AB Klaipėdos Nafta preliminary activity and revenue results for the June 2019

In June 2019 AB Klaipėdos nafta (hereinafter – the Company or KN) has reloaded 506 thousand tons of petroleum products in Klaipėda and Subačius oil terminals. During the first six months of 2019 the Company in total reloaded 2,926 thousand tons of petroleum products into its storage tanks.

The preliminary sales revenue of the Company’s oil terminals for June 2019 reached EUR 2.7 million. The preliminary sales revenue for January – June 2019 of the Company’s oil terminals comprise EUR 15.6 million.

                                                                                                                                   

In June 2019 the Company’s Liquefied Natural Gas (LNG) terminals have re-gasified and reloaded 2,430 thousand MWh of natural gas. During the first six months of 2019 the Company in total re-gasified and reloaded 6,419 thousand MWh of the natural gas.

The preliminary sales revenue of the Company’s LNG terminals for June 2019 comprised EUR 5.8, however compensating positive influence in regulated activity from currency exchange rate change that was accounted in financial activity result, preliminary sales revenue was adjusted accordingly and reduced to EUR 0.5 million. Revenue consists of the re-gasification tariff fixed part (for booked annual capacities), variable part for amount of re-gasified LNG and LNG reloading revenue. Sales revenue is adjusted by impact of currency exchange rate change in regulated activity, as Company actually is not incurring mentioned impact. The preliminary revenue of the LNG terminals for the first six months of 2019 comprise EUR 35.6 million that was adjusted by the impact of currency exchange rate change in regulated activity and increased to EUR 37.4 million, while at the same period of 2018 it was EUR 32.6 million. The LNG terminal revenue level (for booked annual capacities) does not depend on re-gasification volume. Revenue is confirmed by the National Energy Regulatory Council (NERC (NCECP before July 1^st)) based on the approved methodology of State regulated prices in the natural gas sector and is calculated for the whole upcoming year.

Despite the external factors, total preliminary sales revenue of the Company in January - June of 2019 amount to EUR 53.0 million, or more by 0.4 per cent compared to the same period of 2018 - EUR 52.8 million.

Comment by the Company management:

In June, as expected, customers are slowly returning to the planned activity volumes, but the impact of the incident of contaminated oil in Druzhba oil pipeline is still being felt by our main customers. Nonetheless, we managed to maintain stable petroleum handling volumes at the KN Oil Terminal in Klaipėda, working in a pilot mode in the new storage tank park, where new petroleum products where successfully loaded in the new storage tanks. This is an important step in diversifying our operations and strengthening our competitive advantage. In future, we hope to further expand the portfolio of petroleum products and services by employing the new infrastructure at the Klaipeda oil terminal.

The demand for Klaipėda LNG terminal capacity was further increased by the favourable situation in international markets. The activity of LNG terminal in Klaipėda reached record highs in June and volume of re-gasification and reloading was almost 200 percent higher if compared with the same period last year.

Positive exchange rate change in June has also contributed to the EUR 5.3 million lower LNG terminal expenses for the gas consumers in the upcoming periods, that due to the changes since 01 01 2019 in applicable accounting standards is reflected by monthly adjustments of regulated activity income. In case such trend of currency exchange rate remains, this should have positive impact for the security supplement for the upcoming periods.   
  

Petroleum products transshipment and LNG re-gasification and reloading:

	June			January – June
	2019	2018	Change, %	2019	2018	Change, %
Petroleum products reloaded, thousand tons	506	516	-1.9%	2,926	3,594	-18.6%
LNG re-gasification and reloading, thousand MWh	2,430	819	196.7%	6,419	4,519	42.0%

Petroleum products transshipment, LNG re-gasification and reloading volumes in 2019:

	January	February	March	April	June	June
Petroleum products reloaded, thousand tons	626	454	461	433	446	506
LNG re-gasification and reloading, thousand MWh	471	173	96	1,475	1,774	2,430

Preliminary revenue of the Company, EUR million:

	June			January – June
	2019	2018	Change, %	2019	2018	Change, %
Oil terminals’ activity	2.7	3.1	-12.9%	15.6	20.2	-22.8%
LNG terminal activity	0.5*	5.3	-90.6%	37.4*	32.6	14.7%
Total:	3.2	8.4	-61.9%	53.0	52.8	0.4%

* adjusted by the impact of currency exchange rate change in regulated activity

   Jonas Lenkšas, Chief Financial Officer, +370 694 80594