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  • 2019 August 1 12:50

    Terminals managed by KN demonstrated high efficiency in H1’2019

    KN says the first half-year of 2019 was full of challenges often caused by circumstances beyond the company’s control. Despite these challenges, both KN Oil Terminal and the Liquefied Natural Gas Terminal in Klaipėda demonstrated high performance indicators, which make the first half-year of 2019 more efficient if compared to the first half of 2018.
     
    During the first six months of this year, KN earned EUR 51.2 million in revenues, the growth of which amounted to 8% if compared to the period from July to December 2018. The company’s EBITDA indicator (adjusted result) demonstrated growth as well – in the first half-year of 2019 it amounted to EUR 11.4 million, if compared to the indicator of the preceding half-year amounting to EUR 9.7 million. KN’s net profit (adjusted result) in the first half-year of 2019 reached EUR 4.7 million (EUR 1.4 million in the period from July to December 2018).   
     
    “The first-half of 2018 was most successful for KN in many aspects, yet the loading volume has been decreasing since the mid-2018. When assessing this year’s results, we see that we are on the right path – we are focused on higher efficiency, we are more flexible when working with clients, and we are proactive what helped us to cope with the challenges of the previous year and to achieve higher results in the first half of this year despite all the external factors beyond our control,” highlights KN Chief Financial Officer Jonas Lenkšas.
     
    In the first half-year of 2019, KN loading of oil products at the oil terminals managed by KN reached 2.9 million tons (3.1 million tons in July-December 2018, 3.6 million tons in the first half-year of 2018).
     
    The contaminated oil incident in the Druzhba pipeline highly affected the first half-year loading results of KN and also those of many other companies of neighbouring countries. This event has also slowed down the operations of the company’s main clients. KN loading results have also been negatively affected by the decision of AB Orlen Lietuva to refer bigger quantities of production to neighbouring markets by rail.
     
    The development of the infrastructure of Klaipėda Oil Terminal in the last 3.5 years (investments amounting to EUR 45 million) produced the first results in the first half-year of 2019 – the new KN tank farm, operating in trial mode, accepted several oil products in June 2019. 
     
    “Thanks to ongoing investments, Klaipėda Oil Terminal has been increasing its flexibility and competitiveness. Despite the challenges and the harsh competition, Klaipėda Oil Terminal remains the most efficient terminal in the first half of this year among all oil terminals of the Baltic countries, and we will strive to further keep the same level in the future,” says KN Chief Financial Officer Jonas Lenkšas.
     
    In the first half-year of 2019, KN LNG regasification and reloading at Klaipėda LNG Terminal reached 6.4 million MWh (4.7 million MWh in July-December 2018, 4.5 million MWh in the first half-year of 2018).
     
    The favourable situation in the international gas markets has been determining the highest operative efficiency of the LNG Terminal in the last months of the first half-year of 2019 since the launch of its activities. In first half-year, Klaipėda LNG Terminal accepted 15 LNG carriers (5 LNG carriers in the first six months of 2018), which brought 402 thousand tons of liquefied natural gas (300 thousand tons in the first six months of 2018). The successful first half-year of LNG Terminal operation in Klaipėda can be also witnessed by an agreement signed with the third user of Klaipėda LNG Terminal, i.e. UAB Imlitex. The capacities of the LNG Terminal have been fully booked until October, which marks the end of the current gas year.
     
    After the Seimas passed a decision at the end of last year with regard to acquisition of a storage-vessel after 2024, KN plans to ensure long-term LNG import to Lithuania, with optimum distribution of the terminal costs throughout the period from 2019 until the end of 2044.  Among other KN goals for 2019, there is a goal to contribute to the reduction of LNG Terminal maintenance costs with respect to all gas consumers until the end of this year. The best alternative of performance efficiency improvement has been selected – clarification of the LNG Terminal operation by transferring operations regulated by the LNG Terminal to the subsidiary UAB SGD terminalas.  According to Jonas Lenkšas, despite the adjusted plan, KN’s management expects to implement necessary decisions to achieve the said goal.
     
    Jonas Lenkšas highlights that this year’s financial (accounting) result of KN was affected by the International Financial Reporting Standard “Leases” (IFRS 16), which came into effect in the beginning of the year.  This change has significantly affected KN’s statement of financial position, statement of comprehensive income, and financial indicators. Upon coming into effect of the amendments to the standard, leases have been recorded as assets and liabilities (right of use the assets and financial lease liabilities).
     
    “With regard to the impact of the International Accounting Standards, i.e. the 16th standard, which largely disorders the announced financial results and does not provide any possibility to compare the actual operational results, from now on, in our financial statements, we will also indicate the adjusted numbers, i.e. we will specify the managerial (adjusted) result, which will allow investors and those interested in the company’s activities to obtain a more precise understanding of the company’s results within the reporting period thus eliminating further impact of the factors, which the company does not actually experience, for example, changes in currency rates, and which, due to the specifics of the regulated activities, are compensated and do not have any impact on the operational results,” says KN Chief Financial Officer Jonas Lenkšas.
     
    In the first half-year of 2019, compared to the first half-year of 2018, the main KN’s financial indicators changed as follows:

    (thousand) EUR

    H1 2019 accounting result

    Change
    2019 vs 2018

    H1 2019 adjusted result (exd. IFRS 16)

    Change
    2019 vs 2018

    Sales revenues

    EUR 51.2 million

    -2.8%

    EUR 51.2 million

    -2.8%

    Net profit

    EUR 2.5 million

    -75.1%

    EUR 4.7 million

    -54.0%

    EBITDA

    EUR 32.3 million

    87.2%

    EUR 11.4 million

    -34.1%

    EBITDA margin

    62.9%

    30.2 p.p.

    22.2%

    -10.5 p.p.

     




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