Oil Refineries Ltd. (TASE:ORL) today published its financial report for the first quarter of 2009. The company's consolidated net profit rose to $75 million for the first quarter from $2 million for the corresponding quarter of 2008, despite a 47.7% drop in revenue to $984 million for the first quarter from $1.89 billion for the corresponding quarter.
Oil Refineries' adjusted refining margin rose to $4.40 per barrel in the first quarter from $2.40 per barrel in the corresponding quarter. The adjusted refining margin was 30% higher than the quarterly average $3.40 per barrel for the Reuters' quoted Mediterranean Ural Cracking Margin.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the refining and trading sector was $32 million for the first quarter, compared with a $2 million loss for the corresponding quarter. The company's consolidated EBITDA was $98 million for the first quarter, nearly triple the $34 million EBITDA for the corresponding quarter.
Oil Refineries noted that the price per barrel of crude rose from $37 at the end of 2008 to $50 per barrel at the end of March. However, refining margins fell during this period, primarily due to the relative increase in oil prices as well as the end of the winter season. The increase in crude oil prices had a substantial impact on the first quarter results. The company maintains a basic un-hedged inventory of 600,000 tons of crude oil, and the change in the value of this inventory does not affect cash flow, so it excludes the effect of changing oil prices on its operating results, in order to enable a comparative analysis of the company's performance.
Oil Refineries' production capacity was 1.81 million tons in the first quarter, compared with 1.85 million tons in the corresponding quarter. The company saw an 11% decline in domestic demand, mainly because of a drop in demand for diesel, which was partially offset by increased demand for gasoline.
Israel Corporation (TASE: ILCO) owns 45.08% of Oil Refineries, and Israel Petrochemical Enterprises Ltd. (TASE:PTCH) owns 15.76%. Oil Refineries share rose 5.1% by midday to NIS 1.4. Israel Corp.'s share fell 2% to NIS 1,951, and Petrochemical Enterprises' share rose 1.74% to NIS 10.55.
Published by Globes [online], Israel business news - www.globes-online.com - on May 18, 2009
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