|
|||
2009-07-30 08:00:00 CEST 2009-07-30 08:13:39 CEST REGULATED INFORMATION Neste Oil - Interim report (Q1 and Q3)Neste Oil's Interim Report for January-June 2009- Comparable operating profit in Q2 was EUR 47 million (Q2/2008: 181 million) Second quarter in brief: - Diesel margins remained weak during the entire quarter - Neste Oil's total refining margin was USD 7.87 /bbl (4-6/08: 12.38 - Comparable operating profit came in at EUR 47 million (4-6/08: 181 million) - IFRS operating profit was EUR 118 million (4-6/08: 290 million) - Cash flow from operations totaled EUR 223 million (4-6/08: 314 million) - Investments totaled EUR 210 million, of which 149 million was allocated to Renewable Fuels - The second NExBTL renewable diesel production plant was commissioned at the Porvoo refinery President & CEO Matti Lievonen:"Refining margins continue to be weak, dampened by depressed demand, and no rapid recovery seems to be in sight. Despite these difficult circumstances and the two-month maintenance shutdown at Production Line 4 at the Porvoo refinery, we were able to stay in the black. However, a quarterly profit of 47 million euros is not satisfactory and the current market conditions mean that we must further improve our cost and operational efficiency. This is something that we will continue to concentrate on during the second half of the year. We have already seen an improvement in our working capital management, and this has had a positive impact on our operating cash flow.""We remain committed to proceeding with our strategic projects and I'm pleased to say that the start-up of our second NExBTL renewable diesel plant has been very smooth and the plant has reached its nameplate capacity. Our partners published some very promising results during the second quarter from long-term field tests of using NExBTL renewable diesel commercially. These field tests prove that NExBTL's quality is second to none when it comes to performance and emissions." Further information: Matti Lievonen, President & CEO, tel. +358 10 458 11 Ilkka Salonen, CFO, tel. +358 10 458 4490 News conference and conference call A press conference in Finnish on the second quarter results will be held today, 30 July 2009, at 11:30 am EET at the company's headquarters, Keilaranta 21, Espoo. www.nesteoil.com will feature English versions of the presentation materials. A conference call in English for investors and analysts will be held today, 30 July 2009, at 3:00 pm Finland / 1:00 pm London / 8:00 am New York. The call-in numbers are as follows: Europe: +44 (0)20 3023 4426, US: +1 866 966 5335. A webcast of the call can be found at company's website. Use the password: Neste Oil. An instant replay of the call will be available for one week at +44 (0)20 8196 1998 for Europe and +1 866 583 1035 for the US, using access code 725434. NESTE OIL FINANCIAL STATEMENTS, 1 JANUARY - 30 JUNE 2009 1-6/2009 and 1-6/2008 unaudited, full year 2008 audited Figures in parentheses refer to the second quarter of 2008, unless otherwise stated. KEY FIGURES EUR million (unless otherwise noted) 4-6/09 4-6/08 1-3/09 1-6/09 1-6/08 2008 Revenue 2,592 4,420 2,053 4,645 7,717 15,043 Operating profit before 174 343 150 324 606 409 depreciation Depreciation, amortization, and impairments 56 53 55 111 112 223 Operating profit 118 290 95 213 494 186 Comparable operating profit 47 181 56 103 300 602 * Profit before income tax 109 284 81 190 475 129 Earnings per share, EUR 0.35 0.83 0.24 0.58 1.38 0.38 Investments 210 110 174 384 192 508 Net cash from operating 223 314 17 240 201 512 activities 30 June 30 June 31 Dec 2009 2008 2008 Total equity 2,144 2,509 2,179 Interest-bearing net debt 1,409 1,017 1,004 Capital employed 3,660 3,600 3,237 Return on capital employed pre-tax (ROCE), % 12.5 29.2 6.1 Return on average capital employed after tax 8.8 12.7 13.1 (ROACE)**, % Return on equity (ROE), % 13.9 28.8 4.4 Equity per share, EUR 8.34 9.78 8.48 Cash flow per share, EUR 0.94 0.79 2.00 Equity-to-assets ratio, % 41.3 43.5 46.3 Leverage ratio, % 39.7 28.8 31.5 Gearing, % 65.7 40.5 46.1 * Comparable operating profit is calculated by excluding inventory gains/losses, capital gains/losses, and unrealized changes in the fair value of oil and freight derivative contracts from the reported operating profit. As from 1 April 2009, the calculation of comparable operating profit has been amended by including the change in fair value of all trading inventories to inventory gains/losses. This amendment has no effect on previously reported figures. ** Rolling 12 months The Group's second-quarter financial results Revenue at the Neste Oil Group totaled EUR 2,592 million in the second quarter of 2009. The substantial reduction from EUR 4,420 million in the same quarter of 2008 resulted from lower petroleum product prices. The Group's comparable operating profit was EUR 47 million (181 million) in the second quarter. The significant drop compared to the same quarter in 2008 was largely due to a lower total refining margin, which was negatively affected by an approximately 75% reduction in the diesel margin year-on-year and a narrow differential between Urals and Brent crude. This was only partially compensated for by a stronger gasoline margin. The Group's hedged EUR/USD exchange rate was 1.43 in the second quarter. Oil Products' second-quarter comparable operating profit was EUR 37 million (162 million), Renewable Fuels' EUR -7 million (13 million), Oil Retail's EUR 14 million (11 million), and Others' EUR -1 million (-4 million). Others includes profits from associated companies and joint ventures (mainly Nynas AB), which totaled EUR 9 million (10 million). Operating profit under IFRS was EUR 118 million (290 million) in the second quarter, as inventory gains were just half those booked in 2008. The second-quarter profit before taxes was EUR 109 million (284 million), net profit for the period was EUR 89 million (213 million), and earnings per share were EUR 0.35 (0.83). The Group's January-June financial results Revenue at the Group during the first six months amounted to EUR 4,645, compared to EUR 7,717 during the same period in 2008. The decrease resulted from lower oil product prices. Neste Oil's comparable operating profit in January-June was EUR 103 million (1-6/08: 300 million). This reduction resulted primarily from a weaker total refining margin. The company's hedged EUR/USD exchange rate was 1.44 in January-June. Oil Products' six-month comparable operating profit was EUR 101 million (1-6/08: 275 million), Renewable Fuels' EUR -14 million (1-6/08: 15 million), Oil Retail's EUR 26 million (1-6/08: 20 million), and Others' EUR -12 million (1-6/08: -12 million). Others includes profits from associated companies and joint ventures (mainly Nynas AB), which totaled EUR 2 million (1-6/08: 11 million). Given the capital-intensive nature of its business, Neste Oil uses return on average capital employed after tax (ROACE) as its primary financial target, based on comparable results. At the end of June, the rolling twelve-month ROACE was 8.8% (30 June 2008: 12.7%). 4-6/09 4-6/08 1-3/09 1-6/09 1-6/08 2008 COMPARABLE OPERATING PROFIT 47 181 56 103 300 602 - inventory gains/losses 65 119 76 141 194 -453 - changes in the fair value 6 -10 -37 -31 -8 24 of open oil derivatives - capital gains/losses 0 0 0 0 8 13 OPERATING PROFIT 118 290 95 213 494 186 Capital expenditure and financing Investments totaled EUR 384 million during the first six months (1-6/08: 192 million). Oil Products' capital spending was EUR 94 million (1-6/08: 72 million), Renewable Fuels' EUR 273 million (1-6/08: 77 million), and Oil Retail's EUR 10 million (23 million). Depreciation was EUR 111 million (112 million). The Group's interest-bearing net debt was EUR 1,409 million at the end of June (31 Dec 2008: EUR 1,004 million). Net financial expenses between January and June were EUR 23 million (19 million). The Group will capitalize interest expenses related to major investment projects during 2009. The average interest rate of borrowings at the end of June was 2.3%, and the average maturity 3.4 years. Net cash from operating activities between January and June was EUR 240 million (1-6/08: 201 million). This increase in cash flow was largely the result of more effective working capital management. Around EUR 85 million was tied up in contango storages of petroleum products at the end of June. The equity-to-assets ratio was 41.3% at the end of June (31 Dec 2008: 46.3%), the leverage ratio 39.7% (31 Dec 2008: 31.5%), and the gearing ratio 65.7% (31 Dec 2008: 46.1%). Cash and cash equivalents and committed, unutilized credit facilities amounted to EUR 1,357 million at the end of June (31 Dec 2008: 1,536 million). Short-term financing needs will continue to be met by revolving credit and overdraft facilities. There are no financial covenants in existing loan agreements. In accordance with its hedging policy, Neste Oil has hedged the majority of its net foreign currency exposure for the next 12 months, mainly using forward contracts and currency options. The most important hedged currency is the US dollar. Market overview Crude oil prices strengthened during the second quarter, following the rise of equity and commodity prices and the weakening of the US dollar. Brent Dated reached USD 70/bbl in mid-June after OPEC decided to keep its production quotas unchanged and crude oil inventories started to draw down. Price differentials between heavier and lighter grades were narrow throughout the quarter. Refining margins were weak, leading to low refinery runs because of maintenance activity and economic run cuts. Gasoline margins continued to improve as demand increased seasonally and production cuts reduced supply. In late June, margins fell again due to increasing production and a buildup of inventories. Margins for middle distillates suffered from reduced demand caused by the global economic recession and sank to their lowest level in five years. Despite lower refinery runs, inventories continued to build. In June, margins gradually recovered. Fuel oil margins were relatively strong, supported by demand in Asia and cuts in refinery runs. In addition, due to reduced crude oil use, some fuel oil was used in crackers to produce light products. On the Finnish retail market, demand for gasoline fell by approximately 4% and diesel by close to 10% during the second quarter compared to the same quarter in 2008. The drop in diesel demand from trucking companies has been even greater. Demand has also fallen in the Baltic countries, in line with the decline of their GDP. Biofuel prices remained lower and the price difference between biofeedstocks were narrower year-on-year. The price premium of higher-quality renewable fuels remains healthy. Oil freight rates collapsed in both the crude and product market compared to the second quarter of 2008. Key drivers 4-6/09 4-6/08 1-3/09 1-6/09 1-6/08 2008 July09 IEA Brent cracking margin, USD/bbl 1.23 5.87 2.34 1.92 4.57 4.90 0.14 Neste Oil total refining margin, USD/bbl 7.87 12.38 9.44 8.65 12.14 13.39 n.a. Urals-Brent price differential, USD/bbl -0.94 -4.44 -1.17 -1.05 -3.68 -2.95 -0.43 NWE Gasoline margin*, USD/bbl 12.84 6.36 6.39 9.62 6.08 5.34 10.7 NWE Diesel margin*, USD/bbl 9.98 39.15 15.38 12.68 32.24 31.23 8.7 NWE Heavy fuel oil margin*, USD/bbl -8.61 -37.22 -8.77 -8.69 -28.75 -25.16 -5.6 Brent dated crude oil, USD/bbl 58.79 121.38 44.40 51.60 109.14 96.98 64.06 USD/EUR exchange rate 1.36 1.56 1.30 1.33 1.53 1.47 1.41 Crude freights, Aframax WS points 74 228 83 78 187 179 73 *Product margins Platt's fob Rotterdam Production and sales Neste Oil refined a total of 3.5 million tons (3.6 million) of crude oil and feedstocks in the second quarter, of which 2.9 million tons (2.9 million) at Porvoo and 0.6 million tons (0.7 million) at Naantali. The proportion of Russian Export Blend in Neste Oil's total refinery input was 57% (54%) in the second quarter. Diesel fuel accounted for a lower-than-normal proportion of Neste Oil's sales due to a shutdown at Production Line 4 at the Porvoo refinery and gasoline sales from contango storage. At the end of June, Neste Oil's contango storage consisted of 170,000 tons, or approximately 1.3 million barrels, and mainly consisted of middle distillates. Sales from contango storage were quite large in the second quarter, as storage volumes stood at 550,000 tons at the end of March. Neste Oil's sales from in-house production, by product category (1,000 t) 4-6/09 % 4-6/08 % 1-3/09 % 1-6/09 % 1-6/08 % 2008 % Motor gasolines 1,294 35 1,322 35 940 27 2,234 31 2,116 30 4,056 28 Gasoline components 92 3 75 2 64 2 157 2 153 2 253 2 Diesel fuel 1,181 32 1,226 32 1,306 38 2,487 35 2,609 37 5,583 38 Jet fuel 137 4 169 4 148 4 286 4 306 4 658 5 Base oils 73 2 75 2 57 2 130 2 152 2 278 2 Heating oil 131 4 134 4 223 6 354 5 314 4 763 5 Heavy fuel oil 346 9 309 8 354 10 700 10 516 7 981 7 LPG 83 2 87 2 59 2 142 2 185 3 340 2 NExBTL renewable diesel 43 1 35 1 31 1 74 1 53 1 94 1 Other products 286 8 358 9 246 7 532 8 662 9 1,565 11 TOTAL 3,666 100 3,790 100 3,430 100 7,096 100 7,066 100 14,571 100 Neste Oil's sales from in-house production, by market area (1,000 t) 4-6/09 % 4-6/08 % 1-3/09 % 1-6/09 % 1-6/08 % 2008 % Finland 1,854 51 1,805 48 1,860 54 3,714 52 3,573 51 7,537 52 Other Nordic countries 512 14 500 13 537 16 1,048 15 926 13 2,056 14 Other Europe 610 16 748 20 558 16 1,168 16 1,496 21 3,028 20 USA & Canada 627 17 729 19 472 14 1,099 16 995 14 1,857 13 Other countries 63 2 6 0 3 0 66 1 76 1 94 1 TOTAL 3,666 100 3,790 100 3,430 100 7,096 100 7,066 100 14,571 100 SEGMENT REVIEWS As of 1 April 2009, Neste Oil's businesses have been grouped into four reporting segments: Oil Products, Renewable Fuels, Oil Retail, and Others. Quarterly figures for 2008 based on these segments were published on 23 April 2009. Oil Products Key figures 4-6/09 4-6/08 1-3/09 1-6/09 1-6/08 2008 Revenue, MEUR 2,091 3,798 1,582 3,673 6,513 12,641 Comparable operating 37 162 64 101 275 602 profit, MEUR Operating profit, MEUR 105 272 106 211 469 183 Total refining margin, 7.87 12.38 9.44 8.65 12.14 13.39 USD/bbl Oil Products' second-quarter comparable operating profit was EUR 37 million (162 million). This decrease was mainly due to a lower total refining margin of USD 7.87/bbl, which compares to USD 12.38/bbl in the same quarter last year. The total refining margin was depressed by significantly weaker middle distillate margins and a very narrow price differential between Urals and Brent crude. Contango sales of both crude and products had a positive impact on the total refining margin and made a major positive contribution to Oil Products' comparable operating profit. The result of the base oils business was roughly flat year-on-year but margins were softer compared to the first quarter. Gasoline components showed a slightly lower profit than last year. The oil tanker chartering business suffered from record-low freight rates during the second quarter. Oil Products' 12-month comparable return on net assets was 15.4% (17.9%). Renewable Fuels 4-6/09 4-6/08 1-3/09 1-6/09 1-6/08 2008 Revenue, MEUR 38 46 24 62 69 116 Comparable operating profit, -7 13 -7 -14 15 2 MEUR Operating profit, MEUR -3 12 -10 -13 13 2 Renewable Fuels' second-quarter comparable operating profit was EUR -7 million (13 million). Although sales volumes developed positively, lower sales price and the termination of a fixed-priced feedstock contract earlier this year put pressure on renewable diesel margins. The price premium of NExBTL renewable diesel over conventional biodiesel remained healthy. While the first NExBTL plant at Porvoo posted a profit, the segment's costs continued to increase as a result of the expansion of the business and R&D. Renewable Fuels' 12-month comparable return on net assets was -7.0% (7.9%). Oil Retail Key figures 4-6/09 4-6/08 1-3/09 1-6/09 1-6/08 2008 Revenue, MEUR 727 1,078 691 1,418 2,026 4,073 Comparable operating profit, 14 11 12 26 20 22 MEUR Operating profit, MEUR 13 11 12 25 22 25 Total sales volume*, 1,000 m3 964 1,051 1,021 1,985 2,107 4,353 - gasoline station sales, 1,000 m3 370 380 329 699 714 1,479 - diesel station sales, 1,000 m3 326 352 320 646 693 1,406 - heating oil, 1,000 m3 145 161 214 359 359 759 - heavy fuel oil, 1,000 m3 61 77 89 150 174 356 *includes both station and terminal sales Oil Retail's comparable operating profit increased to EUR 14 million (11 million) in the second quarter, supported by somewhat better margins on the Finnish market than in 2008 and reduction of fixed costs in the Finnish organization. Russian operations generated a slightly lower level of profit compared to the same quarter in 2008, while performance in the Baltic Rim was flat. Sales volumes were lower on the Finnish market than during the second quarter of 2008, with the exception of diesel sold to private motorists. The largest reduction has been seen in trucking, which reflects domestic industrial production. Lubricant sales have also been hit significantly. Neste Oil's volumes were roughly flat outside Finland, while demand was down significantly. This was supported by the new stations opened around the Baltic Rim in 2008 and the efficiency of the unmanned station network. Oil Retail's 12-month comparable return on net assets was 8.2% (14.1%). Shares, share trading, and ownership A total of 73,768,025 Neste Oil shares were traded in the second quarter, totaling EUR 0.8 billion. The share price reached EUR 11.53 at its highest and EUR 9.46 at its lowest, and closed the quarter at EUR 9.90, giving the company a market capitalization of EUR 2.5 billion as of 30 June 2009. An average of 1.2 million shares was traded daily, equivalent to 0.5% of shares outstanding. Neste Oil's share capital registered with the Company Register as of 30 June 2009 totaled EUR 40 million, and the total number of shares outstanding is 256,403,686. The company does not hold any of its own shares, and the Board of Directors has no authorization to buy back company shares or to issue convertible bonds, share options, or new shares. At the end of June, the Finnish state owned 50.1% of outstanding shares, foreign institutions 15.0%, Finnish institutions 20.6%, and Finnish households 14.3%. Personnel Neste Oil employed an average of 5,328 (5,099) employees during the first half of the year. At the end of June, the company had 5,547 employees (30 June 2008: 5,477). Health, safety, and the environment The company's safety performance has developed positively. The indicator for safety performance used by Neste Oil - total recordable injury frequency (TRIF, number of cases per million hours worked) for all work done for the company, combining the company's own personnel and contractors - stood at 2.8 (5.2) at the end of June 2009. The target for 2009 is below 4. Lost workday injury frequency (LWIF) stood at 2.0. LWIF for 2008 was 3.2. The target for 2009 is below 2. Strategy implementation Neste Oil's current capital projects consist of new plants designed to increase production of renewable diesel and high-quality base oil. Strategic projects Construction of renewable diesel plants in Singapore and Rotterdam has proceeded according to plan. Mechanical completion of the Singapore plant is expected to be achieved in summer 2010. The project is proceeding in line with its original budget of EUR 550 million. The Rotterdam plant is scheduled for completion in the first half of 2011. The project is proceeding according to schedule and its original budget of EUR 670 million. In June, Neste Oil - together with Daimler AG, Deutsche Post DHL, the energy group OMV, and the Stuttgarter Straßenbahnen AG public transportation company - published the initial results of a joint pilot test project focusing on the use of NExBTL renewable diesel in commercial transportation. The test shows significant emission reductions and a positive CO2 balance when the fuel and its feedstock are produced sustainably. It was also shown that NExBTL performs very well and is tolerated very well by diesel engines currently in use. Also in June, Neste Oil and Stora Enso took an important step in efforts to convert forest residues into transportation fuels with the inauguration of a demonstration plant at Varkaus, Finland for biomass to liquids (BtL) production. The companies' 50/50 joint venture will develop and test the necessary technology and plans to produce biocrude for renewable diesel subsequently. A joint venture between Neste Oil and the Bahrain Petroleum Company (Bapco) is continuing construction of a high-quality lubricant base oil plant in Bahrain. The plant will have an annual capacity of 400,000 tons of VHVI (Very High Viscosity Index) base oil for use in blending top-tier lubricants. Completion is scheduled for the end of 2011. Neste Oil's share of the JV is 45% and its estimated share of the investment cost is EUR 115-135 million. Construction of an isomerization unit at Porvoo was postponed in April. Potential short-term and long-term risks The oil market has been very volatile. Oil refiners are exposed to a variety of political and economic trends and events, as well as natural phenomena that affect the short- and long-term supply of and demand for the products that they produce and sell. The largest uncertainty continues to be the slowdown of the world economy, which is reducing the demand for petroleum products. This has already materialized during the last couple of quarters and has significantly decreased the demand for diesel, which is Neste Oil's most important product. The problems on the international financial market have also increased the level of uncertainty. As a consequence, managing customer receivables risks has become even more important. Sudden and unplanned outages at Neste Oil's production units or facilities continue to represent a short-term risk. Rapid and large changes in feedstock and product prices may lead to significant inventory gains or losses, or changes in working capital that may have a material impact on the company's IFRS operating profit and net cash from operations. Over the longer term, access to funding and rising capital costs, as well as challenges in procuring and developing new competitive and reasonably priced raw materials, may impact the company's growth plans. The implementation of biofuel legislation in the EU and other key market areas may influence the speed at which the demand for these fuels develops. The key market drivers for Neste Oil's financial performance continue to be international refining margins, the price differential between Russian Export Blend (REB) and Brent crude, and the USD/EUR exchange rate. For more detailed information on Neste Oil's risks and risk management, please refer to the company's Annual Report and Financial Statements for 2008. Outlook The overall picture for oil refiners has not changed since the previous outlook published in April. The global economy has not improved over the last few months. The International Energy Agency's global oil demand forecast for 2009 remains at -2.9%, with the steepest reduction predicted for OECD countries. Low demand and new refining capacity coming onstream in 2009 are likely to keep refining margins below those seen in recent years, unless serious disruptions occur on the supply side. Diesel margins are expected to stay under pressure until economical activity picks up. High inventory levels will continue to put pressure on diesel margins. On the other hand, the indications are that diesel margins could improve a little towards the end of the year. Seasonal support for the gasoline market is anticipated to diminish during the second half. Demand for base oils has shown a slight recovery, but margins have weakened. Neste Oil has again shut down its PAO plant in Beringen, Belgium for four weeks in July-August and made temporary lay-offs. Freight rates for oil tankers are set to stay low throughout 2009. Production volumes at Renewable Fuels will increase during the second half, thanks to the start-up of the second NExBTL plant. This will be offset, however, by increasing costs linked to the expansion of the business. Low demand will continue to be the key feature of the Oil Retail business. Performance at Neste Oil's refineries should be better in the second half of 2009. Production Line 4 at Porvoo, which was shut down for maintenance during the second quarter, is expected to operate normally. Neste Oil does not expect to book major contango profits during the third quarter. As a result, if refining margins stay at the level seen in July, the Group's third-quarter comparable operating profit will be significantly lower than in the second quarter. The Group is currently working on an additional cost-savings and efficiency program to reduce its fixed costs. The Group's investments are estimated to be around EUR 890 million in 2009. Maintenance investments will account for around EUR 160 million, productivity investments around EUR 40 million, and strategic investments around EUR 690 million. Capital Markets Day 2009 Neste Oil will hold a Capital Markets Day for investors and analysts on 29 September 2009 in Finland. Details will be published on the company's website soon. Reporting date for the third-quarter 2009 results Neste Oil will publish its third-quarter results for 2009 on 29 October 2009 at approximately 9:00 a.m. EET. Espoo, 29 July 2009 Neste Oil Corporation Board of Directors The preceding information contains, or may be deemed to contain,"forward-looking statements". These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expenditures, future cash sources and requirements, liquidity and cost savings that involve known and unknown risks, uncertainties, and other factors that may cause Neste Oil Corporation's or its businesses' actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, such forward-looking statements can be identified by terminology such as "may,""will,""could,""would,""should,""expect,""plan,""anticipate,""intend,""believe,""estimate,""predict,""potential," or "continue," or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. All forward-looking statements made in this report are based on information presently available to management and Neste Oil Corporation assumes no obligation to update any forward-looking statements. Nothing in this report constitutes investment advice and this report shall not constitute an offer to sell or the solicitation of an offer to buy any securities or otherwise to engage in any investment activity. NESTE OIL GROUP JANUARY- JUNE 2009 Unaudited CONSOLIDATED INCOME STATEMENT MEUR Last Note 12 4-6/2009 4-6/2008 1-6/2009 1-6/2008 1-12/2008 months Revenue 3 2592 4420 4645 7717 15043 11971 Other income 7 9 14 25 44 33 Share of profit (loss) of associates and joint ventures 3 9 10 2 11 13 4 Materials and services -2195 -3824 -3823 -6640 -13657 -10840 Employee benefit costs -83 -79 -162 -154 -315 -323 Depreciation, amortization and impairments 3 -56 -53 -111 -112 -223 -222 Other expenses -156 -193 -352 -353 -719 -718 Operating profit 118 290 213 494 186 -95 Financial income and expenses Financial income 3 2 4 4 8 8 Financial expenses -8 -11 -25 -24 -70 -71 Exchange rate and fair value gains and losses -4 3 -2 1 5 2 Total financial income and expenses -9 -6 -23 -19 -57 -61 Profit before income taxes 109 284 190 475 129 -156 Income tax expense -20 -71 -40 -119 -28 51 Profit for the period 89 213 150 356 101 -105 Profit attributable to: Owners of the parent 88 212 148 354 97 -109 Minority interest 1 1 2 2 4 4 89 213 150 356 101 -105 Earnings per share from profit attributable to the owners of the parent basic and diluted (in euro per share) 0,35 0,83 0,58 1,38 0,38 -0,42 STATEMENT OF COMPREHENSIVE INCOME Last 4-6 4-6 1-6 1-6 1-12 12 MEUR 2009 2008 2009 2008 2008 months Profit for the period 89 213 150 356 101 -105 Other comprehensive income for the period, net of tax Translation differences 2 1 -3 -15 -44 -32 Cash flow hedges recorded in equity 21 0 -4 37 -23 -64 transferred to income statement 10 -20 30 -39 -25 44 Net investment hedges 0 0 0 0 0 0 Hedging reserves in associates and joint ventures -2 -1 -2 -1 -1 -2 Other comprehensive income for the period, net of tax 31 -20 21 -18 -93 -54 Total comprehensive income for the period 120 193 171 338 8 -159 Total comprehensive income attributable to: Owners of the parent 119 192 169 336 4 -163 Minority interest 1 1 2 2 4 4 120 193 171 338 8 -159 CONSOLIDATED BALANCE SHEET 30 30 June June 31 Dec MEUR Note 2009 2008 2008 ASSETS Non-current assets Intangible assets 4 51 53 51 Property, plant and equipment 4 2937 2500 2675 Investments in associates and joint ventures 153 190 152 Non-current receivables 12 8 13 Pension assets 108 84 105 Deferred tax assets 14 7 16 Derivative financial instruments 5 16 64 16 Available-for-sale financial assets 1 2 1 Total non-current assets 3292 2908 3029 Current assets Inventories 752 1422 637 Trade and other receivables 916 1164 786 Derivative financial instruments 5 134 218 213 Cash and cash equivalents 107 74 55 Total current assets 1909 2878 1691 Total assets 5201 5786 4720 EQUITY Capital and reserves attributable to the owners of the parent Share capital 40 40 40 Other equity 2 2094 2463 2131 Total 2134 2503 2171 Minority interest 10 6 8 Total equity 2144 2509 2179 LIABILITIES Non-current liabilities Interest-bearing liabilities 1158 880 926 Deferred tax liabilities 308 292 297 Provisions 26 14 24 Pension liabilities 10 11 12 Derivative financial instruments 5 31 67 32 Other non-current liabilities 2 3 3 Total non-current liabilities 1535 1267 1294 Current liabilities Interest-bearing liabilities 358 211 133 Current tax liabilities 9 60 1 Derivative financial instruments 5 135 191 197 Trade and other payables 1020 1548 916 Total current liabilities 1522 2010 1247 Total liabilities 3057 3277 2541 Total equity and liabilities 5201 5786 4720 CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY Attributable to equity holders of the Company Share Reserve Fair Translation Re- Mi- Total ca- fund value diffe- tained nority equity pital and rences ear- inte- other nings rest MEUR reserves Total equity at 1 January 2008 40 10 42 -11 2342 4 2427 Dividend paid -256 -256 Share-based compensation 0 0 Transfer from retained earnings 1 -1 0 Change in minority 0 0 Total comprehensive income for the period -3 -15 354 2 338 Total equity at 30 June 2008 40 11 39 -26 2439 6 2509 Share Reserve Fair Translation Re- Mi- Total ca- fund value diffe- tained nority equity pital and rences ear- inte- other nings rest MEUR reserves Total equity at 1 January 2009 40 10 -7 -54 2182 8 2179 Dividend paid -205 -205 Share-based compensation -1 -1 Transfer from retained earnings 1 -1 0 Change in minority 0 0 Total comprehensive income for the period 24 -3 148 2 171 Total equity at 30 June 2009 40 11 16 -57 2124 10 2144 CONDENSED CONSOLIDATED CASH FLOW STATEMENT 4-6 4-6 1-6 1-6 1-12 MEUR 2009 2008 2009 2008 2008 Cash flow from operating activities Profit before taxes 109 284 190 475 129 Adjustments, total 53 57 161 135 249 Change in working capital 92 17 -132 -320 248 Cash generated from operations 254 358 219 290 626 Finance cost, net -23 -9 -9 -32 -29 Income taxes paid -8 -35 30 -57 -85 Net cash generated from operating activities 223 314 240 201 512 Capital expenditure -210 -107 -384 -182 -497 Acquisition of subsidiary - -3 - -10 -10 Acquisition of associates and joint ventures - - - - -1 Proceeds from sales of fixed assets 2 1 5 3 9 Proceeds from sales of shares 0 0 0 7 12 Change in other investments -5 -2 -61 -26 -8 Cash flow before financing activities 10 203 -200 -7 17 Net change in loans and other financing activities 256 -182 457 286 244 Dividends paid to the owners of the parent -205 -11 -205 -256 -256 Net increase (+)/decrease (-) in cash and cash equivalents 61 10 52 23 5 KEY FINANCIAL INDICATORS 30 June 30 June 31 Dec Last 12 2009 2008 2008 months Capital employed, MEUR 3660 3600 3237 3660 Interest-bearing net debt, MEUR 1409 1017 1004 - Capital expenditure and acquisition of subsidiary, MEUR 384 192 508 700 Return on average capital employed, after tax, ROACE % - - 13,1 8,8 Return on capital employed, pre-tax, ROCE % 12,5 29,2 6,1 -2,3 Return on equity, % 13,9 28,8 4,4 -4,5 Equity per share, EUR 8,34 9,78 8,48 - Cash flow per share, EUR 0,94 0,79 2,00 2,15 Equity-to-assets ratio, % 41,3 43,5 46,3 - Gearing, % 65,7 40,5 46,1 - Leverage ratio, % 39,7 28,8 31,5 - Average number of shares 255903686 255903686 255903686 255903686 Number of shares at the end of the period 255903686 255903686 255903686 255903686 Average number of personnel 5328 5099 5174 - NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. BASIS OF PREPARATION AND ACCOUNTING POLICIES The interim financial statements has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by EU. The interim report should be read in conjunction with the annual financial statements for the period ended 31 December 2008. The accounting policies adopted are consistent with those of the Group's annual financial statements for the year ended 31 December 2008. The Group applies revised standard IAS 1 Presentation of Financial Statements as of 1 January 2009. This revised standard separates changes in equity of an entity arising from transactions with owners from other changes in equity. The following interpretations are mandatory for the financial year ending 31 December 2009, but not relevant for the Group: - IFRIC 12 Service Concession Arrangements - IFRIC 13 Customer Loyalty Programs - IFRIC 16 Hedges of a Net Investment in a Foreign Operation - Amendment to IFRS 2 Share based payments: Vesting Conditions and Calcellations - Annual improvements 2008. 2. TREASURY SHARES In 2007 Neste Oil entered into an agreement with a third party service provider concerning the administration of the new share-based management share performance arrangement for key management personnel. As part of the agreement, the service provider purchased a total of 500,000 Neste Oil shares in February 2007 in order to hedge part of Neste Oil's cash flow risk in relation to the future payment of the rewards, which will take place partly in Neste Oil shares and partly in cash during 2010 and 2013. Despite the legal form of the hedging arrangement, it has been accounted for as if the share purchases had been conducted directly by Neste Oil, as required by IFRS 2, Share based payments and SIC-12, Consolidation - Special purpose entities. The consolidated balance sheet and the consolidated changes in total equity reflect the substance of the arrangement with a deduction amounting to EUR 12 million in equity. This amount represents the consideration paid for the shares by the third party service provider. 3. SEGMENT INFORMATION Neste Oil's operations are grouped into four segments: Oil Products, Renewable Fuels, Oil Retail and Others. Group administration, shared service functions as well as Research and Technology, Neste Jacobs and Nynas AB are included in the Others segment. Last REVENUE 12 MEUR 4-6/2009 4-6/2008 1-6/2009 1-6/2008 1-12/2008 months Oil Products 2091 3798 3673 6513 12641 9801 Renewable Fuels 38 46 62 69 116 109 Oil Retail 727 1078 1418 2026 4073 3465 Others 41 33 83 64 143 162 Eliminations -305 -535 -591 -955 -1930 -1566 Total 2592 4420 4645 7717 15043 11971 OPERATING Last PROFIT 12 MEUR 4-6/2009 4-6/2008 1-6/2009 1-6/2008 1-12/2008 months Oil Products 105 272 211 469 183 -75 Renewable Fuels -3 12 -13 13 2 -24 Oil Retail 13 11 25 22 25 28 Others -1 -4 -12 -12 -29 -29 Eliminations 4 -1 2 2 5 5 Total 118 290 213 494 186 -95 COMPARABLE OPERATING Last PROFIT 12 MEUR 4-6/2009 4-6/2008 1-6/2009 1-6/2008 1-12/2008 months Oil Products 37 162 101 275 602 428 Renewable Fuels -7 13 -14 15 2 -27 Oil Retail 14 11 26 20 22 28 Others -1 -4 -12 -12 -29 -29 Eliminations 4 -1 2 2 5 5 Total 47 181 103 300 602 405 DEPRECIATION, AMORTIZATION Last AND IMPAIRMENTS 12 MEUR 4-6/2009 4-6/2008 1-6/2009 1-6/2008 1-12/2008 months Oil Products 43 41 87 87 175 175 Renewable Fuels 2 1 4 3 7 8 Oil Retail 8 8 15 16 31 30 Others 3 3 5 6 10 9 Total 56 53 111 112 223 222 CAPITAL EXPENDITURE AND INVESTMENTS IN Last SHARES 12 MEUR 4-6/2009 4-6/2008 1-6/2009 1-6/2008 1-12/2008 months Oil Products 51 39 94 72 165 187 Renewable Fuels 150 50 273 77 249 445 Oil Retail 6 15 10 23 63 50 Others 3 6 7 20 31 18 Total 210 110 384 192 508 700 TOTAL ASSETS 30 June 30 June 31 Dec MEUR 2009 2008 2008 Oil Products 3544 4527 3352 Renewable Fuels 713 273 450 Oil Retail 527 685 568 Others 286 299 265 Eliminations -174 -210 -155 Total 4896 5574 4480 NET ASSETS 30 June 30 June 31 Dec MEUR 2009 2008 2008 Oil Products 2602 2918 2436 Renewable Fuels 601 217 381 Oil Retail 296 385 351 Others 223 241 201 Eliminations 5 1 4 Total 3727 3762 3373 RETURN ON NET ASSETS, % 30 June 30 June 31 Dec Last 12 2009 2008 2008 months Oil Products 16,4 33,1 6,4 -2,7 Renewable Fuels -5,4 14,8 0,9 -6,2 Oil Retail 15,5 11,7 6,8 8,2 COMPARABLE RETURN ON NET ASSETS, % 30 June 30 June 31 Dec Last 12 2009 2008 2008 months Oil Products 7,9 19,4 21,2 15,4 Renewable Fuels -5,8 17,1 0,9 -7,0 Oil Retail 16,1 10,6 6,0 8,2 QUARTERLY SEGMENT INFORMATION QUARTERLY REVENUE MEUR 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008 Oil Products 2091 1582 2221 3907 3798 2715 Renewable Fuels 38 24 20 27 46 23 Oil Retail 727 691 915 1132 1078 948 Others 41 42 43 36 33 31 Eliminations -305 -286 -394 -581 -535 -420 Total 2592 2053 2805 4521 4420 3297 QUARTERLY OPERATING PROFIT MEUR 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008 Oil Products 105 106 -301 15 272 197 Renewable Fuels -3 -10 -9 -2 12 1 Oil Retail 13 12 -6 9 11 11 Others -1 -11 -38 21 -4 -8 Eliminations 4 -2 2 1 -1 3 Total 118 95 -352 44 290 204 QUARTERLY COMPARABLE OPERATING PROFIT MEUR 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008 Oil Products 37 64 154 173 162 113 Renewable Fuels -7 -7 -10 -3 13 2 Oil Retail 14 12 -5 7 11 9 Others -1 -11 -38 21 -4 -8 Eliminations 4 -2 2 1 -1 3 Total 47 56 103 199 181 119 QUARTERLY DEPRECIATION, AMORTIZATION AND IMPAIRMENTS MEUR 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008 Oil Products 43 44 44 44 41 46 Renewable Fuels 2 2 2 2 1 2 Oil Retail 8 7 6 9 8 8 Others 3 2 3 1 3 3 Total 56 55 55 56 53 59 QUARTERLY CAPITAL EXPENDITURE AND INVESTMENTS IN SHARES MEUR 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008 Oil Products 51 43 47 46 39 33 Renewable Fuels 150 123 108 64 50 27 Oil Retail 6 4 22 18 15 8 Others 3 4 8 3 6 14 Total 210 174 185 131 110 82 4. CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT AND CAPITAL COMMITMENTS CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND 30 EQUIPMENT June 30 June 31 Dec MEUR 2009 2008 2008 Opening balance 2726 2477 2477 Depreciation, amortization and impairments -111 -112 -223 Capital expenditure 384 182 497 Disposals -5 -2 -8 Translation differences -6 -3 -28 Acquired group companies 0 11 11 Closing balance 2988 2553 2726 CAPITAL 30 COMMITMENTS June 30 June 31 Dec MEUR 2009 2008 2008 Commitments to purchase property, plant and equipment 539 213 540 Commitments to purchase intangible assets 0 0 0 Total 539 213 540 5. DERIVATIVE FINANCIAL INSTRUMENTS 30 June 2009 30 June 2008 31 Dec 2008 Interest rate and currency derivative contracts and share forward contracts Nominal Net Nominal Net Nominal Net fair fair fair MEUR value value value value value value Interest rate swaps 474 -16 372 2 475 -13 Forward foreign exchange contracts 1611 28 1265 21 1381 17 Currency options Purchased 121 -1 499 15 336 -5 Written 88 2 325 3 256 -11 Share forward contracts 9 -5 14 -3 14 -8 Oil and freight derivative contracts Volume Net Volume Net Volume Net million fair million fair million fair bbl value bbl value bbl value Meur Meur Meur Sales contracts 35 -59 58 -104 28 166 Purchase contracts 29 34 70 89 32 -147 Purchased options 2 -9 2 13 1 -12 Written options 2 8 2 -12 1 12 The fair values of derivative financial instruments subject to public trading are based on market prices as of the balance sheet date. The fair values of other derivative financial instruments are based on the present value of cash flows resulting from the contracts, and, in respect of options, on evaluation models. The amounts also include unsettled closed positions. Derivative financial instruments are mainly used to manage the Group's currency, interest rate and price risk. 6. RELATED PARTY TRANSACTIONS Details of transactions between the Group and associates/joint ventures are disclosed below. 1-6 1-6 1-12 Transactions carried out with associates and joint ventures 2009 2008 2008 Sales of goods and services 21 34 110 Purchases of goods and services 21 30 72 Receivables 10 14 14 Financial income and expenses 0 0 0 Liabilities 4 6 9 7. CONTINGENT LIABILITIES 30 June 30 June 31 Dec MEUR 2009 2008 2008 Contingent liabilities On own behalf for debt Pledged assets - 2 - Total - 2 - On own behalf for commitments Real estate mortgages 26 26 26 Pledged assets 2 4 3 Other contingent liabilities 45 36 37 Total 73 66 66 On behalf of associates and joint ventures Guarantees 6 13 5 Other contingent liabilities 2 2 2 Total 8 15 7 On behalf of others Guarantees 19 12 12 Total 19 12 12 Total 100 95 85 30 June 30 June 31 Dec MEUR 2009 2008 2008 Operating lease liabilities Due within one year 98 105 106 Due between one and five years 243 197 262 Due later than five years 330 105 465 Total 671 407 833 The Group's operating lease liabilities primarily relate to hydrogen supply contracts, time charter vessels, land and office space. Other contingent liabilities Neste Oil Corporation has a collective contingent liability with Fortum Heat and Gas Oy of the demerged Fortum Oil and Gas Oy's liabilities based on the Finnish Companies Act's Chapter 17 Paragraph 16.6. CALCULATION OF KEY FIGURES CALCULATION OF KEY FINANCIAL INDICATORS Operating profit = Operating profit includes the revenue from the sale of goods and services, other income such as gain from sale of shares or non-financial assets, share of profits (loss) of associates and joint ventures, less losses from sale of shares or non-financial assets, as well as expenses related to production, marketing and selling activities, administration, depreciation, amortization, and impairment charges. Realized and unrealized gains or losses on oil and freight derivative contracts together with realized gains and losses from foreign currency and oil derivative contracts hedging cash flows of commercial sales and purchases that have been recycled in the income statement, are also included in operating profit. Comparable operating profit = Operating profit -/+ inventory gains/losses -/+ gains/losses from sale of shares and non-financial assets - unrealized change in fair value of oil and freight derivative contracts. Inventory gains/losses include the change in fair value of all trading inventories. Return on equity, (ROE) % = 100 x (Profit before taxes - taxes) / Total equity average Return on capital employed, pre-tax (ROCE) % = 100 x (Profit before taxes + interest and other financial expenses) / Capital employed average Return on average capital employed, after-tax (ROACE) % = 100 x (Profit for the period (adjusted for inventory gains/losses, gains/losses from sale of shares and non-financial assets and unrealized gains/losses on oil and freight derivative contracts, net of tax) + minority interest + interest expenses and other financial expenses related to interest-bearing liabilities (net of tax)) / Capital employed average Capital employed = Total assets - interest-free liabilities - deferred tax liabilities -provisions Interest-bearing net debt = Interest- bearing liabilities - cash and cash equivalents Leverage ratio, % = 100 x Interest- bearing net debt / (Interest- bearing net debt + Total equity) Gearing, % = 100 x (Interest bearing net debt / Total equity) Equity-to assets ratio, % = 100 x Total equity / (Total assets - advances received) Return on net assets, % = 100 x Segment operating profit / Average segment net assets Comparable return on net assets, % = 100 x Segment comparable operating profit / Average segment net assets Segment net assets = Property, plant and equipment, intangible assets, investment in associates and joint ventures, pension assets, inventories and interest-free receivables and liabilities allocated to the business segment, provisions and pension liabilities CALCULATION OF SHARE-RELATED INDICATORS Earnings per share (EPS) = Profit for the period attributable to the equity holders of the company / Adjusted average number of shares during the period Equity per share = Shareholder's equity attributable to the equity holders of the company/ Adjusted average number of shares at the end of the period Cash flow per share = Net cash generated from operating activities / Adjusted average number of shares during the period |
|||
|