Interim / Quarterly Report • Aug 28, 2020
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Companies Registration Number 296601000
THIS HALF-YEARLY REPORT HAS BEEN PREPARED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 5, LAW 3556/2007 AND THE CAPITAL MARKET COMMISSION'S DECISION AS REFERRED TO BY THE RELEVANT LAW
MAROUSSI, AUGUST 2020
| 1. | Statements of the Chairman, Chief Executive Officer and Member of the Board of Directors on the true representation of the data contained within this report4 |
|---|---|
| 2. | Board of Directors Half-Yearly Report for the Six Month Period ended 30th of June 2020 (Article 5, Law No. 3556/2007)5 |
| 2.1. Introduction 5 | |
| 2.2. Information required as per par. 6, Article 5 of Law No. 3556/2007 5 | |
| 2.2.1. Significant Events during the 1st half of 2020 and their impact on the Interim Financial Statements 5 |
|
| 2.2.2. Review per Segment – Performance and Financial Position for the 1st Half of 2020 – Major Risks and Uncertainties in the 2nd Half of 2020 – Prospects for the 2nd half of 2020 12 |
|
| 2.2.3. Significant Related Party Transactions (Decision No. 1/434/3.7.2007 Article 3) 19 | |
| 2.3. Additional Information of the Board of Directors' Half Yearly Financial Report (article 4 of Decision No.7/448/2007) 22 |
|
| 2.3.1. Other Financial Information 22 | |
| 2.3.2. Selected Alternative Performance Measures 23 | |
| 2.3.3. Non-Financial Information 26 | |
| 3. | 32 Certified Auditor – Accountant's Review Report regarding the Half-Yearly Report |
| 4. | Half-Yearly Financial Statements33 |
| 4.1. Condensed Interim Consolidated Financial Statements 33 | |
| 4.2. Condensed Interim Financial Statements 34 | |
| 5. | Complimentary Information and Data pursuant to the Capital Market Commission's Decision (Government Gazette Β/2092/29.10.2007)35 |
| 5.1. Published Summary Financial Statements 35 | |
| 5.2. Website 36 |
Pursuant to the provisions of article 5, par. 2c, Law No. 3556/2007, we state that to the best of our knowledge:
The half-yearly interim condensed financial statements which has been prepared in accordance with International Financial Reporting Standards, as they have been endorsed by the European Union and applied to interim financial reporting (International Accounting Standard "IAS 34"), accurately reflects the assets and liabilities, equity and financial results of HELLENIC PETROLEUM S.A. and of the subsidiaries that are included in the interim consolidated financial information of the HELLENIC PETROLEUM Group.
The Board of Directors' half-yearly report accurately represents the information required under paragraph 6, article 5, Law No. 3556/2007.
Athens, 27 August 2020
The Chairman of the Board of Directors
The Chief Executive Officer The General Manager Group Strategic Planning & New Activities, Executive Board Member
Ioannis Papathanassiou Andreas Shiamishis Georgios Alexopoulos
Dear Shareholders,
This Board of Directors' report covers the six-month period ending 30.06.2020 (01.01.20-30.06.20). The report on the Consolidated and Company Interim Condensed Financial Statements has been prepared in accordance with Law 4548/2018 and article 5 of Law 3556 / 2007. The Consolidated and Company Interim Condensed Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as they have been endorsed by the European Union and applied to interim financial reporting (International Accounting Standard "IAS 34").
This report includes selected financial information and results of the Group (HELLENIC PETROLEUM) and the parent company HELLENIC PETROLEUM SA, description of significant events that took place during the first half of the financial year, a description of anticipated significant risks and uncertainties for the second half of the financial year, a disclosure of material transactions that took place between the Company and the Group and their related parties as well as a presentation of qualitative information and estimates relating to the development of operations of the Company and the Group for the second half of the financial year.
The emergence of the new Coronavirus (COVID--19) in December 2019 in China, its rapid spread worldwide and its categorization as a pandemic by the World Health Organization, affected negatively the global economy, impacting industry, tourism and transportation, along with a rapid decline in demand for products and services and disruption of international supply chains. The severity of the pandemic's spread and its impact prompted affected countries to take drastic measures to address it, with a significant negative effect on economic activity, mainly during 2Q20. In 2019, the growth rate of the global economy slowed to the lowest levels post-crisis estimated at 2.4% and lower versus the 3% recorded in the previous year, amid weakening trade and investment. Global growth, according to IMF
1 Bank of Greece, Monetary Policy 2019-2020, July 2020
2 IMF, World Economic Outlook, June 2020
3 ECB, Economic Bulletin, Issue 4 / 2020
4 World Bank, World Economic Outlook Update, June 2020
5 US BEA, Gross Domestic Product, 2nd Quarter 2020 (Advance Estimate) and Annual Update, July 2020
6 Eurostat, Inclusion of GDP estimates for Member States, July 2020
(June 2020), is projected at –4.9% in 2020, 1.9% below the April 2020 forecast. In 2021 global growth is projected at 5.4%.
The COVID-19 epidemic has caused a sharp deterioration in the global outlook for 2020 and caused a temporarily significant reduction in the global economic activity; World Bank forecasts that this will be the deepest global recession since World War II.
Growth in the advanced economy group is projected at –8.0% in 2020, with a deeper hit to activity in the 1H20 than anticipated and a more gradual recovery in the 2H20 as fear of contagion is likely to continue. In the USA, according to OECD, a deep downturn of GDP is foreseen to –8.0% (2Q20, based on US BEA, closed at -32.9%) and unemployment to rise to 11.3% from 3.7% in 2019. Growth in the emerging markets and developing economies is forecast for 2020 at –3.0% with China at +1%. For the first time, all economies are projected to contract in 2020. There are, however, substantial differences across individual economies, reflecting the evolution of the pandemic and the effectiveness of containment strategies as well as variation in economic structure.
In the Euro Area, economic activity deteriorated significantly, with GDP growth in 2019 slowing to 1.3%, compared to 1.9% in 2018 and 2.5% in 2017 with real GDP declining by a record 3.6% q-o-q in 1Q20 and 12.1% in 2Q20, in the context of stringent lockdown policies implemented by most euro area countries from mid-March onwards. In the baseline scenario of the projections, ECB expects annual real GDP for Euro Area to fall by 8.7% in 2020 and to rebound by 5.2% in 2021 and 3.3% in 2022, also affecting employment. In general, the extent of the contraction and the recovery will depend on the duration and effectiveness of the containment measures, the success of policies on incomes and employment and the extent to which supply capacity and domestic demand are affected. In the context of monetary policy, ECB has taken additional monetary easing measures and at its meeting at the end of April, announced additional liquidity enhancing measures to support the flow of credit to households and firms.
The spread of COVID-19 worldwide and in Greece towards the end of 1Q20 overturned the growth prospects of the Greek economy for 2020. OECD projects that the COVID-19 pandemic and containment measures are projected to reduce Greece's GDP by 8% in 2020 if there are no further virus outbreaks (the single-hit scenario), before it recovers by 4.5% in 2021. In the case of a second virus outbreak later in the year (the double-hit scenario), the drop in GDP in 2020 will amount to 9.8%, while unemployment will rise at 19.6% from 17.3% in 2019, increasing further in 2021. However, the losses in output, employment and the budgetary costs from this crisis are projected to be less severe than the crises over 2009-16. At the same time, while Greece has contained the pandemic effectively, the negative impact on tourism, investment and public finances will affect the country's longer-term recovery.
The spread of the COVID--19 and the exacerbation of the refugee-migration problem are having a catalytic effect on the short-term development prospects and are temporarily putting major obstacles in a more sustainable growth path. Also, the high portfolio of the non-performing loans, unemployment, the weak foreign investments and the geopolitical developments, remain the biggest challenges for the Greek economy.
The COVID-19 pandemic had a tremendous negative effect in oil prices with Brent prices reaching in mid-April \$13.24. The Brent price (Platt's Dated) for the first half of 2020 averaged at \$40/bbl against \$66/bbl
7 OPEC, monthly oil market report, June 2020 and July 2020
in the comparative period of 2019, recording a 40% decline. In response to these developments, at an extraordinary meeting in April 9, 2020, OPEC and non-OPEC oil producing countries agreed to cut their overall oil production by c.10 mbpd, starting on 1 May 2020, for an initial period of three months, tapering to 8 mbpd for the rest of 2020 and reducing further to 6 mbpd until April 2022.
Brent-Urals spread in the first half of 2020 was particularly volatile and was on average higher than 1H19, mainly due to COVID-19 pandemic, which had a substantial impact in crude oil demand decline of all crude types, as well as the agreement to reduce global crude oil production in April, leading Brent-Urals spread averaged \$0.9/bbl in 1H120 vs \$-0.1/bbl in 1H19.
The weak cracks in key products (diesel, gasoline) was the key factor shaping the benchmark margins for Med refineries. Based on Reuters, FCC margin averaged \$0.6/bbl in the first half of 2020 vs \$2.7/bbl in the first half of 2019, while Hydroskimmimg amounted to \$0.02/bbl, lower levels vs last year, driven by low FO margins in 1Q20 and negative margins for May and June.
Med FCC benchmark margins (\$/bbl) Med Hydroskimming benchmark margins (\$/bbl)
Diesel Unleaded Gasoline
2019 2020
8 Based on Brent price
In the first half of 2020, the Euro continued to weaken against USD, with the average price at \$1.10, 2.7% lower vs last year with the main factors being the economical political and trade developments in both US and EU. The further USD strengthening was also favored by the global macroeconomics and also from the monetary policy directions of the two central banks.
Global oil demand is expected to decrease by 7.9 mbpd on average in 2020 and to recover by 5.3 mbpd in 2021. The COVID-19 pandemic affected negatively global economic activities, leading to a y-o-y decline of 6.4 mbpd in 1Q20 and, according to IEA, by 16.4 mbpd y-o-y in 2Q20
Following OPEC++ agreement, oil supply outside OPEC countries is estimated to decrease in 2020 compared to 2019, by 3.26 mb/d, reaching on average for 2020, 61.76 mb/d. The oil supply from OPEC countries in 1H20 decreased to 26.9 mb/d from 30.2 mb/d (-10.9%) at the same period last year. Reduced jet and kerosene consumption will affect total oil demand until at least 2022.
The domestic ground fuels demand amounted to 3.3m MT, lower by 2% vs 1H19, as the decline in motor fuels demand due to COVID-19 response measures was largely offset by the large increase in heating oil consumption. The impact of the measures was even greater for aviation and shipping fuels, with their demand dropping sharply in 2Q20 to -94% and -38% respectively.
Tables below present the main financial and operational Group indicators for 1H 2020:
9 OPEC, Oil Market Report, July 2020, IEA Oil Market Report, June 2020 and July 2020
| Operational Data | 1H20 | 1H19 |
|---|---|---|
| Refinery sales (in million metric tons) |
7.51 | 7.69 |
| Marketing sales (in million metric tons) |
1.9 | 2.3 |
| Refinery production (in million metric tons) |
7.5 | 7.27 |
| Group employees (FTEs) | 3,523 | 3,578 |
| Financial Data (in million €)10 | 1H20 | 1H19 |
|---|---|---|
| Net sales | 2,986 | 4,457 |
| Reported EBITDA10 | -341 | 323 |
| Inventory effect – Loss (gain) | 515 | -78 |
| One offs | 17 | 7 |
| Adjusted EBITDA10 | 191 | 252 |
| Reported net income (attributable to the owners of the Parent Company)10 |
-336 | 121 |
| Adjusted net income10 | 21 | 70 |
In the first half of 2020, adjusted EBITDA amounted to €191m (2019: €252m) and adjusted Net Income to €21m (2019: €70m). The weak refining and product margins was the key driver of results, accompanied by the decrease in demand in the core markets of the Group due to COVID-19, which particularly affected the 2Q20, where, due to macroeconomic developments and declining of the global crude oil supply, significant deterioration of the international refining environment was recorded (as presented in detail in the section "business environment") with a negative impact on the Group's operating results. The negative impact of the above was mitigated due to very good operational performance throughout the 1H20.
The above, combined with the significantly high inventory valuation losses (€515m losses vs €78m gains in the first half of 2019) due to crude price developments, led Reported EBITDA at - €341m and Reported Net Income at -€336m.. Losses due to inventory valuation are also reflected in the company's balance sheet, affecting the amount of working capital and total assets, as well as Equity, while Net Debt increased.
The Group, while implementing its new strategy with a development perspective and despite the intense challenges and effects of the Coronavirus pandemic, remains focused on its goal of continuously improving its balance sheet and reducing its financial cost. In the context of development in the energy sector, in February 2020 it proceeded with the acquisition of a 204MW PV plant in the Kozani area, which is one of the 5 largest PV plants in Europe and is expected to generate 300 GWh annualy, sufficient to
10 The selected alternative performance measure indicators are listed in Chapter 2.3.2
power 75,000 homes with zero-emission energy, with a CO2 emission avoidance of around 300,000 tons p.a..
| Balance Sheet / Cash Flow (in million €) | 30.06.20 | 30.06.19 |
|---|---|---|
| Total Assets | 6,597 | 7,296 |
| Total Equity | 1,907 | 2,368 |
| Capital Employed | 3,658 | 3,766 |
| Net Debt | 1,752 | 1,398 |
| Net Cash Flows (operating & investing cash flows) |
(63) | 146 |
| Capital Investments (Cash Flow) | (79) | (78) |
| Gearing ratio – Net Debt / Capital Employed | 48% | 37% |
At the Annual General Meeting of the Shareholders of the Company, that took place on 24.06.2020, HELLENIC PETROLEUM S.A. approved a total dividend of 2019 of €0.50 per share of which €0.25 per share relates to a December 2019.
The main event of the first half of 2020 has, without a doubt, been the Coronavirus pandemic, which has negatively impacted international economic activity, oil industry and the capital markets, with the macroeconomic environment presented in section 2.2.1 (a).
The decline in crude oil prices, the significant fall in refining margins as well as in demand, especially during the 2Q20, have affected the financial results of the Group, with the decline in comparable profitability and the high inventory valuation losses affecting respectively the results and the balance sheet as presented in section 2.2.1 (b) and the IFRS financial statements.
In this environment, HELPE Group's main priorities are the safety of its staff and contractors in its facilities, the smooth operation and supply of the market, as well as ensuring liquidity, so that it can both successfully overcome the current situation, as well as plan for the future, taking advantage of the opportunities that will arise. The management team has developed alternative scenarios and their impact on the operation of the Group in order to adjust the planning for the year and the strategy, where required. HELLENIC PETROLEUM Group personnel has demonstrated the ability to respond to difficult conditions, providing optimism for the future. In addition, the Management monitors closely the developments, examines the possible scenarios and evaluates its strategy accordingly, making adjustments where required.
The Group also immediately responded to the outbreak of the pandemic and since the end of February has taken various initiatives, primarily focusing on ensuring the health and safety of its employees and all of its stakeholders, as well as the smooth operation of its activities and uninterrupted supply of our markets.
These initiatives include:
The evolution of the pandemic, in Greece and globally, is expected to affect the financial results and statements for at least 2020 and 2021. It is not possible to estimate the impact as it is defined by drivers that the Group cannot influence, such as international oil prices, benchmark refining margins, euro/dollar exchange rate, domestic and regional demand etc.. The competitive asset base, logistics infrastructure, strong operating performance and adequate financial liquidity are competitive advantages that will support the Group in managing the crisis.
HELLENIC PETROLEUM Group's main segments of business activity include:
The Group's activities during the first half of 2019 and the outlook for the second half are analysed below:
Refining, Supply and Trading of petroleum products constitute the core activity of the HELLENIC PETROLEUM Group. The Group operates in the refining sector through the parent company, HELLENIC PETROLEUM S.A. In Greece, the company operates three refineries: an FCC refinery in Aspropyrgos, a Hydrocracking refinery in Elefsina, both of them in Attica, and a Hydroskimming refinery in Thessaloniki.
During the 1st half of 2020, the Group's refining activity is summarized below:
| Refinery | Annual Nominal Capacity (Κbpd) |
Crude & Intermediate products processed (ΜΤ'000 |
Final & Intermediate Products output (MT'000) |
|---|---|---|---|
| Αspropyrgos | 148 | 3,887 | 3,620 |
| Thessaloniki | 90 | 1,829 | 1,775 |
| Εlefsina | 106 | 3,158 | 2,849 |
| Inter-refinery | (744) | (744) | |
| Total | 8,130 | 7,501 |
The first half of 2020 was driven by increased volatility and was affected by the COVID-19 pandemic, but the improved Refining and Fuels Marketing performance and the Group supply optimization, partly outweighed the decline in the international refining margins and the reduction of domestic market sales. Increased refining availability led to a significant exports increase, keeping the total sales at 7.5m MT (- 2%). Aspropyrgos refinery successfully completed the first full half-year of IMO operation model, supplying the market with a complete range of products, with a substantial change in the crude mix and required adjustments on operation and working capital.
HELPE benchmark margin stood at \$2.1/bbl, \$2.0 lower than last year, reaching the lowest levels in the last few years, due to the word wile pandemic consequences.
| st 1 Half of 2020 (MΤ'000) |
st 1 Half of 2019 (MΤ'000) |
|
|---|---|---|
| Domestic Market | 2,091 | 2,143 |
| International Sales | 780 | 1,227 |
| Εxports | 4,657 | 4,320 |
| Total | 7,528 | 7,690 |
Refining, supply and trading results are affected by external factors such as:
The international environment keeps being driven by volatility and increased uncertainty, so both demand and oil production depend on the pandemic evolution. Additional risk factors that will affect the benchmark margins are developments in the supply of crude oil, the increase in global refinery capacity due to the operation of new refineries and the level of refinery utilisation both globally and regionally. HELPE Group refineries are expected to continue their positive contribution, based on market conditions.
HELLENIC PETROLEUM is conducting studies and implements investments with the objective of safety improvement, energy efficiency and optimisation of its refinery units. In addition, particular attention is paid to the use of all the benefits that could potentially arise from synergies between the Group's refineries, especially with the operation of Elefsina refinery. Therefore, HELLENIC PETROLEUM is constantly seeking to improve safety and the operational performance of its refineries.
The HELLENIC PETROLEUM Group operates in the Petrochemicals sector through a Propylene production unit in the Aspropyrgos refinery, as well as through its Polypropylene (PP) and Solvents production plants in Thessaloniki. Furthermore, the Group owns a ΒΟΡΡ film production unit (through its subsidiary "DIAXON" located in Komotini).
In the first half of 2020, total Petrochemical sales volumes amounted to 140 thousand tones at the same levels of the corresponding period in 2019.
| Product | st 1 half of 2020 (ΜΤ'000) |
st 1 Half of 2019 (ΜΤ'000) |
|---|---|---|
| Polypropylene | 114.0 | 111.5 |
| Solvents | 10.0 | 13.7 |
| ΒΟΡΡ film | 14 | 13.9 |
| Traded goods/Others | 2.9 | 2.7 |
| Total Sales | 140.9 | 141.8 |
Petrochemical sales per product are as follows:
International Petrochemicals is a cyclical, capital intensive industry with capacity surplus. Petrochemicals' margins which affect the profitability of the industry are highly volatile and driven by supply/demand conditions as well as the macro environment.
During the first half of 2020, the key performance drivers were as follows:
During the 2nd half of 2020, following international market developments, sales volumes are estimated to remain within the Business Plan range.
The Group is active in the marketing of oil products through its subsidiary company EKO in Greece and its subsidiary companies in the Balkans and Cyprus.
During the 1st half of 2020, marketing sales were as follows:
| st 1 Half of 2020 |
st 1 Half of 2019 |
|
|---|---|---|
| (MT' 000) | (MT' 000) | |
| Domestic Market | 1,134 | 1,227 |
| Bunkering and Aviation, Exports | 330 | 571 |
| Domestic Marketing Sales | 1,464 | 1,798 |
| International Marketing Sales | 457 | 502 |
| Total | 1,921 | 2,300 |
In Greece, EKO total sales of petroleum products amounted to 1,464 thousand MT, in the 1st half of 2020, increased by -19% compared to the same period last year. The number of petrol stations amounted to 1,711 vs 1,724 in 1H19.
The traffic restrictions from the second fortnight of March onwards due to COVID-19 and the subsequent lockdown imposed, resulted in significant drop of market demand in auto fuels as well as industrial fuels. Heating gasoil sales recorded an increase limiting the overall decline in domestic market fuels to -8% compared to last year.
The impact of COVID-19 was stronger in aviation and bunkering sales where the restriction of ferry routes and domestic flights, as well as the minimal tourist traffic resulted in a drop of sales by -42% compared to last year.
During the second half of 2020, depending on the conditions that will prevail in the market and in tourism, Group's domestic marketing aims at the gradual recovery of retail sales as well as increasing Aviation and Marine sales. EKO will continue implementing its business plan which focuses on increasing market share while further improving operational profitability and liquidity, as well as the value offered to the consumer through innovative products & high quality services at competitive prices.
The number of petrol stations in Cyprus, Montenegro, Serbia and Bulgaria amounted to 286 (against a total of 282 in 1H19). In 1H20, total sales volumes of International Marketing activities amounted to 457 thousand tones vs 502 thousand tones (-9%), mainly due to the drop in the overall fuel consumption as a result of the COVID--19 pandemic and the restrictive measures applied by the governments in which the Group operates.
For the first half of 2020, the International Marketing sector recorded a decline in operating profitability due the decrease in the value of the inventories along with the shortfall in volumes observed in all of the countries that the Group operates.
For the second half of the year, a gradual recovery of the fuel demand is expected leading to a gradual recovery of performance subject to market conditions.
HELLENIC PETROLEUM Group is also engaged in the exploration and production of Hydrocarbons (upstream) sector. Its main activities are focused in Greece:
The Group's power and natural gas activities relate to the Group's participations to ELPEDISON BV (50% HELLENIC PETROLEUM S.A., 50% EDISON) and DEPA S.A. (35% HELLENIC PETROLEUM S.A., 65% Greek State) respectively.
Results of ELPEDISON BV during the first half of 2020 were significantly increased, compared to the same period in 2019, as higher margins in both electricity generation and retail sectors, counterbalanced the decreased electricity consumption due to COVID-19 pandemic.
The main drivers having a positive effect to the electricity market in 1H20 were: lower costs of natural gas due to uncertainties related to the pandemic and due to cheaper LNG imports, which, combined with increased cost of CO2 emission rights, led to increased production from natural gas fired plants.
In the retail electricity market, the Company's market share increased to around 5% (June 2019: 4%, Athens Energy Exchange), with the expansion of its customer portfolio in Low and Medium Voltage (domestic and industrial customers) despite ever-increasing competition from alternative electricity suppliers. In 1H20, Elpedison strengthened its position in the liberalized market of Natural Gas supply, expanding its customer base, mainly in the regions of Attica, Thessaloniki and Thessaly. In addition, the Company still imports significant quantities of Liquefied Natural Gas through DESFA's Revithoussa terminal, part of which are allocated to the wholesale market.
In the second half of 2020, Target Model is expected to commence operations in the Greek energy market, after a period of substantial delays. Concerning the Company, new actions are in place and / or planned, to further expand the customer base and market share, both in electricity and in the supply of Natural Gas.
In the first half of 2020, domestic Natural Gas consumption increased marginally by 2.2% compared to the same period of 2019. The cost of Liquefied Natural Gas (LNG) remained low, a fact that, combined with the upgraded capacity of the Revithoussa station, enabled alternative supply to large DEPA customers, such as electricity producers, leading to a reduction in DEPA's sales and market share. The above environment of intense competition, led to a decrease in DEPA Group's contribution to the profits of HELLENIC PETROLEUM Group, compared to the first half of 2019.
In the context of DEPA's transformation process, "DEPA INFRASTRUCTURE S.A." was established on 30/04/2020, with the registration and publication in the General Commercial Register (G.E.M.I.) of the decision of the General Meeting of the Shareholders of DEPA on the partial division of the infrastructure sector of DEPA and its transfer to the new Company. "DEPA INFRASTRUCTURE S.A." includes, among others, the participations of DEPA S.A. in the companies "EDA ATTIKIS S.A." (100%), "EDA THESSALONIKIS - THESSALIAS S.A." (51%) and "DEDA S.A." (100%). In addition, in May 2020, the split-off of "DEPA INTERNATIONAL PROJECTS S.A." was completed, and "DEPA S.A." was renamed to "DEPA COMMERCIAL S.A.".
In December 2019, the Hellenic Republic Asset Development Fund (HRADF) launched an international public tender process for the joint sale, along with HELLENIC PETROLEUM SA (HELPE), of the 100% in the share capital of DEPA INFRASTRUCTURE SA. In June 2020, Phase A of the tender process was completed, with six interested parties meeting the criteria to participate in Phase B (Binding Offers Phase).
In January 2020, the HRADF launched an international public tender process for the sale of 65% in the share capital of DEPA Commercial S.A. The Fund and HELPE have entered into a Memorandum of Understanding (MoU) allowing for the preferred investor to have the option to acquire the remaining 35% of shares in DEPA Commercial S.A. owned by HELPE, leading to an acquisition of 100% of its share capital. In June 2020, Phase A of the tender process was completed, with seven interested parties meeting the criteria to participate in Phase B (Binding Offers Phase). HELLENIC PETROLEUM S.A. is among the interested parties, in a joint venture with EDISON INTERNATIONAL HOLDING N.V.
The tender process regarding DEPA INFRASTRUCTURE is expected to be finalized by the end of 2020, while completion of the respective process for DEPA COMMERCIAL is expected in 2021.
The activities of the Group are focused on oil refining, as well as petrochemicals, fuels marketing and Exploration & Production, with participation in electricity generation and trading and natural gas. Therefore, the most significant risks that could affect the Group's operations in 2H20 and which are exacerbated by the global crisis from the effects of the COVID-19 pandemic, are the developments that shape the supply of crude oil, fluctuations in crude oil prices, oil products demand, EUR/USD exchange rate volatility, risks of fair value fluctuations due to interest rates variations, changes in refining margins as well as the changes and utilization levels of refining capacity both globally and regionally as well as the developments in the overall macroeconomic environment, not only globally and regionally, but also domestically.
The main event of the first half of 2020 has, without a doubt, been the Coronavirus pandemic, which has negatively impacted international economic activity, oil industry and the capital markets.
HELLENIC PETROLEUM Group is ready to respond to these challenges with its strong balance sheet, framework and risk management policies, as well as our extensive experience in dealing with crises. In the first months of the crisis, economy experienced unprecedented disruptions in nationally and globally, as well as in the international energy industry. HELPE Group's main priorities are the safety of its staff and contractors in its facilities, the smooth operation and supply of the market, as well as ensuring liquidity, so that it can both successfully overcome the current situation, as well as plan for the future, taking advantage of the opportunities that will arise. The management team has developed alternative scenarios and their impact on the operation of the Group in order to adjust the planning for the year and the strategy, where required. HELLENIC PETROLEUM Group personnel has demonstrated the ability to respond to difficult conditions, providing optimism for the future.
The Group also immediately responded to the outbreak of the pandemic and since the end of February has taken various initiatives, primarily focusing on ensuring the health and safety of its employees and all of its stakeholders, as well as the smooth operation of its activities and uninterrupted supply of our markets.
These initiatives include:
Adopting a timely and successful new remote working model (teleworking) where possible, remotely supporting information systems and modifying shift programs.
The interim condensed consolidated statement of comprehensive income includes transactions between the Group and related parties. Such transactions mainly comprise sales and purchases of goods and services in the ordinary course of business.
Transactions have been carried out with the following related parties:
| For the six month period ended | ||||
|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | |||
| Sales of goods and services to related parties | ||||
| Associates | 425.781 | 177.128 | ||
| Joint ventures | 455 | 583 | ||
| Total | 426.236 | 177.711 | ||
| Purchases of goods and services from related parties | ||||
| Associates | 181.095 | 217.659 | ||
| Joint ventures | 23.365 | 16.017 | ||
| Total | 204.460 | 233.676 | ||
| As at | ||||
| 30 June 2020 | 31 December 2019 | |||
| Balances due to related parties | ||||
| Associates | 24.966 | 9.176 | ||
| Joint ventures | 36 | 226 | ||
| Total | 25.002 | 9.402 | ||
| Balances due from related parties | ||||
| Associates | 52.460 | 18.738 | ||
| Joint ventures | 183 | 438 | ||
| Total | 52.643 | 19.176 |
HELLENIC PETROLEUM S.A. has provided letters of comfort and guarantees in favour of banks as security for loans granted by them to Elpedison B.V. The outstanding amount of these as at 30 June 2020 was €102 million (31 December 2019: €105 million).
During the six-month period ended 30 June 2020, transactions and balances with the above government related entities are as follows:
c) Key management includes directors (Executive and Non-Executive Members of the board of HELLENIC PETROLEUM S.A.) and General Managers. The compensation paid or payable for the sixmonth period ended 30 June 2020 to the aforementioned key management amounted as follows:
| For the six month period ended | ||
|---|---|---|
| 30 June 2020 | 30 June 2019 | |
| Short-term employee benefits | 2.344 | 2.608 |
| Post-employment benefits | ||
| Total | 2.416 | 2.680 |
The Group has centralized treasury operations which coordinate and control the funding and cash management activities of all group companies. Within this framework, Hellenic Petroleum Finance plc (HPF) was established in November 2005 in the U.K. as a wholly-owned subsidiary of Hellenic Petroleum S.A. to act as the central treasury vehicle of the Hellenic Petroleum Group.
Βorrowings of the Group by maturity as at 30 June 2020 and 31 December 2019 are summarised in the table below (amounts in € million):
| Balance as at | Balance as at | |||
|---|---|---|---|---|
| Company Maturity | 30 June 2020 | 31 December 2019 | ||
| 1. Bond loan € 400 million | HP SA | Jun 2023 | 395 | 394 |
| 2. Bond loan € 400 million | HP SA | Dec 2020 | 225 | 224 |
| 3. Bond loan € 300 million | HP SA | Feb 2021 | 299 | 299 |
| 4. Bond loan € 100 million | HP SA | Oct 2021 | 100 | 0 |
| 5. Bond loan \$ 250 million | HP SA | Jun 2021 | 222 | 159 |
| 6. European Investment Bank ("EIB") Term loan | HP SA | Jun 2022 | 89 | 111 |
| 7. Eurobond €201m | HPF Plc | Oct 2021 | 200 | 200 |
| 8. Eurobond €500m | HPF Plc | Oct 2024 | 493 | 491 |
| 9. Bilateral lines | Various | Various | 858 | 754 |
| Total | 2.881 | 2.632 |
No loans were in default as at 30 June 2020 (none as at 31 December 2019).
Significant movements in borrowings for the six -month period ended 30 June 2020 are as follows:
In line with the Group's risk management strategy to build up its cash reserves for the COVID -19 crisis, Hellenic Petroleum S.A. concluded a €100 million committed credit facility, with a tenor of 18 months, with Piraeus Bank in April 2020.
In March 2020, HELLENIC PETROLEUM S.A. drew down the remaining portion (\$70 million) of its \$250 million 3 year revolving bond loan facility to finance general working capital needs.
The Group companies have credit facilities with various banks to finance general corporate needs which are being renewed in accordance with the Group's finance needs. The facilities mainly comprise of shortterm loans of the parent company HELLENIC PETROLEUM S.A.
Bilateral loan balances increased by €104 million during the first half of 2020 in line with the Group's liquidity risk management strategy to build up its cash reserves as the COVID--19 crisis was unfolding.
Certain medium-term credit facility agreements that the Group has concluded, include financial covenants, mainly for the maintenance of certain ratios such as: "Consolidated Net Debt/ Consolidated Adjusted EBITDA", "Consolidated Adjusted EBITDA/ Consolidated Net Interest" and "Consolidated Net Debt/ Consolidated Net Worth". Management monitors the performance of the Group to ensure compliance with the above covenants.
On June 30, 2020, the Company's share price closed at €5.95, a 32.2% decrease compared with December 31, 2019. The average price for the A' half of 2020 amounted to €6.60, a 19.02% decrease compared to the same period in 2019. The highest was €8.78 on 02.01.2020 whilst the lowest was €4.56 on 18.03.2020.
The average trading volume in the A' half, reached 129,132 shares a day, an increase of 37.86% from the respective volume of 2019, while the average daily turnover increased by 8.10% to €834.242.
The table below shows Company's average share closing price and the average daily trading volume per month in the A' half of 2020, compared to the same period in 2019.
| Average Closing Price (€) 2020 2019 |
Average Trading Volume (# shares) |
|||
|---|---|---|---|---|
| 2020 | 2019 | |||
| January | 8.4 | 7.61 | 97,591 | 64,966 |
| February | 7.59 | 7.88 | 164,119 | 67,938 |
| March | 5.33 | 8.37 | 201,275 | 101,439 |
| April | 5.91 | 8.44 | 103,038 | 104,966 |
| May | 5.99 | 8.03 | 125,246 | 95,323 |
| June | 6.24 | 8.71 | 84,709 | 133,595 |
The following chart shows the share price evolution at the closing of each month and the average trading volume in the Company's shares from 01.01.2020 up until 30.06.2020:
This Report includes certain financial measures of historical financial performance, financial position, or cash flows, which are not defined or specified under IFRS ("Alternative Performance Measures"). The Group considers that these measures are relevant and reliable in assessing the Group's financial performance and position, however such measures are not a substitute for financial measures under IFRS and should be read in conjunction with Group published financial statements.
Reported EBITDA is defined as earnings/(loss) before interest, taxes, depreciation and amortisation, and is calculated by adding back depreciation and amortization to operating profit.
Adjusted EBITDA is defined as IFRS Reported EBITDA adjusted for: a) Inventory Effect (defined as the effect of the price fluctuation of crude oil and oil product inventories on gross margin and is calculated as the difference between cost of sales in current prices and cost of sales at cost) in the Refining, Supply & Trading segment and b) non-recurring items, which may include but are not limited to costs and expenses related to COVID-19 pandemic, cost of early retirement schemes, write-downs of non-core assets and other one-off and non-operating expenses, in line with the refining industry practice. Adjusted EBITDA is intended to provide a proxy of the operating cash flow projection (before any Capex) in an environment with stable oil and products prices.
ΙFRS Reported EBITDA and Adjusted EBITDA are indicators of the Group's underlying cash flow generation capability. The Group's management uses the above alternative performance measures as a significant indicator in determining the Group's earnings performance and operational cash flow generation both for planning purposes as well as past performance appraisal.
Adjusted Net Income is defined as the IFRS Reported Net Income as derived from the Group's reported financial statements under IFRS, adjusted for post-tax inventory effect (calculated as Inventory Effect times (1- statutory tax rate in Greece) and other post-tax non-recurring items at the consolidated Group financial statements.
Adjusted Net Income is presented in this report because it is considered by the Group and the Group's industry as one of the key measure of its financial performance.
Net Debt is calculated as total borrowings (including "current and non-current borrowings" as shown in the statement of financial position of the Group financial statements and excluding debt from associates) less "Cash & cash equivalents and restricted cash" and "Investment in Equity Instruments", as reflected in the Group's financial statements. It is noted that finance lease obligations are not included in the calculation.
Capital Employed is calculated as "Total Equity" as shown in the statement of financial position of the relevant financial statements plus Net Debt.
The tables below illustrate how the selected alternative performance measures presented in this financial report are reconciled to their most directly reconcilable line item in the financial statements for the corresponding period.
| Calculation of EBITDA, Adjusted EBITDA, Adjusted Profit after tax | ||
|---|---|---|
| million € | 1H20 | 1H19 |
| Operating Profit | -466,4 | 207,6 |
| Depreciation & Amortization | 125,8 | 115,2 |
| Reported EBITDA | -340,6 | 322,8 |
| Inventory effect | 514,7 | -77,7 |
| Other One-off expenses* | 16,6 | 7,0 |
| Adjusted EBITDA | 190,6 | 252,1 |
| Profit After Tax | -335,8 | 121,4 |
| Taxed Inventory effect | 391,2 | -56,0 |
| Taxed other one-off expenses** | 12,6 | 5,0 |
| No recurring items below EBITDA*** | -46,6 | - |
| Adjusted Profit After Tax | 21,4 | 70,4 |
| Calculation of Net Debt, Capital Employed and Gearing ratio | ||
|---|---|---|
| million € | 1H20 | 1H19 |
| Borrowings LT | 1.231,9 | 1.606,6 |
| Borrowings ST | 1.649,2 | 1.112,8 |
| Cash & Cash equivalents | 1.128,6 | 1.319,7 |
| Investment in equity instruments | 0,9 | 1,6 |
| Net Debt | 1.751,6 | 1.398,2 |
| Equity | 1.906,7 | 2.367,9 |
| Capital Employed | 3.658,3 | 3.766,1 |
| Gearing ratio (Net Debt / Capital Employed) | 48% | 37% |
* Main items include, a) for 1H20 COVID -19 related expenses of €12m (comprise of payroll costs mainly related to required modifications in the working shifts in the refineries, donations to the health-care system, protective measures in all Group's premises and marketing, consulting services and other related expenses) and €4m for other non-recurring items, b) for 1Η19 €3m regarding the impact of pricing change on the existing CO2 emission allowances deficit as at 31/12/2018 and €4m for other non-recurring items.
** Includes all one-offs post effect of applicable tax rate
*** Impact of the adjustment of associates' contribution (deferred tax of DESFA sale)
HELLENIC PETROLEUM Group has incorporated Sustainable Development in its strategic development plan and is committed through its respective Policy on Health, Safety, Environment and Sustainable Development. This strategic decision is based on the safe and without accidents, financially sustainable operation, with respect for the environment and society.
Health and safety across all activities is the most important priority of the HELLENIC PETROLEUM Group. Therefore, all necessary safety measures are taken for employees, partners and visitors in all work areas in line with the Goal for Good Health (Sustainable Development Goal SDG 3).
The Group continuously invests in prevention, infrastructure and staff and partners' training in the field of health and safety to ensure compliance with the strictest criteria on a national and European level. All Group facilities set targets to control and improve their Health and Safety performance, with regular periodic reporting.
The first half of 2020 was characterized by addressing the COVID-19 pandemic through the immediate adoption of measures, such as the operation of a pandemic response Committee, the drafting of a Policy, the selection of appropriate Personal Protection Equipment (PPE) as well as their timely supply. The pandemic's development required the continuous monitoring of health developments and State measures for the consequent immediate revision of the Group's response Policy (7 revisions within the six-month period) covering all Group activities. At the same time, relevant instructions to staff on specific preventive measures (i.e. health self-assessment) and proper use of PPE were developed and the permit provisions related to putting installations out of operation were evaluated.
The first planned H&S inspections were carried out, as well as inspections on the implementation of pandemic preventive measures through specific checklists while safety-related projects continued in all installations. Within the framework of holistic safety, new procedures were drafted and five (5) procedures were revised (Safe Execution of Diving Works, Technical Specifications of Safety Footwear, Basic Principles and Safety Measures for Working at Height, Refinery Fuel Tank Safety Checklist and Scaffolding Procedure).
During 1H20, the Policy for Major Accidents Prevention was drafted and signed in accordance with Directive 2013/30 on the safety of Hydrocarbon Research and Production activities.
The following diagrams show the trend for Lost Workday Injury Frequency (LWIF), the All Injuries Frequency (AIF), Process Safety Event Rate (PSER) indices, but also compared to the corresponding European average (CONCAWE).
LWIF index
ΑIF index
Regarding the management of environmental issues (air emissions, liquid and solid waste), the Environmental Terms of Operation (ETO) permit revision process was completed for the Aspropyrgos refinery in compliance with the Industrial Emissions Directive and the new emission limits of the European Best Available Techniques Conclusions (REF BAT Conclusions), including the bioether production process. For the Elefsina refinery, comments to the draft ETO were provided and the Technical Memorandum was drawn up and submitted. The procedure to issue the Environmental Permit is expected to be completed before the end of 2020 in cooperation with the competent authority of the Ministry of Environment and Energy. A corresponding estimate for completion regarding the Environmental Permit is expected for the Thessaloniki refinery.
For HELLENIC PETROLEUM, being steadily oriented towards circular economy, the primary objective is to reduce the production of liquid and solid waste at source, maximize recycling and re-use of all waste streams possible in the production process, and then manage ensuing waste in the best possible way for the environment and public health.
Regarding participation in Phase 3 (2013-2020) of the Emissions Trading System (ETS), in 1H20, all the basic procedures for the refineries' participation (level of activity, emission verification, submission of relevant reports and surrender of emissions allowances for 2019) were successfully completed. For the first half of 2020, Carbon dioxide (CO2) emissions from the three refineries (Aspropyrgos, Elefsina and Thessaloniki) amounted to 1.78 million tons, remaining approximately at the same level in comparison to the same period last year.
Also, in context to the refineries' participation in the 4th ETS Phase, electricity data (power grid and selfgenerated electricity) as well as applications to issue allocation of free GHG emission allowances for the period 2021-2030 were submitted to the Ministry of the Environment and Energy in June 2020.
According to the Group's strategy on climate change and in order to reduce its carbon footprint, in early 2020, a new ambitious target was announced to further develop its RES portfolio to reach 600MW by 2050. In addition, during the same period, the results of the Group's participation in the Carbon Disclosure Project (CDP) evaluation procedure were announced. The CDP is the largest GHG emission data collection and evaluation program, energy consumption and evaluation of companies' response to climate change challenges and opportunities. HELLENIC PETROLEUM, one of the 5 companies in Greece that participated in the evaluation for 2019, maintained its B- rating, exceeding the average in the Oil & Gas Industry category for 2019 (Category average: C).
Moreover, through its participation in the Federation of Enterprises (SEV) and SEV's Council on Sustainable Development, HELPE contributed with comments on the consultation to revise the basic Environmental Legislation Review (issued Law 4685/7.05.2020) and related legislative acts. The same took place on consultation to repeal categorization through nuisance level and land use around SEVEZO installations.
Finally, all reports and relevant indicators were prepared for the corresponding edition of the Group's Annual and Sustainability Report.
The industry in which the Group operates, requires specialized skills, training and experience. As a result, the ability to attract and retain the right human resources is an important factor in the Group's normal operation.
Any inability to find and employ competent personnel, especially highly skilled and in middle and senior management, can adversely affect the Group's operations and financial position.
The provision of a safe working environment, which in addition motivates employees and treats them with respect, giving equal opportunities to all, is a Group priority.
Relations with the employees are based on the equal treatment principle. Both the integration and the progress of each employee within the Group are judged on the basis of an employee's qualifications, performance and ambitions, without any distinction.
The internal operation of the Group's business units is based on specific principles and rules, so that there is consistency and continuity, key building blocks that guarantee successful and developmental progress. In this context, the Code of Conduct summarizes the principles governing the internal operation of the Group's Companies and determines how it operates, while the Internal Labour Regulation defines the rules governing the relationships between the Company and its staff.
As mentioned, the safety of the Group's facilities is one of the most important priorities. In occupational risk management, emphasis is placed on prevention in order to anticipate and control all possible health and safety risks in accordance with the criteria of Greek law (Law 3850/2010), European and international codes and best practices.
In addition, safeguarding the health of our employees and ensuring for a safe working environment are core values which are crystallized through the Health Surveillance Process. Periodic medical examinations of workers take place taking into account work descriptions, age group and gender.
The Group in the context of dealing with the coronavirus pandemic, designed in a timely manner and implemented in all its buildings and facilities a series of important and critical measures. Absolute priority
was given to the protection of the health of human resources and at the same time, to the safe and uninterrupted continuation of the operation of industrial and terminal facilities that ensure the security of supply of our country and the uninterrupted service of the needs of society and the National Economy.
Employee training is another important area in a way that each employee understands the Group's strategic goals. Employee training also enables employees to define their role more effectively and develops their skills.
The Group monitors all relevant labor law (national, European, ILO), including reports on child labor, respect for human rights and working conditions, and is in full compliance with all collective and relevant international conventions.
The Group is committed to implementing the 17 Sustainable Development Goals and conforms to the international standards on Sustainability Reporting, the CoP requirements of the UN Global Compact, the GRI Standards of Global Reporting Initiative, including the Oil and Gas Sector supplement. The credibility of the information provided is ensured by an independent body. Furthermore, the Group conducts a materiality assessment in order to evaluate the most essential aspects of sustainable development associated with its activities. Both internal and external stakeholders participate in this assessment.
More specifically, our cooperation with social partners representing the broader society as well as local communities, is constant, multidimensional and material. Initiatives undertaken by the Group are closely linked to the needs of each area and relate to the society, the environment and local economy. Such initiatives are shaped through the open dialogue with stakeholders, through studies and the identification of material aspects, opinion polls, public debates and consultations. Subsequently, the Group evaluates the results of such practices and redefines actions in order to fully take into account and to meet the needs of all stakeholders.
The Group's contribution and responsible attitude towards the community as a whole, in collaboration with bodies, institutions, voluntary organizations and NGOs, are directed to 5 priority axes: Vulnerable Social Groups & Health, Youth and Education, Sustainable Cities and Environment, Culture, Sports.
In the 1H20, the HELLENIC PETROLEUM Group, on the occasion of the global health crisis caused by COVID-19, immediately undertook important initiatives to support the Greek society and the National Health System by donating medical equipment for rapid and reliable molecular diagnosis of the virus, medical supplies and personal protective equipment to health facilities throughout Greece, as well as significant quantities of fuel to help the State deal with emergencies. The Group continues to contribute to the effective mitigation of this unprecedented health crisis by implementing a donation program of €8 million.
The Code of Conduct summarizes the principles governing the internal operation of the Group in Greece and abroad, which specify the way it operates to achieve its business goals. This serves the best interests of the stakeholders, minimizing additional risks regarding compliance and reputation of the Group. The Code summarizes the principles, according to which each individual employee who participates in the production process of the companies of the Group and all collective bodies must act within the scope of their duties, constituting a guide for everyone, and third parties cooperating with HELPE.
The procedure of accepting and reaffirming the commitment by employees is made periodically by the Human Resources and Administrative Services of the Group and the Code is translated into all the languages of the countries where the Group operates, as well as in English.
Since the implementing of the Code of Conduct in 2011, systematic education and training of executives and employees of companies of the Group has taken place, in the content of the Code and its applications.
3. Certified Auditor – Accountant's Review Report regarding the Half-Yearly Report
ERNST & YOUNG (HELLAS) Certified Auditors – Accountants S.A. 8B Chimarras str., Maroussi 151 25 Athens, Greece
Tel: +30 210 2886 000 Fax:+30 210 2886 905 ey.com
To the Board of Directors of "Hellenic Petroleum S.A."
We have reviewed the accompanying interim condensed statement of financial position of Hellenic Petroleum S.A. as at 30 June 2020, and the related interim condensed statements of comprehensive income, changes in equity and cash flows for the sixmonth period then ended, as well as the selected explanatory notes, that comprise the interim condensed financial information and which form an integral part of the six-month financial report required by Law 3556/2007.
Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with International Financial Reporting Standards, as they have been endorsed by the European Union and applied to interim financial reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on this interim condensed financial information based on our review.
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing as incorporated in Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial information is not prepared, in all material respects, in accordance with IAS 34.
Our review has not identified any material inconsistency or error in the declarations of the members of Board of Directors and the information contained in the six-month financial report prepared in accordance with article 5 and 5a of Law 3556/2007, compared to the accompanying interim condensed financial information.
Athens, 27 August 2020
The Certified Auditor Accountant
Christiana Panayidou S.O.E.L. R.N. 62141
ERNST & YOUNG (HELLAS) Certified Auditors Accountants S.A. Chimarras 8B Maroussi, 151 25, Greece Company S.O.E.L. R.N. 107
ERNST & YOUNG (HELLAS) Certified Auditors – Accountants S.A. 8B Chimarras str., Maroussi 151 25 Athens, Greece
Tel: +30 210 2886 000 Fax:+30 210 2886 905 ey.com
To the Board of Directors of "Hellenic Petroleum S.A."
We have reviewed the accompanying interim condensed consolidated statement of financial position of Hellenic Petroleum S.A. and its subsidiaries, as at 30 June 2020, and the related interim condensed consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended, as well as the selected explanatory notes, that comprise the interim condensed financial information and which form an integral part of the six-month financial report required by Law 3556/2007.
Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with International Financial Reporting Standards, as they have been endorsed by the European Union and applied to interim financial reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on this interim condensed financial information based on our review.
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing as incorporated in Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial information is not prepared, in all material respects, in accordance with IAS 34.
Our review has not identified any material inconsistency or error in the declarations of the members of Board of Directors and the information contained in the six-month financial report prepared in accordance with article 5 and 5a of Law 3556/2007, compared to the accompanying interim condensed financial information.
Athens, 27 August 2020
The Certified Auditor Accountant
Christiana Panayidou S.O.E.L. R.N. 62141
ERNST & YOUNG (HELLAS) Certified Auditors Accountants S.A. Chimarras 8B Maroussi, 151 25, Greece Company S.O.E.L. R.N. 107
30 JUNE 2020
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| Page | ||
|---|---|---|
| I. | Company Information | 3 |
| II. | Interim Condensed Consolidated Statement of Financial Position | 4 |
| III. | Interim Condensed Consolidated Statement of Comprehensive Income | 5 |
| IV. | Interim Condensed Consolidated Statement of Changes in Equity | 6 |
| V. | Interim Condensed Consolidated Statement of Cash Flows | 7 |
| VI. | Notes to the Interim Condensed Consolidated Financial Statements | 8 |
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| Directors | Ioannis Papathanasiou - Chairman of the Board Andreas Shiamishis - Chief Executive Officer Georgios Alexopoulos - Member Theodoros-Achilleas Vardas - Member Michail Kefalogiannis - Member Alexandros Metaxas - Member Iordanis Aivazis - Member Loukas Papazoglou - Member Alkiviadis-Konstantinos Psarras - Member Theodoros Pantalakis - Member Spiridon Pantelias - Member Georgios Papakonstantinou - Member Κonstantinos Papagiannopoulos - Member |
|---|---|
| Registered Office | 8A Chimarras Str GR 151 25 - Marousi |
| Registration number | 2443/06/B/86/23 |
| General Commercial Registry | 000296601000 |
These consolidated financial statements constitute an integral part of the Interim Financial Report, which can be Found at "annual & interim financial reports" and which incorporates the Independent Auditor's Review Report.
| As at | |||||
|---|---|---|---|---|---|
| Note | 30 June 2020 | 31 December 2019 | |||
| ASSETS | |||||
| Non-current assets | |||||
| Property, plant and equipment | 10 | 3.270.843 | 3.297.668 | ||
| Right-of-use assets | 11 | 236.648 | 242.934 | ||
| Intangible assets | 12 | 105.274 | 104.426 | ||
| Investments in associates and joint ventures | 7 | 403.365 | 384.747 | ||
| Deferred income tax assets | 68.991 | 59.358 | |||
| Investment in equity instruments | 3 | 906 | 1.356 | ||
| Loans, advances and long term assets | 44.187 | 55.438 | |||
| 4.130.214 | 4.145.927 | ||||
| Current assets | |||||
| Inventories | 13 | 631.536 | 1.012.802 | ||
| Trade and other receivables | 14 | 606.557 | 748.153 | ||
| Income tax receivables | 91.587 | 91.391 | |||
| Assets held for sale | 2.209 | 2.520 | |||
| Derivative financial instruments | 3 | 5.830 | 3.474 | ||
| Cash and cash equivalents | 15 | 1.128.570 | 1.088.198 | ||
| 2.466.289 | 2.946.538 | ||||
| Total assets | 6.596.503 | 7.092.465 | |||
| EQUITY | |||||
| Share capital and share premium | 16 | 1.020.081 | 1.020.081 | ||
| Reserves | 17 | 270.958 | 276.972 | ||
| Retained Earnings | 552.465 | 964.972 | |||
| Equity attributable to equity holders of the parent | 1.843.504 | 2.262.025 | |||
| Non-controlling interests | 63.173 | 64.548 | |||
| Total equity | 1.906.677 | 2.326.573 | |||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Interest bearing loans & borrowings | 18 | 1.231.906 | 1.610.094 | ||
| Lease liabilities | 169.564 | 169.357 | |||
| Deferred income tax liabilities | 51.926 | 213.495 | |||
| Retirement benefit obligations | 183.253 | 180.398 | |||
| Provisions | 25.485 | 25.625 | |||
| Other non-current liabilities | 28.102 | 28.376 | |||
| 1.690.236 | 2.227.345 | ||||
| Current liabilities | |||||
| Trade and other payables | 19 | 1.237.498 | 1.401.732 | ||
| Income tax payable | 7.975 | 7.147 | |||
| Interest bearing loans & borrowings | 18 | 1.649.190 | 1.022.270 | ||
| Lease liabilities | 27.986 | 30.537 | |||
| Dividends payable | 76.941 | 76.861 | |||
| 2.999.590 | 2.538.547 | ||||
| Total liabilities | 4.689.826 | 4.765.892 | |||
| Total equity and liabilities | 6.596.503 | 7.092.465 |
| A. Shiamishis | C. Thomas | S. Papadimitriou |
|---|---|---|
| Chief Executive Officer | Chief Financial Officer | Accounting Director |
| For the six month period ended | For the three month period ended | ||||
|---|---|---|---|---|---|
| Note | 30 June 2020 | 30 June 2019 | 30 June 2020 | 30 June 2019 | |
| Revenue from contracts with customers | 4 | 2.986.016 | 4.456.629 | 1.067.051 | 2.465.413 |
| Cost of sales | (3.233.578) | (4.037.224) | (946.485) | (2.232.323) | |
| Gross profit / (loss) | (247.562) | 419.405 | 120.566 | 233.090 | |
| Selling and distribution expenses | (158.445) | (157.434) | (77.599) | (81.887) | |
| Administrative expenses | (67.680) | (65.660) | (33.243) | (31.696) | |
| Exploration and development expenses | (2.337) | (1.712) | (1.033) | (1.262) | |
| Other operating income / (expenses) and other gains / (losses) - net | 5 | 9.589 | 13.080 | 3.920 | 10.164 |
| Operating profit / (loss) | (466.435) | 207.679 | 12.611 | 128.409 | |
| Finance income | 2.725 | 2.956 | 1.664 | 1.956 | |
| Finance expense | (54.932) | (66.444) | (28.225) | (33.149) | |
| Finance expense - lease finance cost | (5.435) | (4.705) | (2.687) | (2.432) | |
| Currency exchange gain / (loss) | 6 | 4.254 | 743 | 1.992 | (512) |
| Share of profit / (loss) of investments in associates and joint ventures | 7 | 18.398 | 14.445 | (27.009) | (3.646) |
| Profit / (loss) before income tax | (501.425) | 154.674 | (41.654) | 90.626 | |
| Income tax credit (expense) | 8 | 165.646 | (33.313) | 46.571 | (15.881) |
| Profit / (loss) for the period | (335.779) | 121.361 | 4.917 | 74.745 | |
| Profit / (loss) attributable to: | |||||
| Equity holders of the parent | (335.841) | 121.321 | 3.966 | 74.205 | |
| Non-controlling interests | 62 (335.779) |
40 121.361 |
951 4.917 |
540 74.745 |
|
| Other comprehensive income / (loss): Other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax): |
|||||
| Actuarial gains / (losses) on defined benefit pension plans | 17 | - | (56) | - | - |
| Share of other comprehensive income / (loss) of associates Changes in the fair value of equity instruments |
17 17 |
217 (348) |
(41) 700 |
441 88 |
(41) 704 |
| Net other comprehensive income / (loss) that will not be reclassified to profit or loss (net of tax): |
(131) | 603 | 529 | 663 | |
| Other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax): |
|||||
| Recycling of (gains) / losses on hedges through comprehensive income | 17 | 25.077 | 1.501 | - | - |
| Fair value gains / (losses) on cash flow hedges Currency translation differences and other movements |
17 17 |
(31.140) 145 |
5.186 66 |
19.411 361 |
(1.202) 36 |
| Net other comprehensive income / (loss) that may be reclassified subsequently to profit or loss (net of tax): |
(5.918) | 6.753 | 19.772 | (1.166) | |
| Other comprehensive income / (loss) for the period, net of tax | (6.049) | 7.356 | 20.301 | (503) | |
| Total comprehensive income / (loss) for the period | (341.828) | 128.717 | 25.218 | 74.242 | |
| Total comprehensive income / (loss) attributable to: | |||||
| Equity holders of the parent | (341.855) | 128.683 | 24.249 | 73.695 | |
| Non-controlling interests | 27 | 34 | 969 | 547 | |
| (341.828) | 128.717 | 25.218 | 74.242 | ||
| Basic and diluted earnings / (loss) per share (expressed in Euro per share) |
9 | (1,10) | 0,40 | 0,01 | 0,24 |
| Attributable to owners of the Parent | |||||||
|---|---|---|---|---|---|---|---|
| Note | Share Capital |
Reserves Retained Earnings |
Total | Non Controling interests |
Total Equity |
||
| Balance at 1 January 2019 | 1.020.081 | 258.527 1.052.164 | 2.330.772 | 63.959 | 2.394.731 | ||
| Changes of the fair value of equity investments | 17 | - | 691 | - | 691 | 9 | 700 |
| Currency translation differences and other movements | 17 | - | 81 | - | 81 | (15) | 66 |
| Actuarial gains / (losses) on defined benefit pension plans | 17 | - | (56) | - | (56) | - | (56) |
| Fair value gains / (losses) on cash flow hedges | 17 | - | 5.186 | - | 5.186 | - | 5.186 |
| Recycling of (gains) / losses on hedges through comprehensive income | 17 | - | 1.501 | - | 1.501 | - | 1.501 |
| Share of other comprehensive income / (loss) of associates | - | (41) | - | (41) | - | (41) | |
| Other comprehensive income / (loss) | - | 7.362 | - | 7.362 | (6) | 7.356 | |
| Profit / (loss) for the period | - | - | 121.321 | 121.321 | 40 | 121.361 | |
| Total comprehensive income / (loss) for the period | - | 7.362 | 121.321 | 128.683 | 34 | 128.717 | |
| Share capital issue expenses | - | - | (342) | (342) | - | (342) | |
| Tax on intra-group dividends | - | - | (122) | (122) | - | (122) | |
| Dividends to non-controlling interests | - | - | - | - | (2.246) | (2.246) | |
| Dividends | - | - | (152.818) | (152.818) | - | (152.818) | |
| Balance at 30 June 2019 | 1.020.081 | 265.889 1.020.203 | 2.306.173 | 61.747 | 2.367.920 | ||
| Balance at 1 January 2020 | 1.020.081 | 276.972 | 964.972 | 2.262.025 | 64.548 | 2.326.573 | |
| Changes of the fair value of equity investments | 17 | - | (352) | - | (352) | 4 | (348) |
| Recycling of (gains) / losses on hedges through comprehensive income | 17 | - | 25.077 | - | 25.077 | - | 25.077 |
| Fair value gains / (losses) on cash flow hedges | 17 | - | (31.140) | - | (31.140) | - | (31.140) |
| Share of other comprehensive income / (loss) of associates | 17 | - | 217 | - | 217 | - | 217 |
| Currency translation differences and other movements | 17 | - | 184 | - | 184 | (39) | 145 |
| Other comprehensive income / (loss) | - | (6.014) | - | (6.014) | (35) | (6.049) | |
| Profit / (loss) for the period | - | - | (335.841) | (335.841) | 62 | (335.779) | |
| Total comprehensive income / (loss) for the period | - | (6.014) | (335.841) | (341.855) | 27 | (341.828) | |
| Share capital issue expenses | - | - | (30) | (30) | - | (30) | |
| Participation of minority shareholders in share capital increase of subsidiary | - | - | - | - | 34 | 34 | |
| Tax on intra-group dividends | - | - | (227) | (227) | - | (227) | |
| Dividends to non-controlling interests | - | - | - | - | (1.436) | (1.436) | |
| Dividends | 24 | - | - | (76.409) | (76.409) | - | (76.409) |
| Balance at 30 June 2020 | 1.020.081 | 270.958 | 552.465 | 1.843.504 | 63.173 | 1.906.677 |
| Note 30 June 2020 30 June 2019 Cash flows from operating activities Cash generated from / (used in) operations 20 16.386 Income tax received / (paid) (6.533) Net cash generated from / (used in) operating activities 9.853 Cash flows from investing activities Purchase of property, plant and equipment & intangible assets 10,12 (78.583) Proceeds from disposal of property, plant and equipment & intangible assets 3.382 Share capital issue expenses (30) Purchase of subsidiary, net of cash acquired 25 - Grants received 174 Interest received 2.725 Prepayments for right-of-use assets (218) Dividends received - Proceeds from disposal of investments in equity instruments - |
|
|---|---|
| 228.949 | |
| (3.052) | |
| 225.897 | |
| (78.262) | |
| 363 | |
| (342) | |
| (5.341) | |
| 199 | |
| 2.956 | |
| (463) | |
| 1.347 | |
| 21 | |
| Net cash generated from / (used in) investing activities (72.550) |
(79.522) |
| Cash flows from financing activities | |
| Interest paid (47.946) |
(63.127) |
| Dividends paid to shareholders of the Company (76.381) |
(122) |
| Dividends paid to non-controlling interests - |
(2.246) |
| Participation of minority shareholders in share capital increase of subsidiary 34 |
- |
| Proceeds from borrowings 267.927 |
10.000 |
| Repayments of borrowings (21.820) |
(27.671) |
| Payment of lease liabilities - principal (16.877) |
(19.729) |
| Payment of lease liabilities - interest (5.435) |
|
| Net cash generated from / (used in) financing activities 99.502 |
(102.895) |
| Net increase / (decrease) in cash and cash equivalents 36.805 |
43.480 |
| Cash and cash equivalents at the beginning of the period 15 1.088.198 |
1.275.159 |
| Exchange gain / (loss) on cash and cash equivalents 3.567 |
1.049 |
| Net increase / (decrease) in cash and cash equivalents 36.805 |
43.480 |
| 15 Cash and cash equivalents at end of the period 1.128.570 |
1.319.688 |
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
Hellenic Petroleum S.A. (the "Company" or "Hellenic Petroleum") is the parent company of Hellenic Petroleum Group (the "Group"). The Group operates in the energy sector predominantly in Greece, South Eastern Europe and the East Mediterranean. The Group's activities include refining and marketing of oil products, production and marketing of petrochemical products and exploration for hydrocarbons. The Group also provides engineering services. Through its investments in DEPA Commercial S.A., DEPA Infrastructure S.A. and Elpedison B.V. the Group also operates in the natural gas sector and in the production and trading of electricity power.
The parent company is incorporated in Greece and the address of its registered office is 8A Chimarras Str., Marousi, 151 25. The shares of the Company are listed on the Athens Stock Exchange and the London Stock Exchange through GDRs.
The interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 (IAS 34) – Interim Financial Reporting, and present the financial position, results of operations and cash flows of the Group on a going concern basis.
Management has considered the impact of the COVID-19 pandemic, as described in Note 3, up to the date of authorization of these Condensed Consolidated Financial Statements and has concluded that the going concern basis of their preparation is appropriate.
In reaching this conclusion, Management reassessed its plans for the period of 18 months from the reporting date considering the deterioration in the economic environment and the impact on the financial performance of the Group. The profitability in the plans that Management examined are most sensitive to factors described in note 3. The Group management concludes that, although COVID-19 may continue to have a significant impact on the Group's operations in the 2nd Half of 2020, such impact will be absorbable and does not imperil the long-term viability of the Group.
In terms of funding and liquidity, as described in note 3 and note 18 the Group was able to refinance all debt obligations maturing in the six month period ended 30 June 2020 and as at the date of the balance sheet has available funding headroom of €300 million within the limits of committed and uncommitted credit facilities, with approximately €200 million uncommitted under the bilateral financing arrangements. Additionally, the Group is in the final stages of completing a new €100m committed two year credit facility and is in process to refinance bank facilities maturing in the following 12 month period.
Based on the analysis performed and the refinancing plan which they are in the process of executing, management is satisfied that it can meet all its obligations as they fall due in the period of at least 12 months from the Balance Sheet date, and that there are no material uncertainties that may cast doubt on the Group's ability to operate as a going concern.
The interim condensed consolidated financial statements have been prepared in accordance with the historical cost basis, except for the following:
Where necessary and as described in relevant Notes, comparative figures have been reclassified to conform to changes in the presentation of the current period.
These interim condensed consolidated financial statements do not include all information and disclosures required for the annual consolidated financial statements and should be read in conjunction with the audited annual consolidated financial statements for the year ended 31 December 2019, which can be found on the Group's website www.helpe.gr.
The interim condensed consolidated financial statements for the six-month period ended 30 June 2020 have been authorised for issue by the Board of Directors on 27 August 2020.
The preparation of the interim condensed consolidated financial statements, in accordance with IFRS, requires the use of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the interim condensed consolidated financial statements are disclosed where considered necessary. Estimates and judgements are discussed in detail in the annual consolidated financial statements for the year ended 31 December 2019, are continuously evaluated and are based on historical experience and other factors, including expectations of future events as assessed to be reasonable under the present circumstances.
As a result of COVID-19 pandemic and the economic impact thereof, management reviewed its estimates with regards to future cash flows utilized in estimating the recoverable amount of its investments as well as the estimations for future credit losses on trade receivables.
Given the impact of Covid – 19, the Group proceeded with a further assessment of impairment indicators on the various segments it operates. Despite the effect of Covid 19 during the first half of 2020 and the reduced profitability expected for the second half of 2020 and 2021 as compared to the assumptions used in the respective impairment tests prepared for the year ended 31 December 2019, management concluded that no further impairment losses need to be recorded. However, management will continue to monitor the developments for the rest of the year and adjust their estimates accordingly. (Notes 7, 10 & 12)
Management assessed forward-looking information specific to its trade debtors and the economic environment taken into account the impact of Covid – 19 and recorded additional losses in line with its policies, when needed. (Note 14)
The accounting policies and methods of computation used in the preparation of the interim condensed consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements for the year ended 31 December 2019 and have been consistently applied in all periods presented in this report except for the following IFRSs which have been adopted by the Group as of 1 January 2020. Amendments and interpretations that apply for the first time in 2020 did not have a significant impact on the interim condensed consolidated financial statements of the Group for the six-month period ended 30 June 2020. These are also disclosed below.
document, Amendments to References to the Conceptual Framework in IFRS Standards, which sets out the amendments to affected standards in order to update references to the revised Conceptual Framework. Its objective is to support transition to the revised Conceptual Framework for companies that develop accounting policies using the Conceptual Framework when no IFRS Standard applies to a particular transaction.
The Group has not early adopted any of the following standards, interpretations or amendments that have been issued but are not yet effective. In addition, the Group assessed all standards, interpretations and amendments issued but not yet effective, and expects that, they will not have any significant impact on the consolidated financial statements.
The amendment has not yet been endorsed by the EU.
IAS 1 (Amendment) 'Classification of liabilities as current or non-current' (effective for annual periods beginning on or after 1 January 2023): The amendments are effective for annual reporting periods beginning on or after January 1, 2022 with earlier application permitted. The IASB has issued an exposure draft to defer the effective date to 1 January 2023. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current or non-current. The amendments affect the presentation
of liabilities in the statement of financial position and do not change existing requirements around measurement or timing of recognition of any asset, liability, income or expenses, nor the information that entities disclose about those items. Also, the amendments clarify the classification requirements for debt which may be settled by the company issuing own equity instruments. These Amendments have not yet been endorsed by the EU.
The Group's activities are primarily centred on Downstream Refining (incl. Petrochemicals) & Marketing of petroleum products; with secondary activities relating to exploration of hydrocarbons and power generation and trading. As such, the Group is exposed to a variety of financial and commodity markets' risks including foreign exchange and commodity price risk, credit risk, liquidity risk, cash flow risk and interest-rate risk. In line with international best practices and within the context of local markets and legislative framework, the Group's overall risk management policies aim at reducing possible exposure to market volatility and / or mitigating its adverse effects on the financial position of the Group to the extent possible. In general, the key factors that impact the Group's operations are summarised as follows:
Greek Macros: During 2019, the fundamentals and prospects of the Greek economy improved. However, the COVID-19 pandemic crisis disrupted global financial stability and reversed the growth prospects of the Greek economy for 2020, which were positive during the first two months of the year.
GDP declined by 1,6% in the first quarter of 2020 compared to the previous quarter (GPD decreased by 0,9% as compared to the corresponding period in 2019) mainly reflecting the beginning of the containment measures at the end of March. The decline in GDP was driven by a drop in investment and private consumption, while government expenditure and exports contributed positively.
Total domestic fuels consumption in the first half of 2020 decreased by 2% compared to the respective period of 2019, mainly affected by lower demand for gasoline and auto diesel, resulted from the coronavirus outbreak partly offset by the increased demand for heating gasoil, driven by low prices. Total demand for motor fuels decreased by 14,5%, with the declined sales more pronounced during mobility restrictions in Greece in April and May.
The outbreak of COVID – 19 is expected to have a negative impact on the Greek economy affecting the public debt and unemployment rate as well as the non-performing loans and the low investments. The containment measures imposed by the Greek government due to the outbreak of COVID-19 also had a significant impact on demand and private consumption. Management continually assesses the situation and its possible future impact to ensure that all necessary actions and measures are taken in order to minimize the impact on the Group's Greek operations.
COVID-19: On 11 March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments took increasingly stringent steps to help contain and delay the spread of the virus, which have slowed down the economies worldwide, causing considerable global disruption in business activities and everyday life.
Many countries, including Greece, adopted extraordinary and economically costly containment measures, including requiring companies to limit or even suspend normal business operations. Governments also implemented restrictions on travelling as well as strict quarantine measures. Industries such as tourism, hospitality and entertainment are expected to be mostly disrupted directly by these measures. Other industries such as manufacturing and financial services are expected to be indirectly affected.
The strict containment measures have been gradually relaxed since early May and the economic activity is expected to start recovering, leading to a partial recovery of the domestic demand. Also, the European Commission's proposal for a recovery plan ("Next Generation EU"), is expected to support the economic activity in Greece. However, following a steady increase of the number of infections reported during August, the Greek Government announced additional measures and restrictions to contain the spread of the coronavirus. The measures mainly affect traveling from certain countries, operations hours of restaurants in several regional units, as well as the suspension of public gatherings.
The decline in crude oil prices, the significant fall in refining margins and demand, especially during the second quarter of 2020, have affected the financial results of the Group resulting in declined profitability and high inventory valuation losses. However, the above have not altered the Group's strategic orientation or targets and the current operations are largely unaffected.
The Group immediately responded to the outbreak of the pandemic and since the end of February took various initiatives to this end primarily focusing on ensuring the health and safety of its employees and all of its stakeholders, as well as the smooth operation of its activities and continuing to supply our markets.
These initiatives include:
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
• Regular disinfection in all workplaces and appropriate disposal of personal protection equipment (PPE).
The evolution of the pandemic, in Greece and globally, is expected to affect the financial results and financial position for at least 2020 and 2021. The impact on the global economy and overall business activities cannot be estimated with reasonable certainty at this stage, due to the pace at which the outbreak expands and the high level of uncertainties arising from the inability to reliably predict the outcome. Management will continue to monitor the situation closely and will assess any potential further impact on the Group's financial position and performance, including the recoverable amount of its investments, in case the period of disruption becomes prolonged.
United Kingdom's exit from the European Union: The Group is sourcing funds from international debt capital markets, through Eurobonds, issued by its London based subsidiary, Hellenic Petroleum Finance plc, listed in the Luxembourg stock exchange, for the optimal management of its debt liabilities. It is uncertain, how the exit of the UK from the EU will affect existing HPF Eurobonds, as well as the Group's funding from international debt capital markets. Legal advice received indicates that HPF will be able to continue unimpeded to source funding through the issue of Eurobonds under the terms and conditions of Notes currently in circulation. The Group is closely following relevant developments and assessing alternatives in order to maintain its ability to source funding through the international debt capital markets.
Currency: The Group's business is naturally hedged against a functional currency risk. All petroleum industry transactions are referenced to international benchmark quotes for crude oil and oil products in USD. All international purchases and sales of crude oil and products are conducted in USD and all sales into local markets are either in USD prices or converted to local currency for accounting and settlement reasons using the USD reference on the date of the transaction.
Prices: Commodity price risk management is supervised by a Risk Management Committee, which includes Finance and Trading departments' Senior Management. Non-commodity price risk management is carried out by the Finance Department under policies approved by the Board of Directors. The Finance Department identifies and evaluates financial risks in close co-operation with the Group's operating units. During the six-month period ended on 30 June 2020 Group entered into certain derivatives to hedge cash flows related to purchases and sales of crude oil and petroleum products.
Securing continuous crude oil supplies: Τhe developments in the global and regional crude oil markets during the first half of 2020 (outbreak of COVID 19 and the containment measures imposed by the majority of the countries worldwide) resulted in a significant decrease in the cost of raw material for the Group. Average international crude oil reference prices in the first half of 2020 decreased by about 40% compared to average prices in 2019. These developments led to lower cost of crude, for both sweet and especially sour grades, which represent the key source of feedstock for complex refiners like Hellenic Petroleum, improving the competitive position of Med refiners vs. their global peers. The Group was able to take advantage of this development and diversify its crude basket. In the context of the above the Group was able to capture opportunities in contango trades for crude and products by utilizing its available storage capacity. The oil sector is anticipated to gradually recover during the next months (mainly as a result of the gradual lift of the abovementioned measures, supported also by the reduction of crude oil surplus).
Financing of operations: Given financial market developments since 2011, the key priorities of the Group have been the management of the 'Assets and Liabilities' maturity profile, funding in accordance with its strategic investment plan and liquidity risk for operations. As a result of these key priority initiatives and in line with its medium term financing plan, the Group has maintained a mix of long term, medium term and short term credit facilities by taking into consideration bank and debt capital markets' credit capacity as well as cash flow planning and commercial requirements. In the six month period ended 30 June 2020, the Group has successfully renewed all borrowings maturing within the period and additionally concluded a €100 million committed credit facility (Note 18), reaffirming its relationships with key financial institutions being the majority of the existing debt providers of the Group. Approximately 70% of total debt is financed by medium to long term committed credit lines while the remaining debt is being financed by short term credit facilities (bilateral lines). Further details of the relevant loans and refinancing are provided in Note 18, "Interest bearing loans and borrowings".
The Group's plans with respect to facilities expiring within the next 12 months are presented below in million Euros. Contractual Term Facilities 2H20 1H21 Total Schedule for repayment Schedule for refinancing Bond loan €400 million 225 - 225 - 225 Bond loan €300 million - 300 300 - 300 Bond loan \$ 250 million - 222 222 - 222 European Investment Bank ("EIB") Term loan 22 22 44 44 - Other credit lines (callable on demand) Bilateral/ Factoring with recourse 858 - 858 - 858
The Group is in the process of executing a refinancing plan for the above bond loans. Following negotiations with the banks concerned, the Group obtained proposed key terms for refinancing certain of the above bond loan facilities as well as head of terms for a new committed term loan facility. The Group expects the refinancing to be completed in due time before maturity of existing loans. With respect to the bilateral lines, these are uncommitted credit facilities with various banks to finance general corporate needs, which have been consistently renewed in the last 20 years in accordance with the Group's finance needs. The Group expects it will be able to continue to renew these in the future or will refinance part of them into term loans.
Total 1.105 544 1.649 44 1.605
Capital management: Another key priority of the Group has been the management of its Assets. Overall the Group has approximately €3,9 billion of capital employed which is driven from working capital, investment in fixed assets and its investment in its associates and joint ventures. Current assets are mainly funded with current liabilities (incl. short term bank debt) which are used to finance working capital (inventories and receivables). As a result of the implementation of the Group's investment plan during the period 2007-2012, net debt level, excluding leases has increased to 48% of total capital employed while the remaining 52% is financed through shareholders equity. In the medium term the Group's intention is to reduce its net debt levels through the utilization of the incremental operating cashflows. This is expected to lead to lower Debt to Equity ratio, better matched Asset and Liability maturity profiles as well as lower financing costs.
The interim condensed consolidated financial statements do not include all financial risk management information and disclosures that are required in the annual consolidated financial statements and should be read in conjunction with the group's annual consolidated financial statements as at 31 December 2019.
There have been no changes in the risk management or in any risk management policies since 31 December 2019.
The table below analyses financial instruments carried at fair value, categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The different levels are defined as follows:
The following table presents the Group's assets and liabilities that are measured at fair value at 30 June 2020:
| Total | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | balance | |
| Assets | ||||
| Derivatives used for hedging- ST | - | 5.830 | - | 5.830 |
| Investment in equity instruments | 906 | - | - | 906 |
| Assets held for sale | 2.209 | - | - | 2.209 |
| 3.115 | 5.830 | - | 8.945 | |
| Liabilities | ||||
| Derivatives used for hedging | - | - | - | - |
| - | - | - | - |
The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2019:
| Total | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | balance | |
| Assets | ||||
| Derivatives used for hedging | - | 3.474 | - | 3.474 |
| Investment in equity instruments | 1.356 | - | - | 1.356 |
| Assets held for sale | 2.520 | - | - | 2.520 |
| 3.876 | 3.474 | - | 7.350 | |
| Liabilities | ||||
| Derivatives used for hedging | - | - | - | - |
| - | - | - | - |
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry Group, pricing service, or regulatory agency. These financial instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
There were no changes in valuation techniques during the period. There were no transfers between levels during the period ended on 30 June 2020.
The fair value of Euro denominated Eurobonds as at 30 June 2020 was €702 million (31 December 2019: €718 million), compared to its book value of €693 million (31 December 2019: €692 million). The fair value of the remaining borrowings approximates their carrying value. The fair values of borrowings are within level 2 of the fair value hierarchy.
The fair value of the following financial assets and liabilities approximate their carrying amount due to their short term nature:
All critical operating decisions are made by the Group's Executive Committee, which reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The committee assesses performance taking into account a number of measures which may vary depending on the nature and evolution of a business segment by taking into account the risk profile, cash flow, product and market considerations. Information provided to the committee is measured in a manner consistent with that of the financial statements.
Financial information regarding the Group's operating segments for the six-month period ended 30 June 2020 is presented below:
| For the six month period ended 30 June 2020 | |||||||
|---|---|---|---|---|---|---|---|
| Refining | Marketing | Exploration & | Production Petro-chemicals Gas & Power | Other | Total | ||
| Gross Sales | 2.563.544 | 997.935 | - | 132.630 | 2.013 | 5.031 | 3.701.153 |
| Inter-segmental Sales | (708.058) | (2.423) | - | - | (8) | (4.649) | (715.137) |
| Revenue from contracts with customers | 1.855.486 | 995.512 | - | 132.630 | 2.005 | 382 | 2.986.016 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | (393.595) | 26.117 | (5.651) | 34.139 | 1.767 | (3.369) | (340.592) |
| Depreciation & Amortisation (PPE & Intangibles) | (81.904) | (19.569) | (453) | (2.096) | (553) | (230) | (104.805) |
| Depreciation of Right-of-Use assets (*) | (2.941) | (16.541) | (25) | (1.808) | (5) | 282 | (21.038) |
| Operating profit / (loss) | (478.440) | (9.993) | (6.129) | 30.235 | 1.209 | (3.317) | (466.435) |
| Currency exchange gains / (losses) | 4.342 | (83) | - | (5) | - | - | 4.254 |
| Share of profit / (loss) of investments in associates & joint ventures | (892) | 1.288 | - | - | 5.554 | 12.448 | 18.398 |
| Finance (expense) / income - net | (29.019) | (5.807) | - | 31 | (142) | (17.270) | (52.207) |
| Lease finance cost (*) | (662) | (4.782) | (11) | (39) | (1) | 60 | (5.435) |
| Profit / (loss) before income tax | (504.671) | (19.377) | (6.140) | 30.223 | 6.620 | (8.079) | (501.425) |
| Income tax expense / (credit) | 165.646 | ||||||
| Profit / (loss) for the period | (335.779) | ||||||
| Profit / (loss) attributable to non-controlling interests | (62) | ||||||
| Profit / (loss) for the period attributable to the owners of the parent | (335.841) |
* Other segment includes inter-segment eliminations for depreciation of right of use assets and lease finance cost.
(All amounts in Euro thousands unless otherwise stated)
Financial information regarding the Group's operating segments for the six -month period ended 30 June 2019 is presented below:
| For the six month period ended 30 June 2019 | |||||||
|---|---|---|---|---|---|---|---|
| Refining | Marketing | Exploration & | Production Petro-chemicals Gas & Power | Other | Total | ||
| Gross Sales | 3.940.101 | 1.521.272 | - | 158.657 | 1.809 | 6.908 | 5.628.746 |
| Inter-segmental Sales | (1.162.303) | (3.916) | - | - | (11) | (5.887) | (1.172.117) |
| Revenue from contracts with customers | 2.777.798 | 1.517.356 | - | 158.657 | 1.798 | 1.021 | 4.456.629 |
| EBITDA | 215.714 | 54.565 | (2.776) | 52.906 | 1.249 | 1.244 | 322.902 |
| Depreciation & Amortisation (PPE & Intangibles) | (73.464) | (19.856) | (250) | (2.270) | (549) | (317) | (96.706) |
| Depreciation of Right-of-Use assets * | (3.306) | (15.598) | (16) | (54) | (5) | 461 | (18.517) |
| Operating profit / (loss) | 138.944 | 19.111 | (3.042) | 50.582 | 695 | 1.388 | 207.679 |
| Currency exchange gains / (losses) | 1.025 | (281) | (1) | - | - | - | 743 |
| Share of profit / (loss) of investments in associates & joint ventures | 1.012 | 195 | - | - | 13.233 | 5 | 14.445 |
| Finance (expense) / income - net | (27.502) | (7.513) | - | 25 | (175) | (28.324) | (63.489) |
| Lease finance cost * | (464) | (4.284) | (2) | (4) | (2) | 50 | (4.705) |
| Profit / (loss) before income tax | 113.016 | 7.228 | (3.045) | 50.604 | 13.751 | (26.881) | 154.674 |
| Income tax expense / (credit) | (33.313) | ||||||
| Profit / (loss) for the period | 121.361 | ||||||
| Profit / (loss) attributable to non-controlling interests | (40) | ||||||
| Profit / (loss) for the period attributable to the owners of the parent | 121.321 |
* Other segment includes inter-segment eliminations for depreciation of right of use assets and lease finance cost.
Inter-segment sales primarily relate to sales from the refining segment to other operating segments.
"Other Segments" include Group entities, which provide treasury, consulting and engineering services.
There were no changes in the basis of segmentation or in the basis of measurement of segment profit or loss, as compared to the consolidated annual financial statements for the year ended 31 December 2019.
There has been no material change in the definition of segments or the segmental analysis of total assets or total liabilities from the amounts disclosed in the consolidated annual financial statements for the year ended 31 December 2019.
An analysis of the Group's revenue from contracts with customers by type of market (domestic, aviation & bunkering, exports and international activities) and business unit is presented below:
| For the six month period ended 30 June 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Exploration & | Gas & | ||||||||
| Revenue from contracts with customers | Refining Marketing | Production | Petro-chemicals | Power | Other | Total | |||
| Domestic | 374.944 | 674.092 | - | 47.303 | 2.005 | 378 | 1.098.722 | ||
| Aviation & Bunkering | 151.252 | 119.884 | - | - | - | (0) | 271.136 | ||
| Exports | 1.203.134 | 6.668 | - | 85.327 | - | 4 | 1.295.133 | ||
| International activities | 126.156 | 194.868 | - | - | - | - | 321.024 | ||
| Total | 1.855.486 | 995.512 | - | 132.630 | 2.005 | 382 | 2.986.016 |
(All amounts in Euro thousands unless otherwise stated)
| For the six month period ended 30 June 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Exploration & | Gas & | ||||||||
| Revenue from contracts with customers | Refining Marketing | Production | Petro-chemicals | Power | Other | Total | |||
| Domestic | 558.868 | 808.219 | - | 56.640 | 1.798 | 435 | 1.425.959 | ||
| Aviation & Bunkering | 287.174 | 301.690 | - | - | - | - | 588.865 | ||
| Exports | 1.726.296 | 10.410 | - | 102.017 | - | 223 | 1.838.946 | ||
| International activities | 205.459 | 397.037 | - | - | - | 363 | 602.859 | ||
| Total | 2.777.797 | 1.517.356 | - | 158.657 | 1.798 | 1.021 | 4.456.629 |
| For the six month period ended | For the three month period ended | |||
|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | 30 June 2020 | 30 June 2019 | |
| Other operating income and other gains | ||||
| Income from Grants | 520 | 589 | 272 | 394 |
| Services to 3rd Parties | 1.127 | 2.335 | 316 | 1.698 |
| Rental income | 3.438 | 4.208 | 1.274 | 1.971 |
| Insurance compensation | 143 | 269 | (17) | 2 |
| Gains on disposal of non-current assets | 2.539 | 292 | 1.883 | 87 |
| Gains from discounting of long-term receivables and liabilities | 2.001 | 689 | 449 | 445 |
| Other | 14.040 | 13.466 | 11.571 | 9.374 |
| Total | 23.808 | 21.848 | 15.748 | 13.971 |
| Other operating expenses and other losses | ||||
| Covid-19 related expenses | (12.002) | - | (12.002) | - |
| Loss on disposal of non-current assets | (344) | (312) | (50) | (229) |
| Impairment of fixed assets | (85) | (745) | (37) | (5) |
| Loss from discounting of long-term receivables and liabilities | (583) | (681) | (419) | (681) |
| Other | (1.205) | (7.030) | 680 | (2.892) |
| Total | (14.219) | (8.768) | (11.828) | (3.807) |
| Other operating income / (expenses) and other gains / (losses) - Net | 9.589 | 13.080 | 3.920 | 10.164 |
Restatement: The analysis of the comparative amounts as at 30 June 2019 has been reclassified within the note to conform to changes in presentation of the current year.
Other operating income / (expenses) and other gains / (losses) include amounts which do not relate to the principal trading activities of the Group.
Covid-19 related expenses of €12 million comprise of €4,3 million payroll costs mainly related to required modifications in the working shifts in the refineries, €3,2 million donations to the health-care system, €2,2 million for protective measures in all Group's premises and €2,2 million for marketing, consulting services and other related expenses.
Rental income relates to long term rental of petrol stations, let to dealers.
Foreign currency exchange gains of €4,3 million reported for the six-month period ended 30 June 2020, mainly relate to unrealized gains arising from the valuation of bank accounts denominated in foreign currency (mostly USD) as well as unrealized exchange losses arising from the valuation of borrowings denominated in foreign currency. The corresponding amount for the six -month period ended 30 June 2019 was a gain of €0,7 million.
The amounts represent the Group's share of the net profit / (losses) from associated companies and joint ventures accounted for on an equity accounting basis, which are analysed as follows:
| For the six month period ended | For the three month period ended | ||||
|---|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | 30 June 2020 | 30 June 2019 | ||
| DEPA Commercial SA (ex Public Natural Gas Corporation of Greece (DEPA)) | 14.823 | 16.856 | (29.007) | 245 | |
| DEPA Infrastructure SA | (949) | - | (949) | - | |
| ELPEDISON B.V. | 5.554 | (3.623) | 1.495 | (4.285) | |
| DMEP | (523) | 719 | 1.930 | (11) | |
| Other associates | (507) | 493 | (478) | 405 | |
| Total | 18.398 | 14.445 | (27.009) | (3.646) |
The Group is active in power generation, trading and supply in Greece through its 50% shareholding in Elpedison B.V., a joint venture entity with EDISON International. The Group accounts for Elpedison B.V. using the equity method and as such, the Group's 50% share of the consolidated results of Elpedison B.V. appear under "Share of profit of investments in associates and joint ventures" and its 50% share of net assets under "Investment in associates and joint ventures". Based on the improved results of Elpedison during the six-month period ended on 30 June 2020 there is no indication of impairment.
The Group's subsidiary company, Hellenic Petroleum International AG, participates in the shareholding of DMEP Holdco Ltd (48% shareholding). DMEP HoldCo Ltd is incorporated in the UK and ultimately owns 100% of "OTSM S.A. of Maintenance Compulsory Stocks and Trading of Crude Oil and Petroleum Products" (OTSM). OTSM is established under Greek law and is fully permitted to provide crude oil and petroleum products stock keeping and management services. The Group has delegated part of its compulsory stock keeping obligations to OTSM, reducing its stock holding by approximately 153 kMT (31 December 2019: 142 kMT), at a fee calculated in line with the legal framework. All Group's transactions with OTSM are included in Note 21.
In December 2019, the Hellenic Republic Asset Development Fund ("HRADF" or "Fund") launched an international public tender process for the joint sale, along with HELLENIC PETROLEUM SA (HELPE), of the 100% in the share capital of DEPA INFRASTRUCTURE SA. In June 2020, Phase A of the tender process was completed, with six interested parties meeting the criteria to participate in Phase B (Binding Offers Phase).
In January 2020, the HRADF launched an international public tender process for the sale of 65% in the share capital of DEPA Commercial S.A. The Fund and HELPE have entered into a Memorandum of Understanding (MoU) allowing for the preferred investor to have the option to acquire the remaining 35% of shares in DEPA Commercial S.A. owned by HELPE, leading to an acquisition of 100% of its share capital. In June 2020, Phase A of the tender process was completed, with seven interested parties meeting the criteria to participate in Phase B (Binding Offers Phase). HELLENIC PETROLEUM S.A. is among the interested parties, in a joint venture with EDISON INTERNATIONAL HOLDING N.V.
The completion of sale process for DEPA Infrastructure and the completion of the sale or acquisition of controlling stake in DEPA Commercial are subject to a number of conditions including regulatory approval.
In accordance with Law 4001/ 2011 as amended by Law 4643/2019 a partial demerger of DEPA's distribution gas branch took place on 30 April 2020 and a new entity name DEPA infrastructure was created. The new company includes the participation in the entities acting as operators of Natural Gas Distribution Networks, i.e. EDA Attikis SA, EDA Thessalonikis – Thessalias SA and DEDA SA. The surviving entity was renamed as DEPA commercial SA and will include all current wholesale and retail gas activities of DEPA through the 100% participation in EPA Attikis.
In the period up to 30 April 2020, the Group consolidated using the equity method of accounting 35% of the net asset value of DEPA group. Following the partial demerger on 30 April, the Group separately consolidates the DEPA Commercial group and DEPA Infrastructure group using the equity method of accounting and the carrying value of the investments in the consolidated financial statements reflects HELPE's 35% share of the net asset value of the DEPA Commercial and DEPA Infrastructure group.
(All amounts in Euro thousands unless otherwise stated)
The tax (charge) / credit relating to components of comprehensive income, is as follows:
| For the six month period | For the three month period ended | ||||
|---|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | 30 June 2020 | 30 June 2019 | ||
| Current tax | (2.904) | (19.861) | (1.318) | (6.848) | |
| Prior year tax | (605) | 5.183 | (802) | 4.873 | |
| Tax on reserves | 0 | 0 | 0 | 0 | |
| Deferred tax | 169.155 | (18.635) | 48.691 | (13.906) | |
| Total expense | 165.646 | (33.313) | 46.571 | (15.881) |
The corporate income tax rate of legal entities in Greece for the period ended 30 June 2020 is 24% (30 June 2019: 28%).
The deferred tax credit within income taxes mainly relates to tax losses arising in the six-month period ended on 30 June 2020 and carried forward amounting to € 122,2 million.
In accordance with thin capitalization rules the net interest expense is deductible up to a certain percentage of tax EBITDA. This resulted in a deferred tax asset of €14,9 million as at 30 June 2020 (31 December 2019: €3 million), which can be offset against future taxable profits without any time constraints.
In accordance with the applicable tax provisions, tax audits in Group companies are conducted as follows:
Effective from fiscal years ending 31 December 2011 onwards, Greek companies meeting certain criteria can obtain an "Annual Tax Compliance Report" as provided for by par. 5, article 82 of L.2238/1994 and article 65A of L. 4174/2013, as of 2014, from their statutory auditor in respect of compliance with tax law. The issuance of a Tax Compliance Report under certain conditions, substitutes the full tax audit by the tax authorities, however the tax authorities reserve the right of future tax audit taking into consideration the statute of limitation provisions.
All Group companies based in Greece have received unqualified Tax Compliance Reports by their respective statutory auditor for fiscal years up to 2018 inclusive. The management expects that the same will also apply for the year ended 31 December 2019.
Income tax years of the parent company and its most significant subsidiaries audited by the tax authorities are set out below:
| Company name | Financial years ended (up to and including) |
|---|---|
| HELLENIC PETROLEUM SA | 2011 |
| EKO SA | 2010 |
| HELLENIC FUELS & Lubricants SA (former HELLENIC FUELS SA) | 2011 |
Νotwithstanding the possibility of future tax audits, Group management believes that no additional material liability will arise as a result of unaudited tax years over and above the tax liabilities and provisions recognised in the consolidated financial statements as of 30 June 2020 (Note 23).
Basic earnings / (losses) per share are calculated by dividing the net profit / (loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, excluding the weighted average number of treasury shares. Diluted earnings / (losses) per share equal basic earnings (losses) per share.
(All amounts in Euro thousands unless otherwise stated)
| For the six month period ended 30 June 2020 |
30 June 2019 | For the three month period ended 30 June 2020 |
30 June 2019 | |
|---|---|---|---|---|
| Earnings per share attributable to the Company | ||||
| Shareholders (expressed in Euro per share): | (1,10) | 0,40 | 0,01 | 0,24 |
| Net income attributable to ordinary shares | ||||
| (Euro in thousands) | (335.841) | 121.321 | 3.966 | 74.205 |
| Weighted average number of ordinary shares | 305.635.185 | 305.635.185 | 305.635.185 | 305.635.185 |
| Plant & | Transportation | Furniture and | Assets Under | ||||
|---|---|---|---|---|---|---|---|
| Land | Buildings | Machinery | means | fixtures | Con-struction | Total | |
| Cost | |||||||
| As at 1 January 2019 | 314.960 | 918.298 | 4.820.343 | 92.319 | 193.750 | 92.143 | 6.431.813 |
| Additions | 1.227 | 908 | 7.851 | 49 | 3.617 | 62.960 | 76.612 |
| Capitalised projects | - | 3.511 | 23.905 | 65 | 467 | (27.948) | - |
| Disposals | (12) | (15) | (7.895) | (75) | (1.198) | - | (9.195) |
| Impairment/write off | - | (1.056) | (666) | (1) | (198) | (678) | (2.599) |
| Currency translation effects | 49 | (2) | (136) | (1) | (6) | (36) | (132) |
| Transfers and other movements | (4.943) | (2.801) | (839) | 2.524 | (866) | (4.168) | (11.093) |
| As at 30 June 2019 | 311.281 | 918.843 | 4.842.563 | 94.880 | 195.566 | 122.273 | 6.485.406 |
| Accumulated Depreciation | |||||||
| As at 1 January 2019 | - | 489.551 | 2.452.564 | 63.222 | 157.548 | - | 3.162.885 |
| Charge for the period | - | 13.894 | 72.570 | 1.637 | 4.559 | - | 92.660 |
| Disposals | - | (12) | (7.599) | (75) | (1.145) | - | (8.831) |
| Impairment/write off | - | (1.013) | (658) | - | (198) | - | (1.869) |
| Currency translation effects | - | (40) | (116) | (2) | (6) | - | (164) |
| Transfers and other movements | - | (1.809) | (734) | 886 | (709) | - | (2.366) |
| As at 30 June 2019 | - | 500.571 | 2.516.027 | 65.668 | 160.049 | - | 3.242.315 |
| Net Book Value at 30 June 2019 | 311.281 | 418.272 | 2.326.536 | 29.212 | 35.517 | 122.273 | 3.243.091 |
| Cost | |||||||
| As at 1 January 2020 | 308.826 | 924.515 | 4.947.527 | 87.472 | 202.682 | 148.576 | 6.619.598 |
| Additions | - | 626 | 5.285 | 439 | 1.974 | 66.830 | 75.154 |
| Capitalised projects | - | 2.997 | 43.615 | - | 113 | (46.725) | - |
| Disposals | (867) | (2.174) | (3.243) | (11.121) | (634) | - | (18.039) |
| Impairment/write off | - | (1.780) | (975) | - | - | - | (2.755) |
| Currency translation effects | (13) | (172) | (325) | (4) | (19) | (2) | (535) |
| Transfers and other movements | - | 333 | 1.598 | - | - | (1.383) | 548 |
| As at 30 June 2020 | 307.946 | 924.345 | 4.993.482 | 76.786 | 204.116 | 167.296 | 6.673.971 |
| Accumulated Depreciation | |||||||
| As at 1 January 2020 | - | 509.186 | 2.588.552 | 59.423 | 164.769 | - | 3.321.930 |
| Charge for the period | - | 13.075 | 81.256 | 1.708 | 5.141 | - | 101.180 |
| Disposals | - | (2.173) | (2.991) | (11.121) | (567) | - | (16.852) |
| Impairment/write off | - | (1.736) | (934) | - | - | - | (2.670) |
| Currency translation effects | - | (162) | (277) | (4) | (17) | - | (460) |
| As at 30 June 2020 | - | 518.190 | 2.665.606 | 50.006 | 169.326 | - | 3.403.128 |
| Net Book Value at 30 June 2020 | 307.946 | 406.155 | 2.327.876 | 26.780 | 34.790 | 167.296 | 3.270.843 |
'Transfers and other movements' for the six-month period ended on 30 June 2019 primarily comprise the transfer of finance leases balances (Cost of € 10.4 million and Accumulated Depreciation of € 4.1 million) to right-of-use assets based on the implementation of the IFRS 16 as from 1 January 2019. 'Transfers and other movements' for the six-month period ended on 30 June 2020 include the transfer of computer software development costs (Cost of € 1 million) to intangible assets(Note 12) and the transfer of spare parts for the refinery units between inventories and fixed assets.
Plant and machinery include the pipeline connecting Thessaloniki and Skopje, which is an asset of the Group's subsidiary Vardax S.A.. and has been tested for impairment according to the requirements of IAS 36 in the annual financial statements of 2019. Although commencement date may be delayed due to Covid-19 pandemic, the impairment test included a sensitivity analysis assuming 2 years delay in operation commencement. The result of the impairment test was that the carrying amount of the asset is recoverable.
| Petrol station properties |
Commercial Properties |
Plant & Machinery |
Motor Vehicles |
Other | Total | |
|---|---|---|---|---|---|---|
| Cost | ||||||
| As at 1 January 2019 | 189.950 | 22.419 | 6.325 | 6.275 | - | 224.969 |
| Additions | 8.007 | 73 | 144 | 1.695 | - | 9.920 |
| Derecognition | (6) | - | - | (18) | - | (24) |
| Modification | 6.955 | 46 | 10 | 1.177 | - | 8.188 |
| Currency translation effects | 12 | - | - | (5) | - | 7 |
| As at 30 June 2019 | 204.919 | 22.538 | 6.479 | 9.124 | - | 243.060 |
| Accumulated Depreciation | ||||||
| As at 1 January 2019 | 4.094 | - | - | - | - | 4.094 |
| Charge for the period | 13.225 | 2.950 | 564 | 1.781 | - | 18.519 |
| As at 30 June 2019 | 17.319 | 2.950 | 564 | 1.781 | - | 22.613 |
| Net Book Value at 30 June 2019 | 187.600 | 19.588 | 5.915 | 7.343 | - | 220.447 |
| Petrol station | Commercial | Plant & | Motor | |||
|---|---|---|---|---|---|---|
| properties | Properties | Machinery | Vehicles | Other | Total | |
| Cost | ||||||
| As at 1 January 2020 | 219.969 | 31.321 | 8.909 | 25.714 | - | 285.913 |
| Additions | 9.630 | 11 | 1.043 | 309 | 26 | 11.019 |
| Derecognition | - | (24) | - | - | - | (24) |
| Impairment/ Write off | - | - | - | (50) | - | (50) |
| Modification | 3.468 | 242 | 30 | (0) | - | 3.740 |
| Currency translation effects and other movements | 15 | (0) | - | (20) | - | (5) |
| As at 30 June 2020 | 233.083 | 31.549 | 9.982 | 25.953 | 26 | 300.593 |
| Accumulated Depreciation | ||||||
| As at 1 January 2020 | 31.576 | 5.887 | 1.150 | 4.366 | - | 42.979 |
| Charge for the period | 13.784 | 2.278 | 920 | 4.052 | 4 | 21.038 |
| Derecognition | - | (16) | - | - | - | (16) |
| Impairment/ Write off | - | - | - | (50) | - | (50) |
| Currency translation effects and other movements | 0 | - | - | (6) | - | (6) |
| As at 30 June 2020 | 45.360 | 8.148 | 2.070 | 8.362 | 4 | 63.945 |
| Net Book Value at 30 June 2020 | 187.722 | 23.401 | 7.912 | 17.591 | 22 | 236.648 |
| Retail Service | ||||||
|---|---|---|---|---|---|---|
| Station Usage | Computer | Licences & | ||||
| Goodwill | Rights | software | Rights | Other | Total | |
| Cost | ||||||
| As at 1 January 2019 | 133.914 | 53.858 | 114.992 | 38.807 | 74.806 | 416.377 |
| Additions | 4.674 | 320 | 576 | 26 | 52 | 5.648 |
| Disposals | - | (39) | (51) | - | - | (90) |
| Currency translation effects | - | - | 1 | (2) | 10 | 9 |
| Other movements | - | - | 2.615 | 5 | - | 2.620 |
| As at 30 June 2019 | 138.588 | 54.139 | 118.133 | 38.836 | 74.868 | 424.564 |
| Accumulated Amortisation | ||||||
| As at 1 January 2019 | 71.829 | 37.701 | 107.180 | 29.689 | 64.361 | 310.760 |
| Charge for the period | - | 1.091 | 2.432 | 299 | 223 | 4.046 |
| Impairment | - | - | - | 15 | - | 15 |
| Disposals | - | (20) | (51) | - | - | (71) |
| Currency translation effects | - | - | (1) | (1) | - | (2) |
| Other movements | - | - | - | 3 | - | 3 |
| As at 30 June 2019 | 71.829 | 38.772 | 109.561 | 30.006 | 64.584 | 314.751 |
| Net Book Value at 30 June 2019 | 66.759 | 15.367 | 8.573 | 8.830 | 10.284 | 109.813 |
| Cost As at 1 January 2020 |
138.588 | 6.993 | 123.404 | 40.222 | 74.596 | 383.803 |
| Additions | - | - | 2.912 | 444 | 73 | 3.429 |
| Disposals | - | - | (6) | - | - | (6) |
| Currency translation effects | - | - | (3) | (2) | 1 | (4) |
| Other movements | - | - | 1.045 | - | - | 1.045 |
| As at 30 June 2020 | 138.588 | 6.993 | 127.352 | 40.664 | 74.670 | 388.266 |
| Accumulated Amortisation | ||||||
| As at 1 January 2020 | 71.829 | - | 112.349 | 30.574 | 64.625 | 279.377 |
| Charge for the period | - | - | 2.943 | 450 | 232 | 3.625 |
| Disposals | - | - | (6) | - | - | (6) |
| Currency translation effects | - | - | (2) | (2) | - | (4) |
| As at 30 June 2020 | 71.829 | - | 115.285 | 31.022 | 64.857 | 282.993 |
| Net Book Value at 30 June 2020 | 66.759 | 6.993 | 12.067 | 9.642 | 9.812 | 105.274 |
'Licenses and Rights' include net exploration license costs relating to the exploration & production of hydrocarbons' concessions in Greece. 'Other movements' in computer software include the transfer of computer software development costs from assets under construction to intangible assets (Note 10).
Management assessed goodwill and concluded that due to the significant headroom there is no impairment concern as of 30 June 2020.
(All amounts in Euro thousands unless otherwise stated)
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Crude oil | 68.985 | 331.819 | ||
| Refined products and semi-finished products | 469.428 | 587.398 | ||
| Petrochemicals | 20.712 | 25.554 | ||
| Consumable materials and other spare parts | 102.951 | 98.571 | ||
| - Less: Provision for consumables and spare parts | (30.540) | (30.540) | ||
| Total | 631.536 | 1.012.802 |
The cost of inventories recognised as an expense and included in Cost of sales amounted to €2,8 billion (30 June 2019: €3,6 billion). As at 30 June 2020, the Group wrote down inventories to their net realisable value, recording a loss of €14,7 million (30 June 2019: loss of €4,7 million included in Cost of Sales in the statement of comprehensive income).
Under IEA and EU regulations, Greece is obliged to hold crude oil and refined product stocks in order to fulfil the EU requirement for compulsory Stock obligations (90 days stock directive), as legislated by Greek Law 3054/2002. This responsibility is passed on to all companies, including Hellenic Petroleum S.A., which import and sell in the domestic market and who have the responsibility to maintain and finance the appropriate stock levels. Such stocks are part of the operating stocks and are valued on the same basis.
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Trade receivables | 624.804 | 748.181 | ||
| - Less: Provision for impairment of receivables | (260.438) | (255.023) | ||
| Trade receivables net | 364.366 | 493.158 | ||
| Other receivables | 267.287 | 275.695 | ||
| - Less: Provision for impairment of receivables | (45.025) | (44.120) | ||
| Other receivables net | 222.262 | 231.575 | ||
| Deferred charges and prepayments | 19.929 | 23.420 | ||
| Total | 606.557 | 748.153 |
As part of its working capital management the Group utilises factoring facilities to accelerate the collection of cash from its customers in Greece. Non-recourse factoring, is excluded from balances shown above, since all risks and rewards of the relevant invoices have been transferred to the factoring institution.
Other receivables include balances in respect of advances to suppliers, advances to personnel, VAT, withholding taxes and taxes paid (other than income taxes which are shown separately on the statement of financial position), as a result of tax audit assessments from the tax authorities during previous years. The Group has disputed the relevant assessments and has commenced legal proceedings. The timing of the finalization of these disputes cannot be estimated and the Group has classified the amounts as current assets.
This balance as at 30 June 2020 also includes an amount of €54 million (31 December 2019: €54 million) of VAT approved refunds which has been withheld by the customs authorities due to a dispute relating to stock shortages. The Group has filed a specific legal objection and claim against this action and expects to fully recover this amount following the conclusion of the relevant legal proceedings (Note 23).
(All amounts in Euro thousands unless otherwise stated)
The Group recognized additional provisions for impairment losses on trade and other receivables, included in the statement of comprehensive income, amounting to €6,4 million and €4,1 million for the six months ended 30 June 2020 and 2019, respectively.
| As at | ||
|---|---|---|
| 30 June 2020 | 31 December 2019 | |
| Cash at Bank and in Hand | 1.128.570 | 1.083.747 |
| Short term bank deposits | - | 4.451 |
| Cash and Cash Equivalents | 1.128.570 | 1.088.198 |
The balance of US Dollars included in Cash at bank as at 30 June 2020 was \$567 million (euro equivalent €506 million). The respective amount for the period ended 31 December 2019 was \$824 million (euro equivalent €734 million).
| Number of Shares (authorised and issued) |
Share Capital |
Share premium |
Total | |
|---|---|---|---|---|
| As at 1 January & 31 December 2019 | 305.635.185 | 666.285 | 353.796 | 1.020.081 |
| As at 30 June 2020 | 305.635.185 | 666.285 | 353.796 | 1.020.081 |
All ordinary shares were authorised, issued and fully paid. The nominal value of each ordinary share is €2,18 (31 December 2019: €2,18).
| Statutory reserve |
Special reserves |
Hedging reserve |
Share-based payment reserve |
Tax-free & Incentive Law reserves |
Other Reserves | Treasury Shares |
Total | |
|---|---|---|---|---|---|---|---|---|
| Balance at 1 January 2019 | 144.838 | 86.495 | (11.751) | 1 | 71.335 | (32.391) | - | 258.527 |
| Changes of the fair value of equity investments | - | - | - | - | - | 691 | - | 691 |
| Recycling of gains / (losses) on hedges through comprehensive income | - | - | 1.501 | - | - | - | - | 1.501 |
| Actuarial gains / (losses) on defined benefit pension plans | - | - | - | - | - | (56) | - | (56) |
| Fair value gains / (losses) on cash flow hedges | - | - | 5.186 | - | - | - | - | 5.186 |
| Currency translation differences and other movements | - | - | - | - | - | 81 | - | 81 |
| Share of other comprehensive income / (loss) of associates | - | - | - | - | - | (41) | - | (41) |
| Balance at 30 June 2019 | 144.838 | 86.495 | (5.064) | 1 | 71.335 | (31.716) | - | 265.889 |
| Balance at 1 January 2020 | 160.656 | 86.495 | 2.640 | 1 | 71.335 | (44.155) | - | 276.972 |
| Changes of the fair value of equity investments | - | - | - | - | - | (352) | - | (352) |
| Recycling of gains / (losses) on hedges through comprehensive income | - | - | 25.077 | - | - | - | - | 25.077 |
| Fair value gains / (losses) on cash flow hedges | - | - | (31.140) | - | - | - | - | (31.140) |
| Currency translation differences and other movements | - | - | - | (1) | - | 185 | - | 184 |
| Share of other comprehensive income / (loss) of associates | - | - | - | - | - | 217 | 217 | |
| As at 30 June 2020 | 160.656 | 86.495 | (3.423) | - | 71.335 | (44.105) | - | 270.958 |
Statutory reserves
Under Greek law, corporations are required to transfer a minimum of 5% of their annual net profit as reflected in their statutory books to a statutory reserve until this reserve is equal to one third of the outstanding share capital. This reserve cannot be distributed during the existence of the corporation, but can be used to offset accumulated losses.
Special reserves primarily relate to reserves arising from tax revaluations which have been included in the parent company accounts in accordance with the relevant legislation in prior years.
These reserves relate to retained earnings that have not been taxed with the prevailing corporate income tax rate as allowed by Greek law under various statutes and include reserves relating to investments under incentive laws. These reserves will become liable to tax at the rate prevailing at the time of distribution to shareholders or conversion to share capital under certain conditions.
The hedging reserve is used to record gains or losses on derivatives that are designated and qualify as cash flow hedges and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss within cost of sales. As at 30 June 2020 the fair value result in hedging reserve relates to transactions described in Note 3 for commodity price risk management.
Other reserves are almost entirely comprised of actuarial losses.
Other reserves include:
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Non-current interest bearing loans and borrowings | ||||
| Bank borrowings | 538.718 | 917.938 | ||
| Eurobonds | 693.188 | 692.156 | ||
| Total non-current interest bearing loans and borrowings | 1.231.906 | 1.610.094 | ||
| Current interest bearing loans and borrowings | ||||
| Short term bank borrowings | 1.604.746 | 977.826 | ||
| Current portion of long-term bank borrowings | 44.444 | 44.444 | ||
| Total current interest bearing loans and borrowings | 1.649.190 | 1.022.270 | ||
| Total interest bearing loans and borrowings | 2.881.096 | 2.632.364 |
The Group has centralized treasury operations which coordinate and control the funding and cash management activities of all group companies. Within this framework, Hellenic Petroleum Finance plc (HPF) was established in November 2005 in the U.K. as a wholly-owned subsidiary of Hellenic Petroleum S.A. to act as the central treasury vehicle of the Hellenic Petroleum Group.
Βorrowings of the Group by maturity as at 30 June 2020 and 31 December 2019 are summarised in the table below (amounts in € million):
| Balance as at | Balance as at | |||
|---|---|---|---|---|
| Company Maturity | 30 June 2020 | 31 December 2019 | ||
| 1. Bond loan € 400 million | HP SA | Jun 2023 | 395 | 394 |
| 2. Bond loan € 400 million | HP SA | Dec 2020 | 225 | 224 |
| 3. Bond loan € 300 million | HP SA | Feb 2021 | 299 | 299 |
| 4. Bond loan € 100 million | HP SA | Oct 2021 | 100 | 0 |
| 5. Bond loan \$ 250 million | HP SA | Jun 2021 | 222 | 159 |
| 6. European Investment Bank ("EIB") Term loan | HP SA | Jun 2022 | 89 | 111 |
| 7. Eurobond €201m | HPF Plc | Oct 2021 | 200 | 200 |
| 8. Eurobond €500m | HPF Plc | Oct 2024 | 493 | 491 |
| 9. Bilateral lines | Various | Various | 858 | 754 |
| Total | 2.881 | 2.632 |
No loans were in default as at 30 June 2020 (none as at 31 December 2019).
Significant movements in borrowings for the six -month period ended 30 June 2020 are as follows:
In line with the Group's risk management strategy to build up its cash reserves for the Covid-19 crisis, Hellenic Petroleum S.A. concluded a €100 million committed credit facility, with a tenor of 18 months, with Piraeus Bank in April 2020.
In March 2020, Hellenic Petroleum S.A. drew down the remaining portion (\$70 million) of its \$250 million 3 year revolving bond loan facility to finance general working capital needs.
The Group companies have credit facilities with various banks to finance general corporate needs which are being renewed in accordance with the Group's finance needs. The facilities mainly comprise of short-term loans of the parent company Hellenic Petroleum S.A.
Bilateral loan balances increased by € 104 million during the first half of 2020 in line with the Group's liquidity risk management strategy to build up its cash reserves as the Covid-19 crisis was unfolding.
Certain medium-term credit facility agreements that the Group has concluded, include financial covenants, mainly for the maintenance of certain ratios such as: "Consolidated Net Debt/ Consolidated Adjusted EBITDA", "Consolidated Adjusted EBITDA/ Consolidated Net Interest" and "Consolidated Net Debt/ Consolidated Net Worth". Management monitors the performance of the Group to ensure compliance with the above covenants.
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Trade payables | 1.076.706 | 1.238.776 | ||
| Accrued expenses | 94.099 | 77.477 | ||
| Other payables | 66.693 | 85.479 | ||
| Total | 1.237.498 | 1.401.732 |
Trade payables comprise amounts payable or accrued in respect of supplies of crude oil, products, and services.
(All amounts in Euro thousands unless otherwise stated)
Trade payables, as at 30 June 2020 and 31 December 2019, include amounts in respect of crude oil imports from Iran, which were received between December 2011 and March 2012 as part of a long term contract with NIOC. Despite repeated attempts to settle the payment for these cargoes through the international banking system between January and June 2012, it was not possible to do so. In the period from 16 January 2016 up to 8 May 2018, when sanctions were suspended, the Group successfully made several payments against a significant part of these amounts. Following the re-imposition of relevant sanctions by the United States, no deliveries of Iranian crude oil or payments have taken place since 8 May 2018.
Accrued expenses mainly relate to accrued interest, payroll related accruals and accruals for operating expenses not yet invoiced.
Other payables include amounts in respect of payroll related liabilities, social security obligations and sundry taxes.
| For the six month period ended | |||||
|---|---|---|---|---|---|
| Note | 30 June 2020 | 30 June 2019 | |||
| Profit / (loss) before tax | (501.425) | 154.674 | |||
| Adjustments for: | |||||
| Depreciation and impairment of property, plant and equipment and | |||||
| right-of-use assets | 10,11 | 122.303 | 111.906 | ||
| Amortisation and impairment of intangible assets | 12 | 3.625 | 4.061 | ||
| Amortisation of grants | 5 | (520) | (589) | ||
| Finance costs - net | 57.642 | 68.193 | |||
| Share of operating profit / (loss) of associates | 7 | (18.398) | (14.445) | ||
| Provisions for expenses and valuation charges | 28.684 | 5.441 | |||
| Foreign exchange gains / (losses) | 6 | (4.254) | (743) | ||
| Amortization of long term contract costs | 5 | (1.418) | (1.379) | ||
| Gain / (loss) on assets held for sale | 302 | (228) | |||
| (Gain) / loss on sales of property, plant and equipment | 5 | (2.195) | 19 | ||
| (315.654) | 326.911 | ||||
| Changes in working capital | |||||
| (Increase) / decrease in inventories | 377.322 | (33.153) | |||
| (Ιncrease) / decrease in trade and other receivables | 144.743 | (33.358) | |||
| Increase / decrease in trade and other payables | (190.025) | (31.451) | |||
| 332.040 | (97.962) | ||||
| Net cash generated from / (used in) operating activities | 16.386 | 228.949 |
Restatement: The analysis of the comparative amounts as at 30 June 2019 has been reclassified within the note to conform to changes in presentation of the current year.
The interim condensed consolidated statement of comprehensive income includes transactions between the Group and related parties. Such transactions mainly comprise sales and purchases of goods and services in the ordinary course of business.
Transactions have been carried out with the following related parties:
(All amounts in Euro thousands unless otherwise stated)
| For the six month period ended | |||
|---|---|---|---|
| 30 June 2020 | 30 June 2019 | ||
| Sales of goods and services to related parties | |||
| Associates | 425.781 | 177.128 | |
| Joint ventures | 455 | 583 | |
| Total | 426.236 | 177.711 | |
| Purchases of goods and services from related parties | |||
| Associates | 181.095 | 217.659 | |
| Joint ventures | 23.365 | 16.017 | |
| Total | 204.460 | 233.676 | |
| As at | |||
| 30 June 2020 | 31 December 2019 | ||
| Balances due to related parties | |||
| Associates | 24.966 | 9.176 | |
| Joint ventures | 36 | 226 | |
| Total | 25.002 | 9.402 | |
| Balances due from related parties | |||
| Associates | 52.460 | 18.738 | |
| Joint ventures Total |
183 52.643 |
438 19.176 |
Hellenic Petroleum S.A. has provided letters of comfort and guarantees in favour of banks as security for loans granted by them to Elpedison B.V. The outstanding amount of these as at 30 June 2020 was €102 million (31 December 2019: €105 million).
During the six-month period ended 30 June 2020, transactions and balances with the above government related entities are as follows:
Sales of goods and services amounted to €98 million (30 June 2019: €156 million)
| For the six month period ended | |||
|---|---|---|---|
| 30 June 2020 | 30 June 2019 | ||
| Short-term employee benefits | 2.344 | 2.608 | |
| Post-employment benefits | 72 | 72 | |
| Total | 2.416 | 2.680 |
(a) Capital commitments
Significant contractual commitments of the Group amount to €42,6 million as at 30 June 2020 (31 December 2019: €39,1 million), which mainly relate to improvements in refining assets.
(b) Exploration costs
Contractual commitments of the Group for exploration costs amount to €13,9 million as at 30 June 2020 (31 December 2019: €23,8 million).
(c) Letters of Credit
The Group may be requested to provide bank letters of credit to suppliers in order to obtain better commercial and credit terms. To the extent that such items are already recorded as liabilities in the financial statements there is no additional commitment to be disclosed. In cases where the underlying transaction occurs after the year end, the Group is not liable to settle the letter of credit and hence no such liability exists as at the year end.
(d) Put and call option
Hellenic Petroleum S.A. is counterparty to outstanding put and call option agreements to purchase oil stock from its associate OTSM. The put and call options may be exercised by either counterparty at any time before maturity under certain conditions. The value of these two options (put and call) is immaterial due to the fact that the terms of the agreements are such that the transactions will be market priced resulting in zero payoff at any time of exercise.
The Group has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business, the most significant of which are disclosed below:
(i) Unresolved legal claims
The Group is involved in a number of legal proceedings and has various unresolved claims pending arising in the ordinary course of business. Based on currently available information and the opinion of legal counsel, management believes that the final outcome will not have a significant effect on the Group's operating results or financial position and that no additional provisions over and above provisions already reflected in the consolidated financial statements are required.
During the current and preceding years, a number of Municipalities proceeded with the imposition of duties and fines relating to the rights of way occupied by underground pipelines operated by the Group within the boundaries of each respective municipality. As at 30 June 2020, the total amounts imposed amount to € 33,4 million (31 December 2019: €30,3 million). In order to appeal against these, and in accordance with legislation, the Group has paid an amount of €14 million, which is included in Other Receivables in the Financial Statements. During the first half of 2020, the Municipality of Aspropyrgos communicated a new duty/fine for the year 2019, amounting to € 3,1 million. The Group has exercised all available legal recourse relating to these cases and Group Management have assessed that it is most probable that the outcome of all appeals will be favourable.
During the current and preceding years, the Municipality of Aspropyrgos proceeded with the imposition of duties and fines relating to the rights of way occupied by underground pipelines operated by EAKKA in which HELPE SA owns 50% of the share capital and consolidates through the equity method. As at 30 June 2020, the total amounts imposed amount to € 5,8 million (31 December 2019: €5,8 million). EAKAA has exercised all available legal recourses relating to these cases and the company's Management have assessed that it is most probable that the outcome of the current process will be favorable.
In 2008, the Competition Commission (CC) imposed a penalty to BP Hellas S.A. (BP) amounting to € 30,066,585. On 24.12.2008, BP appealed against the CC Decision before the Athens Appellate Administrative Court and obtained suspension of enforcement for the amount of €28 million. Said Court, by virtue of Decision No. 1494/2011 sustained the appeal and cancelled the penalty. On 26.10.2011 the CC appealed against the above Decision before the Supreme Administrative Court (Conseil d' Etat), which recently rendered its Decision No. 1770/2019, by virtue of which it has sustained the appeal of the CC and annulled the Decision of the Appellate Court, before which the case will be tried anew. The relevant hearing that was originally scheduled for 30 April 2020, was postponed for 22 October 2020. The Group's legal advisors firm view since the beginning of the Court proceedings in 2008 is that the Company did not violate Law 703/1977 and their view still remains unchanged.
Therefore, Group management believes that there is sufficient defense against the above penalty of the CC, which will be ultimately cancelled and no probable loss is expected to arise for the Company. Therefore, no provision has been made in the financial statements in relation to this claim.
During the period ended 30 June 2020, the Group received a credit note from DEPA S.A., amounting to € 7,3 million, following a court decision on its action against Botas Petroleum Pipeline Corporation ("Botas") and subject to the condition that if the outcome of Botas appeal against the above decision is favourable for the counterparty the above amount will be recalled by DEPA S.A. Group believes that the likelihood of such an event is less than probable and therefore has not raised a respective provision.
The parent Company has provided letters of comfort and guarantees in favour of banks as security for loans granted by them to subsidiaries and associates of the Group. The outstanding amount of these as at 30 June 2020 was the equivalent of €915 million (31 December 2019: €912 million). Out of these, €813 million (31 December 2019: €807 million) are included in consolidated borrowings of the Group and are presented as such in the consolidated financial statements.
Τhe Group's international operations face a number of legal issues related mainly to changes in local permits and fines imposed by Independent Regulatory Agencies, however it is considered that they do not present any material impact on the consolidated financial statements. Such cases include a dispute in connection with the local tank depots of Jugopetrol AD in Montenegro, as well as the re-opening of the Commission for the Protection of Competition in Cyprus' investigation against the Petroleum companies operating there (wholesale), for the period from 1 October 2004 to 22 December 2006. On 15 November 2017 the Commission for the Protection of Competition in Cyprus imposed a fine amounting to €5 million against Hellenic Petroleum Cyprus Ltd. Pertinent legal actions, have commenced on 30 December 2017 and are in progress. The likelihood for an outflow of resources is assessed as remote. Management believes that no additional material liabilities will arise as a result of these cases over and above those recognised in the consolidated financial statements.
The tax framework and practices in Greece, which determine the tax base for the transactions of the Group's main entities, may result in inherent uncertainties, due to its complexity and it being subject to changes and alternative interpretation by relevant authorities at different points in time and across different entities. As a result, there may be types of expenses or treatments for which a company may be assessed on a different basis than the one adopted during preparation of its tax return and the financial statements. Based on past experience tax audits were carried out by tax authorities on average 5-7 years after the filing of the tax return. In addition, where a tax audit results in a different view to the that adopted by a Group entity, the process for resolving the issue is usually through a court of law proceeding, which has many stages and can take a considerable number of years to reach its final and irrevocable ruling. For an entity to engage in this process, a minimum down payment of 50% of the total tax and surcharges assessed is required.
All of the above result in inherent difficulties in the determination and accounting of tax liabilities. As a result, management aims to determine its policy based on specific legislation available at the time of accounting for a transaction, obtain specialist legal and tax advice on individual cases, if required, and utilise prior tax audits experience and rulings, including relevant court decisions. This process ensures that the financial statements reflect any material tax and customs liabilities as accurately and completely as possible.
As disclosed in Note 8, tax audits for the Group's most important Greek legal entities have been completed by the Tax Authorities as follows:
Hellenic Petroleum S.A. has been audited up to and including the financial year ended 31 December 2011. The Tax audit reports for years ended 31 December 2010 and 31 December 2011 were received in December 2017 and they are subject to legal dispute by the Company. In summary, the reports assess additional taxes of € 22,5 million and penalties of €23,5 million, for items relating to stamp duty, various non-deductible expenses and other income tax adjustments. Following a detailed review of the Tax Audit Report, the Company has disputed the additional taxes imposed (which are over and above the amounts already included in the Companies' normal tax returns) and proceeded with all possible legal means and actions to appeal against these additional taxes and surcharges imposed.
Even though the Company disputed the additional taxes and surcharges imposed, it was obliged to pay 50% of the assessed amounts (taxes and surcharges) to the Tax Authorities in order to appeal the results of the tax audits. This was paid within the applicable deadline, while the remaining amounts have been fully offset by the Authorities, with tax and other State receivables of the Company, within 2018. These amounts are included in the Income Tax Receivable balance if they relate to income tax, or in Trade and Other Receivables balance if they relate to other taxes, as the Company assesses that it will succeed in its appeals. As far as surcharges are concerned, the report
has assessed amounts at 120% of the original tax instead of the applicable 50%; this is also being legally challenged by the Company.
Notification for audit has been received for the year ended 31 December 2012, which according to the general provisions is time-barred.
During March 2020, a notification for audit was received, for the years 2014 up to and inclusive 2017. The audit is in progress and is related to specific tax subjects. Moreover, during July 2020, a new notification for full audit was received for the year 2014 regarding all tax subjects.
The two main retail subsidiaries in Greece, which merged during 2016, have been audited as follows:
Former Hellenic Fuels S.A. has been audited up to and including the financial year ended 31 December 2011, while notifications for audit have been received for subsequent years up to and including 31 December 2013, which according to the general provisions are time–barred. The most recent Tax audit reports for 2010 and 2011 were delivered in December 2017, and assess additional taxes of € 1,6 million and surcharges of € 1,9 million for similar reasons as Hellenic Petroleum. The process followed is identical to the one described above for Hellenic Petroleum and the subsidiary has already proceeded with the relevant legal actions.
Following the court hearing, the relevant Decisions were issued in Q3 2019. With regards to the Stamp duty cases amounting to € 3,4 million, the decisions were in favor of the company and the relevant amounts were refunded to the company, whereas for the Real Estate tax dispute of 2010 amounting to € 100 thousand, which was not in favor, the company continues the legal procedure.
EKO S.A. has been audited up to and including 31 December 2010, while notification for audit has been received for the fiscal year 2012, which according to the general provisions is time-barred. The most recent Tax audit reports for 2008, 2009 and 2010 were delivered in February 2018 and assess additional stamp duty of € 4,1 million and surcharges of € 3,5 million. The process followed is identical to the one described above for Hellenic Petroleum and the subsidiary has already proceeded with the relevant legal actions.
Following the court hearing, the relevant Decisions were issued in Q1 2020, the decisions were in favor of the company and the relevant amounts are to be refunded to the company.
Even though the Companies dispute the additional taxes and surcharges imposed, they were obliged to pay 50% of the assessed amounts (taxes and surcharges) to the Tax Authorities in order to appeal the results of the tax audits. These were paid within the applicable deadlines, while the remaining amounts have been fully offset by the Authorities, with tax and other State receivables of the Companies, within 2018. The amounts paid and/or offset are included in the Income Tax Receivable balance if they relate to income tax or in the Trade and Other Receivable balance if they relate to other taxes, as the Group assesses that it will succeed in its appeals.
Management believes that no additional material liability will arise either as a result of open tax years or from the outcome of current litigation cases over and above the tax liabilities and provisions already recognized in the consolidated financial statements as at 30 June 2020. The Company has recorded down payments made for taxes and penalties assessed in previous disputes with the tax authorities in income tax receivable, to the extent that the Company has assessed that the amounts will be ultimately recoverable.
It is noted that for financial years ending 31 December 2011 up to and including 31 December 2018, the Group's Greek legal entities obtained unqualified "Annual Tax Compliance Reports" from their Statutory Auditors, as provided for by par. 5, article 82 of L.2238/1994 and article 65A of L. 4174/2013. The management expects that the same will also apply for the year ended 31 December 2019.
In 2008, Customs authorities assessed additional customs duties and penalties amounting to approximately €40 million for alleged "stock shortages" during the years 2001-2005. Τhe Company has duly filed contestations before the Administrative Court of First Instance, and Management believes that this case will have a positive outcome when the legal procedure will be concluded.
Notwithstanding the filing of the above contestations, the Customs office withheld an amount of €54 million (full payment plus surcharges) of established VAT refunds (Note 14), an action against which the Company filed two Contestations before the Administrative Courts of Athens and Piraeus. The Administrative Court of Athens ruled that the withholding effected by the Tax Office was unlawful.
The Company considers that the above amounts will be recovered.
As at 30 June 2020 there are pending appeals against court decisions that have been filed against the Group by the State, concerning customs violations that have been carried out by petrol stations dealers and whereby the Group is considered to be jointly liable. Furthermore, a number of decisions have been issued by the Supreme Administrative Court in similar cases, which either reject the Group's appeals, or accept the State's appeals and redirect them to the Administrative Appeals Court. The total amounts imposed amount to €13,9 million of which €13,3 million have been paid and recognized in Other Receivables in the Financial Statements (31 December 2019: € 13,1 million).
With regards to EKO S.A.'s cases, the Group has filed an appeal to the European Court of Human Rights as it assesses that the above Court decisions contradict the provisions of the European Convention on Human Rights.
In this context, Group Management assesses that the probability of a favorable outcome from the European Courts is more likely than not, which may as a result change the Supreme Administrative Court's position, which will subsequently result in a favorable outcome for the Group. For the reasons mentioned above, the Group has not raised a provision with regards to these cases.
In 2019, the customs authorities in North Macedonia, conducted an audit in OKTA, with regards to excise duties of eurodiesel imports, for the fiscal years 2014 - 2018. They are of the opinion that, excise duties related to these imports, were not correctly calculated and they issued relevant decisions for the fiscal year 2014, imposing additional amounts of € 380 k, which were paid in 2020. The Company filed lawsuits within 2019, initiating administrative disputes, seeking full annulment, on grounds of substantial violations of procedural rules from the customs authorities' side, their failure to completely and correctly establish the facts of the case and to correctly apply substantive laws. In July and August 2020, the authorities issued new decisions for the fiscal years 2015 and 2016, imposing additional amounts of € 2,456 k. The Company will file lawsuits, within the relevant deadlines, seeking full annulment, for the same reasons. The Company expects that the case will have a positive outcome, when the legal procedure will be concluded.
At its meeting held on 5 November 2019, the Board of Directors decided to distribute an interim dividend of €0,25 per share for the financial year 2019. The total final dividend amounted to €76,4 million and was paid during the first quarter of 2020.
On 27 February 2020, the Board of Directors proposed to the AGM the distribution of a final dividend of €0,25 per share for the financial year 2019, which was approved by the AGM on 24 June 2020. The total final dividend for 2019, amounts to €76,4 million and is included in the Interim Condensed Consolidated Financial Statements for the six-month period ended 30 June 2020. The whole amount was paid in July 2020.
The Board did not approve a change in dividend policy overall and will evaluate the payment of a dividend for the financial year 2020.
| EFFECTIVE | |||||
|---|---|---|---|---|---|
| COUNTRY OF | PARTICIPATION | METHOD OF | |||
| COMPANY NAME | ACTIVITY | REGISTRATION | PERCENTAGE | CONSOLIDATION | |
| HELLENIC FUELS AND LUBRICANTS INDUSTRIAL AND COMMERCIAL S.A | Marketing | GREECE | 100,00% | FULL | |
| ΕΚΟΤΑ KO S.A. | Marketing | GREECE | 49,00% | FULL | |
| ΕΚΟ KALYPSO M.E.P.E. | Marketing | GREECE | 100,00% | FULL | |
| EKO ATHINA MARITIME COMPANY | Vessel owning / Marketing | GREECE | 100,00% | FULL | |
| EKO ARTEMIS MARITIME COMPANY | Vessel owning / Marketing | GREECE | 100,00% | FULL | |
| EKO DIMITRA MARITIME COMPANY | Vessel owning / Marketing | GREECE | 100,00% | FULL | |
| EKO IRA MARITIME COMPANY | Vessel owning / Marketing | GREECE | 100,00% | FULL | |
| EKO AFRODITI MARITIME COMPANY | Vessel owning / Marketing | GREECE | 100,00% | FULL | |
| EKO BULGARIA EAD | Marketing | BULGARIA | 100,00% | FULL | |
| EKO SERBIA AD | Marketing | SERBIA | 100,00% | FULL | |
| HELLENIC PETROLEUM INTERNATIONAL S.A. | Holding | AUSTRIA | 100,00% | FULL | |
| HELLENIC PETROLEUM CYPRUS LTD | Marketing | U.K | 100,00% | FULL | |
| R.A.M.OIL Cyprus LTD | Marketing | CYPRUS | 100,00% | ||
| YUGEN LTD | Marketing | CYPRUS | 100,00% | FULL | |
| FULL | |||||
| HELPE COMPANY HOLDING LTD | Marketing | CYPRUS | 100,00% | FULL | |
| HELLENIC PETROLEUM BULGARIA (HOLDINGS) LTD | Holding | CYPRUS | 100,00% | FULL | |
| HELLENIC PETROLEUM SERBIA (HOLDINGS) LTD | Holding | CYPRUS | 100,00% | FULL | |
| JUGOPETROL AD | Marketing | ΜONTENEGRO | 54,35% | FULL | |
| GLOBAL ALBANIA S.A | Marketing | ΑLBANIA | 99,96% | FULL | |
| ELPET BALKANIKI S.A. | Holding | GREECE | 100,00% | FULL | |
| VARDAX S.A | Pipeline | GREECE | 80,00% | FULL | |
| OKTA CRUDE OIL REFINERY A.D | Refining | FYROM | 81,51% | FULL | |
| ASPROFOS S.A | Engineering | GREECE | 100,00% | FULL | |
| DIAXON S.A. | Petrochemicals | GREECE | 100,00% | FULL | |
| POSEIDON MARITIME COMPANY | Vessel owning / Petrochemicals | GREECE | 100,00% | FULL | |
| APOLLON MARITIME COMPANY | Vessel owning / Refining | GREECE | 100,00% | FULL | |
| HELLENIC PETROLEUM FINANCE PLC | Treasury services | U.K | 100,00% | FULL | |
| HELLENIC PETROLEUM CONSULTING | Consulting services | GREECE | 100,00% | FULL | |
| HELLENIC PETROLEUM R.E.S S.A. | Energy | GREECE | 100,00% | FULL | |
| HELPE-LARCO ENERGIAKI SERVION S.A. | Energy | GREECE | 51,00% | FULL | |
| HELPE-LARCO ENERGIAKI KOKKINOU S.A. | Energy | GREECE | 51,00% | FULL | |
| ENERGIAKI PYLOY METHONIS S.A. | Energy | GREECE | 100,00% | FULL | |
| ATEN ENERGY S.A. | Energy | GREECE | 100,00% | FULL | |
| HELPE E&P HOLDINGS S.A | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE ARTA PREVEZA SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE NW PELOPONISSOS SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE WEST KERKYRA SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE SEA OF THRACE SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE IONIO SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE KIPARISSIAKOS GULF SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE WEST CRETE SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE SW CRETE SA | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE PATRAIKOS S.A. | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| HELPE UPSTREAM S.A | E&P of hydrocarbons | GREECE | 100,00% | FULL | |
| SUPERLUBE LTD | Lubricants | CYPRUS | 100,00% | FULL | |
| BLUE CIRCLE ENGINEERING LIMITED | Marketing | CYPRUS | 100,00% | FULL | |
| ELPEDISON B.V. | Power Generation | NETHERLANDS | 50,00% | EQUITY | |
| SAFCO S.A. | Airplane Fuelling | GREECE | 33,33% | EQUITY | |
| DEPA COMMERCIAL S.A. (ex DEPA S.A.) | Natural Gas | GREECE | 35,00% | EQUITY | |
| DEPA INFRASTRUCTURE S.A. | Natural Gas | GREECE | 35,00% | EQUITY | |
| Ε.Α.Κ.Α.Α S.A. | Pipeline | GREECE | 50,00% | EQUITY | |
| HELPE THRAKI S.A | Pipeline | GREECE | 25,00% | EQUITY | |
| DMEP HOLDCO LTD | Trade of crude/products | U.K | 48,00% | EQUITY | |
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
Other than the events already disclosed in Notes 3 and 23, no material events took place after the end of the reporting period and up to the date of the publication of the financial statements.
4.2. Condensed Interim Financial Statements
30 JUNE 2020
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| Page | ||
|---|---|---|
| I. | Company Information | 3 |
| II. | Interim Condensed Statement of Financial Position | 4 |
| III. | Interim Condensed Statement of Comprehensive Income | 5 |
| IV. | Interim Condensed Statement of Changes in Equity | 6 |
| V. | Interim Condensed Statement of Cash Flows | 7 |
| VI. | Notes to the Interim Condensed Financial Statements | 8 |
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| Directors | Ioannis Papathanasiou – Chairman of the Board Andreas Shiamishis – Chief Executive Officer Georgios Alexopoulos – Member Theodoros–Achilleas Vardas – Member Michail Kefalogiannis – Member Alexandros Metaxas –Member Iordanis Aivazis – Member Loukas Papazoglou – Member Alkiviades-Konstantinos Psarras – Member Theodoros Pantalakis – Member Spiridon Pandelias - Member Georgios Papakonstantinou – Member Constantinos Papagiannopoulos – Member |
|---|---|
| Registered Office: | A Chimarras Str. 8 GR 15125 Maroussi, Greece |
| General Commercial Registry: |
000296601000 |
| Auditors: | ERNST & YOUNG (HELLAS) Certified Auditors – Accountants 8B Chimarras str. 15125 Maroussi Greece |
These financial statements constitute an integral part of the Group Interim Financial Report, which can be found at https://www.helpe.gr/investor-relations/quarterly-results/annual-interim-financial-reports and which incorporate the Independent Auditor's Review Report
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| As at | |||
|---|---|---|---|
| Note | 30 June 2020 | 31 December 2019 | |
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 9 | 2.672.864 | 2.693.794 |
| Right-of-use assets | 10 | 28.684 | 32.084 |
| Intangible assets | 11 | 7.868 | 8.704 |
| Investments in subsidiaries, associates and joint ventures | 1.053.138 | 1.045.138 | |
| Investment in equity instruments | 3 | 530 | 965 |
| Loans, advances and long-term assets | 10.424 | 22.089 | |
| 3.773.508 | 3.802.774 | ||
| Current assets | |||
| Inventories | 12 | 535.205 | 899.760 |
| Trade and other receivables | 13 | 527.275 | 791.257 |
| Income tax receivable | 87.955 | 87.616 | |
| Derivative financial instruments | 3 | 5.830 | 3.474 |
| Cash and cash equivalents | 14 | 930.271 | 888.564 |
| 2.086.536 | 2.670.671 | ||
| Total assets | 5.860.044 | 6.473.445 | |
| EQUITY | |||
| Share capital and share premium | 15 | 1.020.081 | 1.020.081 |
| Reserves | 16 | 276.712 | 283.106 |
| Retained Earnings | 541.403 | 935.648 | |
| Total equity | 1.838.196 | 2.238.835 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Interest bearing loans and borrowings | 17 | 1.082.618 | 1.607.838 |
| Lease liabilities | 19.755 | 21.264 | |
| Deferred income tax liabilities | 21.258 | 182.065 | |
| Retirement benefit obligations | 149.537 | 147.074 | |
| Provisions | 22.797 | 22.797 | |
| Other non-current liabilities | 13.049 | 13.620 | |
| 1.309.014 | 1.994.658 | ||
| Current liabilities | |||
| Trade and other payables | 18 | 1.122.853 | 1.271.809 |
| Income tax payable | 5.767 | 5.785 | |
| Interest bearing loans and borrowings | 17 | 1.499.498 | 875.576 |
| Lease liabilities | 7.775 | 9.919 | |
| Dividends payable | 76.941 | 76.863 | |
| 2.712.834 | 2.239.952 | ||
| Total liabilities | 4.021.848 | 4.234.610 | |
| Total equity and liabilities | 5.860.044 | 6.473.445 |
| A. Shiamishis | C. Thomas | S. Papadimitriou |
|---|---|---|
| Chief Executive Officer | Chief Financial Officer | Accounting Director |
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| For the six-month period ended 30 June 2020 |
30 June 2019 | For the three-month period ended 30 June 2020 |
30 June 2019 | |||
|---|---|---|---|---|---|---|
| Revenue from contracts with customers | 4 | 2.690.940 | 4.087.415 | 950.340 | 2.263.042 | |
| Cost of sales | (3.036.594) | (3.826.905) | (862.662) | (2.123.081) | ||
| Gross profit / (loss) | (345.654) | 260.510 | 87.678 | 139.961 | ||
| Selling and distribution expenses | (51.922) | (49.637) | (24.369) | (25.343) | ||
| Administrative expenses | (41.058) | (39.110) | (20.446) | (18.067) | ||
| Exploration and development expenses | (1.066) | (52) | (49) | (23) | ||
| Other operating income/(expenses) & other gains/(losses) | 5 | 7.282 | (485) | 2.818 | (3.336) | |
| Operating profit / (loss) | (432.418) | 171.226 | 45.632 | 93.192 | ||
| Finance income | 4.910 | 5.509 | 2.690 | 3.121 | ||
| Finance expense | (52.066) | (60.605) | (26.674) | (30.038) | ||
| Lease finance cost | (692) | (464) | (334) | (245) | ||
| Dividend income | - | 7.917 | - | 7.917 | ||
| Currency exchange gains/(losses) | 6 | 4.316 | 1.032 | 2.021 | (531) | |
| Profit / (Loss) before income tax | (475.950) | 124.615 | 23.335 | 73.416 | ||
| Income tax credit / (expense) | 7 | 158.114 | (28.666) | 39.472 | (13.522) | |
| Profit / (Loss) for the period | (317.836) | 95.949 | 62.807 | 59.894 | ||
| Other comprehensive income/(loss): Other comprehensive income/(loss), that will not be reclassified to profit or loss (net of tax): |
||||||
| Changes in the fair value of equity instruments | 16 | (331) | 651 | 7 | 668 | |
| Other comprehensive income/(loss), that may be reclassified subsequently to profit or loss (net of tax): |
(331) | 651 | 7 | 668 | ||
| Fair value gains / (losses) on cash flow hedges | 16 | (31.140) | 5.186 | (5.666) | (2.703) | |
| Recycling of losses / (gains) on hedges through comprehensive income |
16 | 25.077 | 1.501 | 25.077 | 1.501 | |
| (6.063) | 6.687 | 19.411 | (1.202) | |||
| Other Comprehensive income/(loss) for the period, net of tax | (6.394) | 7.338 | 19.418 | (534) | ||
| Total comprehensive income / (loss) for the period | (324.230) | 103.287 | 82.225 | 59.360 | ||
| Basic and diluted earnings / (losses) per share (expressed in Euro per share) |
8 | (1,04) | 0,31 | 0,21 | 0,20 |
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| Note | Share Capital |
Reserves | Retained Earnings |
Total Equity |
|
|---|---|---|---|---|---|
| Balance at 1 January 2019 | 1.020.081 | 262.263 | 864.333 | 2.146.677 | |
| Changes in the fair value of equity instruments | 16 | - | 651 | - | 651 |
| Fair value gains/(losses) on cash flow hedges Recycling of (gains)/losses on hedges through |
16 | - | 5.186 | - | 5.186 |
| comprehensive income | 16 | - | 1.501 | - | 1.501 |
| Other comprehensive income/(loss) | - | 7.338 | - | 7.338 | |
| Profit/(Loss) for the period | - | - | 95.949 | 95.949 | |
| Total comprehensive income/(loss) for the period | - | 7.338 | 95.949 | 103.287 | |
| Dividends | - | - | (152.818) | (152.818) | |
| Balance at 30 June 2019 | 1.020.081 | 269.601 | 807.464 | 2.097.146 | |
| Balance at 1 January 2020 | 1.020.081 | 283.106 | 935.648 | 2.238.835 | |
| Movement - 1 January 2020 to 30 June 2020 Changes in the fair value of equity instruments |
16 | - | (331) | - | (331) |
| Fair value gains/(losses) on cash flow hedges | 16 | - | (31.140) | - | (31.140) |
| Recycling of (gains)/losses on hedges through comprehensive income |
16 | - | 25.077 | - | 25.077 |
| Other comprehensive income/(loss) | - | (6.394) | - | (6.394) | |
| Profit/(Loss) for the period | - | - | (317.836) | (317.836) | |
| Total comprehensive income/(loss) for the period | - | (6.394) | (317.836) | (324.230) | |
| Dividends | 23 | - | - | (76.409) | (76.409) |
| Balance at 30 June 2020 | 1.020.081 | 276.712 | 541.403 | 1.838.196 |
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| For the six-month period ended | |||||
|---|---|---|---|---|---|
| Note | 30 June 2020 | 30 June 2019 | |||
| Cash flows from operating activities | |||||
| Cash generated from / (used in) operations | 19 | (13.243) | 172.120 | ||
| Income tax received / (paid) | (4.843) | (1.768) | |||
| Net cash generated from / (used in) operations | (18.086) | 170.352 | |||
| Cash flows from investing activities | |||||
| Purchase of property, plant and equipment & intangible Proceeds from disposal of property, plant and equipment |
9,11 | (58.706) | (55.856) | ||
| & intangible assets | 4.846 | 1.074 | |||
| Dividends received | 150.000 | 6.571 | |||
| Interest received | 4.910 | 5.509 | |||
| Participation in share capital increase of subsidiaries, | |||||
| associates and joint ventures | (10.000) | (10.014) | |||
| Net cash generated from / (used in) investing activities | 91.050 | (52.716) | |||
| Cash flows from financing activities | |||||
| Interest paid | (49.633) | (66.132) | |||
| Dividends paid | (76.385) | (122) | |||
| Proceeds from borrowings | 265.010 | 10.067 | |||
| Repayments of borrowings | (168.278) | (302.423) | |||
| Payment of lease liabilities - principal | (4.866) | (3.063) | |||
| Payment of lease liabilities - interest | (692) | (464) | |||
| Net cash generated from /(used in) financing activities | (34.844) | (362.137) | |||
| Net increase / (decrease) in cash and cash equivalents | 38.120 | (244.501) | |||
| Cash and cash equivalents at the beginning of the period |
14 | 888.564 | 1.070.377 | ||
| Exchange gains / (losses) on cash and cash equivalents | 3.587 | 1.999 | |||
| Net increase / (decrease) in cash and cash equivalents | 38.120 | (244.501) | |||
| Cash and cash equivalents at end of the period | 14 | 930.271 | 827.875 |
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
Hellenic Petroleum S.A. (the "Company" or "Hellenic Petroleum") operates in the energy sector in Greece. The Company's activities include refining and marketing of oil products, production and marketing of petrochemical products and exploration for hydrocarbons.
The Company is incorporated in Greece and the address of its registered office is 8A Chimarras str., Maroussi 15125. The shares of the Company are listed on the Athens Stock Exchange and the London Stock Exchange through GDRs.
These interim condensed financial statements are separate financial statements. The consolidated financial statements are available on the Company's website and also include a list of significant investments in subsidiaries, joint ventures and associates.
The interim condensed financial statements are prepared in accordance with International Accounting Standard 34 (IAS 34) – Interim Financial Reporting, and present the financial position, results of operations and cash flows of the Company on a going concern basis.
Management has considered the impact of the Covid-19 pandemic, as described in Note 3, up to the date of authorization of these condensed financial statements and has concluded that the going concern basis of their preparation is appropriate.
In reaching this conclusion, Management reassessed its plans for the period of 18 months from the reporting date considering the deterioration in the economic environment and the impact on the financial performance of the Company. The profitability in the plans that Management examined are most sensitive to factors described in Note 3. Management concludes that, although Covid-19 may continue to have a significant impact on the Company's operations in the 2nd half of 2020, such impact will be absorbable and does not imperil the long-term viability of the Company.
In terms of funding and liquidity, as described in Note 3 and Note 17 the Company was able to refinance all debt obligations maturing in the six-month period ended 30 June 2020 and as at the date of the balance sheet has available funding headroom of €300 million within the limits of committed and uncommitted credit facilities, with approximately €200 million uncommitted under the bilateral financing arrangements. Additionally, the Company is in the final stages of completing a new €100m committed two-year credit facility and is in process to refinance bank facilities maturing in the following 12 month period.
Based on the analysis performed and the refinancing plan, which they are in the process of executing, management is satisfied that it can meet all its obligations as they fall due in the period of at least 12 months from the balance sheet date, and that there are no material uncertainties that may cast doubt on the Company's ability to operate as a going concern.
The interim condensed financial statements have been prepared in accordance with the historical cost basis, except for the following:
Where necessary and as described in relevant notes, comparative figures have been reclassified to conform to changes in the presentation of the current period.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
These interim condensed financial statements do not include all information and disclosures required for the annual financial statements and should be read in conjunction with the audited annual financial statements for the year ended 31 December 2019, which can be found on the Company's website www.helpe.gr.
The interim condensed financial statements for the six-month period ended 30 June 2020 have been authorised for issue by the Board of Directors on 27 August 2020.
The preparation of the interim condensed financial statements, in accordance with IFRS, requires the use of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the interim condensed financial statements are disclosed where considered necessary. Estimates and judgements are discussed in detail in the annual financial statements for the year ended 31 December 2019, are continuously evaluated and are based on historical experience and other factors, including expectations of future events as assessed to be reasonable under the present circumstances.
As a result of the Covid-19 pandemic and the economic impact thereof, management reviewed its estimates with regards to future cash flows utilized in estimating the recoverable amount of its investments as well as the estimations for future credit losses on trade receivables.
Given the impact of Covid-19, the Company proceeded with a further assessment of impairment indicators on the various segments it operates. Despite the effect of Covid-19 during the first half of 2020 and the reduced profitability expected for the second half of 2020 and 2021, as compared to the assumptions used in the respective impairment tests prepared for the year ended 31 December 2019, management concluded that no further impairment losses need to be recorded. However, management will continue to monitor the developments for the rest of the year and adjust their estimates accordingly.
Management assessed forward-looking information specific to its trade debtors and the economic environment taken into account the impact of Covid-19 and recorded additional losses in line with its policies, when needed. (Note 13).
The accounting policies and methods of computation used in the preparation of the interim condensed financial statements are consistent with those applied in the preparation of the financial statements for the year ended 31 December 2019 and have been consistently applied in all periods presented in this report, except for the following IFRSs, which have been adopted by the Company as of 1 January 2020. Amendments and interpretations that apply for the first time in 2020 did not have a significant impact on the interim condensed financial statements of the Company for the six-month period ended 30 June 2020. These are also disclosed below.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
The Company has not early adopted any of the following standards, interpretations or amendments that have been issued, but are not yet effective. In addition, the Company assessed all standards, interpretations and amendments issued, but are not yet effective and expects that they will not have any significant impact to the financial statements.
The amendment has not yet been endorsed by the EU.
IAS 1 (Amendment) 'Classification of liabilities as current or non-current' (effective for annual periods beginning on or after 1 January 2023). The amendments are effective for annual reporting periods beginning on or after January 1, 2022 with earlier application permitted. The IASB has issued an exposure draft to defer the effective date to 1 January 2023. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current or non-current. The amendments affect the presentation of liabilities in the statement of financial position and do not change existing requirements around measurement or timing of recognition of any asset, liability, income or expenses, nor the information that entities disclose about those items. Also, the amendments clarify the classification requirements for debt which may be settled by the company issuing own equity instruments. These Amendments have not yet been endorsed by the EU.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
The Company's activities are primarily centred on Downstream Refining (incl. Petrochemicals) & Marketing of petroleum products; with secondary activities relating to exploration of hydrocarbons. As such, the Company is exposed to a variety of financial and commodity markets' risks including foreign exchange and commodity price risk, credit risk, liquidity risk, cash flow risk and interest-rate risk. In line with international best practices and within the context of local markets and legislative framework, the Company's overall risk management policies aim at reducing possible exposure to market volatility and / or mitigating its adverse effects on the financial position of the Company to the extent possible. In general, the key factors that impact the Company's operations are summarised as follows:
Greek Macros: During 2019, the fundamentals and prospects of the Greek economy improved. However, the covid-19 pandemic crisis disrupted global financial stability and reversed the growth prospects of the Greek economy for 2020, which were positive during the first two months of the year.
GDP declined by 1,6% in the first quarter of 2020, compared to the previous quarter and by 0,9%, compared to the corresponding period of 2019, mainly reflecting the beginning of the containment measures at the end of March. The
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
decline in GDP was driven by a drop in investment and private consumption, while government expenditure and exports contributed positively.
Total domestic fuels consumption in the first half of 2020 decreased by 2% compared to the respective period of 2019, mainly affected by lower demand for gasoline and auto diesel, resulting from the coronavirus outbreak; the decrease was partially offset by higher demand for heating gasoil, driven by low prices. Total demand for motor fuels decreased by 14,5%, with the declined sales more pronounced during mobility restrictions in Greece in April and May.
The outbreak of the Covid-19 pandemic is expected to have a negative impact on the Greek economy, affecting the public debt and unemployment rate, as well as non-performing loans and low investments. The containment measures imposed by the Greek government due to the outbreak of covid-19 also had a significant impact on demand and private consumption. Management continually assesses the situation and its possible future impact to ensure that all necessary actions and measures are taken in order to minimize the impact on the Company's operations.
COVID-19: On 11 March 2020, the World Health Organisation declared the Coronavirus (Covid-19) outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments took increasingly stringent steps to help contain and delay the spread of the virus, which have slowed down the economies worldwide, causing considerable global disruption in business activities and everyday life.
Many countries, including Greece, adopted extraordinary and economically costly containment measures, including requiring companies to limit or even suspend normal business operations. Governments also implemented restrictions on travelling as well as strict quarantine measures. Industries such as tourism, hospitality and entertainment are expected to be mostly disrupted directly by these measures. Other industries such as manufacturing and financial services are expected to be indirectly affected.
The strict containment measures have been gradually relaxed since early May and the economic activity is expected to start recovering, leading to a partial recovery of the domestic demand. Also, the European Commission's proposal for a recovery plan ("Next Generation EU"), is expected to support the economic activity in Greece. However, following a steady increase of the number of infections reported during August, the Greek Government announced additional measures and restrictions to contain the spread of the coronavirus. The measures mainly affect traveling from certain countries, operations hours of restaurants in several regional units, as well as the suspension of public gatherings.
The decline in crude oil prices, the significant fall in refining margins and demand, especially during the second quarter of 2020, have affected the financial results of the Company, resulting in declined profitability and high inventory valuation losses. However, the above have not altered the Company's strategic orientation, or targets and the current operations are largely unaffected.
The Company immediately responded to the outbreak of the pandemic and since the end of February took various initiatives to this end primarily focusing on ensuring the health and safety of its employees and all of its stakeholders, as well as the smooth operation of its activities and continuing to supply our markets.
These initiatives include:
The evolution of the pandemic, in Greece and globally, is expected to affect the financial results and financial position for at least 2020 and 2021. The impact on the global economy and overall business activities cannot be estimated with reasonable certainty at this stage, due to the pace at which the outbreak expands and the high level of uncertainties
arising from the inability to reliably predict the outcome. Management will continue to monitor the situation closely and will assess any potential further impact on the Company's financial position and performance, including the recoverable amount of the investments in subsidiaries, in case the period of disruption becomes prolonged.
United Kingdom's exit from the European Union: The Company is sourcing funds from international debt capital markets, through Eurobonds, issued by its London based subsidiary, Hellenic Petroleum Finance plc, listed in the Luxembourg stock exchange, for the optimal management of its debt liabilities. It is uncertain, how the exit of the UK from the EU, will affect existing HPF Eurobonds, as well as the Company's funding from international debt capital markets. Legal advice received indicates that HPF will be able to continue unimpeded to source funding through the issue of Eurobonds under the terms and conditions of Notes currently in circulation. The Company is closely following relevant developments and assessing alternatives in order to maintain its ability to source funding through the international debt capital markets.
Currency: The Company's business is naturally hedged against a functional currency risk. All petroleum industry transactions are referenced to international benchmark quotes for crude oil and oil products in USD. All international purchases and sales of crude oil and products are conducted in USD and all sales into local markets are either in USD prices or converted to local currency for accounting and settlement reasons using the USD reference on the date of the transaction.
Prices: Commodity price risk management is supervised by a Risk Management Committee which includes Finance and Trading departments' Senior Management. Non-commodity price risk management is carried out by the Finance Department under policies approved by the Board of Directors. The Finance Department identifies and evaluates financial risks in close co-operation with the Company's operating units. During the six-month period ended on 30 June 2020 Company entered into certain derivatives to hedge cash flows related to purchases and sales of crude oil and petroleum products.
Securing continuous crude oil supplies: The developments in the global and regional crude oil markets during the first half of 2020 (outbreak of covid-19 and the containment measures imposed by the majority of the countries worldwide) resulted in a significant decrease in the cost of raw material for the Company. Average international crude oil reference prices in the first half of 2020 decreased by more than 40% compared to average prices in 2019. These developments led to lower cost of crude, for both sweet and especially sour grades, which represent the key source of feedstock for complex refiners like Hellenic Petroleum, improving the competitive position of Med refiners vs. their global peers. The Company was able to take advantage of this development and diversify its crude basket. In the context of the above the Company was able to capture opportunities in contango trades for crude and products by utilizing its available storage capacity. The oil sector is anticipated to gradually recover during the next months (mainly as a result of the gradual lift of the abovementioned measures, supported also by the reduction of crude oil surplus.
Financing of operations: Given financial market developments since 2011, the key priorities of the Company have been the management of the 'Assets and Liabilities' maturity profile, funding in accordance with its strategic investment plan and liquidity risk for operations. As a result of these key priority initiatives and in line with its medium term financing plan, Hellenic Petroleum has maintained a mix of long term, medium term and short term credit facilities by taking into consideration bank and debt capital markets' credit capacity as well as cash flow planning and commercial requirements. In the six-month period ended 30 June 2020, the Company has successfully renewed all borrowings maturing within the period and additionally concluded a €100 million committed credit facility (Note 17), reaffirming its relationships with key financial institutions being the majority of the existing debt providers of the Company. Approximately 45% of total debt is financed by medium to long-term committed credit lines while the remaining debt is being financed by short term credit facilities (bilateral lines). Further details of the relevant loans and refinancing are provided in Note 17 "Interest-bearing loans and borrowings".
The Company's plans with respect to facilities expiring within the next 12 months are presented below in million Euros:
| (€ million) Contractual Term Facilities |
2H20 | 1H21 | Total | Schedule for repayment |
Schedule for refinancing |
|---|---|---|---|---|---|
| Bond loan €400 million | 225 | - | 225 | - | 225 |
| Bond loan €300 million | - | 300 | 300 | - | 300 |
| Bond loan \$250 million | - | 222 | 222 | - | 222 |
| European Investment Bank ("EIB") Term loan | 22 | 22 | 44 | 44 | - |
| Other credit lines (callable on demand) | |||||
| Bilateral / Factoring with recourse | 709 | - | 709 | - | 709 |
| Total | 956 | 544 | 1.500 | 44 | 1.456 |
The Company is in the process of executing a refinancing plan for the above bond loans. Following negotiations with the banks concerned, the Company obtained proposed key terms for refinancing certain of the above bond loan facilities as well as head of terms for a new committed term loan facility. The Company expects the refinancing to be completed in due time before maturity of existing loans. With respect to the bilateral lines, these are uncommitted credit facilities with various banks to finance general corporate needs, which have been consistently renewed in the last 20 years in accordance with the Company's finance needs. The Company expects it will be able to continue to renew these in the future, or will refinance part of them into term loans.
Capital management: Another key priority of the Company has been the management of its Assets. Overall the Company has approximately €3,5 billion of capital employed which is driven from working capital, investment in fixed assets and its investment in its subsidiaries, associates and joint ventures. Current assets are mainly funded with current liabilities (incl. short-term bank debt) which are used to finance working capital (inventories and receivables). As a result of the implementation of the Company's investment plan, during the period 2007-2012, net debt level, excluding leases, has increased to 47% of total capital employed, while the remaining is financed through shareholders equity. In the medium term the Company's intention is to reduce its net debt levels through the utilisation of the incremental operating cashflows. This is expected to lead to lower Debt to Equity ratio, better matched Asset and Liability maturity profiles as well as lower financing costs.
The interim condensed financial statements do not include all financial risk management information and disclosures that are required in the annual financial statements and should be read in conjunction with the annual financial statements as at 31 December 2019.
There have been no changes in the risk management or in any risk management policies since 31 December 2019.
The table below analyses financial instruments carried at fair value, categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The different levels are defined as follows:
The following table presents the Company's assets and liabilities that are measured at fair value at 30 June 2020:
| Assets | Level 1 | Level 2 | Level 3 | Total balance |
|---|---|---|---|---|
| Derivatives held for trading | - | 1.609 | - | 1.609 |
| Derivatives used for hedging | - | 4.221 | - | 4.221 |
| Investment in equity instruments | 530 | - | - | 530 |
| 530 | 5.830 | - | 6.360 |
The following table presents the Company's assets and liabilities that are measured at fair value at 31 December 2019:
| Assets | Level 1 | Level 2 | Level 3 | Total balance |
|---|---|---|---|---|
| Derivatives used for hedging | - | 3.474 | - | 3.474 |
| Investment in equity instruments | 965 | - | - | 965 |
| 965 | 3.474 | - | 4.439 |
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency. These financial instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
There were no changes in valuation techniques during the period. There were no transfers between levels during the six-month period ended 30 June 2020.
The fair value of the following financial assets and liabilities approximate their carrying amount, due to their shortterm nature:
All critical operating decisions are made by the Executive Committee, which reviews the Company's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The committee assesses performance taking into account a number of measures which may vary depending on the nature and evolution of a business segment by taking into account the risk profile, cash flow, product
and market considerations. Information provided to the committee is measured in a manner consistent with that of the financial statements.
Financial information regarding the Company's operating segments for the six-month period ended 30 June 2020 is presented below:
| Exploration | ||||||
|---|---|---|---|---|---|---|
| Petro | & | |||||
| Note | Refining | chemicals | Production | Other | Total | |
| Revenue from contracts with customers | 2.558.309 | 132.631 | - | - | 2.690.940 | |
| EBITDA | (378.600) | 31.856 | 2.145 | (2.424) | (347.023) | |
| Depreciation and amortisation (PPE & | ||||||
| Intangible assets) | 9,11 | (78.780) | (1.779) | (179) | - | (80.738) |
| Depreciation of right-of-use assets | 10 | (2.844) | (1.802) | (5) | (6) | (4.657) |
| Operating profit / (loss) | (460.224) | 28.275 | 1.961 | (2.430) | (432.418) | |
| Finance income /(expense) | (28.960) | (899) | - | (17.297) | (47.156) | |
| Lease finance cost | (654) | (38) | - | - | (692) | |
| Currency exchange gains/(losses) | 6 | 4.316 | - | - | - | 4.316 |
| Profit / (Loss) before income tax | (485.522) | 27.338 | 1.961 | (19.727) | (475.950) | |
| Income tax credit / (expense) | 7 | 158.114 | ||||
| Profit / (Loss) for the period | (317.836) |
EBITDA is calculated as Operating profit/(loss) per the statement of comprehensive income plus depreciation and amortisation
Financial information regarding the Company's operating segments for the six-month period ended 30 June 2019 is presented below:
| Exploration | ||||||
|---|---|---|---|---|---|---|
| Note | Refining | Petro chemicals |
& Production |
Other | Total | |
| Revenue from contracts with customers | 3.928.758 | 158.657 | - | - | 4.087.415 | |
| EBITDA | 205.552 | 46.919 | 967 | (7.397) | 246.041 | |
| Depreciation and amortisation (PPE & | ||||||
| Intangible assets) | 9,11 | (69.598) | (1.857) | (61) | - | (71.516) |
| Depreciation of right-of-use assets | 10 | (3.235) | (54) | (6) | (4) | (3.299) |
| Operating profit / (loss) | 132.719 | 45.008 | 900 | (7.401) | 171.226 | |
| Finance income /(expense) | (27.509) | (900) | - | (26.687) | (55.096) | |
| Lease finance cost | (459) | (4) | (1) | - | (464) | |
| Dividend income | - | - | - | 7.917 | 7.917 | |
| Currency exchange gains/(losses) | 6 | 1.032 | - | - | - | 1.032 |
| Profit / (Loss) before income tax Income tax credit / (expense) |
7 | 105.783 | 44.104 | 899 | (26.171) | 124.615 (28.666) |
| Profit / (Loss) for the period | 95.949 |
EBITDA is calculated as Operating profit/(loss) per the statement of comprehensive income plus depreciation and amortisation
There were no changes in the basis of segmentation or in the basis of measurement of segment profit or loss, as compared to the annual financial statements for the year ended 31 December 2019. There has been no material change in the definition of segments or the segmental analysis of total assets or total liabilities from the amounts disclosed in the annual financial statements for the year ended 31 December 2019.
An analysis of the Company's revenue from contracts with customers by type of market (domestic, aviation & bunkering, exports) and business unit, is presented below:
| Exploration | ||||||
|---|---|---|---|---|---|---|
| Petro | & | |||||
| Refining | chemicals | Production | Other | Total | ||
| Domestic | 840.251 | 45.616 | - | - | 885.867 | |
| Aviation & Bunkering | 256.015 | - | - | - | 256.015 | |
| Exports | 1.462.043 | 87.015 | - | - | 1.549.058 | |
| Revenue from contracts with customers | 2.558.309 | 132.631 | - | - | 2.690.940 |
| Exploration | |||||
|---|---|---|---|---|---|
| Petro | & | ||||
| Refining | chemicals | Production | Other | Total | |
| Domestic | 1.267.566 | 53.795 | - | - | 1.321.361 |
| Aviation & Bunkering | 544.059 | - | - | - | 544.059 |
| Exports | 2.117.133 | 104.862 | - | - | 2.221.995 |
| Revenue from contracts with customers | 3.928.758 | 158.657 | - | - | 4.087.415 |
| For the three-month period ended | ||||
|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | 30 June 2020 | 30 June 2019 | |
| 348 | 313 | 149 | 156 | |
| 2.640 | 2.897 | 1.251 | 1.652 | |
| 777 | 739 | 386 | 385 | |
| 169 | ||||
| - | ||||
| (61) | ||||
| 11.225 | 3.427 | 9.549 | 2.840 | |
| 19.979 | 8.721 | 14.965 | 5.142 | |
| (8.107) | - | (7.772) | - | |
| (6.914) | ||||
| - | ||||
| (1.407) | ||||
| (2.590) | (207) | (2.375) | (157) | |
| (12.697) | (9.206) | (12.147) | (8.479) | |
| (3.336) | ||||
| 143 3.518 1.328 (2.000) - - 7.282 |
For the six-month period ended 271 1.074 - (6.914) (678) (1.407) (485) |
- 3.518 112 (2.000) - - 2.818 |
Restatement: The analysis of the comparative amounts as at 30 June 2019 has been reclassified within the note to conform to changes in presentation of the current year.
Other operating income / (expenses) and other gains / (losses), include amounts, which do not relate to the principal trading activities of the Company.
Covid-19 related expenses of €8 million comprise of €4,1 million payroll costs mainly related to required modifications in the working shifts in the refineries, €3,1 million donations to the health-care system, €0,6 million for protective measures in all Company's premises and €0,3 million for marketing, consulting services and other related expenses
Foreign currency exchange gains of €4,3 million, reported for the six-month period ended 30 June 2020, mainly relate to unrealized gains arising from the valuation of bank accounts and borrowings denominated in foreign currency (mostly US\$). The corresponding amount for the six-month period ended 30 June 2019 was a gain of €1,0 million.
The tax (charge) / credit relating to components of comprehensive income, is as follows:
| For the six-month period ended | For the three-month period ended | |||
|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | 30 June 2020 | 30 June 2019 | |
| Current year tax | - | (11.883) | - | (289) |
| Prior year tax | (673) | - | (673) | - |
| Deferred tax | 158.787 | (16.783) | 40.145 | (13.233) |
| Income tax credit / (expense) | 158.114 | (28.666) | 39.472 | (13.522) |
The corporate income tax rate for the six-month period ended 30 June 2020 is 24% (six-month period ended 30 June 2019: 28%).
The deferred tax credit within income taxes mainly relates to tax losses arising in the six-month period ended 30 June 2020 and carried forward, amounting to €114 million.
In accordance with thin capitalization rules the net interest expense is deductible up to a certain percentage of tax EBITDA. This resulted in a deferred tax asset of €10 million as at 30 June 2020 (31 December 2019: nil), which can be offset against future taxable profits without any time constraints.
In accordance with the applicable tax provisions, tax audits are conducted as follows:
Effective from fiscal years ending 31 December 2011 onwards, Greek companies meeting certain criteria can obtain an "Annual Tax Compliance Report" as provided for by par.5, article 82 of L.2238/1994 and article 65A of L.4174/2013, as of 2014 from their statutory auditor in respect of compliance with tax law. The issuance of a Tax Compliance Report, under certain conditions, substitutes the full tax audit by the tax authorities; however the tax authorities reserve the right of future tax audit, taking into consideration the statute of limitation provisions. The Company has received unqualified Tax Compliance Reports for fiscal years up to 2018 (inclusive) and management expects that the same will also apply for the year ended 31 December 2019.
The Company has undergone full tax audits for the financial years ended up to and including 31 December 2011.
Notwithstanding the possibility of future tax audits, Management believes that no additional material liability will arise as a result of unaudited tax years over and above the tax liabilities and provisions recognised in the condensed financial statements as of 30 June 2020 (Note 22).
Basic earnings / (losses) per share are calculated by dividing the net profit / (loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, excluding the weighted average number of treasury shares. Diluted earnings / (losses) per share equal basic earnings / (losses) per share.
| For the six-month period ended | For the three-month period ended | |||
|---|---|---|---|---|
| 30 June 2020 | 30 June 2019 | 30 June 2019 | ||
| Earnings/(Losses) per share attributable to the Company Shareholders (expressed in Euro per share): |
(1,04) | 0,31 | 0,21 | 0,20 |
| Net income / (loss) attributable to ordinary shares (Euro in thousands) |
(317.836) | 95.949 | 62.807 | 59.894 |
| Weighted average number of ordinary shares | 305.635.185 | 305.635.185 | 305.635.185 | 305.635.185 |
| Land | Buildings | Plant & Machi nery |
Motor vehicles |
Furniture and fixtures |
Assets Under Cons truction |
Total | |
|---|---|---|---|---|---|---|---|
| Cost | |||||||
| As at 1 January 2019 | 142.850 | 541.928 | 3.992.671 | 15.583 | 91.296 | 82.288 | 4.866.616 |
| Additions | - | 17 | 528 | 12 | 784 | 54.259 | 55.600 |
| Capitalised projects | - | 2.473 | 22.453 | 56 | 383 | (25.365) | - |
| Disposals | - | - | - | (20) | (5) | - | (25) |
| Impairment / Write-off | - | - | - | - | - | (678) | (678) |
| Transfers and other movements | - | - | (374) | - | - | (2.614) | (2.988) |
| As at 30 June 2019 | 142.850 | 544.418 | 4.015.278 | 15.631 | 92.458 | 107.890 | 4.918.525 |
| Accumulated Depreciation | |||||||
| As at 1 January 2019 | - | 232.169 | 1.858.332 | 11.226 | 80.652 | - | 2.182.379 |
| Charge for the period | - | 7.673 | 60.423 | 202 | 1.184 | - | 69.482 |
| Disposals | - | - | - | (20) | (5) | - | (25) |
| As at 30 June 2019 | - | 239.842 | 1.918.755 | 11.408 | 81.831 | - | 2.251.836 |
| Net Book Value at 30 June 2019 | 142.850 | 304.576 | 2.096.523 | 4.223 | 10.627 | 107.890 | 2.666.689 |
| Cost | |||||||
| As at 1 January 2020 | 142.850 | 546.816 | 4.105.313 | 15.699 | 94.480 | 114.193 | 5.019.351 |
| Additions | - | - | 853 | 6 | 1.088 | 54.653 | 56.600 |
| Capitalised projects | - | 1.049 | 39.899 | - | 37 | (40.985) | - |
| Disposals | - | - | - | - | (15) | - | (15) |
| Transfers and other movements | - | - | 1.594 | - | - | (804) | 790 |
| As at 30 June 2020 | 142.850 | 547.865 | 4.147.659 | 15.705 | 95.590 | 127.057 | 5.076.726 |
| Accumulated Depreciation | |||||||
| As at 1 January 2020 | - | 247.468 | 1.983.400 | 11.615 | 83.074 | - | 2.325.557 |
| Charge for the period | - | 7.382 | 69.406 | 206 | 1.325 | - | 78.319 |
| Disposals | - | - | - | - | (14) | - | (14) |
| As at 30 June 2020 | - | 254.850 | 2.052.806 | 11.821 | 84.385 | - | 2.403.862 |
| Net Book Value at 30 June 2020 | 142.850 | 293.015 | 2.094.853 | 3.884 | 11.205 | 127.057 | 2.672.864 |
'Transfers and other movements' include the transfer of computer software development costs to intangible assets (Note 11) and the transfer of spare parts for the refinery units between inventories and fixed assets.
| Commercial Properties |
Plant & Machinery |
Motor vehicles | Total | |
|---|---|---|---|---|
| Cost | ||||
| As at 1 January 2019 | 17.054 | 6.285 | 2.405 | 25.744 |
| Additions | 24 | 144 | 546 | 714 |
| Modification | (4) | 10 | - | 6 |
| As at 30 June 2019 | 17.074 | 6.439 | 2.951 | 26.464 |
| Accumulated Depreciation | ||||
| As at 1 January 2019 | - | - | - | - |
| Charge for the period | 2.347 | 556 | 396 | 3.299 |
| As at 30 June 2019 | 2.347 | 556 | 396 | 3.299 |
| Net Book Value at 30 June 2019 | 14.727 | 5.883 | 2.555 | 23.165 |
| Cost | ||||
| As at 1 January 2020 | 23.363 | 8.869 | 6.645 | 38.877 |
| Additions | - | 1.043 | 171 | 1.214 |
| Modification | 17 | 30 | (4) | 43 |
| As at 30 June 2020 | 23.380 | 9.942 | 6.812 | 40.134 |
| Accumulated Depreciation | ||||
| As at 1 January 2020 | 4.644 | 1.134 | 1.015 | 6.793 |
| Charge for the period | 1.677 | 915 | 2.065 | 4.657 |
| As at 30 June 2020 | 6.321 | 2.049 | 3.080 | 11.450 |
| Net Book Value at 30 June 2020 | 17.059 | 7.893 | 3.732 | 28.684 |
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| Computer software |
Licences & Rights |
Total | |
|---|---|---|---|
| Cost | |||
| As at 1 January 2019 | 97.902 | 24.299 | 122.201 |
| Additions | 256 | - | 256 |
| Transfers & other movements | 2.616 | - | 2.616 |
| As at 30 June 2019 | 100.774 | 24.299 | 125.073 |
| Accumulated Amortisation | |||
| As at 1 January 2019 | 93.107 | 24.295 | 117.402 |
| Charge for the period | 2.034 | - | 2.034 |
| As at 30 June 2019 | 95.141 | 24.295 | 119.436 |
| Net Book Value at 30 June 2019 | 5.633 | 4 | 5.637 |
| Cost | |||
| As at 1 January 2020 | 105.334 | 25.536 | 130.870 |
| Additions | 1.662 | 444 | 2.106 |
| Disposals | - | (1.681) | (1.681) |
| Transfers & other movements | 804 | - | 804 |
| As at 30 June 2020 | 107.800 | 24.299 | 132.099 |
| Accumulated Amortisation | |||
| As at 1 January 2020 | 97.602 | 24.564 | 122.166 |
| Charge for the period | 2.333 | 86 | 2.419 |
| Disposals | - | (354) | (354) |
| As at 30 June 2020 | 99.935 | 24.296 | 124.231 |
| Net Book Value at 30 June 2020 | 7.865 | 3 | 7.868 |
'Licenses and Rights' include net exploration license costs relating to the exploration & production of hydrocarbons' concessions in Greece. During April 2020 they were transferred to other group entities. 'Transfers and other movements' in computer software include the transfer of computer software development costs from assets under construction to intangible assets (Note 9).
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Crude oil | 68.761 | 331.447 | ||
| Refined products and semi-finished products | 386.498 | 487.614 | ||
| Petrochemicals | 20.712 | 25.554 | ||
| Consumable materials, spare parts and other | 89.574 | 85.485 | ||
| - Less: Impairment provision for consumables and spare | ||||
| parts | (30.340) | (30.340) | ||
| Total | 535.205 | 899.760 |
The cost of inventories recognised as an expense and included in "Cost of sales" amounted to €2,7 billion (30 June 2019: €3,6 billion). As at 30 June 2020, the Company wrote down inventories to their net realisable value, recording a loss of €14,7 million (30 June 2019: loss of €4,7 million), included in 'Cost of Sales' in the statement of comprehensive income.
Under IEA and EU regulations Greece is obliged to hold crude oil and refined product stocks in order to fulfil the EU requirement for compulsory Stock obligations (90 days stock directive), as legislated by Greek Law 3054/2002. This responsibility is passed on to all companies, including Hellenic Petroleum S.A., which import and sell in the domestic market and who have the responsibility to maintain and finance the appropriate stock levels. Such stocks are part of the operating stocks and are valued on the same basis.
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Trade receivables | 334.747 | 449.115 | ||
| - Less: Provision for impairment of receivables | (101.952) | (100.543) | ||
| Trade receivables net | 232.795 | 348.572 | ||
| Other receivables | 298.947 | 443.101 | ||
| - Less: Provision for impairment of receivables | (14.438) | (14.438) | ||
| Other receivables net | 284.509 | 428.663 | ||
| Deferred charges and prepayments | 9.971 | 14.022 | ||
| Total | 527.275 | 791.257 |
As part of its working capital management, the Company utilises factoring facilities to accelerate the collection of cash from its customers in Greece. Non-recourse factoring, is excluded from balances shown above, since all risks and rewards of the relevant invoices have been transferred to the factoring institution.
'Other receivables' include balances in respect of advances to suppliers, advances to personnel, VAT, withholding taxes and taxes paid (other than income taxes, which are shown separately on the statement of financial position), as a result of tax audit assessments from the tax authorities during previous years. The Company has disputed the relevant assessments and has commenced legal proceedings. The timing of the finalisation of these disputes cannot be estimated and the Company has classified the amounts as current assets.
Other receivables as at 30 June 2020 also include the following:
The Company recognised impairment losses on trade and other receivables, included in the statement of comprehensive income, amounting to €1,4 million and €0,1 million for the six months ended 30 June 2020 and 2019, respectively.
| As at | |
|---|---|
| 30 June 2020 | 31 December 2019 |
| 930.271 | 888.564 |
| 930.271 | 888.564 |
The balance of US Dollars included in Cash at bank as at 30 June 2020 was US\$563 million (Euro equivalent €503 million). The respective amount for the year ended 31 December 2019 was US\$ 822 million (Euro equivalent €732 million).
| Number of Shares (authorised and issued) |
Share Capital |
Share premium |
Total | |
|---|---|---|---|---|
| As at 1 January 2019 & 31 December 2019 | 305.635.185 | 666.285 | 353.796 | 1.020.081 |
| As at 30 June 2020 | 305.635.185 | 666.285 | 353.796 | 1.020.081 |
All ordinary shares were authorised, issued and fully paid. The nominal value of each ordinary share is €2,18 (31 December 2019: €2,18).
| Statutory reserve |
Special reserves |
Tax-free & Incentive law reserves |
Hedging reserve |
Actuarial gains/ (losses) |
Equity instrum. FVOCI gains/ (losses) |
Total | |
|---|---|---|---|---|---|---|---|
| Balance at 1 January 2019 | 144.838 | 86.495 | 71.255 | (11.751) | (28.065) | (509) | 262.263 |
| - Fair value gains/(losses) on cash flow hedges - Recycling of (gains)/losses on hedges through |
- | - | - | 5.186 | - | - | 5.186 |
| comprehensive income | - | - | - | 1.501 | - | - | 1.501 |
| Changes in the fair value of equity instruments | - | - | - | - | - | 651 | 651 |
| Balance at 30 June 2019 | 144.838 | 86.495 | 71.255 | (5.064) | (28.065) | 142 | 269.601 |
| Balance at 1 January 2020 | 160.656 | 86.495 | 71.255 | 2.640 | (37.900) | (40) | 283.106 |
| - Fair value gains/(losses) on cash flow hedges - Recycling of (gains)/losses on hedges through |
- | - | - | (31.140) | - | - | (31.140) |
| comprehensive income | - | - | - | 25.077 | - | - | 25.077 |
| Changes in the fair value of equity instruments | - | - | - | - | - | (331) | (331) |
| Balance at 30 June 2020 | 160.656 | 86.495 | 71.255 | (3.423) | (37.900) | (371) | 276.712 |
Under Greek law, corporations are required to transfer a minimum of 5% of their annual net profit as reflected in their statutory books to a statutory reserve until this reserve is equal to one third of the outstanding share capital. This reserve cannot be distributed during the existence of the entity, but can be used to offset accumulated losses.
Special reserves primarily relate to reserves arising from tax revaluations in accordance with the relevant legislation in prior years.
These reserves relate to retained earnings that have not been taxed with the prevailing corporate income tax rate as allowed by Greek law under various statutes and include reserves relating to investments under incentive laws. These reserves will become liable to tax at the rate prevailing at the time of distribution to shareholders or conversion to share capital under certain conditions.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
The hedging reserve is used to record gains or losses on derivatives that are designated and qualify as cash flow hedges and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss, when the associated hedged transaction affects profit or loss, within cost of sales. As at 30 June 2020 the fair value result in hedging reserve relates to transactions described in Note 3 for commodity price risk management.
These include:
| As at | |||
|---|---|---|---|
| 30 June 2020 | 31 December 2019 | ||
| Non-current interest bearing loans and borrowings | |||
| Bank borrowings | 44.444 | 66.667 | |
| Intercompany borrowings | 543.900 | 689.900 | |
| Bond loans | 494.274 | 851.271 | |
| Νon-current borrowings | 1.082.618 | 1.607.838 | |
| Current interest bearing loans and borrowings | |||
| Short-term bank borrowings | 1.455.054 | 831.132 | |
| Current portion of long-term bank borrowings | 44.444 | 44.444 | |
| Total current borrowings | 1.499.498 | 875.576 | |
| Total borrowings | 2.582.116 | 2.483.414 |
Hellenic Petroleum and its subsidiaries (the "Group") has centralised treasury operations, which coordinate and control the funding and cash management activities of all group companies. Within this framework, Hellenic Petroleum Finance plc ("HPF") was established in November 2005 in the U.K. as a wholly-owned subsidiary of Hellenic Petroleum S.A. to act as the central treasury vehicle of the Hellenic Petroleum Group.
Borrowings by maturity as at 30 June 2020 and 31 December 2019 are summarised in the table below (amounts in € million):
| As at | ||||
|---|---|---|---|---|
| 30 June 2020 | 31 December 2019 | |||
| Maturity | (millions) | (millions) | ||
| Βond loan €400 million | Jun 2023 | 395 | 394 | |
| Bond loan €400 million | Dec 2020 | 225 | 224 | |
| Bond loan €300 million | Feb 2021 | 299 | 299 | |
| Bond loan \$250 million | Jun 2021 | 222 | 159 | |
| Bond loan €100 million | Oct 2021 | 100 | - | |
| European Investment Bank ("EIB") Term loan | Jun 2022 | 89 | 111 | |
| HPF Loan, October 2016 | Oct 2021 | 440 | 442 | |
| HPF Loan, October 2019 | Oct 2024 | 71 | 215 | |
| Bilateral lines | Various | 741 | 639 | |
| Total | 2.582 | 2.483 |
No loans were in default as at 30 June 2020 (none as at 31 December 2019).
Significant movements in borrowings for the six-month period ended 30 June 2020 are as follows:
In March 2020, Hellenic Petroleum S.A. drew down the remaining portion (\$70 million) of its \$250 million 3 year revolving bond loan facility to finance general working capital needs.
In line with its risk management strategy to build up its cash reserves for the Covid-19 crisis, Hellenic Petroleum S.A. concluded a €100 million committed credit facility, with a tenor of 18 months, with Piraeus Bank in April 2020.
Total repayments during the six-month period ended 30 June 2020, amount to €150 million.
The Company has credit facilities with various banks, to finance general corporate needs, which are being renewed in accordance with the Company's finance needs. The facilities mainly comprise of short-term loans.
Bilateral loan balances increased by €102 million during the first half of 2020, in line with the Company's liquidity risk management strategy to build up its cash reserves as the Covid-19 crisis was unfolding.
Certain medium-term credit facility agreements include financial covenants, mainly for the maintenance of certain ratios at Group level, such as: "Consolidated Net Debt/ Consolidated Adjusted EBITDA", "Consolidated Adjusted EBITDA/ Consolidated Net Interest" and "Consolidated Net Debt/ Consolidated Net Worth". Management monitors the performance of the Group to ensure compliance with the above covenants.
| As at | |||
|---|---|---|---|
| 30 June 2020 | 31 December 2019 | ||
| Trade payables | 1.036.089 | 1.165.580 | |
| Accrued Expenses | 73.085 | 64.280 | |
| Other payables | 13.679 | 41.949 | |
| Total | 1.122.853 | 1.271.809 |
Trade payables comprise amounts payable or accrued in respect of supplies of crude oil, products and services.
Trade payables, as at 30 June 2020 and 31 December 2019, include amounts in respect of crude oil imports from Iran, which were received between December 2011 and March 2012 as part of a long-term contract with NIOC. Despite repeated attempts to settle the payment for these cargoes through the international banking system between January and June 2012, it was not possible to do so. In the period from 16 January 2016 up to 8 May 2018, when sanctions were suspended, the Company successfully made several payments against a significant part of these amounts. Since 8 May 2018, following the re-imposition of relevant sanctions by the United States, no deliveries of Iranian crude oil or payments have taken place.
Accrued expenses mainly relate to accrued interest, payroll-related accruals and accruals for operating expenses not yet invoiced.
Other payables include amounts in respect of payroll-related liabilities, social security obligations and sundry taxes.
| Note | For the six-month period ended 30 June 2020 |
30 June 2019 | |
|---|---|---|---|
| Profit / (Loss) before tax | (475.950) | 124.615 | |
| Adjustments for: | |||
| Depreciation and impairment of property, plant and | |||
| equipment and right of use assets | 9,10 | 82.976 | 73.459 |
| Amortisation and impairment of intangible | |||
| assets | 11 | 2.419 | 2.034 |
| Amortisation of grants | 5 | (348) | (313) |
| Financial expenses / (income) - net | 47.848 | 55.560 | |
| Provisions for expenses and valuation changes | 8.021 | 7.555 | |
| Amortization of long-term contracts costs | 5 | (1.328) | 1.407 |
| Gains on disposal of property, plant and equipment | (3.518) | (1.074) | |
| Foreign exchange (gains) / losses | 6 | (4.316) | (1.032) |
| Dividend income | - | (7.917) | |
| (344.196) | 254.294 | ||
| Changes in working capital | |||
| (Increase) / Decrease in inventories | 360.704 | (14.842) | |
| (Increase) / Decrease in trade and other receivables | 129.431 | (32.991) | |
| Increase / (Decrease) in trade and other payables | (159.182) | (34.341) | |
| 330.953 | (82.174) | ||
| Net cash generated from / (used in) operating | |||
| activities | (13.243) | 172.120 |
Restatement: The analysis of the comparative amounts as at 30 June 2019 has been reclassified within the note to conform to changes in presentation of the current year.
The interim condensed statement of comprehensive income includes transactions between the Company and related parties. Such transactions mainly comprise sales and purchases of goods and services in the ordinary course of business.
| For the six-month period ended | |||
|---|---|---|---|
| 30 June 2020 | 30 June 2019 | ||
| Sales of goods and services to related parties | |||
| Group entities | 828.978 | 1.356.419 | |
| Associates | 425.627 | 177.031 | |
| Joint ventures | 271 | 260 | |
| Total | 1.254.876 | 1.533.710 | |
| Purchases of goods and services from related parties | |||
| Group entities | 21.090 | 27.688 | |
| Associates | 179.490 | 215.396 | |
| Joint ventures | 22.284 | 14.704 | |
| Total | 222.864 | 257.788 |
Other operating income/(expenses) & other gains/(losses)-net for the six-month period to 30 June 2020 include income from subsidiaries, amounting to €2,4 million (30 June 2019: €4,0 million).
The statement of financial position includes balances, which derive from sales / purchases of goods and services in the ordinary course of business.
| As at | |||
|---|---|---|---|
| 30 June 2020 | 31 December 2019 | ||
| Balances due to related parties | |||
| (Trade and other creditors) | |||
| Group entities | 19.600 | 14.469 | |
| Associates | 24.884 | 8.732 | |
| Joint ventures | 0 | 0 | |
| Total | 44.484 | 23.201 | |
| Balances due from related parties | |||
| (Trade and other debtors) | |||
| Group entities | 44.677 | 247.232 | |
| Associates | 48.798 | 14.283 | |
| Joint ventures | 127 | 256 | |
| Total | 93.602 | 261.771 |
Transactions have been carried out with the following related parties:
The Company has provided letters of comfort and guarantees in favour of banks as security for loans granted by them to Elpedison B.V. The outstanding amount of these as at 30 June 2020 was €102 million (31 December 2019: €105 million).
DMEP HoldCo Ltd was incorporated in 2011 in the UK and ultimately owns 100% of "OTSM S.A. of Maintenance Compulsory Stocks and Trading of Crude Oil and Petroleum Products" ("OTSM"). OTSM is established under Greek law and is fully permitted to provide crude oil and petroleum products stock keeping and management services. The Company has delegated part of its compulsory stock keeping obligations to OTSM, reducing its stock holding by approximately 153 kMT (31 December 2019: 142 kMT), at a fee calculated in line with the legal framework. All transactions with OTSM are included in the current note.
During the six-month period ended 30 June 2020, transactions and balances with the above government related entities are as follows:
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
| For the six-month period ended | |||
|---|---|---|---|
| 30 June 2020 | 30 June 2019 | ||
| Short-term employee benefits | 2.298 | 2.492 | |
| Post-employment benefits | 72 | 72 | |
| Total | 2.370 | 2.564 |
The Company has also received loans from its subsidiaries. The outstanding balance of these loans as at 30 June 2020 was €543,9 million (31 December 2019: €689,9 million). Interest expense for the six-month period ended 30 June 2020 was €11,5 million (30 June 2019: €20,0 million). All loans are at variable interest rates. The average interest rate on inter-company loans during the six-month period ended 30 June 2020 was 4,05%.
a) Capital commitments
Significant contractual commitments of the Company, amount to €42 million as at 30 June 2020 (31 December 2019: €34 million), which mainly relate to improvements in refining assets.
b) Letters of Credit
The Company may be requested to provide bank letters of credit to suppliers in order to obtain better commercial and credit terms. To the extent that such items are already recorded as liabilities in the financial statements there is no additional commitment to be disclosed. In cases where the underlying transaction occurs after the year end, the Company is not liable to settle the letter of credit and hence no such liability exists as at the year end.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
Hellenic Petroleum S.A. is counterparty to outstanding put and call option agreements to purchase oil stock from its associate OTSM. The put and call options may be exercised by either counterparty at any time before maturity under certain conditions. The value of these two options (put and call) is immaterial due to the fact that the terms of the agreements are such that the transactions will be market priced resulting in zero payoff at any time of exercise.
The Company has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business, the most significant of which are disclosed below:
The Company is involved in a number of legal proceedings and has various unresolved claims pending arising in the ordinary course of business. Based on currently available information and the opinion of legal counsel, management believes that the final outcome will not have a significant effect on the Company's operating results or financial position and that no additional provisions, over and above provisions already reflected in the interim condensed financial statements, are required.
During the current and preceding years, a number of Municipalities proceeded with the imposition of duties and fines relating to the rights of way occupied by underground pipelines operated by the Company within the boundaries of each respective municipality. As at 30 June 2020, the total amounts imposed amount to €33,4 million (31 December 2019: €30,3 million) . In order to appeal against these, and in accordance with legislation, the Company has paid an amount of €14 million (31 December 2019: €14 million), which is included in other receivables in the interim condensed financial statements. During the six-month period ended 30 June 2020, the Municipality of Aspropyrgos communicated a new duty/fine for the year 2019, amounting to €3,1 million. The Company has exercised all available legal recourse relating to these cases and Management have assessed that it is most probable that the outcome of all appeals will be favourable. Therefore the Company has not raised a provision with regard to these cases.
During the period ended 30 June 2020, the Company received credit notes from DEPA S.A., amounting to €7,3 million, following a court decision on its action against Botas Petroleum Pipeline Corporation ("Botas") and subject to the condition that if the outcome of Botas appeal against the above decision is favourable for the counterparty the above amount will be recalled by DEPA S.A. Management believes that the likelihood of such an event is less than probable and therefore has not raised a respective provision.
The Company has provided letters of comfort and guarantees in favour of banks as security for loans granted by them to subsidiaries and associates of the Group, the outstanding amount of which as at 30 June 2020 was the equivalent of €915 million (31 December 2019: €912 million).
The tax framework and practices in Greece, which determine the tax base for the Company's transactions, may result in inherent uncertainties, due to its complexity and it being subject to changes and alternative interpretation by relevant authorities at different points in time and across different entities. As a result, there may be types of expenses or treatments for which a company may be assessed on a different basis than the one adopted during the preparation of its tax return and the financial statements. Based on past experience tax audits were carried out by tax authorities on average 5-7 years after the filing of the tax return. In addition, where a tax audit results in a different view to that adopted by the Company, the process for resolving the issue is usually through a court of law proceeding, which has many stages and can take a considerable number of years to reach its final and irrevocable ruling. For an entity to engage in this process, a minimum down payment of 50% of the total tax and surcharges assessed is required.
All of the above result in inherent difficulties in the determination and accounting of tax liabilities. As a result, management aims to determine its policy based on specific legislation available at the time of accounting for a transaction, obtain specialist legal and tax advice on individual cases, if required and utilise prior tax audits experience and rulings, including relevant court decisions. This process ensures that the financial statements reflect any material tax and customs liabilities as accurately and completely as possible.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
As disclosed in Note 7, tax audits have been completed by the Tax Authorities up to and including the financial year ended 31 December 2011. The Tax audit reports for years ended 31 December 2010 and 2011 were received in December 2017 and they are subject to legal dispute by the Company. In summary, the reports assess additional taxes of €22,5 million and penalties of €23,5 million for items relating to stamp duty, various non-deductible expenses and other income tax adjustments. Following a detailed review of the Tax Audit Report, the Company has disputed the additional taxes imposed (which are over and above the amounts already included in the Company's normal tax returns) and proceeded with all possible legal means and actions to appeal against these additional taxes and surcharges imposed.
Even though the Company disputed the additional taxes and surcharges imposed, it was obliged to pay 50% of the assessed amounts (taxes and surcharges) to the Tax Authorities, in order to appeal the results of the tax audits. This was paid within the applicable deadline, while the remaining amounts have been fully offset by the Authorities, with tax and other State receivables of the Company, within 2018. These amounts are included in 'Income tax receivable, if they relate to income tax, or in Trade and Other Receivables', if they relate to other taxes, as the Company assesses that it will succeed in its appeals. As far as surcharges are concerned, the report has assessed amounts at 120% of the original tax instead of the applicable 50%; this is also being legally challenged by the Company.
Notification for audit has been received for the year ended 31 December 2012, which according to the general provisions is time-barred. During March 2020, a notification for audit was received, for the years 2014 up to and including 2017. The audit is in progress and is related to specific tax subjects. Moreover, during July 2020, a new notification for a full audit was received for the year 2014, regarding all tax subjects.
Management believes that no additional material liability will arise either as a result of open tax years or from the outcome of current litigation cases over and above the tax liabilities and provisions already recognised in the financial statements as at 30 June 2020. The Company has recorded down payments made for taxes and penalties assessed in previous disputes with the tax authorities in income tax receivable, to the extent that the Company has assessed that the amounts will be ultimately recoverable.
It is noted that for financial years ending 31 December 2011 up to and including 31 December 2018, the Company obtained unqualified "Annual Tax Compliance Reports" from their Statutory Auditors, as provided for by par. 5, article 82 of L.2238/1994 and article 65A of L. 4174/2013. Management expects that the same will also apply for the year ended 31 December 2019.
In 2008, Customs authorities assessed additional customs duties and penalties amounting to approximately €40 million for alleged "stock shortages" during the years 2001-2005. The Company has duly filed contestations before the Administrative Court of First Instance and Management believes that this case will have a positive outcome when the legal procedure will be concluded.
Notwithstanding the filing of the above contestations, the Customs office withheld an amount of €54 million (full payment plus surcharges) of established VAT refunds (Note 13), an action against which the Company filed two Contestations before the Administrative Courts of Athens and Piraeus. The Administrative Court of Athens ruled that the withholding effected by the Tax Office was unlawful.
The Company considers that the above amounts will be recovered.
At its meeting held on 5 November 2019, the Board of Directors decided to distribute an interim dividend of €0,25 per share for the financial year 2019. The dividend amounts to a total of €76,4 million and was paid during the first quarter of 2020.
On 27 February 2020, the Board of Directors proposed to the AGM the distribution of a final dividend of €0,25 per share for the financial year 2019, which was approved by the AGM on 24 June 2020. The total final dividend for 2019, amounts to €76,4 million and is included in the interim condensed financial statements for the six-month period ended 30 June 2020. The whole amount was paid in July 2020.
INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2020 (All amounts in Euro thousands unless otherwise stated)
The Board did not approve a change in dividend policy overall and will evaluate the payment of dividend for the financial year 2020.
In December 2019, the Hellenic Republic Asset Development Fund ("HRADF" or the "Fund") launched an international public tender process for the joint sale, along with Hellenic Petroleum S.A. ("HELPE"), of the 100% in the share capital of DEPA Infrastructure S.A. In June 2020, Phase A of the tender process was completed, with six interested parties meeting the criteria to participate in Phase B (Binding Offers Phase).
In January 2020, the HRADF launched an international public tender process for the sale of 65% in the share capital of DEPA Commercial S.A. The Fund and HELPE have entered into a Memorandum of Understanding (MoU) allowing for the preferred investor to have the option to acquire the remaining 35% of shares in DEPA Commercial SA owned by HELPE, leading to an acquisition of 100% of its share capital. In June 2020, Phase A of the tender process was completed, with seven interested parties meeting the criteria to participate in Phase B (Binding Offers Phase). Hellenic Petroleum S.A. is among the interested parties, in a joint venture with Edison International Holding N.V.
The completion of sale process for DEPA Infrastructure S.A. and the completion of the sale or acquisition of controlling stake in DEPA Commercial S.A. are subject to a number of conditions including regulatory approval.
In accordance with Law 4001/ 2011, as amended by Law 4643/2019 a partial demerger of DEPA's distribution gas branch took place on 30 April 2020 and a new entity named DEPA Infrastructure S.A. was created. The new company includes the participation in the entities acting as operators of Natural Gas Distribution Networks, i.e. EDA Attikis SA, EDA Thessalonikis – Thessalias SA and DEDA SA. The surviving entity was renamed as DEPA Commercial S.A. and will include all current wholesale and retail gas activities of DEPA, through the 100% participation in EPA Attikis.
The Company's owns a 35% investment in each entity, i.e. DEPA Commercial S.A. and DEPA Infrastructure S.A.
Other than the events already disclosed in Note 3, no material events took place after the end of the reporting period and up to the date of the publication of the financial statements.
5.1. Published Summary Financial Statements
| COMPANY | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Head office Address: | A 8 |
, CHIMARRAS STR. - 15125 MAROUSI | |||||||
| Website : Approval date of the six month financial information by the Board of Directors |
http://www.helpe.gr 27 AUGUST 2020 |
||||||||
| The Certified Auditor: Auditing Company: Type of Auditor's Report |
Unqualified | Christiana Panayidou, SOEL reg.no.62141 ERNST & YOUNG (HELLAS), SOEL reg.no.107 |
|||||||
| STATEMENT OF FINANCIAL POSITION | STATEMENT OF CHANGES IN EQUITY | ||||||||
| (Amounts in thousands €) | GROUP 30/06/2020 |
31/12/2019 | 30/06/2020 | COMPANY 31/12/2019 |
(Amounts in thousands €) | GROUP 30/06/2020 |
30/06/2019 | COMPANY 30/06/2020 |
30/06/2019 |
| ASSETS | |||||||||
| Property, plant and equipment | 3.270.843 | 3.297.668 | 2.672.864 | 2.693.794 | Total equity at beginning of the year 1/1/2020 & 1/1/2019 | 2.326.573 | 2.394.731 | 2.238.835 | 2.146.677 |
| Right-of-use assets Intangible assets |
236.648 105.274 |
242.934 104.426 |
28.684 7.868 |
32.084 8.704 |
Total comprehensive income for the period Dividends |
(341.828) (76.409) |
128.717 (152.818) |
(324.230) (76.409) |
103.287 (152.818) |
| Other non-current assets Inventories |
516.543 631.536 |
499.543 1.012.802 |
1.063.562 535.205 |
1.067.227 899.760 |
Dividends to non-controlling interests Tax on intra-group dividends |
(1.436) (227) |
(2.246) (122) |
- - |
- - |
| Trade and other receivables | 606.557 91.587 |
748.153 91.391 |
527.275 87.955 |
791.257 87.616 |
Participation of minority shareholders in share capital increase of subsidiary Share capital issue expenses |
34 (30) |
- (342) |
- - |
- - |
| Assets held for sale Derivative financial instruments |
2.209 5.830 |
2.520 3.474 |
- 5.830 |
- 3.474 |
Total equity at the end of the period | 1.906.677 | 2.367.920 | 1.838.196 | 2.097.146 |
| Cash and cash equivalents | 1.128.570 | 1.088.198 | 930.271 | 888.564 | |||||
| Investment in equity instruments TOTAL ASSETS |
906 6.596.503 |
1.356 7.092.465 |
530 5.860.044 |
965 6.473.445 |
STATEMENT OF CASH FLOW (Amounts in thousands €) |
GROUP | COMPANY | ||
| 1/1/2020 - 30/06/2020 |
1/1/2019 - 30/06/2019 |
1/1/2020 - 30/06/2020 |
1/1/2019 - 30/06/2019 |
||||||
| EQUITY AND LIABILITIES | |||||||||
| Share capital Share premium |
666.285 353.796 |
666.285 353.796 |
666.285 353.796 |
666.285 353.796 |
Cash flows from operating activities | ||||
| Retained earnings and other reserves Equity attributable to equity holders of the parent |
823.423 1.843.504 |
1.241.944 2.262.025 |
818.115 1.838.196 |
1.218.754 2.238.835 |
Profit before income tax | (501.425) | 154.674 | (475.950) | 124.615 |
| Non-controlling interests TOTAL EQUITY |
63.173 1.906.677 |
64.548 2.326.573 |
- 1.838.196 |
- 2.238.835 |
Adjustments for: assets |
122.303 | 111.906 | 82.976 | 73.459 |
| Amortisation and impairment of intangible assets | 3.625 | 4.062 | 2.419 | 2.034 | |||||
| Interest bearing loans and borrowings | 1.231.906 | 1.610.094 | 1.082.618 | 1.607.838 | Amortisation of grants | (520) | (589) | (348) | (313) |
| Lease liabilities Provisions and other long term liabilities |
169.564 288.766 |
199.894 447.894 |
27.530 206.641 |
31.183 365.556 |
Interest expense Interest expense - lease finance cost |
54.932 5.435 |
66.444 4.705 |
52.066 692 |
60.605 464 |
| Short-term Interest bearing loans and borrowings Other short-term liabilities |
1.649.190 1.350.400 |
1.022.270 1.485.740 |
1.499.498 1.205.561 |
875.576 1.354.457 |
Interest income Share of operating profit of associates |
(2.726) (18.398) |
(2.956) (14.445) |
(4.910) - |
(5.509) - |
| Total liabilities | 4.689.826 | 4.765.892 | 4.021.848 | 4.234.610 | Provisions for expenses and valuation charges Foreign exchange (gains) / losses |
28.684 (4.254) |
5.441 (743) |
8.021 (4.316) |
7.555 (1.032) |
| TOTAL EQUITY AND LIABILITIES | 6.596.503 | 7.092.465 | 5.860.044 | 6.473.445 | Gain / (loss) on assets held for sale Dividend income |
302 - |
(228) - |
- - |
- (7.917) |
| Amortisation of long-term contracts costs | (1.418) | (1.379) | (1.328) | 1.407 | |||||
| STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD (Amounts in thousands €) |
GROUP | (Gain) / loss on sale of fixed assets | (2.195) (315.654) |
19 326.911 |
(3.518) (344.196) |
(1.074) 254.294 |
|||
| 1/1/2020 - 30/06/2020 |
1/1/2019 - 30/06/2019 |
1/4/2020 - 30/06/2020 |
1/4/2019 - 30/06/2019 |
||||||
| Revenue from contracts with customers | 2.986.016 | 4.456.629 | 1.067.051 | 2.465.413 | Changes in working capital (Increase) / decrease in inventories |
377.322 | (33.153) | 360.704 | (14.842) |
| Gross profit Operating profit |
(247.562) (466.435) |
419.405 207.679 |
120.566 12.611 |
233.090 128.409 |
(Increase) / decrease in trade and other receivables Decrease in payables |
144.743 (190.025) |
(33.358) (31.451) |
129.431 (159.182) |
(32.991) (34.341) |
| Profit before income tax Less : Taxes |
(501.425) 165.646 |
154.674 (33.313) |
(41.654) 46.571 |
90.626 (15.881) |
Less: Income tax received /paid |
(6.533) | (3.052) | (4.843) | (1.768) |
| Profit for the period | (335.779) | 121.361 | 4.917 | 74.745 | Net cash generated from / (used in) operating activities (a) | 9.853 | 225.897 | (18.086) | 170.352 |
| Profit/(loss) attributable to: | |||||||||
| Owners of the parent Non-controlling interests |
(335.841) 62 |
121.321 40 |
3.966 951 |
74.205 540 |
Cash flows from investing activities Purchase of property, plant and equipment & intangible assets |
(78.583) | (78.262) | (58.706) | (55.856) |
| (335.779) | 121.361 | 4.917 | 74.745 | Proceeds from disposal of property, plant and equipment & intangible assets |
3.382 | 363 | 4.846 | 1.074 | |
| Other comprehensive (loss)/income for the period, net of tax Total comprehensive income for the period |
(6.049) (341.828) |
7.356 128.717 |
20.301 25.218 |
(503) 74.242 |
Share capital issue expenses Purchase of subsidiary, net of cash acquired |
(30) - |
(342) (5.341) |
- - |
- - |
| Grants received | 174 | 199 | - | - | |||||
| Total comprehensive income/(loss) attributable to: Owners of the parent |
(341.855) | 128.683 | 24.249 | 73.695 | Interest received Prepayments for right-of-use assets |
2.725 (218) |
2.956 (463) |
4.910 - |
5.509 - |
| Non-controlling interests | 27 (341.828) |
34 128.717 |
969 25.218 |
547 74.242 |
Dividends received Investments in associates - net |
- - |
1.347 - |
150.000 (10.000) |
6.571 (10.014) |
| Proceeds from disposal of investments in equity instruments Net cash generated from / (used in) investing activities (b) |
- (72.550) |
21 (79.522) |
- 91.050 |
- (52.716) |
|||||
| Basic and diluted earnings per share (in Euro per share) | (1,10) | 0,40 | 0,01 | 0,24 | |||||
| Cash flows from financing activities Interest paid |
(47.946) | (63.127) | (49.633) | (66.132) | |||||
| Earnings Before Interest, Taxes, Depreciation and | Dividends paid to shareholders of the Company Dividends paid to non-controlling interests |
(76.381) - |
(122) (2.246) |
(76.385) - |
(122) - |
||||
| Amortisation (EBITDA) | (340.592) | 319.601 | 75.521 | 187.409 | Participation of minority shareholders in share capital increase of subsidiary | 34 | - | - | - |
| Proceeds from borrowings Payments of lease liabilities |
267.927 (22.313) |
10.000 (19.729) |
265.010 (5.558) |
10.067 (3.527) |
|||||
| STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD | Repayments of borrowings Net cash generated from / (used in) financing activities (c) |
(21.820) 99.502 |
(27.671) (102.895) |
(168.278) (34.844) |
(302.423) (362.137) |
||||
| (Amounts in thousands €) | 1/1/2020 - | 1/1/2019 - | COMPANY 1/4/2020 - |
1/4/2019 - | |||||
| 30/06/2020 | 30/06/2019 | 30/06/2020 | 30/06/2019 | Net decrease in cash & cash equivalents (a)+(b)+(c) | 36.805 | 43.480 | 38.120 | (244.501) | |
| Revenue from contracts with customers Gross profit |
2.690.940 (345.654) |
4.087.415 260.510 |
950.340 87.678 |
2.263.042 139.961 |
Cash & cash equivalents at the beginning of the period | 1.088.198 | 1.275.159 | 888.564 | 1.070.377 |
| Operating profit Profit before income tax |
(432.418) (475.950) |
171.226 124.615 |
45.632 23.335 |
93.192 73.416 |
Exchange gains/(losses) on cash and cash equivalents | 3.567 | 1.049 | 3.587 | 1.999 |
| Less : Taxes | 158.114 | (28.666) | 39.472 | (13.522) | Net increase/(decrease) in cash & cash equivalents | 36.805 | 43.480 | 38.120 | (244.501) |
| Profit for the period | (317.836) | 95.949 | 62.807 | 59.894 | Cash & cash equivalents at end of the period | 1.128.570 | 1.319.688 | 930.271 | 827.875 |
| Other comprehensive (loss)/income for the period, net of tax Total comprehensive income for the period |
(6.394) (324.230) |
7.338 103.287 |
19.418 82.225 |
(534) 59.360 |
|||||
| Basic and diluted earnings per share (in Euro per share) | (1,04) | 0,31 | 0,21 | 0,20 | |||||
| Earnings Before Interest, Taxes, Depreciation and | |||||||||
| Amortisation (EBITDA) | (349.790) | 244.372 | (556.213) | (26.604) | |||||
| ADDITIONAL INFORMATION | |||||||||
| GROUP | COMPANY | |||
|---|---|---|---|---|
| a) for pending legal cases | 12.369 | 7.796 | ||
| b) for tax matters | 10.556 | 8.155 | ||
| c) for SLI | 183.253 | 149.537 | ||
| d) for other provisions relating to expenses | 29.479 | 29.479 | ||
30/06/2020 30/06/2019 30/06/2020 30/06/2019
Changes in the fair value of equity instruments (348) 700 (331) 651
| Actuarial losses on defined benefit pension plans | 0 | (56) | - | - |
|---|---|---|---|---|
| Share of other comprehensive income of associates | (41) | (41) | - | - |
| Fair value gains/(losses) on cash flow hedges | (31.140) | 5.186 | (31.140) | 5.186 |
| Derecognition of (gains)/ losses on hedges through comprehensive income | 25.077 | 1.501 | 25.077 | 1.501 |
| Currency translation differences and other movements | 145 | 66 | - | - |
| Net income/(expense) recognised directly in equity | (6.049) | 7.356 | (6.394) | 7.338 |
| GROUP | COMPANY | |
|---|---|---|
| Sales of goods and services | 524.254 | 1.298.876 |
| Purchases of goods and services | 234.203 | 252.864 |
| Receivables | 86.954 | 110.602 |
| Payables | 42.050 | 61.484 |
| Board members and senior management remuneration & other benefits | 2.416 | 2.370 |
Athens, 27th of August 2020
GROUP COMPANY
The following financial data and information are only for general information purposes with regard to the financial position and results of HELLENIC PETROLEUM Group and the parent company. We, therefore, recommend to the reader, before making any investment decision, or proceeding to any transaction with the company, to refer to the company's internet address, where the financial statements in accordance with International Financial Reporting Standards are available, together with the auditors' review report.
1.Νοte No. 25 of the interim condensed consolidated financial statements includes all subsidiary and associated companies and their related information. 2. With regards to tax audits carried out by Certified Auditors, all Group companies based in Greece have received unqualified Tax Compliance Reports by their respective statutory auditor, for fiscal years up to 2018 (inclusive). With regards to tax audits carried out by the Tax Authorities, tax audits have been completed as follows: a) for Hellenic Petroleum S.A for years up to and including 2011, b) for former Hellenic Fuels SA for years up to and including 2011, with ongoing audits for subsequent years up to and including 2013, c) for EKO S.A for years up to and including 2010. Notwithstanding the possibility of future tax audits, the Group's management believes that no additional material liability will arise as a result of unaudited tax years over and above the tax liabilities and provisions recognised in the interim condensed consolidated financial statements for the period ended 30 June 2020 (Note 23 of the interim condensed consolidated financial statements). 4. The accounting policies used in the preparation of the interim condensed consolidated financial statements for the period ended 30 June 2020 are consistent with those applied for the preparation of the annual consolidated financial statements for the year ended 31 December 2019, except for the new or revised accounting standards and interpretations that have been implemented in 2020, as outlined in Note 2 of the interim condensed consolidated financial statements of 30 June 2020. Where necessary, comparative figures have been reclassified to conform to changes in the presentation of the current financial period. 5. As mentioned in Note 23 of the interim condensed consolidated financial statements, the Group's entities are involved in a number of legal proceedings and have various unresolved claims pending arising in the ordinary course of business. Based on currently available information, management believes the outcome will
not have a significant impact on the Group's operating results or financial position. 6. Number of employees at 30 June 2020 in Greece: Company: 2.162, Group: 2.974 (31/12/2019: Company: 2.178, Group: 2.975).
FINANCIAL DATA AND INFORMATION FOR THE PERIOD FROM 1 JANUARY 2020 TO 30 JUNE 2020 (In accordance with decision of the Board of Directors of the Capital Market Commission 4/507/28.04.2009)
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER ACCOUNTING DIRECTOR
ANDREAS N. SHIAMISHIS C. THOMAS STEFANOS I. PAPADIMITRIOU
ID. Number ΑΑ 010147 ID. Number Π 062606 ID. Number ΑΚ 553436
The annual and interim financial statements of the HELLENIC PETROLEUM Group and the parent company on a consolidated and non-consolidated basis, the Independent Auditors' Report and the Annual Report of the Board of Directors are available on the internet at www.helpe.gr.
The financial statements of the consolidated companies under EKO S.A. are available online at www.eko.gr.
On HELLENIC PETROLEUM's website https://www.helpe.gr/investor-relations/quarterlyresults/financial-statements/financial-statements-of-subsidiary-companies/, there is a list of subsidiaries that are fully consolidated in the Group's financial statements; these companies also have their own website through which their financial statements can be accessed. The financial statements of the other subsidiaries can be viewed at the above address.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.