ECONOMY

ELPE: Find partner now

Hellenic Petroleum (ELPE) chief executive Eleftherios Tzellas yesterday urged the government to resolve the issue of a strategic investor for the petroleum product company as soon as possible, as the uncertainty could impact on its credibility. The government is currently debating the merits of offers submitted by three bidders. Austrian oil company OMV, Russian group Yukos Oil and the consortium of local petroleum firm Petrola (which is part of the Swiss-based Latsis Group) and LUKoil of Russia have declared their interest in acquiring a 15-30 percent stake in ELPE. The State currently holds a 58-percent stake in the company. A decision on a partner is expected early next year. A linkup with an international investor is expected to help raise ELPE’s profile in the West and strengthen its presence in the Balkans. Tzellas said the process should be speeded up as soon as possible. Knowing who the strategic investor is important, as the outcome would define the company’s business plan and boost the company’s credibility abroad, he told a press conference. Presenting ELPE’s nine-month results, he said sharply depressed profit margins in the Mediterranean and lower margins for petrochemical products had flattened consolidated EBITDA (earnings before interest, tax, depreciation and amortization) which plunged to 66.4 billion drachmas from 104.5 billion drachmas in the same period in 2000. The figures were calculated according to International Accounting Standards. Tzellas said overall year results would be similarly affected as the squeeze on profit margins is expected to continue with the instability in the crude oil market set to continue for a long time. Consolidated operating profits were down by more than half to 41.8 billion drachmas from 84.8 billion, while pretax profits fell to 40 billion drachmas from 76.4 billion. Group revenues declined by 4.1 percent to 982.3 billion drachmas, the result of a 2-percent drop in sales and an average 2 percent fall in prices. Sales this year are projected at 8.71 million tons against 8.88 million in 2000, the result of a sharp drop in demand for aviation fuel and crude oil and the company’s shift to other kinds of petrochemical products. ELPE’s share of the local fuel market remained unchanged at 56.9 percent in the year to September. The company expects a substantial contribution to revenues from the recently opened polypropylene plant in Thessaloniki, which has an annual capacity of 180,000 tons. Tzellas said the unit is projected to see annual turnover of $120 million with a 20 percent profit margin.