ECONOMY

Winter’s cold lifts Hellenic Petroleum

The spell of bad weather at the beginning of the year might have hurt consumers but to oil refiner Hellenic Petroleum, the cold snap was heaven-sent as it boosted demand for heating oil and, in turn, the company’s profits in the first quarter of the year. The oil refiner lifted consolidated pretax profits in the first quarter of the year by 156 percent to 45.9 million euros from 17.9 million euros. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 49 percent to 75.1 million euros. The figures were calculated according to International Accounting Standards. Athanasios Karachalios, managing director, said the sharp growth in profitability was due to the increased demand for heating oil brought on by the cold weather at the beginning of the year. Sales of heating oil were up by 12.4 percent in the first quarter. He said first-quarter results also benefited from the jump in oil prices at the end of March, shortly after the company had increased its reserves. The improvement in the petrochemical sector, helped by higher sales of two new products, and increased profits from the marketing division also boosted first-quarter figures. Marketing subsidiary Eko-Elda posted «a spectacular increase in sales,» contributing to a 5-million-euro profit in the first quarter of the year compared with a loss of 3.9 million euros last year, said Karachalios. Hellenic Petroleum’s profits are more due to an improvement in accounting than organic growth, said Dimitris Nikolos, head of research at Kappa Securities. «There is organic growth but not as much as the accounting profit, resulting from the higher valuation of the company’s inventory,» he said. He said a drop in international oil prices could have a significant impact on Hellenic Petroleum’s profitability. Hellenic Petroleum is due to launch a marketing venture in Bulgaria next month, marking its expansion into the Balkans. The company, which will compete with UK group Shell and Austria’s OMV, is aiming for a 20-25 percent market share. Hellenic Petroleum is also present in the former Yugoslav Republic of Macedonia and Belgrade. The government is due to hold talks soon with its sole bidder, the consortium of Latsis Group and Russian oil group Lukoil, for a 23-percent stake in Hellenic Petroleum. The joint bid offers 7.5 euros per share.