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Rompetrol Rafinare has tripled its net consolidated profitin the first 9 months of 2017

kmgi rompetrol

Rompetrol Rafinare, company member of KMG International, has recorded a net consolidated*profit totalling56mil. USD in the first 9 months of 2017,almost triple compared with the same periodof 2016. The operational consolidated result (EBITDA) has also recordeda growth by26% in the first 9 months of 2017, compared to the same period of 2016, rising to over152mil. USD. The gross turnover has reached2,9billion USD in the first 9 months of 2017, 12% higher compared to the same period of last year.

“Rompetrol Rafinare operates two refineries with tradition for the Romanian industry, updated and benefiting from the highest performance standards. Constant operational records and positive financial results, as well as the significant impact that the two refineries have in the economy were achieved followoing the investments supported by KMG International and its unique shareholder, the national oil and gas company of Kazakhstan, KazMunayGas. Investments made to increase the processing capacity of Petromidia refinery, its flexibility and the modernization of industrial capabilitiesreached over 1,4 billion USD ever since 2007, the moment of the take-over”, Yedil Utekov, director general of Rompetrol Rafinare stated.

The positive results registeredwere supported both by the increase in thequantity of feedstock processed by the two refineries of the company, Petromidia Năvodari and Vega Ploiești, given the continuation of the optimization andefficiency of operațional processes. Also, the financial results have been positively influenced by the evolution of processing margins. In the first 9 months of 2017, the gross refining marginhas grown by 26% compared to the same period of last year.

AlthoughPetromidia Năvodari and Vega Ploieşti refineries have gone through a planned stop in May, production units recorded a quantity of over 4,2 mil. tons of raw processed materialin the first 9 months of 2017, which is 2% higher than the same period of last year. Between June - September, Petromidia refineryhas taken over an average of 15,150 oil tons/day.Given the preliminary data for October 2017, Petromidia refinery has processed a daily quantity of about 18.000 tons of feedstock each month, the highest level reached in its history of 41 years. At the same time, Vega Ploiești refinery and the petrochemicalunit reached in October a total volume ofprocessed feedstock of 60.000 tons, historic figures for the twoproduction units.Against this background of increased production at the Petromidia refinery, the fules sales of the refining division grewby 13% on the internal market.

Rompetrol Rafinare is the largest exporter of oil products in Romania. In the first months of 2016, through its refining and petrochemical units, exports totalled 855 mil. USD, 16% higher compared to the same period of 2016. The company exports mainly to its partners in the Black Sea region.

Through its operations, Rompetrol Rafinare has continued to be an important contributor to Romania’s state budget, paying over 878 mil. USD in the first months of 2017. KMG International group has payed, as of 2007, almost 14billion USD to Romania’s state budget.

The majority shareholder of Rompetrol Rafinare is KMG International, the Romanian state holding 44,69% of the shares. Holding shares in Rompetrol Rafinare is automatically reflected in the companies the enterprise controls, directly and indirectly. Rompetrol Rafinare operates the Petromidia refinery, the Vega refinery, and the petrochemicals division, Rompetrol Downstream operates the gas station network and the Rom Oil warehouse network.

The refining segment

Financial Q3 2017 Q3 2016 % 9 months 2017 9 months 2016 %

Gross turnover USD 941,538,983 649,044,595 45% 2,355,470,391 2,041,303,683 15%

EBITDA USD 68,974,986 11,161,784 518% 111,221,191 69,204,250 61%

Net result USD 42,034,454 (15,378,314) N/A 24,824,208 (5,885,812) N/A


Processed feedstock – Petromidia kt 1,560 1,106 41% 3,982 3,899 2%

Processed feedstock - Vega kt 112 85 32% 264 256 3%

Fuel sales domestic market kt 611 472 30% 1,561 1,378 13%

Fuel sales export kt 537 351 53% 1,396 1,495 -7%

Note: The refining segment includes the results of Rompetrol Rafinare, strictly reffering to the activities carried out by Petromidia and Vega refineries.

The net profit registered in the first nine months of 2017 on the refining segment amounted to USD 24,8 million, while the EBITDA operating profit amounted to USD 111 million, up by 61% compared to the same period of last year. The turnover rose in the first nine months of 2017 by 15%, to USD 2,4billion.

Petromidia processed 3,98 million tons of feedstock in the first none months of 2017, while the refinery’s utilization rate was 80,2% of operable capacity. In August 2017, the Petromidiarefinery has reached historical records in terms of processed feedstock, of 17.4 thousand tons/day.

Furthermore, during three consecutive months, June – August 2017, the Atmospheric and Vacuum Distillation unit has reached its designed capacity of 15,2 thousand tons / day of processed crude oil.

For the Vega refinery, the total quantity of processed feedstock was 263,6 thousand tons in the first nine months of 2017, up by approximately 3% over the same period of last year. The refinery's utilization rate in the first 9 months of 2017 was 106,5%.

In July 2017, the Vega refinery has reached a historic maximum for processed feedstock, of approximately 39,6 thousand tons.

The Vega Ploieștirefinery is the oldest of such units in the country and the only local producer of road bitumen. In 2016, the Vega refinery has produced almost 91 thousand tons of bitumen, a historic record for the refinery in Ploiești.


The petrochemicals segment

Financial Q3 2017 Q3 2016 % 9 months 2017 9 months 2016 %

Gross turnover USD 54,213,091 40,409,645 34% 134,197,285 131,479,056 2%

EBITDA USD (281,055) (2,120,714) -87% (3,770,350) 4,924,742 N/A

Net result USD (2,112,039) (4,193,708) -50% (7,614,875) (3,201,220) 138%


Processed propylene kt 35 22 56% 95 87 9%

Processed ethylene kt 16 17 -5% 44 48 -10%

Total sales Kt 53 40 33% 135 137 -1%

Starting with 1 January 2014, the petrochemical activity was taken over by Rompetrol Rafinare SA., being fully integrated into the flow of propylene, utilities and logistics.

The petrochemicals segment is the sole polypropylene producer in Romania, steadily increasing its market share on the secondary product categories. Its dynamic development strategy provides the company with a competitive position on the domestic and regional markets, both in the areas of the Black Sea and Mediterranean Sea, Central and Eastern Europe.

In the first 9 months of 2017, the total polymer production was 102,5 thousand tones, decreasing with 5% compared to last year (108,5 thousand tones), the difference being caused by the planned shutdown of the polypropylene plant and by the unplanned shutdown of LDPE unit.

In terms of low density polyethylene (LDPE), it works 100% with imported ethylene. The polypropylene plant (PP) works with feedstock fully supplied by the Petromidia refinery.


Financial Data Q3 2017 Q3 2016 % 9 Months 2017 9 Months 2016 %

Gross Turnover USD 722,296,073 604,367,884 20% 1,774,311,849 1,638,122,732 8%

EBITDA USD 28,093,854 20,265,230 39% 47,268,474 46,786,728 1%

Net Result USD 25,056,154 16,313,591 54% 40,704,405 31,846,583 28%

Operational Data

Fuel quantities - retail kt 202 181 12% 520 475 10%

Fuel quantities – wholesale kt 364 295 24% 903 851 6%

Sold LPG quantities Kt 93 52 80% 264 197 34%

Distribution segment

Note: The distribution segment includes the Rom Oil, Rompetrol Downstream, Rompetrol Quality Control, Rompetrol Logistics and Rompetrol Gas subsidiaries.

The consolidated gross turnover on the distribution segment amounted to $1,8 billion in the first 9 months of 2017, up by 8% compared to the same period of 2017. The EBITDA increased by 1% compared to same period of last year, reaching $47 million.

In terms of quantity, fuel sales grew by 10% in the retail segment, by 6% on the wholesale segment, while the most significant growth was recorded on the LPG segment, where sales were up by 34% in the first 9 months of 2017 compared to the same period last year.

The financial results on the distribution segment were mainly influenced by the evolution of the Platts quotations (FOB Med Italy-mean) from July-September 2017, denominated in USD as reference currency. These were, on average, 18% higher on gasoline and 19% higher on diesel. The 2,5% growth of the Romanian Leu compared to the US Dollar has led to an increase in the national currency of the 2 quotes of about 15% for gasoline and diesel.

Domestically, as of 1 January 2017, VAT has decreased by 1 percentage point, from 20% to 19%, while the fuel excises have been reduced by 7 eurocents per liter. Subsequently, excise duty on fuel was increased by 32 bani / liter in two stages of 16 bani / liter, the first stage entering into force on 15 September 2017.

At the end of September 2017, the distribution segment of Rompetrol Downstream included 793 units, including its own stations network, partner stations and mobile stations.

According to preliminary data for October, total fuel sales in January-October reached a record level of about 2,7 million tons, and advance of more than 11% compared to the volume sold in the same period of 2016. In the first 10 months of the year, Rompetrol Downstream recorded a volume growth of 7%.

This development was supported by the continued expansion of the fuel distribution network, the completion of the rebranding program for the Rompetrol stations and the consolidation of the Hei and Fill&Go brands.

KMG International’s retail activities are carried out in over 1,000 fuel distribution points owned and operated in countries such as Romania, Georgia, Bulgaria and Moldova. KMG International through Rompetrol Downstream continued to modernize the existing stations, with investment so far exceeding $7 million.



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