• Half Year EBITDA: EUR639 million, increased by 19% year-on-year.
• Net Income: EUR359 million, increased 30% year-on-year.
• Net Debt: EUR1.6 billion, returning to the level of year-end 2023.
• Adjusted EBITDA (Q2): EUR289 million.
• Refining Segment Adjusted EBITDA (Q2): EUR231 million, up from EUR89 million a year ago.
• Fuels Marketing EBITDA (Q2): EUR30 million.
• Power & Gas EBITDA (Q2): EUR27 million, down from EUR40 million a year ago.
• Gasoline Sales Growth (Q2): Up 1.4%.
• Auto Diesel Sales Growth (Q2): Up 4.7%.
• Jet Fuel Sales Growth (Q2): Up 17%.
• Gas Prices (Q2): EUR32 per megawatt hour, a 14% increase from Q1.
• Wholesale Electricity Price (Q2): EUR80 per megawatt hour.
• Production Volume (H1): 6.1 million metric tons, increased by 14%.
• Sales Volume (H1): 6.7 million metric tons, increased by 11%.
• Fuels Marketing EBITDA (H1): EUR52 million, up from EUR22 million last year.
• Power & Gas Segment EBITDA (H1): EUR75 million, down from EUR93 million last year.
• Renewables Business EBITDA (H1): EUR63 million, up from EUR54 million last year.
• Free Cash Flow Generation (Q2): EUR416 million.
• CapEx (H1): EUR82 million for the company, EUR123 million for the group.
• Debt Maturity Profile: Group debt at EUR2.6 billion, net debt at 1.1 times EBITDA.

• Warning! GuruFocus has detected 5 Warning Sign with MOHCY.

Release Date: August 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Motor Oil (Hellas) Corinth Refineries SA (MOHCY) reported a strong operating profitability in the first half of 2024, with EBITDA increasing by 19% year-on-year to EUR639 million.
• Net income for the first half of 2024 increased by 30% year-on-year to EUR359 million, despite a 10% drop in refining margins.
• The refining segment's adjusted EBITDA climbed significantly to EUR231 million in Q2 2024 from EUR89 million a year ago, mainly due to the absence of maintenance activity.
• Fuels marketing EBITDA showed strong year-on-year growth, reaching EUR30 million in the second quarter.
• The company achieved a significant reduction in net debt, decreasing by EUR400 million during the second quarter, supported by strong cash flow generation.

Negative Points

• Refining margins have been lower quarter-on-quarter, in line with industry trends, due to weaker distillate cracks and tighter crude differentials.
• The power and gas segment's EBITDA decreased to EUR75 million in the first half of 2024 from EUR93 million in the same period last year, due to a weaker performance of energy.
• Middle distillate cracks weakened further in the second quarter due to dull industrial demand and increased imports from the Middle East and Asia.
• The company faces potential tightness in crude sourcing due to production issues in Libya, although alternative sources have been identified.
• The solidarity tax contribution is estimated to be around EUR205 million, which could impact the company's financials.

Q & A Highlights

Q: Can you comment on the outlook for refining margins in the second half of the year and the working capital expectations? A: We have seen a drop in margins recently, but we are optimistic that the market will normalize. Regarding working capital, we have some inflows from dividends and sales, but also outflows from dividends paid, resulting in a balanced picture. The situation with cargo delays might affect cash flow slightly, but no major shifts are expected. (Petros Tzannetakis, Deputy CEO)

Q: How is the situation in Libya affecting your crude sourcing, and what are your plans for CapEx in the second half? A: We have alternative sources to offset any disruptions from Libya. As for CapEx, it is spread throughout the year, and we will have a clearer picture by the nine-month results. (Petros Tzannetakis, Deputy CEO)

Q: What is the status of the solidarity tax contribution and the cap on fuels marketing profitability? A: The solidarity tax estimate will be finalized by the end of September, likely around EUR198-205 million. The cap on fuels marketing is still in place, but demand and product mix have been favorable, especially due to tourism. (Petros Tzannetakis, Deputy CEO)

Q: Are there any plans to dispose of your stake in ELLAKTOR, and what is the expected contribution of the new gas turbine plant to EBITDA? A: There are no immediate plans to dispose of ELLAKTOR shares. The new gas turbine plant is expected to start commercial operations in Q1 next year, contributing to equity consolidation rather than EBITDA this year. (Petros Tzannetakis, Deputy CEO)

Q: How will new refining capacities in the Middle East and Africa impact your margins, and what is your dividend policy outlook? A: New capacities may pressure margins globally, but typically, the market balances out, affecting less complex refineries first. Regarding dividends, we aim for a healthy yield, but the high dividend from 2023 is unlikely to be repeated in 2024 due to extra taxation. (Petros Tzannetakis, Deputy CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.