ECONOMY

Hellenic Petroleum meets 2003 result expectations; PPC falls short

State-controlled Hellenic Petroleum said yesterday higher refining margins helped boost its 2003 group core profit by 34.5 percent, which was broadly in line with market expectations. The country’s largest refiner said earnings before interest, tax, depreciation and amortization (EBITDA) came in at 396 million euros, which compared with an average forecast of 389.3 million in a Reuters poll of seven analysts. Analysts expected profit growth to come from higher refining margins, a merger with rival Petrola and 60 million euros in one-off capital gains from Hellenic’s sale back to the State of an option to increase its stake in state-controlled gas company DEPA. Pretax profit rose to 297 million euros from 215.8 million euros, slightly above the consensus forecast. Hellenic said it would propose a 0.20 euro per share dividend for 2003, up from 0.15 in 2002. Core profits came in as expected, said George Grigoriou. «However, at the pretax level, results came in higher than expected. Though the company has not given out details yet, we suspect it was courtesy of relatively high net foreign exchange gains.» Hellenic’s management said that non-operating income from the sale of the DEPA option helped boost results for the year. «The improvement in the year 2003 is attributable to the increase in the profitability of the refining activities due to the boost in production volumes… and the growth in the profitability of the marketing activities in Greece,» the company added in a statement. Results were reported under International Financial Reporting Standards (IFRS). The company did not give an IFRS sales figure but said that according to Greek GAAP calculations, sales rose by around 29 percent from last year. Results are not directly comparable to 2002, because they incorporate former competitor Petrola from the fourth quarter of 2003. Hellenic Petroleum merged with Petrola in September to create a group with a combined 80 percent local market share. PPC Separately, power utility Public Power Corporation (PPC) reported a 11.8 percent rise in 2003 core profit, falling short of market expectations as operating expenses grew faster than revenues. Greece’s dominant power company said its earnings before interest, tax, depreciation and amortization (EBITDA) came in at 1.149 billion euros ($1.45 billion), below the average forecast in a Reuters poll of 11 analysts of an 18 percent rise to 1.208 billion euros. Net profit rose to 299 million euros from 216 million in 2002 but was below an average market forecast of 329.6 million. Revenues grew 13.7 percent to 3.891 billion euros, broadly in line with market expectations, mainly driven by a 6 percent rise in electricity consumption fueled by Greece’s buoyant economic growth. A 2.5 percent tariff increase introduced in September also contributed to sales growth, the company said. PPC said 2003 operating expenses, excluding depreciation, increased by 14.6 percent. It cited projects related to the 2004 Olympic Games and the development of new lignite mines among factors that have driven 2003 costs higher. The state-run power utility, which enjoys a near monopoly of the domestic market, said it would increase the 2003 dividend payout but its chief financial officer said the PPC board would decide the exact amount next month. The dividend was 0.50 euros per share in 2002. PPC reported its results under International Financial Reporting Standards. (Reuters)