WOOD Flash – Motor Oil Hellas: results and strategy update

Motor Oil Hellas reported a very strong set of results on 21 November, due to a better-than-expected refining margin. Market margins were strong in the quarter, but Motor Oil’s margins were as high as the record levels of a year earlier. The extraordinary contribution from the naphtha complex was the prime reason. Petrol/naphtha differentials in the third quarter averaged USD 295/tonne, or about USD 35/bbl. In the five years prior to 2022, this averaged at just USD 6.8/bbl. A weak petrochemicals market means that the differential could remain strong, in our view. In addition, Motor Oil increased the capacity of the complex during maintenance by 25%. A year on from the launch of its new strategy, management gave an update on the progress. RES capacity has tripled due to acquisitions, but the focus is now on organic growth. The pipeline has the potential to overshoot the 2030E target significantly. The current EBITDA run rate is >EUR 100m per annum. EV charge points are now above 1,100, with a 2030E target of 4,000. The circular economy businesses are running at about EUR 20m EBITDA per year. Low carbon strategies have attracted EUR 145m in EU grants. The biggest project, IRIS, could reduce emissions at the refinery by about 25% through carbon capture at the hydrogen unit. With a strongly performing core business, Motor Oil’s long-term plans are proceeding well.