusted net profit, i. e. 73% more than a year ago, when adjusted net profit was 4.7 million euros. This year Group’s adjusted EBITDA is 14 million euros and is 25% higher compared to the respective period of last year (last year – EUR 11.3 million). Consolidated revenue of KN over 6 months was EUR 40.7 million (EUR 51.2 million in 2019, respectively),
In 2020 alone adjusted net profit for the second quarter is EUR 4.2 million (EUR 1.3 million a year ago) and adjusted EBITDA is EUR 7.2 million (EUR 4.9 million a year ago). During the second quarter, KN earned EUR 20.7 million of consolidated income
“After the assessment of the result of the first half of the year, I am grateful to the team, which was looking for the solutions that would be the best for customers during the difficult period of quarantine, and was thinking how to make use of all opportunities in the market more effectively. However, while the financial result is indeed positive, there is no time to relax – the effect of the reduction in demand for oil and gas due to the limitations of COVID-19 becomes clear only now. We are closely monitoring the situation in the markets, assessing how the industry will recover and how the demand for oil and gas products will change, as well as how the oil refining margin curve will adjust,” says Darius Šilenskis, CEO of KN.
During the first half of the year, 2.6 million tons of oil and its products were transshipped at KN oil terminals, i. e. 8 percent. less than a year ago. Revenue of KN oil terminals in 2020 of the first half of the year was EUR 16.1 million and the net profit amounted to EUR 3.1 million. During the first half of this year, about 669 thousand tons of crude oil (8 tankers) were transshipped at the KN oil terminal in Klaipėda.
“This year is really exceptional in the oil business industry – they were marked by both the impact of the coronavirus and the disruption of oil supply to the Belarus oil refineries, which was caused by geopolitical factors. These are exceptional for us, because they significantly increased the handling of crude oil. Furthermore, for the first time in the history of the terminal, we accepted oil cargo originating from the US. We see that we are a global market player in both oil and gas logistics chains. Being efficient and having sufficient capacity, we are able to flexibly adapt to customer needs. I believe that our customers appreciate this as well: one of the main customers of KN – compared to last year BNK (UK) Limited has increased the volume of cargo transshipped through Klaipėda by about 39%,” emphasizes the head of the KN.
The first half of this year was very successful for the operation of Klaipėda LNG Service Center as well. Due to extremely favorable international LNG prices, the demand for the services of LNG terminal in Klaipėda increased significantly. During the first half of the year, the LNG terminal received as many as 35 gas carriers – more than twice as many as in 2019. Accordingly, 11.1 TWh of LNG were regasified and transhipped during this period (6.3 TWh a year ago). In 2020 the net operating profit of the LNG terminal was EUR 5.5 million, i. e. 67% higher than in the corresponding period in 2019. LNG terminal revenue decreased from EUR 36 million in the comparable period to EUR 22 million.
“From 2020 KN implements decisions that are related to the reduction of LNG terminal costs for gas consumers in Lithuania, which is reflected in the operating revenue of the LNG terminal. Nevertheless, while focusing on operational efficiency, we managed to ensure high profitability of this activity. By comparing the results of only the first half of the year, according to the results of LNG regasification and transshipment, 2020 is the most successful year for the operation of the LNG terminal,” points out D. Šilenskis, CEO of KN.
Income from KN LNG commercial activities, including Klaipėda LNG reloading station and international LNG projects, reached EUR 2.3 million in the first six month of 2020.
KN group is comprised of KN and KN subsidiaries and companies that they control.
Regarding the publication of adjusted financial results
The financial (accounting) result of KN is affected by the 16th International Financial Reporting Accounting Standard “Leases”, which entered into force last year. This standard significantly disrupts the balance of the published financial results, because the result is recorded with the consideration of the influence of the exchange rate on the last day of the reporting quarter and does not allow to compare the actual operating results. As we show the managerial (adjusted) result, the investors and those interested in the company’s activities can easier and more accurately understand how the company is performing during the reporting period, eliminating the influence of factors that the company does not actually experience.
Source: Klaipėdos nafta