Petroplus , Europe's largest independent oil refiner, reported a lower than expected first-quarter loss on Thursday and said improving market conditions could boost its margins, Reuters reports. Revenues climbed 9 percent from the previous quarter and 25 percent from a year earlier to $6.2 billion, helping the company limit the effects of deteriorating margins which were hit by higher crude oil prices.
Shares in Petroplus were 9 percent higher at 14 Swiss francs by 0840 GMT, outstripping a 0.9 percent rise in the Stoxx 600 Europe oil and gas sector index .SXEP. Chief Executive Jean-Paul Vettier said product prices had not kept pace with crude oil price rises but planned maintenance shutdowns during the quarter had reduced the impact.
"During the second quarter to date, margins have remained volatile but have improved from the lows of the first quarter," he said.
"We expect them to improve further in the coming weeks as the summer driving season begins and global economic activity continues to pick up.
"With no major maintenance planned for the rest of the year, Petroplus should be in a good position to capture whatever the market may bring."
However, data shows northwest European refining margins fell only slightly in the quarter, while Petroplus's benchmark margins worsened significantly and remained below those of rivals.
The majority of the company's intake is high-cost crude like North Sea Brent, while many rivals can use lower cost grades. One aim of the Petroplus improvement programme is to enable it to take more advantage of price differences between various grades of crude.
In the first quarter the company made a net loss of $15 million on the basis of "clean" figures which strip out the impact of oil price changes on inventory, beating average estimates for a $31.3 million loss in a Reuters poll.
"These results are better than I expected by a pretty wide margin despite the difficult operating environment and the fact that Petroplus's benchmark margin was near historic lows in the quarter," said Deutsche Bank analyst Gergely Varkonyi.
"The clean EBITDA to net interest improved again, the company has a strong cash balance and the lowest end of quarter net debt since the third quarter of 2008.
"What we today see is a new Petroplus, the three-year improvement programme that began last year is well on track."
REICHSTETT CLOSURE CHARGE
During the quarter Petroplus took a $250 million charge against the closure of its Reichstett refinery in France, which will be transformed into a terminal.
It benefited from a rebate of prepaid tax which analysts said could be close to that amount, although the company did not break out the number.
Prior to Thursday's results, shares in Petroplus had risen around 4 percent since the start of the year, but were 28 percent off the year's high in early February as a stronger than expected supply of oil products weighed on prices.
The industry has been reducing capacity as margins softened. Through March, Europe's refineries processed 6.5 percent less crude than a year earlier, and overall crude and products stocks were 1.4 percent lower on the year.
In March Libya's Tamoil announced the expected closure of a refinery in Cremona, Italy, and said it planned to convert the plant into a storage site by the end of the year.
Petroplus said in December it expected European refining margins to improve as inventories are depleted and global demand for gasoline and naphtha grows at a robust pace.
That follows a year in which oversupply of refined products weighed on profits at Petroplus and other European competitors like Finland's Neste Oil and Saras of Italy.
Shares in Petroplus were 9 percent higher at 14 Swiss francs by 0840 GMT, outstripping a 0.9 percent rise in the Stoxx 600 Europe oil and gas sector index .SXEP. Chief Executive Jean-Paul Vettier said product prices had not kept pace with crude oil price rises but planned maintenance shutdowns during the quarter had reduced the impact.
"During the second quarter to date, margins have remained volatile but have improved from the lows of the first quarter," he said.
"We expect them to improve further in the coming weeks as the summer driving season begins and global economic activity continues to pick up.
"With no major maintenance planned for the rest of the year, Petroplus should be in a good position to capture whatever the market may bring."
However, data shows northwest European refining margins fell only slightly in the quarter, while Petroplus's benchmark margins worsened significantly and remained below those of rivals.
The majority of the company's intake is high-cost crude like North Sea Brent, while many rivals can use lower cost grades. One aim of the Petroplus improvement programme is to enable it to take more advantage of price differences between various grades of crude.
In the first quarter the company made a net loss of $15 million on the basis of "clean" figures which strip out the impact of oil price changes on inventory, beating average estimates for a $31.3 million loss in a Reuters poll.
"These results are better than I expected by a pretty wide margin despite the difficult operating environment and the fact that Petroplus's benchmark margin was near historic lows in the quarter," said Deutsche Bank analyst Gergely Varkonyi.
"The clean EBITDA to net interest improved again, the company has a strong cash balance and the lowest end of quarter net debt since the third quarter of 2008.
"What we today see is a new Petroplus, the three-year improvement programme that began last year is well on track."
REICHSTETT CLOSURE CHARGE
During the quarter Petroplus took a $250 million charge against the closure of its Reichstett refinery in France, which will be transformed into a terminal.
It benefited from a rebate of prepaid tax which analysts said could be close to that amount, although the company did not break out the number.
Prior to Thursday's results, shares in Petroplus had risen around 4 percent since the start of the year, but were 28 percent off the year's high in early February as a stronger than expected supply of oil products weighed on prices.
The industry has been reducing capacity as margins softened. Through March, Europe's refineries processed 6.5 percent less crude than a year earlier, and overall crude and products stocks were 1.4 percent lower on the year.
In March Libya's Tamoil announced the expected closure of a refinery in Cremona, Italy, and said it planned to convert the plant into a storage site by the end of the year.
Petroplus said in December it expected European refining margins to improve as inventories are depleted and global demand for gasoline and naphtha grows at a robust pace.
That follows a year in which oversupply of refined products weighed on profits at Petroplus and other European competitors like Finland's Neste Oil and Saras of Italy.