Quarterly Report • Sep 3, 2013
Quarterly Report
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SC KLAIPĖDOS NAFTA INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2013 PREPARED ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARTS, AS ADOPTED BY THE EUROPEAN UNION (UNAUDITED)
| FINANCIAL STATEMENTS 3 – 17 | |
|---|---|
| Statement of financial position 3 – 4 | |
| Statement of comprehensive income 5 | |
| Statement of changes in equity 6 | |
| Cash flow statement 7 – 8 | |
| Explanatory note 9 – 17 | |
| CONFIRMATION OF RESPONSIBLE PERSON 18 | |
| INTERIM REPORT FOR THE SIX MONTHS PERIOD OF 2013 19 - 44 |
| Notes | 30 June 2013 |
31 December 2012 |
|
|---|---|---|---|
| ASSETS | (unaudited) | (audited) | |
| Non-current assets | |||
| Intangible assets | 1,281 | 1,354 | |
| Property, plant and equipment | 3 | 470,003 | 444,711 |
| Investment into subsidiaries | 1,000 | 1,000 | |
| Investment into associates | 585 | 585 | |
| Total non-current assets | 472,869 | 447,650 | |
| Current assets | |||
| Inventories | 4 | 1,522 | 1,134 |
| Prepayments | 496 | 438 | |
| Trade receivables | 5 | 7,683 | 13,579 |
| Other receivables | 6 | 7,224 | 4,141 |
| Other financial assets | 7 | 16,171 | 13,234 |
| Cash and cash equivalents | 8 | 74,862 | 79,834 |
| Total current assets | 107,958 | 112,360 | |
| Total assets | 580,827 | 560,010 |
(cont'd on the next page)
| Notes | 30 June 2013 |
31 December 2012 |
|
|---|---|---|---|
| EQUITY AND LIABILITIES | (unaudited) | (audited) | |
| Equity | |||
| Share capital | 1 | 380,606 | 380,606 |
| Share premium | 13,512 | 13,512 | |
| Legal reserve | 24,611 | 22,561 | |
| Reserve for own shares | 55,000 | 55,000 | |
| Other reserves | 62,273 | 23,727 | |
| Retained earnings | 21,423 | 41,006 | |
| Total equity | 557,425 | 536,412 | |
| Non-current liabilities | |||
| Deferred income tax liability | 7,152 | 7,194 | |
| Non-current employee benefits | 896 | 816 | |
| Total non-current liabilities | 8,048 | 8,010 | |
| Current liabilities | |||
| Trade payables | 9 | 7,054 | 7,157 |
| Payroll related liabilities | 10 | 4,864 | 3,869 |
| Provisions | 366 | 164 | |
| Income tax payable | 2,253 | 2,524 | |
| Prepayments received | - | 53 | |
| Dividends payable | 39 | 39 | |
| Other payables and current liabilities | 11 | 778 | 1,782 |
| Total current liabilities | 15,354 | 15,588 | |
| Total equity and liabilities | 580,827 | 560,010 |
| General Manager | Rokas Masiulis | 29 August 2013 |
|---|---|---|
| Director of Finance and Administrative Department |
Mantas Bartuška | 29 August 2013 |
| Head of Accounting Department |
Rasa Gudė | 29 August 2013 |
| Notes | For the six months period ended 30 June 2013 |
For the three months period ended 30 June 2013 |
For the six months period ended 30 June 2012 |
For the three months period ended 30 June 2012 |
|
|---|---|---|---|---|---|
| (unaudited) | (unaudited) | (restated) | (restated) | ||
| Sales | 12 | 72,070 | 29,917 | 68,105 | 30,695 |
| Cost of sales | 13 | (41,326) | (17,490) | (40,670) | (17,824) |
| Gross profit | 30,744 | 12,427 | 27,435 | 12,871 | |
| Operating expenses | (5,928) | (2,946) | (3,884) | (1,995) | |
| Other income | 50 | 26 | 24 | 20 | |
| Profit from operating activities | 24,866 | 9,507 | 23,575 | 10,896 | |
| Income from financial activities | 14 | 352 | 205 | 1,264 | 516 |
| Loss from financial activities | 14 | (47) | (28) | (27) | (25) |
| Profit before income tax | 25,171 | 9,684 | 24,812 | 11,387 | |
| Income tax expense | (3,748) | (1,468) | (3,818) | (1,752) | |
| Net profit | 21,423 | 8,216 | 20,994 | 9,635 | |
| Other comprehensive income (expenses) | - | - | - | - | |
| Total comprehensive income | 21,423 | 8,216 | 20,994 | 9,635 | |
| Basic and diluted earnings (losses) per share, in LTL |
15 | 0.06 | 0.02 | 0.06 | 0.03 |
| General Manager | Rokas Masiulis | 29 August 2013 |
|---|---|---|
| Director of Finance and Administrative Department |
Mantas Bartuška | 29 August 2013 |
| Head of Accounting Department |
Rasa Gudė | 29 August 2013 |
| Notes | Share capital | Share premium |
Legal reserve | Reserve for own shares |
Other reserves |
Retained earnings | Total | |
|---|---|---|---|---|---|---|---|---|
| Balance as at 31 December 2011 (after the change of accounting policy) |
342,000 | - | 19,000 | - | 68,043 | 70,795 | 499,838 | |
| Net profit for the six months | - | - | - | - | - | 20,994 | 20,994 | |
| Other comprehensive income | - | - | - | - | - | - | - | |
| Total comprehensive income | - | - | - | - | - | 20,994 | 20,994 | |
| Dividends declared | - | - | - | - | - | (56,981) | (56,981) | |
| Transfers between reserves | - | - | 3,561 | 55,000 | (44,316) | (14,245) | - | |
| Increase in share capital | 38,606 | 13,512 | - | - | - | - | 52,118 | |
| Balance as at 30 June 2012 (unaudited) |
380,606 | 13,512 | 22,561 | 55,000 | 23,727 | 20,563 | 515,969 | |
| Balance as at 31 December 2012 (audited) |
380,606 | 13,512 | 22,561 | 55,000 | 23,727 | 41,006 | 536,412 | |
| Net profit for the six months | - | - | - | - | - | 21,423 | 21,423 | |
| Other comprehensive income | - | - | - | - | - | - | - | |
| Total comprehensive income | - | - | - | - | - | 21,423 | 21,423 | |
| Dividends declared | - | - | - | - | - | (410) | (410) | |
| Transfers between reserves | - | - | 2,050 | - | 38,546 | (40,596) | - | |
| Balance as at 30 June 2013 (unaudited) |
380,606 | 13,512 | 24,611 | 55,000 | 62,273 | 21,423 | 557,425 |
| General Manager | Rokas Masiulis | 29 August 2013 |
|---|---|---|
| Director of Finance and Administrative Department |
Mantas Bartuška | 29 August 2013 |
| Head of Accounting Department |
Rasa Gudė | 29 August 2013 |
| 2013 Notes Cash flows from operating activities 15 Net profit 21,423 Adjustments for noncash items: Depreciation and amortization 12,337 Impairment and writing off of non-current tangible assets - Change in vacation reserve 296 Change in employee benefit liabilities 80 Change in allowance for doubtful receivables (1) Accrued emission rights 202 Accrued income (474) Income tax expenses 3,748 Interest income 14 (241) 37,370 Changes in working capital: (Increase) decrease in inventories (388) Decrease (increase) in prepayments (58) Decrease (increase) in trade and other accounts receivable 5,896 Decrease (increase) in other receivables (1,877) Increase (decrease) in trade and other payables (1,092) (Decrease) increase in prepayments received (53) Increase (decrease) in other current liabilities and payroll related (580) liabilities 39,218 Income tax (paid) (2,183) Interest received 150 Net cash flows from operating activities 37,185 |
For six months period, ended 30 June (unaudited) |
|
|---|---|---|
| 2012 | ||
| 20,994 | ||
| 11,168 | ||
| 255 | ||
| (185) | ||
| 99 | ||
| (1) | ||
| 155 | ||
| (71) | ||
| 3,907 | ||
| (1,249) | ||
| 35,072 | ||
| (509) | ||
| (189) | ||
| 145 | ||
| (1,506) | ||
| (738) | ||
| (49) | ||
| 599 | ||
| 32,825 | ||
| (440) | ||
| 575 | ||
| 32,960 | ||
| Cash flows from investing activities | ||
| (Acquisition) of property, plant, equipment and intangible assets (37,556) |
(12,839) | |
| (Acquisition) of investments held-to-maturity (131,969) |
(243,212) | |
| Sales of investments held-to-maturity 127,778 |
331,222 | |
| (41,747) Net cash flows from investing activities |
75,171 |
(cont'd on the next page)
| Notes | 2013 | 2012 | |
|---|---|---|---|
| Cash flows from financing activities | (restated) | ||
| Increase in share capital | - | 6,627 | |
| Dividends (paid) | (410) | (56,981) | |
| Net cash flows from financing activities | (410) | (50,354) | |
| Net increase (decrease) in cash flows | (4,972) | 57,777 | |
| Cash and cash equivalents on 1 January | 79,834 | 9,983 | |
| Cash and cash equivalents on 30 June | 74,862 | 67,760 |
| General Manager | Rokas Masiulis | 29 August 2013 |
|---|---|---|
| Director of Finance and Administrative Department |
Mantas Bartuška | 29 August 2013 |
| Head of Accounting Department |
Rasa Gudė | 29 August 2013 |
SC Klaipėdos Nafta (hereinafter referred to as "the Company") is a public limited liability company registered in the Republic of Lithuania. The address of its registered office is as follows: Burių str. 19, 91003 Klaipėda, Lithuania.
The main activities of the Company – oil products transshipment services and other related.
The Company was established by SC Naftos Terminalas (Lithuania) and Lancater Steel Inc. (USA) acquiring 51 and 49 per cent of shares respectively. The Company was registered on 27 September 1994.
As of 25 June 2013 all the shares were owned by 1,845 shareholders. The Company's share capital – LTL 380,606,184 (three hundred eighty million six hundred six thousand one hundred eighty-four) is fully paid. It is divided into 380,606,184 (three hundred eighty million six hundred six thousand one hundred eighty-four) ordinary shares with a par value of one (1) LTL. 72.32 % of the shares (275,241,290 shares) are owned by the State of Lithuania, represented by the Ministry of Energy.
The Company has not acquired any own shares and has arranged no deals regarding acquisition or transfer of its own shares during six months period in 2013. The Company's shares are listed in the Baltic Secondary List on the NASDAQ OMX Vilnius Stock Exchange.
As of 31 June 2013 and 31 December 2012 the shareholders of the Company were:
| 31 June 2013 |
31 December 2012 |
|||
|---|---|---|---|---|
| Number of shares held (thousand) |
Part of ownership (%) |
Number of shares held (thousand) |
Part of ownership (%) |
|
| Government of the Republic of Lithuania | ||||
| represented by the Ministry of Energy | 275,241 | 72.32 | 275,241 | 72.32 |
| UAB Concern Achema Group | 38,975 | 10.24 | 38,975 | 10.24 |
| Other (less than 5 per cent each) | 66,390 | 17.44 | 66,390 | 17.44 |
| Total | 380,606 | 100.00 | 380,606 | 100.00 |
The average number of employees on 30 June 2013 was 361 (312 – on 30 June 2012).
These financial statements have been prepared on a historical cost basis.
The financial statements are presented in Litas and all values are rounded to the nearest thousand (LTL 000), except when otherwise indicated.
The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (hereinafter the EU).
The Company applies the same accounting policies and the same calculation methods in preparing Interim Financial Statements as they have been used for the Annual Financial Statements of the year 2012. The principles used in preparation of financial statements were presented in more detail in the Notes to the Financial Statements for 2012
In the first half of the year 2013 the Company continued works in the following projects:
Liquefied natural gas terminal project. On 30 June 2011 SC Klaipėdos Nafta signed an Agreement with the Lead Adviser for preparation and implementation of liquefied natural gas (LNG) terminal's project – the international company FLUOR S.A. The Extraordinary General Shareholders' Meeting of SC Klaipėdos Nafta held on 27 July 2011 approved the conclusion of the Agreement. The Agreement provides for the Lead Adviser during four years to prepare the technical development plan of the Project, assist in selection of technologies, perform actions in order to get obligatory permits, solve the matters related to the safety of the project, navigation as well as other issues associated with the technical implementation of the Project. Further, the Adviser will perform works related to the economic part – will produce business model of the Terminal, financial model and develop strategy of the Terminal's performance. The Adviser will also supervise technical realization of the Project during its entire execution period - until the end of 2014 when the Terminal will start its activities.
On 2 March, 2012, the Company concluded Build, Operate and Transfer (BOT) lease contract with Hoegh LNG Ltd. regarding LNG Floating Storage and Regasification Unit (FSRU) with the right of its redemption providing that the delivery term of FSRU into the Seaport of Klaipeda should be 1 September, 2014 – 1 December, 2014.
On 18 March 2013 the Company to conclude the contract for Engineering and Construction Works of Port Infrastructure with Suprastructure with the winner of the international tender "Procurement of Engineering and Construction Works of Port Infrastructure (Jetty) with Suprastructure (Equipment) of Liquefied Natural Gas Terminal" of the Company, who proposed the lowest price for all the scope of works – Akciju sabiedriba (transl. -stock company) "BMGS". All the works under the Contract shall be finished till 1 October 2014.
As of 31 March 2013 the construction in progress of LNG Terminal's project amounted to LTL 35,835 thousand – the major part of which was payments of LTL 25,103 thousand paid according to the Agreement to the Lead Adviser for preparation and implementation of liquefied natural gas terminal's project as well as for legal and other research services.
On 6 May 2013 the Company concluded the Contract for Natural Gas Pipeline System Engineering, Procurement and Construction (EPC) Works (hereinafter, the Contract) with German concern PPS Pipeline Systems GmbH, the winner of "Procurement of Engineering, Procurement and Construction (EPC) Works for Natural Gas Pipeline System". Under the Contract natural gas pipeline system engineering, procurement and construction works, necessary in constructing the connection between the Liquefied Natural Gas Terminal's jetty within the water area of the Klaipėda State Sea Port (near the northern part of the Kiaulės Nugara island) and the Lithuanian natural gas transportation system (gas pipeline Jurbarkas-Klaipėda (section Tauragė-Klaipėda) near Klaipėda DSS-2 (gas distribution station) by Kiškėnų village, Dovilų sub-district, Klaipėda district municipality). The Works are to be performed by 1 August 2014.
As of 30 June 2013 the investments into implementation of LNG Terminal's project amounted to LTL 58,581 thousand – the major part of which was comprised of advance payments of LTL 31,383 thousand paid according to the Agreement to the Lead Adviser for preparation and implementation of liquefied natural gas terminal's project as well as for legal and other research services.
Reconstruction of HFO (i.e. heavy fuel oil products) storage tank park, which involves demolishing of 4 storage tanks with the capacity 5,000 m3 and construction of 2 storage tanks with the capacity 32,250 m3. The investment will increase flexibility of the Company's reloading activities thus enabling to reload additional flows of oil products and will make the Terminal more attractive to its clients by giving them an opportunity to accumulate greater batches (up to 90 thousand tonnes) of the products. The investment amounts to LTL 29 million. The Company intends to complete construction at the end of 2013. The total value of the works performed amounted to LTL 13.557 thousand.
At the site of the universal storage tanks under construction the Company plans updating of the piping of the existing storage tanks of oil products that will provide technical possibility to accommodate part of the HFO storage tanks for reloading of LFO (i.e. light oil products).
The depreciation charge of the Company's property, plant and equipment for the first half of 2013 amounts to LTL 12,165 thousand (LTL 11,168 thousand – in the first half of 2012). LTL 12,014 thousand of depreciation charges have been included into cost of sales (LTL 10,985 thousand – in 2012), LTL 45 thousand depreciation charges (LTL 34 thousand – in the first half of 2012) reclassified into inventories and the remaining amount has been included into operating expenses.
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| Oil products, for sale | 570 | 362 |
| Spare parts, construction materials and other inventories | 952 | 772 |
| 1,522 | 1,134 |
As of 30 June 2013 the Company had accounted write-off of inventories in the amount of LTL 6,235 thousand (LTL 6,168 thousand on 31 December 2012), that have been written off down to the net realisable value. The Company makes write-off the inventories to the net realisable value if they are not used for more than 6 months.
Write-off has been accounted for mostly construction materials and spare parts, which were not used during the reconstruction (1996 – 2005).
As of 30 June 2013 the Company stored 145.1 thousand tons of oil products delivered for transhipment in its storage tanks (148.2 thousand tons as on 31 December 2012). Such oil products are not recognised in the Company's financial statements, they are accounted for in the off-balance sheet accounts as the Company has no ownership rights into oil products.
Oil products for sale are energy products collected in the Waste Water Treatment Facilities. On 30 June 2013 the Company stored 1,963 tons of oil products collected in its Waste Water Treatment Facilities (31 December 2012 – 1,162 tons).
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| Receivables for trans-shipment of oil products and other related services | 7,683 | 13,579 |
| 7,683 | 13,579 |
Trade and other receivables are non-interest bearing and are generally on 6 - 15 days payment terms.
On 30 June 2013 trade debts to the Company in the amount of LTL 813 thousand were denominated in EUR (LTL 3,012 thousand – on 31 December 2012).
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| Accrued income | 2,789 | 2,315 |
| VAT receivable | 4,370 | 1,715 |
| Accrued interest on term deposits | 1 | 46 |
| Other receivables | 77 | 78 |
| 7,237 | 4,154 | |
| Less: impairment allowance | (13) | (13) |
| 7,224 | 4,141 |
Change in allowance for receivables has been included into operating expenses in the Statement of Comprehensive income.
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Loans and receivables | ||
| Cession of rights in Vnesekonom bank | 100 | 100 |
| Loan to UAB "Žavesys" | 356 | 356 |
| Less: impairment allowance for receivables | (456) | (456) |
| Total loans and receivables | - | - |
| Investments held- to-maturity | ||
| Short-term deposits | 12,000 | - |
| Investments into the state government bonds of the Republic of Lithuania | 4,171 | 9,474 |
| Investments into the government bonds of Lithuanian banks | - | 3,760 |
| Total investments held-to-maturity | 16,171 | 13,234 |
| Total other financial assets | 16,171 | 13,234 |
| Current part | 16,171 | 13,234 |
| Non-current part | - | - |
| Carrying values of other financial assets are denominated in the following currencies: | ||
| Currency | 30 June 2013 |
31 December 2012 |
| EUR | 16,171 | 10,648 |
| LTL | - | 2,586 |
| 16,171 | 13,234 |
On 24 January 2003 AB "Naftos terminalas", as a part of settlement for the shares acquired, transferred to the Company the right of demand for the deposit of USD 95,266 thousand (or LTL 277,243 thousand) in the liquidated Vnesekonom bank and the right to the loan provided to UAB "Zavesys". Cost of sales of the right in the liquidated Vnesekonom bank amounts to LTL 100 thousand. The Company's Management considers the receivables subject to the acquired rights of demand to be doubtful therefore they have been accounted for by cost less 100 per cent allowance.
The maximum exposure of these investments to credit risk at the reporting date was represented by carrying value of the securities and term deposits, classified as investments held to maturity.
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| Cash at bank | 60,862 | 67,221 |
| Short-term deposits | 14,000 | 12,613 |
| 74,862 | 79,834 |
Calculated values of cash and cash equivalents are denominated in the following currencies:
| Currency | 30 June 2013 |
31 December 2012 |
|---|---|---|
| EUR | 36,182 | 22,523 |
| LTL | 38,679 | 57,311 |
| 74,861 | 79,834 |
The maximum exposure of these investments to credit risk at the reporting date was represented by carrying value of the securities and term deposits, classified as investments held to maturity.
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Payable to contractors Payable for rent of land |
3,438 512 |
1,985 504 |
| 212 | 594 | |
| 2,892 | 4,074 | |
| 7,054 | 7,157 |
Trade payables are non-interest bearing and are normally settled on 30-day payment terms. On 30 June 2013 trade payables of LTL 608 thousand were denominated in EUR (LTL 87 thousand – on 31 December 2012).
As of 30 June 2013 the Company's liabilities, related to labour relations, were basically comprised of vacation reserve of LTL 2,046 thousand, social insurance payable of LTL 829 thousand, salaries payable for June of LTL 946 thousand and accrual of bonuses in the amount of LTL 742 thousand for the annual results. As of 31 December 2012 the Company's liabilities, related to labour relations, were mainly comprised of vacation reserve of LTL 1,750 thousand, social insurance payable for December of LTL 878 thousand and accrued bonuses in the amount of LTL 1,200 thousand for the annual results.
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Accrued expenses Tax payable on real estate |
429 302 |
1,131 309 |
| Other liabilities | 47 | 342 |
| 778 | 1,782 |
Other liabilities are non-interest bearing and have an average term of one month.
| For six months period, ended 30 June (unaudited) |
||
|---|---|---|
| 2013 | 2012 | |
| Sales of oil transhipment services | 68,100 | 57,715 |
| Sales of heavy oil products collected in the Waste Water Treatment Facilities | 2,256 | 8,391 |
| Other sales related to transhipment | 1,659 | 1,443 |
| Revenues for storage of oil products | 55 | 556 |
| 72,070 | 68,105 |
Other sales related to transhipment include moorage, sales of fresh water, transportation of crew and other sales related to transhipment.
| For six months period, ended 30 June (unaudited) |
|||
|---|---|---|---|
| 2013 | 2012 | ||
| (restated) | |||
| Depreciation and amortization | 12,073 | 11,056 | |
| Natural gas | 10,021 | 11,654 | |
| Wages, salaries and social security | 9,384 | 7,928 | |
| Railway services | 2,663 | 3,158 | |
| Electricity | 3,164 | 2,889 | |
| Rent of land and quays | 1,025 | 1,028 | |
| Repair and maintenance of non-current assets | 725 | 655 | |
| Tax on real estate | 604 | 592 | |
| Insurance of assets | 641 | 498 | |
| Services for tankers | 298 | 301 | |
| Work safety costs | 182 | 195 | |
| Emission rights expenses | 82 | 155 | |
| Other | 464 | 561 | |
| 41,326 | 40,670 |
| For six months period, ended 30 June (unaudited) |
||
|---|---|---|
| 2013 | 2012 | |
| Interest income | 241 | 1,249 |
| Profit from currency exchange | 2 | 15 |
| Fines collected | 109 | - |
| Total income from financial activity | 352 | 1,264 |
| (Losses) from currency exchange | (47) | (27) |
| Total result of the financial activity | 305 | 1,237 |
Basic earnings per share are calculated by dividing net profit of the Company by the number of the shares available. Diluted earnings per share equal to basic earnings per share as the Company has no instruments issued that could dilute shares issued. Basic and diluted earnings per share are as follows:
| For six months period, ended 30 June (unaudited) |
||
|---|---|---|
| 2013 | 2012 | |
| Net profit attributable to shareholders | 21,423 | 20,994 |
| Weighted average number of ordinary shares (thousand) | 380,606 | 342,000 |
| Earnings per share (in LTL) | 0.06 | 0.06 |
The parties are considered related when one party has a possibility to control the other one or has significant influence over the other party in making financial and operating decisions. The related parties of the Company and transactions with them during the six months of 2013, 2012 and 2011 were as follows:
| Purchases from related parties |
Sales to related parties |
Receivables from related parties |
Payables to related parties |
||
|---|---|---|---|---|---|
| State Tax Inspectorate at the | 30 June 2013 | 48,034 | - | - | 7,562 |
| Finance Ministry of the Republic | 30 June 2012 | 50,649 | - | - | 7,690 |
| of Lithuania | 30 June 2011 | 52,926 | - | - | 4,410 |
| State Social Insurance Fund | 30 June 2013 | 4,240 | - | - | 829 |
| Board under the Ministry of | 30 June 2012 | 3,632 | - | - | 645 |
| Social Security and Labour | 30 June 2011 | 2,358 | - | - | - |
| State Enterprise Klaipeda State | 30 June 2013 | 1,025 | - | - | 512 |
| Seaport Authority owned by the | 30 June 2012 | 1,028 | - | - | 514 |
| State of Lithuania represented by the Ministry of transportation |
30 June 2011 | 1,028 | - | - | 514 |
| AB Lithuanian Railways owned | 30 June 2013 | 3,922 | - | - | 212 |
| by the State of Lithuania | 30 June 2012 | 3,184 | - | - | 359 |
| represented by the Ministry of transportation |
30 June 2011 | 4,773 | - | - | 234 |
| AB "Lesto", owned by the State of | 30 June 2013 | 1,657 | - | - | 216 |
| Lithuania represented by the | 30 June 2012 | 1,323 | - | - | 161 |
| Ministry of Energy | 30 June 2011 | 3,025 | - | - | 384 |
| Other related parties | 30 June 2013 | - | 21 | 2 | - |
| 30 June 2012 | - | 15 | 1 | - | |
| 30 June 2011 | - | 17 | 2 | - | |
| Transactions with related | 30 June 2013 | 58,878 | 21 | 2 | 9,331 |
| parties, in total: | 30 June 2012 | 59,819 | 15 | 1 | 8,724 |
| 30 June 2011 | 64,110 | 17 | 2 | 5,542 |
The Company's Management is comprised of General Manager, Deputy General Manager, Directors of Departments and their Deputies, Managers of Departments.
| For six months period, ended 30 June (unaudited) |
||
|---|---|---|
| 2013 m. | 2012 m. | |
| Labour related disbursements | 2.190 | 1.771 |
| 31 | 25 |
During six month period in 2013 and 2012 the Management of the Company did not receive any loans, guarantees, or any other payments or property transfers were made or accrued.
To grant a State guarantee to the European Investment Bank (hereinafter referred to as the EIB) for the loan of 81,093 thousand EUR provided to the Company for a period of 20 years, at the interest rate established by the EIB, for financing of the investment liquefied natural gas terminal's (hereinafter referred to as the LNGT) Project, with the State assuming guarantee liabilities for the payment of the loan of 81.093 thousand EUR as well as interests.
To establish that the State guarantee for the aforementioned loan shall be also valid in the following cases:
To establish that the State guarantee can be signed provided that:
Under the Credit Agreement, the credit period will be up to 20 years; the interest will be variable or fixed whose rate would be provided in the EIB's disbursement proposals. The Agreement also provides that the minimal payable amount of credit is EUR 15 million, and all the credit amount must be paid to the Company in no more than 6 payments. 100% of the Company's financial obligations under the Agreement shall be secured by a State guarantee.
In the opinion of management of the Company, the complaint is groundless, and the Company shall provide to the court response to the complaint following terms indicated by the court.
No other significant subsequent events have occurred after the date of financial statements.
Following Article 22 of the Law on Securities of the Republic of Lithuania and the Rules on Preparation and Submission of Periodic and Additional Information of the Lithuanian Securities Commission, we, Rokas Masiulis, General Manager of SC Klaipėdos Nafta, Mantas Bartuska, Finance Director of SC Klaipėdos Nafta and Rasa Gaudė, Head of accounting department, hereby confirm that to the best of our knowledge the above-presented unaudited Interim condensed Financial Statements of SC Klaipėdos Nafta for the six months ended 30 June 2013, prepared in accordance with the International Financial Reporting Standards as adopted to be used in the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss and cash flows of SC Klaipėdos Nafta.
General Manager Rokas Masiulis
Director of Finance and Administrative Department Mantas Bartuška
Head of Accounting Department Rasa Gudė
Klaipėda August 2013
| REPORTING PERIOD IN RESPECT OF WHICH THE REPORT WAS PREPARED21 | |
|---|---|
| DETAILS ABOUT THE COMPANY21 | |
| DESCRIPTION OF THE ACTIVITY 21 | |
| SIGNIFICANT EVENTS OF THE REPORTING PERIOD21 | |
| SIGNIFICANT SUBSEQUENT EVENTS AFTER THE REPORTING PERIOD28 | |
| BUSINESS ENVIRONMENT31 | |
| RISK FACTORS 32 | |
| ENVIRONMENT PROTECTION35 | |
| RESULTS OF THE ACTIVITY35 | |
| ACTIVITY PLANS AND FORECASTS37 | |
| INFORMATION REGARDING SHAREHOLDERS AND SHARES OF THE COMPANY 39 | |
| AUTHORIZED CAPITAL OF THE COMPANY40 | |
| MANAGEMENT OF THE COMPANY 40 | |
| PERSONNEL 43 | |
| REFERENCES AND ADDITIONAL EXPLANATIONS ABOUT FINANCIAL STATEMENTS 43 | |
| TRANSACTIONS WITH RELATED PARTIES43 | |
| OTHER INFORMATION (PROCEDURE OF CHANGING ARTICLES OF ASSOCIATION)43 | |
This Interim Management Report for the first six months of 2013 is prepared for the period from 1 January 2013 to 30 June 2013. SC Klaipėdos Nafta is referred to as the Company in this Management Report.
| Name of the Company: | Stock Company "Klaipėdos nafta" |
|---|---|
| Legal status: | Stock Company |
| Authorized capital: | LTL 380,606,184 |
| Date and place of registration: | 27 September 1994, State Enterprise Register Centre |
| Company code: | 110648893 |
| Address: | Burių street 19, 91003 Klaipėda |
| Company's register: | State Enterprise Register Centre |
| Telephone numbers: | +370 46 391772 |
| Fax numbers: | +370 46 311399 |
| E-mail address: | [email protected] |
| Internet site: | www.oil.lt |
The Company is one of the largest terminals on the Baltic States market of oil and oil products transit. The Terminal's core activity is to tranship oil products delivered by rail cars from Lithuania, Russia, Byelorussia and other countries into tankers. It can also provide Lithuania with imported oil products which are shipped to Klaipėda port by tankers. From 2012, the Company also provides long-term storage services of oil products.
The company provides the following services:
The Company also implements the LNGT project, which consists of construction of the ship-storage, creation of the jetty and its related infrastructure, laying the pipeline system, which connects the terminal with the trunking gas pipeline, and organization of gas supply. The LNGT is a critically important project of energy security of the Republic of Lithuania in order to reduce prices of natural gas and to create the market of natural gas.
Mission of the Company is to be a reliable oil product import and export terminal in Lithuania and neighbouring countries and to make a possibility for region's oil refineries continuously export their production on tankers to the Western Europe and further markets through the terminal of the Company.
The vision of the Company is to be a financially sustainable oil products transhipment terminal, implement projects in time and invest in initiatives that will increase economic returns for investors.
The Company is a strategic company of Lithuanian energy sector. The Company ensures a possibility to import oil product in Lithuania, if necessary. Moreover, the Company was granted storage of the obligatory reserve of oil products of the Republic of Lithuania. In February 2012, the Government of the Republic of Lithuania assigned the Company to implement a strategic project of construction of LNGT until the end of 2014 which is significant for the energy sector of Lithuania.
17 January 2013. Nordea Bank Finland Plc. was announced as a winner of the public procurement "Procurement of Overdraft Services" by way of negotiated procedures with publication of a tender notice. During the procurement conducted by the Company 3 final offers were received, one of which was rejected due to inconformity with the Tender requirements. Final offers have been evaluated by the lowest price criteria and Nordea Bank Finland Plc. was announced as the winner.
25 January 2013. An Extraordinary General Meeting of Shareholders of the Company has approved the decision of 21 December 2012 of the Board of the Company to sign the contract with the winner of the public procurement "for Natural Gas Pipeline System Engineering, Procurement and Construction (EPC) Works", which proposed the lowest price for proposed scope of work – the consortium of AB Kauno dujotiekio statyba and AB Šiaulių dujotiekio statyba for the total price of LTL 137,999 thousand excl. VAT. The fixed price may be increased only in the extraordinary cases provided under the contract. SC Klaipėdos Nafta shall be paying the indicated fixed sum for the completed works according to the progress performed under the contract. All the works under the Contract shall be finished until 1 October 2014. The contract deadline may only be extended in the extraordinary cases defined in the contract.
According to the notice of the Public Procurement Office mentioned above, inter alia, the Company was obliged to annul the following decisions adopted by the public procurement commission of the Company:
Shareholders of the Company approved the decision of the Board of the Company to enter into an agreement with the Bank for assignment of the rights of claim to the receivable funds to the Bank which were intended for covering all or part of the expenses of installation of the LNGT, its facilities and the connection to gas transmission system. This agreement for assignment of the rights of claim being intended to secure the Overdraft Agreement between the Company and the Bank, pursuant to which:
Amount of the overdraft is LTL 120,000 thousand;
Besides, one of the conditions of the overdraft agreement is a prohibition to pay dividends to shareholders of the Company until the deed of completion of construction of the LNGT is provided to the Bank.
The above stated restriction on the payment of dividends shall be applied and any sums under the Overdraft Agreement shall be paid to the Company upon the condition, that based on the Resolution of the Government of the Republic of Lithuania No. 20 "On Dividends for the State-owned Shares of the Companies and Profit Taxes of the State-Owned Companies" from 14 January 1997 (including all later amendments hereto), there should be issued and entered into force the relevant Resolution of the Government of the Republic of Lithuania, by which there shall be established that the manager of shares of the Company which belong to the State of the Republic of Lithuania, shall be entitled to take the decisions that the Company would abstain from payment of dividends until obtaining the deed of completion of construction of the LNGT.
procedure and sent the invitations to the participants of the procurement to present final offers. The tenders shall be evaluated according to the criterion of the most economically beneficial offer.
1 March 2013. The Company announced AS BMGS as the winner of the international procurement "Engineering and Construction Works of Port Infrastructure (Jetty) with Superstructure (Equipment) of Liquefied Natural Gas Terminal". AS BMGS undertook to carry out all works for the total amount of EUR 27,190 thousand (LTL 93,880 thousand) excluding VAT.
In accordance with the bilateral agreement between the Company and KSSA on the improvement and creation of Port Infrastructure/Superstructure, part of the costs of the contract shall be reimbursed by KSSA (all costs for the Klaipeda State Seaport Infrastructure and part of the costs of General Works). KSSA shall
reimburse to the Company the amount of EUR 14,196 thousand (LTL 49,015 thousand) excluding VAT. The Company shall incur the costs for remaining part of works amounting to EUR 12,994 thousand (LTL 44,866 thousand) excluding VAT.
The claimants filed the lawsuit and requested the Court, in addition to the above:
By its separate appeal the Company requests to annul the ruling of the Klaipėda Regional Court of 8 March 2013, by which the interim measures were imposed. In case the court of first instance annuls the ruling on imposition of interim measures itself, the Company requests to allow execution of the ruling on lifting of the interim measures in the urgent manner.
During its first meeting the Supervisory Council also recalled the Audit Committee of the Company in corpore and for the term of 4 years elected the new Audit Committee. Linas Sasnauskas and Simonas Rimašauskas were chosen as the independent members of the Audit Committee for the new term and Eimantas Kiudulas had also been elected to the Audit Committee for one more term.
order to guarantee an appropriate control of amendments of the Contract, the consent of the Board of the Company for the increasing of the Contract price and (or) for the extension of the Contract performance term correspondingly must be received.
On 5 April 2013, the Extraordinary General Meeting of Shareholders also approved the principal provisions of Confidentiality Agreement for the Supervisory Board of the Company.
The decisions of the Board dated 21 December 2012 are to be changed, since the above mentioned decisions have been adopted a part of the Procurement procedures were repeated, new offers were submitted and results of the Procurement were changed, i.e., German consortium PPS Pipeline Systems GmbH was announced as the winner, and the decisions of the Board adopted before may not be implemented.
On 22 April 2013, the Board of the Company, inter alia, adopted the following decisions:
To amend the decisions adopted at the Board Meeting on 21 December 2012 related to conclusion of the Contract (hereinafter referred to as the Contract) on Natural Gas Pipeline System Engineering, Procurement and Construction (EPC) Works that are necessary to install the connection between the LNGT jetty located in the Klaipėda State Seaport harbour waters (in the northern part of near Kiaulės Nugara (Pig's back) Island) and Lithuanian natural gas transmission system (gas pipeline Jurbarkas–Klaipėda (a part of Tauragė–Klaipėda) near the Klaipėda DSS-2, located in Kiškėnai village, Dovilai pro., Klaipėda region municipality) as follows:
1.1. To conclude a contract with PPS Pipeline Systems GmbH (hereinafter referred to as the Contractor), the winner of public tender "Procurement of engineering, procurement and construction works for natural gas pipeline system (EPC)" performed by the Company under the negotiated procedure with a publication of notice, that submitted the most economically beneficial offer.
1.2. The total fixed price for the performed works under the contract is LTL 94,840 thousand excluding VAT and LTL 114,756 thousand including VAT with the rate of 21% on the day of the Contract signing. The fixed Contract price may only be increased in the extraordinary cases defined in the contract. The Company shall pay the fixed contract price only for the actual Works performed according to the progress.
1.3. All the works under the Contract shall be completed until 1 October 2014. The deadline for completion may only be extended in the extraordinary cases defined in the contract.
24 April 2013. The Government of the Republic of Lithuania in order ensure SC Klaipedos Nafta possibilities to finance the LNGT project from its own and borrowed funds adopted a resolution pursuant to which the Ministry of Energy of the Republic of Lithuania, as shareholder, is assigned to ensure that its authorized representative at the General Meeting of Shareholders offers to allocate to dividends 1% of the 2012 distributable profit of the Company and votes for it.
The offered size of dividends to be allocated per one share is LTL 0.00107737777 (or EUR 0.00031203017). Accordingly, the total sum of dividends to be allocated for the shareholders of the Company would amount LTL 410,056.65 (or EUR 118,760.61).
30 April 2013. The General Meeting of Shareholders of the Company:
Main provisions of the Contract, inter alia, contain the following:
In addition to the above, the Court adopted a decision:
According to the opinion of the Management of the Company, the decision of the Vilnius Regional Court is unjustified and unreasonable particularly in the part of the countersuit rejection and in the part of the lawsuit for requirements satisfaction, in addition to the above, because the Court has not considered the conclusions of the state institutions (the State control and the Competition Council) regarding separate provisions of the Contract and possible violation of legal acts, and inasmuch as UAB Naftos grupė has not justified the amount of allegedly unearned revenues. The Company has terminated this Contract that is obviously not of economic benefit in order to protect interests of shareholders of the Company.
The above-mentioned decision of Vilnius Regional Court could have been appealed against to the Court of Appeal of Lithuania within 30 days from the day of its publishing, so the Company appealed by the specified time.
24 May 2013. The Extraordinary General Meeting of Shareholders of the Company approved a decision of the Board of the Company:
To change the decisions adopted by the Company at the Board Meeting on 21 December 2012, that are related to the conclusion of the Contract (hereinafter referred to as the Contract) on Natural Gas Pipeline System Engineering, Procurement and Construction (EPC) Works (hereinafter referred to as the Works), necessary to install the connection between the LNGT jetty located in the Klaipeda State Seaport harbour waters (in the northern part of near Kiaulės Nugara (Pig's back) Island) and Lithuanian natural gas transmission system (the Jurbarkas–Klaipėda gas pipeline (a part of Tauragė–Klaipėda) near the Klaipėda DSS-2, located at Kiškėnai village, Dovilai pro., Klaipėda region municipality), in the following manner:
to conclude a contract with PPS Pipeline Systems GmbH (hereinafter referred to as Contractor), the winner of public tender "Procurement of engineering, procurement and construction works for natural gas pipeline system (EPC)" performed by the Company by way of negotiated procedures with publication of a tender notice, that submitted the most economically beneficial offer;
the total fixed price for the works under the Contract is LTL 94,840 thousand excluding VAT and LTL 114,756 thousand including VAT of 21% rate on the day of the Contract signing. The fixed Contract price may only be increased in the extraordinary cases defined in the contract. The Company shall pay the fixed contract price only for the actual Works;
all the Works under the Contract shall be finished until 1 August 2014. The contract deadline may only be extended in the extraordinary cases defined in the contract.
The ruling adopted by the Court can be appealed against by separate claim during 7 (seven) days from the day of its publishing applying to the Supreme Administrative Court of Lithuania via Vilnius Regional Administrative Court.
interest rate: fluctuating or fixed, the norm of which should be determined in the EIB offer for payment;
condition precedent for the EIB to pay the credit to the Company – obligation to provide the state guarantee ensuring the Company's financial obligations under the Credit Agreement.
allegedly belong to the claimant and are stored at the Company facilities, and acknowledgement of termination of the Service Agreement No. 12-12-2005 dated on 22 December 2004 (hereinafter referred to as the Contract) due to the Company's alleged.
In addition to the above, the Company filing its appeal requests the Appeal Court of the Republic of Lithuania:
The decision of Vilnius Regional Court of 20 May 2013 in the parts regarding acknowledgement that the Contract was terminated due to the Company's fault; regarding awarding of the LTL 9,745 thousand damages and 6% annual interest rate from the adjudged sum for the period of time starting from the day of the case submission to the Court until complete execution of the ruling of the Court and all court fees from the Company in favour of UAB Naftos grupė; regarding rejection of the Company's countersuit against UAB Naftos grupė to annul and in these parts to adopt a new decision: to reject the lawsuit requirements regarding acknowledgement that the Contract was terminated due to the Company's fault; regarding awarding of the LTL 9,745 thousand damages and 6% annual interest rate from the adjudged sum for the period of time starting from the date of the case submission to the Court until complete execution of the ruling of the Court and court fees from the Company in favour of UAB Naftos grupė, but to satisfy in full the Company's countersuit;
Other parts of the decision of Vilnius Regional Court of 20 May 2013 should remain unchanged.
It is noted that that having appealed against the decision of Vilnius Regional Court of 20 May 2013, this decision does not come to force, but may come to force and cause real consequences for the Company only in case if it is not invalidated in the course of investigating the case under procedure of appeal.
In addition to the above, the present Law changes the regulation of selling of natural gas imported through the LNGT:
to invalidate the requirement for natural gas companies importing natural gas into the Republic of Lithuania by means of junction pipelines of natural gas and other transhipment systems, to acquire through the LNGT not less than 25% of the total natural gas amount, which is supplied by such companies into the natural gas system per year;
it is determined, that natural gas imported through the LNGT must be supplied on a priority basis in order to ensure heat and (or) electricity production regulated by the State. The quantity of imported natural gas conforming to the natural gas amount approved by the Government necessary to ensure the obligatory activity of LNGT is distributed as needed to producers performing energy production activity, that is regulated by the Government every year pursuant to contracts composed with determined supplier for the duration of 5 years or, according to mutual agreement of parties for longer period of time.
the Government has competence to determine a duration of appliance of the mentioned obligation, which cannot be longer than 10 years from the LNGT commissioning, and may be suspended or stoped in order to assure diversified supply and usage of natural gas, safety and reliability of energy supply and protection of consumers' interests.
This Act has also specified provisions of financing of the LNGT project which enter into force from 1 January 2014. These provisions determine to include the costs of LNGT, its infrastructure and connections fixed operating costs into the additional component of natural gas supply safety to the price of transhipment of natural gas, that are necessary to ensure the LNG terminal activity and only those costs of the LNGT, its infrastructure and connection installation, that are not possible to be financed from other sources available to the Company.
After the Act enters into force, the European Commission should adopt a decision regarding the further actions of analysis on violation of EU law, which is suspended at the moment.
To grant a State guarantee to the European Investment Bank (hereinafter referred to as the EIB) for the loan of EUR 81,093 thousand provided to the Company for a period of 20 years, at the interest rate established by the EIB, for financing of the investment liquefied natural gas terminal's (hereinafter referred to as the LNGT) Project, with the State assuming guarantee liabilities for the payment of the loan of EUR 81,093 thousand as well as interests.
To establish that the State guarantee for the aforementioned loan shall be also valid in the following cases:
if the LNGT Project implemented by the Company and (or) its constituent works and (or) assets are passed, according to the procedure prescribed by legal acts, and (or) the activity related to LNGT that is executed by the Company are transferred to a subsidiary which is directly controlled by the Company by 100 percent.
if all rights and duties related to the implementation of the LNGT Project and (or) its constituent works and (or) assets and (or) the activity of LNGT, i.e. all the assets including mortgage, all liabilities including rights and duties according to the loan and all rights for the LNGT funds are transferred to the aforementioned subsidiary company
if by executing direct control the Republic of Lithuania holds at least 67 percent of the Company shares and the Company holds 100 percent of the subsidiary company's shares for the whole loan period.
To establish that the State guarantee can be signed provided that:
the company mortgages, by a conditional mortgage (primary mortgage), to the Ministry of Finance of the Republic of Lithuania, future immovable objects of LNGT and objects inseparably related to them, i.e. the LNGT connection and its technological appurtenances which will be created in the future and (or) which will be owned by the Company or its subsidiary company in the future, when they will have implemented the LNGT Project, for the minimum amount of 100 percent of the loan amount, to ensure the performance of contractual obligations;
the Company pays a guarantee fee equal to 0,1 percent of the loan amount;
a confirmation of the European Commission is received that the provided State guarantee is not considered the state aid pursuant to Article 107 (1) of the Treaty on the Functioning of the European Union or is considered state aid compatible with the internal market pursuant to Article 107 (3) of the mentioned Treaty.
2 July 2013. During the Extraordinary General Meeting of Shareholders of the Company it was approved to enter the Credit Agreement with the EIB in accordance with regular applicable practice of the EIB, whereby:
the maximum sum of the credit should be EUR 87,000 thousand (LTL 300,000 thousand );
term of the credit should be up to 20 (twenty) years;
interest rate: fluctuating or fixed, the norm of which should be determined in the EIB offer for payment;
conditions precedent for the credit payment are the following:
The Bank must be provided with evidences that the Company has been fully empowered in order to enter into the Credit Agreement with the Bank and the Credit Agreement with the Bank is going to be signed by appropriately authorized person/persons and confirmed sample (s) of signature (s) of such person (s) are provided;
The Bank must be provided with evidences that the Company has received all necessary decisions and permissions from its management bodies and shareholders in order to enter into the Credit Agreement with the Bank and for the very implementation of the LNGT project (hereinafter – the Project);
The Bank must be provided with the evidences that the Europe Commission has given its confirmation (does not contradict) for the granting of the State guarantee in accordance with the Credit Agreement, whereby performance of the financial obligations of the Company towards the Bank according to the Credit Agreement are assured;
The Bank must be provided with the Credit Agreement which is appropriately constituted and confirmed, the form and the content of which are acceptable for the Bank;
The Bank must be provided with the legal conclusion regarding the fact that all identified terms are met appropriately and all necessary documents from the Company's side are presented in order to enter into the Credit Agreement. The legal conclusion must be submitted in the manner and the content that are acceptable for the Bank. It must be provided to the Bank before the signing of the Credit Agreement;
The Bank must be provided with the evidences that all design, procurement and construction contracts (EPC contracts) related to the Project between the Company and the relevant parties of these contracts are appropriately constituted, valid and all conditions precedent identified in such contracts are appropriately performed or application of such preconditions is cancelled.
The obligations of the Company and (or) its subsidiary company in addition to the above are the following:
Not to repay before the term any credits issued by other financiers except when a written advanced confirmation from the EIB for prescheduled repayment is received; or the refinanced credit issued in accordance with revolving credit agreement (overdraft); or the credit is refinanced from the credit funds, the term of which is the same as the refinanced credit or longer, is allowed;
To repay the credit issued or its part by the request of the EIB, in case the Republic of Lithuania as a shareholder quits controlling the Company;
To maintain total ownership of 100% of shares of subsidiary companies which own by the right of ownership or manage any other property that is the part of the LNGT;
Not to transfer (i.e., to sell, to assign, to rent or to transfer in any other manners) any property of the Company or its subsidiary companies without the advanced written consent of the EIB except in cases, when:
the property is transferred for the market price:
when the market price is higher, the remuneration value of the transferred property for the term of the credit does not exceed 20% of value of the consolidated long term assets of the Company as of 31 December 2012;
the property is sold under execution of regular selling activity;
the property is assigned in exchange for another property of similar or equal type, value and quality; or
having received the advanced written consent of the EIB, in every case except the property which composes a part of the LNGT project property and majority ownership in subsidiaries of the Company which possess the LNGT assets, is not allowed to be transferred;
and
the property composing a part of the LNGT is transferred to a subsidiary company under 100% management of the Company;
it is not allowed to charge (to pledge, to assign receivables, etc.) the property of the Company's own or its subsidiary companies in any way. This limitation is not applicable, if the following is assured:
debt not bigger than EUR 100 million intended to finance the LNGT project;
debt obligations under the State guarantee;
all debt obligations intended to finance the oil terminal activity and (or) capacity addition or developing the terminal activity in any other way and (or) its infrastructure should not in total exceed EUR 30,000 thousand This limitation is not applicable to assure execution of the above mentioned obligations; or
for the Company being engaged in its regular activity or executing everyday trade transactions over activity of the terminal of oil and (or) oil products and (or) regarding the working capital with the condition that mean of guarantee is to be invalidated during 12 months and an agreement or transaction is not to be constituted firstly as a method of financing of credit provision or property acquisition;
to inform the EIB about any more favourable conditions provided to other creditors or any more strict obligations undertaken to other creditors and the EIB has the right to require to amend the Credit Agreement with more favourable conditions for itself or with more strict obligations toward the Company if the Company undertakes such obligations to other creditors.
2 July 2013. The Extraordinary General Meeting of Shareholders of the Company also:
Entitled the General Manager of the Company to resolve regarding conditions of lending, which are to be provided in the EIB offers for payment including but not limited to:
Entitled the General Manager of the Company to sign the Credit Agreement with the EIB according to the essential provisions of the Credit Agreement, which have been approved by the Board, and for which the confirmation of the General Meeting of shareholders of the Company has been also received, as provided in Article 16.10 in the Articles of Association of the Company.
dated 28 June 2013. This ruling of the Supreme Court of Lithuania is final and cannot be appealed. This ruling has finished the dispute related to the international procurement "Natural Gas Pipeline System Engineering, Procurement and Construction (EPC) Works" by way of negotiated procedures with publication of a tender notice, and the Company by announcing the German consortium PPS Pipeline Systems GmbH as the winner of has not violate any requirements of legal acts.
8 August 2013. The Company received notification from Vilnius Regional Administrative Court regarding submission of the response to the complaint from the owners of the part of land plots, via which the LNGT connective main gas pipeline route is planned to be lined in accordance with technical projects of construction, which are under development at the moment. Submitting this complaint the claimants requested to annul the Decree No.1-130 of the Minister of Energy of the Republic of Lithuania dated 13 June 2013 (hereinafter referred to as the Decree), which has approved the Special plan of construction of the LNG terminal, related infrastructure and gas pipeline, and, in addition to the above, is providing a possibility to line the mentioned gas pipeline route through the land plots that are possessed by the claimants. The Company is involved in the case as third related party.
The opinion of the Management of the Company is that the complaint is unjustified and the Company will submit its response to it during the term identified by the Court.
Following order of the Law of the Republic of Lithuania, all Company related material events and information about time and place of the General Meeting of the shareholders are published on website of the Company www.oil.lt and in AB NASDAQ OMX Vilnius Stock Exchange.
During the first six months of 2013 the Company has published 72 official announcements about material events and other regulated information at AB NASDAQ OMX Vilnius stock exchange (www.nasdaqomxbaltic.com).
During the first six months of 2013 the Company transhipped 3,569 thousand tons of oil products. 63% (65% in 2012) of the total transhipment volume was transhipment of heavy oil products (HOP). The fluidity of HOP depends on the product temperature and ambient temperatures, and due to this these products are energetically more favourable during decanting. The following oil products are attributed to HOP: types of fuel oil and its substitutes, vacuum gas oil, orimulsion, oil ant etc. Light oil products (LOP) are oil products, the fluidity of which does not depend on the product temperature and ambient temperatures. The following oil products are attributed to LOP: types of gasoline, diesel fuel, jet fuel and etc.
During the six-month-period of 2013 Belarusian and Russian oil products flows (1,368 thousand tons) compared to the six-month-period of 2012 (1,569 thousand tons) decreased by 13%, compared to the six-month-period of 2011 (1,967 thousand tons) – transhipped less by 30%. The Company anticipated the trends of decrease in heavy oil products from Belarus and Russia due to the planned modernization of oil refineries increasing the oil processing depth and decreasing the output of HOP which are the main oil products transhipped by the Company from the eastern oil refineries.
In order to ensure the revenue during the period of changes in 2012 the Company signed a two years contract with the Swiss company Litasco S.A. (OAO Lukoil Group Company) on supply of black oil fuel under "take-or-pay" conditions ensuring the Company's revenue will be not less than in 2012, regardless of variations on the physical flows of oil products. The same type of contract was signed with the company Somitekno Ltd on transhipment of vacuum gas oil. The Company, taking into account the changes in the market, is oriented and plans to continue the conclusion of new contracts with customers under "take-or-pay" conditions, because they provide a stable income from carrying out the main operations even if the supply of oil products is irregular.
A long-term contract (by the end of 2024) concluded with AB Orlen Lietuva ensures the basic handling flows of fuel oil, gasoline and diesel fuel. During the six-month-period of 2013 loading of AB Orlen Lietuva oil products composed 61% of the total oil products transhipment of the terminal. During the reporting period AB Orlen Lietuva transhipped 25% or 431 thousand tons more of oil products compared to the same period of 2012. The transhipment could be even bigger; however, due to unfavourable fluctuations of oil refinement margins, production at the Mažeikiai FRP and transhipment was decreased starting from the beginning of second quarter.
After the approval of the share emission agreement with the Republic of Lithuania on 11 June 2012, the Company started to manage the Subačius fuel storage facility in Kunčių village, Kupiškis region. The infrastructure of the Subačius fuel storage facility consists of the following: (1) the park of 338,000 m3 of storage tanks adapted to store light oil products; (2) the rail access point modernized in 2007 which can simultaneously handle 14 rail tank wagons; (3) modern rail tank loading platform; (4) renovated laboratory that can detect the main quality parameters of oil products; (5) vehicles and other service buildings and equipment.
The main operations of Subačius fuel storage facility are the following: long-term storage of oil products (currently the majority of storage tanks are filled with the obligatory reserve of oil products of Lithuania), and the loading of tank trucks which service the entities in the Aukštaitija region. In addition, the Company is carrying out social activities which create the opportunity for the local residents and legal entities having the status of social companies to receive services of sanitation, passenger transport, snow clearing and other services of heavy transport under favourable conditions.
The main competitors of the Company are the following terminals of the Baltic Sea ports, reloading dark and light oil products exported from Russia, Belarus and Lithuania: Kroviniu Terminalas (Lithuania), Ventspils Nafta (Latvia), Ventburkers (Latvia), BLB (Latvia), Naftimpex (Latvia), Alexela (Estonia), Vopak EOS (Estonia), Vesta (Estonia), terminals of Odessa, Sevastopol and Feodosia (Ukraine), Peterburg Oil Terminal (Russia), newly built Ust-Luga terminal (Russia). The most significant factors influencing the competitiveness of the Company on the market are as follows: technical parameters of the port and terminal (depth and number of quays, maximum allowable draughts of the ships, storage capacity of the terminal, capacity of the loading equipment etc.) and logistic costs of the terminal maintaining infrastructure (road lines, railway nets, etc).
The Government of Russian Federation aims to export all oil products produced in Russian Federation refineries via Russian ports, therefore Russian Federation offers advantageous conditions for transporting freights through national ports thus stimulating national competition of the ports in regard to foreign ports.
The Company has an excellent reputation, engaged part of the market, concluded long-term agreements with cargo owners and has an ice-free port of Klaipėda, so it is hopefully that the Company will maintain flows of Russian and Belorussian cargo in winter time.
AB ORLEN Lietuva is the main client of the Company, whose load volume through the Company composes more than 60 percent of the total annual transhipment volume of the Company. The Company has signed a long-term contract with AB ORLEN Lietuva until 2024; conclusion of this contract lets the Company hope for regular flow of loading of oil products.
Annual loading volumes of Belarusian oil refinery products comprise about 30 percents of the total loading volume of the Company's terminal. Since Belarus has no direct access to the sea, exporting oil products to the Western countries Belarus must use transit via neighbouring countries and their ports. Therefore cooperation with Belarusian companies and institutions is of high importance seeking to divert their load through Klaipėda port.
Due to the significant share of Belarusian transit of oil products in Company's activities there is a risk (including but not limited to political, economic, etc.) that the Belarusian oil refineries may decide to export oil products using ports of other countries (Latvian, Estonian or Ukrainian). The Company may not be able to find new customers within short period of time which would replace the lost transhipment volume and, therefore, may not be able to maintain the same volume of transhipment of oil products as in previous years.
Capacity utilization as well as earnings and profitability of the Company highly depend on the situation on the oil market. In case of low oil refining margins oil refineries reduce the volume of oil refining, i.e., produce less oil products which could be exported using the Company's or other competitive terminals. Therefore, due to less profitable oil refining and the relatively decreasing flows of export oil products, the competition for transhipment of these flows is becoming more intense and it affects transhipment volume of the Company and the size of applied tariffs. If the oil refining margins are high, the reverse processes are observed.
The allowed draught of 12.5 meters at jetties No. 1 and No. 2 of Klaipėda State Seaport which are operated by the Company, creates disadvantage among other Baltic countries seaports. At the terminals of Ventspils and Tallinn the allowed depth exceeds 14 meters which enables a full load of Aframax type tankers (up to 100,000 tons). Klaipėdos Nafta, because of the restrictions of allowed draught of up to 12.5 meters can load such type of tankers only up to 80-85 thousand tons. Therefore, Klaipėdos Nafta loses its competitive edge against the neighbouring ports as this translates into higher marine logistics costs for oil products shipped by Aframax type tankers.
Governments of Russian Federation and Belarus strictly regulated oil and its products export from the country by establishing strict export quotas and tariffs of oil products transported by railway, giving preference to one or another port. There is a possibility that both in Russian Federation and in Belarus decisions regarding the quotas issue and exportation via specific state ports as well as application of railway tariffs preferences may be made based on not only economic but also political motives.
Consequently, there is a risk that political decisions adopted by Russia and Belarus, relating to the granting of quotas of oil product export to particular foreign ports or reducing such quotas to Klaipeda port, despite the strategically advantageous geographic position of the Company, would lead to the decrease in the transhipment volume of the Company.
Also an additional risk exists that EU may apply economic sanctions to Belarus because of political reasons related to regime of president of Belarus A. Lukasenka. Such economic sanctions may determine restriction or suspend import of appropriate goods or products which were made in Belarus to EU countries, also trade relations between EU and Belarus may be absolutely terminated. It was considered that Belarus may apply responsive economic measures and to restrict export of oil products which were made inside Belarus through EU terminals even if EU economic sanctions for Belarus would not be applied for export and import sector of oil products. For this reason there is a risk that any economic sanctions that EU applies to Belarus would reduce scope of oil products made in Belarus and loaded by the Company.
The distance from the Company's terminal to the main oil refineries, which are the producers of oil products, is shorter than the distance from these refineries to the Latvian and Estonian oil terminals. Therefore, it is economically more favourable to tranship oil products from these oil refineries through the Company's terminal and Klaipėda Port than at the neighbouring terminals located at the Baltic Sea ports. However, if the Government of the Republic of Latvia or the Latvian Railways decide significantly reduce their transit tariffs, a risk may arise that it will be economically more favourable for certain customers to tranship their oil products at the terminals of Latvian ports (or even to transport oil products by railway to the terminals of Estonian ports). Nonetheless, the advantageous geographic position of the Company helps to reduce such risk.
Technological characteristics of the terminal are of major importance for quick and effective satisfaction of potential customers' needs and at the same time for generation of additional income.
Actual investment plans to expand the park of berth storage by 10 percent, making opportunities to tranship light oil products and heavy oil products via these storage tanks, would allow in future to tranship vessels of larger tonnage and broaden the assortment of transhipped products. Equipped terminal complex located on the area of 35.7 ha is capable to handle up to 9,000 thousand tons of exported and imported oil products per year. Total volume of oil and oil products storage tanks in Klaipėda – 405 thousand m3. Every freight batch from different refinery is stored separately in storage tanks, i.e. is not intermixed. It allows saving quantity and quality of transported products. Quality parameters are controlled by the terminal laboratory.
Tankers of capacity up to 100 thousand tons with allowed draught of 12.5 m are handled at two jetties which are located at the port entrance channel which was dredged to 14 meters depth. The Terminal operates a facility for road tanker loading where four road tankers can be loaded at the same time. A unique biological waste water treatment technology guarantees that the treated clear water, discharged into open water basins, complies with the European Union regulations. Total capacity of waste water treatment plant is 160 m3 per hour. Up to 400 thousand m3 of water is collected and treated annually.
The Company's oil terminal equipment was manufactured by the following Western and USA companies: "KANON", "BORNEMANN", "INGERSOLL DRESSER", "ROTORK", "ENRAF", "ROSSMARK", "AEG" and etc. Also installed are AJAX-HEKATRON automatic fire detection and extinguishing system, HONEYWELL shutdown system and BAILEY computerized control system of the transhipment process.
| Risk | Description | Commentary/Risk management |
|---|---|---|
| Regulatory and political |
Relevant legislation may not be approved or adopted legislation may be amended |
LNG terminal project has made a significant progress and important changes in project's legal or regulatory environment could result in significant losses due to the financial and/or legal commitments already made. After the parliamentary elections held in October 2012, the new country's Government was elected, which defined the field of energetics as one of the priorities. The new Prime Minister of Lithuania, A. Butkevičius, and the designated Minister of Energy, J. Neverovičius, have repeatedly mentioned in their speeches that the new government supports the LNG terminal project and seeks for its rapid implementation. The Minister of Energy has supported the project by signing the Letter of Support addressed to financial institutions. The Parliament of the Republic of Lithuania adopted a Law on the Liquefied Natural Gas terminal on 27 June 2013, which aims at regulation of general principles and requirements for construction of LNG terminal within the territory of the Republic of Lithuania, its operation and usage, as well as establishing adequate legal, financial and organizational conditions for implementation of the LNG terminal project. |
| Construc tion |
Construction works of the jetty and pipeline may take longer and cost more than expected |
Construction works of the jetty and pipeline were procured by signing Engineering, procurement and construction (EPC) type agreements. In such a way, schedule and cost of the works are indicated during the conclusion of the contract with the contractors. All the risks associated with these activities not completed on time and the increase in the price of work is transferred to the contractor. Various instruments are used to secure the contract (for example, pre-payment guarantee, performance guarantee, guarantee for defect adjustments, payment detentions for defect adjustments, etc.). The schedule and construction costs of the LNG terminal project were estimated according to suggestions of the main consultant of the projects, Fluor. Fluor has extensive experience in the development and successful implementation of such projects all around the world. In order to avoid delay in construction works, the Company performs strict monitoring and control of construction works, supervises mutual communication between contractors. |
| Financing | The Company may not receive the necessary funding for the consytuction of the infrastructure of the LNG Terminal |
The NCC has already approved the LNG terminal investment plan (LTL 452,965 thousand) Klaipėdos Nafta has also signed an agreement with Nordea Bank Finland Plc. on the overdraft of LTL 120,000 thousand. The Company has signed the Contract with the EIB regarding the credit up to LTL 300,000 thousand (EUR 87,000 thousand) granting for the LNGT project implementation. According to the Contract the EIB will finance up to 50% of the funding necessary for the Project implementation. The Parliament of the Republic of Lithuania and the Government of the Republic of Lithuania resolved to grant the State guarantee to the EIB regarding the credit issued for the Company, notification procedure of the State assistance is performed with the European Commission. |
| Third parties |
The delivery of the vessel-storage to the port of Klaipeda may be delayed |
Höegh LNG is one of the leading maritime companies supplying the technologies of LNG transportation and regasification. The company has received the loan of EUR 250,000 thousand for the construction of LNG terminal's vessel-storage for Klaipėdos Nafta. The specialists of both, Höegh LNG and Klaipėdos Nafta supervise the |
The pipeline Jurbarkas – Klaipėda
may not be completed on time schedule.
launch of the LNG Terminal.
construction works of the vessel-storage in South Korean Hyundai Shipyard according to the strict schedule. The construction works are performed on
The construction works of the main pipeline Jurbarkas - Klaipėda has already been started and should be completed in 2013, i.e. earlier by one year than the
| Risk | Description | Commentary/Risk management |
|---|---|---|
| Force majeure |
Fire, explosion, etc. | Klaipėdos nafta has a comprehensive insurance coverage of force majeure risks. |
| Environ mental |
Obtaining of permits for territory planning and construction might be delayed due to environmental or political reasons |
The Environmental Impact Assessment (EIA) report was adopted and approved by all concerned authorities. The special plan has been agreed and approved by the order of the Minister of Energy of the Republic of Lithuania. All environmental issues are resolved at the level of the Government, by delegating of tasks to appropriate offices. |
The Company performing its activities must follow the legal acts on environment protection that provide the usage, marking and storage of various materials, ensure that all equipment used would comply with their usage requirements. In the objects operated by the Company, where is the higher risk of damage to the environment by emitted pollutants or amount of accumulated waste, the Company works according to the licenses of integrated prevention and control of pollution (PIPC) issued by the regional departments of environment protection and according to the most accessible methods of production. The Company is obliged, in compliance with all these rules, to implement such procedures and technologies that would enable to handle appropriately any hazardous materials. The Company is responsible for the management and elimination of any environmental pollution and for the maintenance of adequate equipment condition.
In order to reduce the environmental risks, the Company implemented the systems of automatic fire detection and extinguishing, computer-assisted loading process control, and technologies for air, soil and water protection from pollution in accordance with the EU standards. The management of systems for extreme situations, fire protection and territory protection comply with the requirements of the Republic of Lithuania institutions of fire protection, labour security, civil safety, environment protection, port control. The inspectors of British Petroleum and SHELL which carried out the danger and risk analysis and evaluation of the Company gave positive conclusions on the safety of the Company's terminal.
For further reduce of the environment pollution by hydrocarbon vapours, the Company has finished the LOP project and the construction of oil vapour recuperation.
During 2013, the Company did not experience any accidents or malfunctions which could affect environment. The Company performs constant environmental monitoring of:
During the six-month-period of 2013 the expenses for environment protection amounted to LTL 1,526 thousand (during the six-month-period of 2012 – LTL 1,407 thousand). Additionally during the six-month-period of 2013 LTL 28 thousand (during the six-month-period of 2012 – LTL 61 thousand) were allocated for different environmental studies (investigation of pollutants and etc.) and LTL 8 thousand of pollution tax was paid (during the six-month-period of 2013 – LTL 11 thousand).
Sales revenues of the six-month-period of 2013 - LTL 72,070 thousand; if compared with the revenues of the same period in 2012 (LTL 68,105 thousand) it increased by LTL 3,965 thousand. Increase of income was influenced by: revenues from activity of the newly started activity (Augustin 2012) in Subačius fuel storage facility (LT 3,174 thousand) and increased revenues from loading of AB Orlen Lietuva products (AB Orlen Lietuva during the six-month-period of 2013 compared with the same period of 2012, has transhipped by 25% or by 431 thousand tons more of oil products).
The revenues from transshipment services make over 90% of the Company's total revenue (2012 – 85 percent).
The Company earned LTL 21,423 thousand net profit during the six months of 2013, that is by LTL 429 thousand or 2% more if compared with the same period of 2012 (LTL 20,994 thousand). The Company continues successful activity by maintaining the high level of profitability (not less than the level of 2012) and management of the constructions and developing of the LNGT project which is strategically important for the Republic of Lithuania.
The Company did not obtain any new financial obligations during the reporting period. The contract with the EIB, regarding the credit of up to LTL 300,000 thousand (EUR 87,000 thousand) granted for the liquefied natural gas terminal project implementation, was signed on 9 July 2013.
| Indexes of the activity | 30 June 2013 | 30 June 2012 | 30 June 2011 |
|---|---|---|---|
| Transhipment of the oil products (thousand tons, net) | 3,569 | 3,329 | 3,992 |
| Investment (PP&E acquisitions) | 37,556 | 12,839 | 2,529 |
| Financial figures | |||
| Revenues | 72,070 | 68,105 | 79,772 |
| Gross profit | 30,744 | 27,435 | 34,932 |
| EBITDA | 37,157 | 34,742 | 42,945 |
| EBIT | 24,866 | 23,575 | 31,337 |
| Profit before tax | 25,171 | 24,812 | 32,074 |
| Net profit | 21,423 | 20,994 | 27,901 |
| Non-current assets | 472,869 | 433,757 | 387,044 |
| Current assets | 107,958 | 103,243 | 113,934 |
| Total assets | 580,827 | 537,000 | 500,978 |
| Equity | 557,425 | 516,905 | 482,917 |
| Profitability | |||
| Return on equity ratio (ROE) | 8.0% | 8.4% | 12.0% |
| Return on assets (ROA) | 8.9% | 9.1% | 13.0% |
| Gross profit margin | 43% | 40% | 44% |
| EBITDA margin | 52% | 51% | 54% |
| EBIT margin | 35% | 35% | 39% |
| Net profit margin | 30% | 31% | 35% |
| Turnover | |||
| Trade receivable, days | 19 | 11 | 16 |
| Trade payable, days | 18 | 9 | 6 |
| Financial structure | |||
| Debt to equity ratio | 0.04 | 0.04 | 0.04 |
Main ratios of the Company's financial status in thousands LTL, if not indicated otherwise:
AB "KLAIPĖDOS NAFTA" INTERIM REPORT FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2013 36
| Indexes of the activity | 30 June 2013 | 30 June 2012 | 30 June 2011 |
|---|---|---|---|
| Debt ratio | 0.96 | 0.96 | 0.96 |
| Current liquidity ratio | 7.03 | 12.28 | 8.09 |
| Market value ratios | |||
| Share price and earnings per share ratio (P/E), | |||
| times | 11 | 12 | 14 |
| Earnings per share, LTL | 0.06 | 0.06 | 0.08 |
EBITDA = profit before taxation, before interest, depreciation and amortization.
EBIT = profit before taxation, up to result of the financial activity.
Return on equity (ROE) = net profit of the reporting period/average equity capital totally per reporting period.
Return on assets (ROA) = EBIT / average asset totally per reporting period.
Debt ratio = total fixed and current obligations at the end of the reporting period/ total asset at the end of the reporting period.
Current liquidity ratio = total current assets at the end of the reporting period / total current obligations at the end of the reporting period.
The Company's operational objectives for 2013 are associated with the Company's strategy for 2012-2016 that remains unchanged from the beginning of the year. The strategy key plans are:
During the six-month-period of 2013 the Company transhipped 51% of the planned annual transhipment of 2013.
For the remaining period of the year 2013 (2nd half) the Company plans to continue the oil products transhipment and related activities at the same level as in previous periods and also to continue LNGT project works in accordance to the schedule. For the investments both into oil and LNG terminals the Company pays special attention and efforts.
Investments into the oil terminal aim to increase the oil terminal's flexibility for accepting more types of different oil products in order to maintain a high level of profitability from the Company's main activity – transhipment of oil products.
Currently, the Company accumulates different batches of oil products in the shore storage tanks with an overall volume of 405 thousand m3.
In 2013 the Company continues the construction of the two universal storage tanks (2 x 32.25 thousand m3) which replace old storage tanks (4 x 5 thousand m3) which no longer comply with environmental and safety requirements due to their depreciation. Upon realization of this investment, the storage tank park will increase by 45 thousand tons; VOC (volatile organic compounds) emissions from the newly installed storage tanks will be 10 times lower. The investment will increase the Company's flexibility in transhipment of oil products and will enable to tranship additional LOP flows as well as will increase the terminal's attractiveness – customers will be able to accumulate larger batches of oil products (up to 90 thousand tons). The value of the investment amounts to LTL 29,000 thousand. The Company is planning to finish the construction by the end of 2013. Construction works of the storage tanks in 2013 are performed according to the schedule in the Contract.
Besides construction of the new universal storage tanks, the Company is planning to carry out modernization of the existing storage tank pipeline network that will create a technical possibility to use part of HOP storages for the transhipment of LOP.
In June 2013, the Company nearly completed the installation of the system for utilization of hydrocarbon vapour from the rail piers. The purpose of this investment is to modernize the facilities used for collection and utilization of vapours during transhipment of oil products from/to rail tank cars. The mentioned investment amounts to LTL 7,000 thousand. After the six months of 2013, launching and commissioning works of the facilities (coal improvement) are performed till the specified capacities are reached.
The Company is planning additionally invest up to LTL 1,000 thousand in modernization of water treatment facilities in order that the treated water that is discharged to the Baltic Sea would comply with the maximum requirements set by environment control inspections.
The other important implemented investments are: reconstruction of the fire protection system, modernization of the unloading system for the rail tank cars, modernization of boiler steam separation system, renovation of the heat exchangers and other.
The Company's shares are traded on a regulated market. All the shares of the Company are listed in the Baltic Secondary list on the NASDAQ OMX Vilnius Stock Exchange.
| Main data on the Company's shares: | ||
|---|---|---|
| ISIN code | LT0000111650 | |
| Abbreviation | KNF1L | |
| Size of issue (units) | 380,606,184 |
As at 25 June 2013 1,845 shareholders (30 June 2012 – 1,732) held the shares of the Company. All the shares issued by the Company are ordinary registered shares granting its owners (shareholders) equal rights. One ordinary registered share of SC Klaipedos Nafta gives one vote at the General Meeting of Shareholders. The company has not been informed of any agreements between the shareholders which may result in restrictions on the transfer of securities and (or) the voting right.
The shareholders having more than 5 % of the authorized capital of the Company as on 25 June 2013:
| Shareholder (Company's name, type, registered office address, Company Register Code) |
Number of shares (ps.) owned by proprietary right |
Part (%) of authorized capital |
|---|---|---|
| State of LR, represented by Ministry of Energy (Gedimino aven. 38/2, Vilnius, 302308327) |
275,241,290 | 72.32 |
| UAB Concern ACHEMA GROUP (Jonalaukio village, Jonava district, 156673480) |
38,975,150 | 10.24 |
The rest 66,389,744 shares (pcs.) of the Company (17.44 % of the authorized capital) belong to 1,843 minority shareholders.
| Highest price per share |
Lowest price per share |
Price per share at the end of the period |
Average price per share |
Turnover, pcs. |
Turnover | |
|---|---|---|---|---|---|---|
| LTL | 1.30 | 1.18 | 1.18 | 1.25 | 2,167,718 | 2,660,997 |
| EUR | 0.38 | 0.34 | 0.34 | 0.36 | 2,167,718 | 770,678 |
As of 30 June 2013 the Company's market capitalization was LTL 449,442 thousand (EUR 130,167 thousand).
The Company's authorized capital amounted to LTL 380,606 thousand as at 30 June 2013. All the shares of the Company are fully paid and no restrictions on the transfer of securities are applied to them. The authorized capital is divided into 380,606 thousand (three hundred eighty million six hundred six thousand hundred and eighty-four) ordinary shares with a par value of 1 LTL.
The Government of the Republic of Lithuania by the decision No. 204 dated 15 February 2012 "On the investment of state-owned property and the increase of the authorized capital of SC Klaipėdos nafta approved to increase the authorized capital by investing LTL 45,491 thousand assets into the Company.
The Republic of Lithuania which owns 72.32% of the ordinary nominal shares of the company invested in the Company the assets being upon trust of the State Enterprise Lithuanian oil products agency - the Subačius fuel storage facility by increasing the authorized capital of the Company with additional contribution, provided that the Company obliges to rent for the period not shorter than 10 years to the State Enterprise Lithuanian oil products agency a part of the property, which is necessary to assure accumulation of the State reserve of oil products and oil and its maintenance according to requirements of legal acts. Shareholders of the Company that held shares according to the accounting of 14 May 2012 could subscribe for the amount of newly issued shares proportionally to the amount of already existing shares. During the period of distribution of the shares (from 29 May 2012 till 11 June 2012) 38.606.184 issued new ordinary shares have been subscribed, whereas the nominal value of each is LTL 1.
The SFSF incorporation into the Company and conclusion of the long-term (for 10 years) contract with the State Enterprise Lithuanian oil products agency regarding storage of oil products allows the Company to diversify risks of its activity since activity of the Company depends only on a few participants of the oil products market, i.e. Mažeikiai plant and Novopolock and Mozyr oil refineries located in Belarus. After the beginning of a new activity, i.e. storage of fuel reserve, the Company has secured additional guaranteed long-term revenues.
The Company does not have own shares.
On 30 April 2013, the Ordinary General Meeting of Shareholders was held which approved the 2012 financial reports and profit distribution project. The Company allocated LTL 410 thousand (EUR 119 thousand) for shareholders from the Company profit in 2012 (LTL 56,981 thousand or EUR 16,503 thousand in 2011).
The Company has an agreement with Financial Markets Department of AB SEB Bankas for accounting of the Company's securities and related services.
| AB SEB bank Financial Markets Department: | ||
|---|---|---|
| Company code | 112021238 | |
| Address | Gedimino 12, 01103 Vilnius | |
| Telephone | +370 5 2681190 | |
| [email protected] | ||
| Website | www.seb.lt |
In fact, the Company is governed by the Code on Corporate Governance for the companies that are listed on the NASDAQ OMX Vilnius Stock Exchange. New revision of the Code was approved at the Board Meeting of AB NASDAQ OMX Vilnius on 14 December 2009 (Records No.09-106) (Amex to the Annual Report of 2012).
In its activities the Company follows the Law on Stock Companies, the Law on Securities, Articles of Association of the Company and other legal acts of the Republic of Lithuania. The competences of the General Meeting of Shareholders, rights of the shareholders and their realization are defined in the Law on Stock Companies and the Articles of Association of the Company.
The Company's Articles of Association are registered in the Register of Legal Entities and indicate the following management bodies:
the General Meeting of Shareholders,
The Supervisory Board is a body supervising the activities of the Company. It is formed of three (3) members elected by the General Meeting of Shareholders for the period of four (4) years according to the procedure established by the Law on Stock Companies. The number of the terms of office a member may serve on the Supervisory Board is not limited. The General Manager of the Company, a member of the Board of the Company and a person, who under the legal acts is not entitled to serve in this office, shall not serve on the Supervisory Board. The Supervisory Board is a collegial body supervising the activities of the Company, its status, competence and functions have been defined by the Law on Stock Companies and the Articles of Association of the Company. The Supervisory Board has established an Audit Committee as an advisory body. The Audit Committee is comprised of three (3) members elected for the term of office of the Supervisory Board. "The rules of formation and conduct of the Audit Committee of SC Klaipėdos Nafta", approved by the Company's Supervisory Board, regulate functions, rights and duties of the Audit Committee. The key functions of this committee are: observe preparation process of the Company's Financial Statements, observe the process of audit performance, analyze the efficiency of the systems of internal audit and risk management.
The Board is a management body of the Company consisting of five (5) members, who are elected by the Supervisory Board for the period of four (4) years. The Board members elect the Chairman of the Board. The number of the terms of office a member may serve on the Board is not limited. A person who is a member of the Supervisory Board of the Company, who under the legal acts may not serve in this office shall not be elected or serve as member of the Board. The powers of the members of the Board and activities of the General Manager have been determined by the Law on Stock Companies and the Articles of Association of the Company.
| Name, surname | Position | Term of office | ||
|---|---|---|---|---|
| Agnė Amelija Petravičienė | Chairman of the Supervisory Board | February 2013 – February 2017 | ||
| Deputy Head of Law Division of the Ministry of Energy of the Republic of Lithuania. Member of the Board of UAB Visagino Atominė Elektrinė, Member of the Board of UAB Kauno energetikos remontas, member of the Board of VĮ Ignalinos atominė elektrinė. No Company shares owned. |
||||
| Romas Švedas | Member of the Supervisory Board | February 2013 – February 2017 | ||
| shares owned. | Independent expert. Lecturer of Institute of International Relations and Political Science at Vilnius University. No Company | |||
| Eimantas Kiudulas | Member | April 2010 – April 2014 | ||
| Director and Member of the Board of UAB Klaipėda Free Economic Zone Management Company. Member of the Board of UAB LEZ projektų valdymas, Director of PO7, Member of the Board of UAB Quantum capital. No Company shares owned. |
||||
The members of the Supervisory Board were elected during the Extraordinary General Meeting of Shareholders on 11 February 2013. During the six months of 2013 the members of the Company's Supervisory Board did not receive any remuneration, loans, guarantees; no property transfers to them were made.
| Name, surname | Position | Term of office | ||
|---|---|---|---|---|
| Eimantas Kiudulas | Member of the Audit Committee | The term of office of the Supervisory Board |
||
| Director and Member of the Board of UAB Klaipėda Free Economic Zone Management Company. Member of the Board of UAB LEZ projektų valdymas, Director of PO7, Member of the Board of UAB Quantum capital. No Company shares owned. |
||||
| Simonas Rimašauskas | Member of the Audit Committee | The term of office of the Supervisory Board |
||
| Director of UAB "ERPRO". No Company shares owned. | ||||
| The term of office of the Supervisory | ||||
| Linas Sasnauskas | Member of the Audit Committee | Board | ||
| Independent consultant. No Company shares owned. |
During the six months of 2013, for S. Rimašauskas and L. Sasnauskas, the members of the Audit Committee, were paid remuneration in total for LTL 25 thousand. Members of the Audit Committee did not receive any loans, guarantees or assets.
| Name, surname | Position | Term of office | ||
|---|---|---|---|---|
| Rytis Ambrazevičius | Member of the Board | October 2011 – April 2014 | ||
| Independent expert. Member of the Board of UAB LitGas. No Company shares owned. | ||||
| Mindaugas Jusius | Member of the Board | October 2011– April 2014 | ||
| of the Board of UAB LitGas. No Company shares owned. | Member of the Management Body of foreign juridical entity of Lithuanian branch of Swedbank Life Insurance SE, Member | |||
| Rokas Masiulis | Member of the Board | September 2010– April 2014 | ||
| General Manager of SC Klaipėdos Nafta. Member of the Council of Association of Lithuanian Stevedoring Companies, Member of the Board, General Manager of UAB LitGas. No Company shares owned. |
||||
| Valdas Lastauskas | Member of the Board | May 2013 – April 2014 | ||
Chancellor of the Ministry of Energy of the Republic of Lithuania. No Company shares owned.
During the six months of 2013, M.Jusius and R.Ambrazevičius, Members of the Board, received remuneration amounted in total for LTL 34 thousand. The accounted amounts for Member of the Board R.Masiulis comprise only of the sums related to employment in the Company. Members of the Board did not receive any loans, guarantees or assets.
The Company is managed by the General Manager which is a single-person managing body of the Company. The General Manager is the key person managing and representing the Company.
| Name, surname | Position | Works since | ||
|---|---|---|---|---|
| Rokas Masiulis | General Manager | May 2010 | ||
| General Manager of UAB LitGas. No Company shares owned. | Member of the Board. Member of the Council of Association of Lithuanian Stevedoring Companies. Member of the Board, | |||
| Vytautas Kazimieras Aranauskas | Deputy General Manager | May 2010 | ||
| shares owned. | Acting General Manager of State Enterprise Lithuanian oil products agency (VĮ "Naftos Produktų Agentūra"). No Company | |||
| Mantas Bartuška | Director of Finance and Administration Department | May 2010 | ||
| Chairman of the Board of UAB Baltpool. No Company shares owned. | ||||
| Gediminas Vitkauskas | Director of Production and Technique Department | October 1995 | ||
| companies. | Holds 0.00002 % of authorised capital. Does not participate in the management of other | |||
| Sigitas Zakalskis | Director of Commerce | August 2010 | ||
| No Company shares owned. Does not participate in the management of other companies. | ||||
| Rolandas Zukas | Director of the LNGT | December 2010 | ||
| No Company shares owned. Does not participate in the management of other companies. |
The average number of employees (total 361) for the six months of 2013 in comparison to the six months of 2012 (total 312) has grown by 49 employees. The number of employees increased due to the SFSF activity that was incorporated in 2012 (30 employees) and increased number of personnel at the LNGT project, seeking to implement the LNGT project in time, which is strategically important for the Lithuanian Energy.
| Average number of employees Average gross salary per month in LTL |
|||||
|---|---|---|---|---|---|
| Employee group | The six months of 2013 |
The six months of 2012 |
The six months of 2013 2) |
The six months of 2012 2) |
|
| Managers 1) | 31 | 25 | 10,668 | 10,897 | |
| Specialists | 99 | 81 | 4,928 | 4,920 | |
| Workers | 231 | 206 | 3,544 | 3,652 | |
| Total | 361 | 312 | 3,978 | 4,028 |
Notes:
1) The Company's managers consist of: General Manager, Deputy General Manager, Directors of Departments and their Deputies, Heads of Divisions. During the six months of 2013, the Managers of the Company received remuneration in total for LTL 2,190 thousand.
2)Average gross salary per month includes accrued average annual bonuses for the corresponding year.
The Company has a Collective Agreement providing the basic regulations that are applicable to all employees of the Company, such as: payment for work, time of work and rest, advanced training of the personnel, safety and health, other social and economic issues.
The regulation of payment for work of SC Klaipėdos nafta provide the principles and system of remuneration in the Company pursuant to which the salary of an employee consists of two parts: (1) the fixed part – agreed fixed rate or monthly salary (monthly salary is a basic payment, which is paid for the agreed work execution and efforts needed according to the provisions of employment agreement); General Manager of the Company determines this part of remuneration; (2) the variable part – bonuses which are of two types: bonus for quarterly operating results of the Company and bonus for monthly operating results of an employee.
The Board of the Company determines the procedures of remuneration for General Manager, Deputy General Manager and Directors of Departments by setting the fixed monthly salaries and procedure for payment of bonuses. The bonuses are paid on a quarterly basis in accordance to the achieved profit and revenues ratios.
The employees of the Company are awarded with the annual bonuses in case the financial annual results of the Company are achieved in terms of bonuses calculation procedures.
The Company continuously instructs and trains its employees on the principles of safe work. Employees who perform hazardous works and work with potentially hazardous equipment undergo training at licensed centres, re-testing takes place every 5 years. Also training drills and exercises are periodically arranged to train practical skills for emergency response.
During the six months of 2013 there were 2 light accidents related to work
All the financial data in this Annual Report have not been audited and accounted for according to the International Financial Reporting Standards.
The Company did not have any transactions or agreements with the members of its Supervisory Board and the Board. More information regarding transactions with related Parties is detailed in the Explanatory Notes to the Company's Interim Financial Statements for the six months of 2013. From 2012, there were no changes in type of transactions with related parties, which could have made impact on the Company's financial activity.
The activity of the Company is based on the Articles of Association, Civil Code and other laws and sub legislative acts of the Republic of Lithuania. Changes in the Articles of Association can be made by the General Meeting of Shareholders.
Following Article 22 of the Law on Securities of the Republic of Lithuania and the Rules on Preparation and Submission of Periodic and Additional Information of the Lithuanian Securities Commission, we, Rokas Masiulis, General Manager of SC Klaipėdos Nafta, Mantas Bartuska, Director of Finance and Administrative Department of SC Klaipėdos Nafta, Rasa Gudė , Head of Accounting Department, hereby confirm that to the best of our knowledge the above-presented Interim Financial Statements of SC Klaipėdos Nafta for the six months period ended 30 June 2013 gives a true and fair view of the business development and performance, description of the Company.
General Manager Rokas Masiulis
Director of Finance and Administrative Department Mantas Bartuška
Head of Accounting Department Rasa Gudė
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