AB Klaipėdos nafta interim unaudited financial information regarding the six months of 2020

AB Klaipėdos nafta (hereinafter – KN, the Company) announces the unaudited consolidated (hereinafter – the Group) and separate financial results for the six months ended 30 June 2020.

• Revenue for the 6 months of 2020 of the Group and the Company comprise EUR 40,7 million and EUR 39,7 million respectively and is lower by 21% and 22% compared to the same period of 2019 (EUR 51,2 million and EUR 51,2 million respectively).
• Financial net profit of the Group and the Company for the 6 months of 2020 amounts to EUR 9.4 million and EUR 9.3 million respectively and is 2.8 times and 2.7 times higher compared to the first 6 months of 2019 (EUR 2.5 million and EUR 2.5 million respectively).
• Adjusted net profit of the Group and the Company for the 6 months of 2020 amounts to EUR 8.2 million and EUR 8.1 million respectively and is higher by 74% and 72% compared to the first 6 months of 2019 (EUR 4.7 million and EUR 4.7 million respectively).
• EBITDA for the 6 months of 2020 of the Group and the Company amounts to EUR 26.6 million and EUR 26.5 million respectively and is lower by 17.6% and 17.9% compared to the same period of 2019 (EUR 32.3 million and EUR 32.3 million respectively).
• Adjusted EBITDA for the 6 months of 2020 of the Group and the Company amounts to EUR 14.2 million and EUR 14.1 million respectively and is higher by 24.6% and 23.7% compared to the same period of 2019 (EUR 11.4 million and EUR 11.4 million respectively).

Main finance rations of the Group comparing H1 2020 and H1 2019:

Management comment:

In the H1 of 2020, the same as during 2019, the Group‘s and the Company‘s net profit was significantly affected by fluctuations of exchange rate. The unrealized impact of exchange rates arose from the 1^st January of 2019 under the requirements of IFRS 16 “Lease”, which indicated the Company to capitalize finance lease obligations and the major part of them is denominated in US dollars. Whereas all US dollar denominated lease liabilities relate to LNG terminal, the effect of unrealized exchange rate are reflected in the regulated segment. Revenue of the Group for the first six months of 2020 compared to the same period of 2019 is lower mainly due to the reduction of LNG security supplement from the 1^st January 2020.

LNG regasification at Klaipėda LNG terminal (hereinafter – LNG terminal) still remains at a high level. However, revenue for the six months of 2020 comprise EUR 22.1 million and is lower by EUR 13.4 million or 37.7% compared to the same period of 2019 (EUR 35.5 million) due to the reduction of LNG security supplement by EUR 13.4 million in H1 2020. Compared to the same period of 2019, more income was generated due to much higher level of LNG regasification, which partially compensated the lower revenue due to the reduction of LNG security supplement.

Revenue of oil terminals for the first six months of 2020 is higher by EUR 0.5 million compared to the same period of 2019. Various factors influenced the revenue result from this segment: due to especially warm winter season and decrease in global demand of diesel fuel, heating oil and similar fuels, storage levels of oil products have increased worldwide and caused lower refining margins. Consequently, production capacities have decreased in regions’ refineries and transshipment, respectively. Thus, global environment has had an impact to the decrease of the income of the Group oil terminals of the respective oil products transshipment. Volumes of the oil products transshipment were also affected by the decreased export volumes of petroleum products from Belarus through Klaipėda, which were influenced by the Belarus's negotiations with Russia on oil import prices. However, despite dealing with various adverse developments in international markets, including the negative impact of COVID-19 on energy demand, lower sales revenue of handling was substituted by income from crude oil import to Belarus via KN as well as with provided services of oil product storage.

During the first six months of 2020 revenue from commercial LNG activities comprise EUR 2.5 million and is higher by EUR 2.4 million compared to the same period of 2019 (EUR 109 thousand). Commercial LNG activities comprise of business development projects including LNG terminal operator services provided at the Port of Acu terminal in Brazil and LNG reloading station in Klaipėda.

Enclosed:

1. Interim Condensed Consolidated and Separate Financial Statements of AB Klaipėdos nafta for the six months period ended 30 June 2020.
2. Presentation of the unaudited financial results of the Group for the 6 months period of 2020.

Jonas Lenkšas, Chief Financial Officer, .

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