Petroplus announces a net income of EUR 1.9 million from normal operations over the first 6 months of 2004

8/20/2004, 8:00 AM (Source: GlobeNewswire)
Second quarter net income of EUR 2.8 million reflects good refining margins Petroplus International ("Petroplus"), announces today its 2004 semi annual results. Petroplus' 6 month net income before non-recurring items was EUR 1.9 million compared to a loss of EUR 2.4 million in the same period last year. Including non-recurring items, the 6 month net income was EUR 50.5 million (which includes EUR 46 million proceeds from the sale of Tango) compared to a loss of EUR 42.4 million in the same period last year (which included a EUR 40 million provision for the write down and reorganisation of the Antwerp refinery). Petroplus' 2004 second quarter net income before non-recurring items was EUR 2.8 million compared to a loss of EUR 10.6 million in the same period last year. Including non-recurring items, the 2004 second quarter net income was also EUR 2.8 million compared to a loss of EUR 50.6 million in the same period last year (which included a EUR 40 million provision for the write down and reorganisation of the Antwerp refinery).

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EUR (000) January - June
Q2 2004 Q2 2003 % Petroplus 2004 2003 %
unaudited unaudited
1 481 115 1 554 064 -5% Net Sales 2 813 405 3 244 975 -13%

54 441 46 427 17% Gross Profit 106 307 107 576 -1%
54 102 46 427 17% Adjusted GP* 103 724 107 576 -4%

18 305 5 975 206% EBITDA 81 272 29 920 172%
Adjusted
17 966 5 975 201% EBITDA * 32 346 29 920 8%

Net Operating
10 322 ( 42 610) n.a. Income 65 030 (26 378) n.a.
Adjusted NOI
9 983 ( 2 610) n.a. * 16 104 13 622 18%

2 803 ( 50 630) n.a. Net Income 50 479 (42 436) n.a.
Adjusted Net
2 841 ( 10 630) n.a. Income* 1 930 ( 2 436) n.a.

€ (€ Earnings per € €
0.09 1.70) n.a. share 1.63 (1.43) n.a.
€ (€ Adjusted EPS € €
0.09 0.36) n.a. * 0.06 (0.08) n.a.
* Adjusted = excludes non-recurring items
Note: Gross Profit and EBITDA are not stated in the audited and
reviewed financial accounts
See end notes of press release for definitions



Petroplus' 2004 second quarter earnings from normal operations
reflect a quarter with above mid-cycle refining margins countered by
an ongoing weak US dollar, high oil prices, a 4 weeks planned
maintenance shutdown of the Teesside refinery and the ongoing
restructuring of the Antwerp refinery. The marketing division and
logistics division (primarily tank storage) had a difficult quarter
as a consequence of low demand caused by high oil product prices and
backwardation. There were several non-recurring items with a limited
net impact of minus EUR 0.04 million on the second quarter results.


Key Petroplus Market Indicators

Q2 2004 Q2 2003
min average max min average max
Petroplus
Theoretical
Refining Margin USD/bbl 1.24 2.36 3.50 0.36 1.89 4.08
10ppm ULSD
premium vs GO fob USD/MT 14.25 26.63 40.00 9.75 22.55 69.00
10ppm ULSD
premium vs GO cif USD/MT 8.75 19.70 37.25 7.00 19.84 67.50
Rhine Freight
Premium CHF/MT 10.50 12.22 21.50 16.50 26.46 31.50
Dated Brent Crude USD/bbl 30.92 35.33 39.36 23.10 25.93 28.56
EUR-USD exchange
rage 1.18 1.21 1.24 1.07 1.14 1.19
Contango
(Backwardation)
for Brent USD/MT (0.47) (0.21) (0.02) (0.33) (0.22) (0.09)
Contango
(Backwardation)
for GO USD/MT (8.36) (6.40) (3.41) (0.77) (0.00) 0.59

See endnotes for precise definition of indicators


Refining

EUR (000) January - June
Q2 2004 Q2 2003 % Refining 2004 2003 %
unaudited unaudited
- - n.a. Net Sales - - n.a.
26 915 16 230 66% Gross Profit 44 287 50 584 -12%
10 786 ( 3 749) n.a. EBITDA 11 783 13 548 -13%
10 786 ( 3 749) n.a. Adjusted EBITDA * 11 783 13 548 -13%
(36
5 252 ( 48 748) n.a. Net Operating Income 847 215) n.a.
5 252 ( 8 748) n.a. Adjusted NOI * 847 3 785 -78%
* Adjusted = excludes non-recurring items
Note: Gross Profit and EBITDA are not stated in the audited and
reviewed financial accounts
See end notes of press release for definitions


HY 2004 vs HY 2003
The gross profit over the first 6 months of 2004 was EUR 44.3 million
(HY 2003: EUR 50.6 million). This result is a strong improvement
since the 2003 financials include a very strong 2003 first quarter
which benefited from high refining margins. Petroplus' actual average
gross margin in Teesside and Cressier over the first 6 months 2004
was USD 2.07 per bbl relative to a 10 year mid-cycle margin of USD
1.93 per barrel. The adjusted net operating income in the first 6
months was EUR 0.8 million (HY 2003: EUR 3.8 million). The Antwerp
refinery contributed negatively to the results during the whole
period and the reorganisation will improve results as of Q3 2004.

Q2 2004 vs Q2 2003
The gross profit over the second quarter 2004 increased by 66%
relative the same period last year, despite a 14% reduction in total
crude throughput in the refineries. Total crude processed in the
second quarter 2004 was 14.2 million barrels and was negatively
impacted by the 4 weeks of planned maintenance shutdown in Teesside
and the closure of the Antwerp crude unit. In the same period last
year 16.4 million barrels were processed which included a six weeks
maintenance shutdown of the Cressier refinery.
The 2004 second quarter net operating income was EUR 5.2 million
compared to minus EUR 48.8 million over the same period in 2003. The
2003 figure however includes a EUR 40 million non-recurring provision
for the write down and reorganisation of the Antwerp refinery.

Operational developments
The implementation of the reorganisation plan at the Antwerp refinery
is progressing as expected. To produce ULSD in the new operating mode
without the crude unit, high sulphur gasoil is imported as feedstock
and hydrogen is produced in the reformer unit. The ULSD premium in
the second quarter averaged USD 19.7 per MT which is approximately
the same as last year.
The commercial development of the tank farm is on track to become
operational in the third quarter of 2004. The cleaning of the storage
tanks and the pipe-lines has been completed. The current outlook for
developing the storage activities is however negatively influenced as
a consequence of the backwardation and high product prices.
The Antwerp bitumen plant operated smoothly throughout the second
quarter.

The Teesside refining margin in the second quarter was slightly
higher than in the first quarter of the year. The refinery underwent
a 4 week planned maintenance shutdown in June. The shutdown was
conducted successfully, within budget and within the set time period.
The plant availability throughout the remainder of the quarter was
good and the total number of barrels crude processed was 65.1 % of
the nameplate capacity (Q2 2003: 75.4%)

The Cressier refinery had a strong performance in the second quarter
with refining margins bolstered by strong gasoline margins and a good
plant availability. The total number of barrels crude processed was
92.4% of the nameplate capacity compared to 49.2% in Q2 2003
(included a 6 weeks planned maintenance shutdown). Rhine freight
rates have however been significantly lower this year reflecting low
demand for shipping capacity on the Rhine. The average Rhine freight
rate in the second quarter was CHF 12.2 per MT (Q2 2003: CHF 26.5 per
MT).

Marketing

EUR (000) January - June
Q2 2004 Q2 2003 % Marketing 2004 2003 %
unaudited unaudited
2 723 3 165
1 432 766 1 518 096 -6% Net Sales 542 649 -14%
18 842 21 140 -11% Gross Profit 43 712 36 787 19%
18 503 21 140 -12% Adjusted GP* 41 129 36 787 12%
7 796 8 494 -8% EBITDA 21 334 11 182 91%
7 457 8 494 -12% Adjusted EBITDA * 18 751 11 182 68%
6 986 6 633 5% Net Operating Income 19 126 7 847 144%
6 647 6 633 0% Adjusted NOI * 16 543 7 847 111%
* Adjusted = excludes non-recurring items
Note: Gross Profit and EBITDA are not stated in the audited and
reviewed financial accounts
See end notes of press release for definitions


HY 2004 vs HY 2003
The gross profit over the first 6 months of the year was EUR 43.7
million, an increase of 19% relative to last year (HY 2003: EUR 36.8
million). The 2004 result includes a EUR 3.2 million partial release
of a provision made in the fourth quarter 2003 in connection with a
non-performing counterpart in the Dubai Supply & Trading office.
Adjusted for non-recurring items, the gross profit was up 12%. The
Adjusted Net operating income was EUR 16.5 million compared to EUR
7.9 million in 2003. The improved 6 month performance is attributed
to a strong first quarter which benefited from a strong performance
from the bunkering activities and the operational earnings from
Tango. The Tango activities were sold to Kuwait Petroleum on 29
February 2004.

Q2 2004 vs Q2 2003
The second quarter results were impacted by low product demand, high
oil prices and backwardation in the market. The adjusted gross profit
in the second quarter 2004 was EUR 18.5 million (Q2 2003: EUR 21.1
million) and the adjusted net operating income was EUR 6.6 million
(Q2 2003: EUR 6.6 million). The second quarter 2003 results included
Tango earnings that are not included in the second quarter 2004
results anymore.

Operational developments
Supply & Trading
The Dubai Supply & Trading office had a modest second quarter. In the
second quarter, Petroplus released an additional EUR 0.9 million of
the EUR 7.1 million provision made in the 2003 accounts to cover a
claim the Dubai Supply & Trading office had against a non-performing
counterpart. This release is in addition to the EUR 2.2 million that
was already recovered in the first quarter 2004. Petroplus remains
optimistic that a large share of the outstanding claim will be
released in instalments during the rest of 2004.
Wholesale
The wholesale activities had a difficult second quarter. The average
price of crude was 36% higher this quarter compared to Q2 2003. The
high oil prices together with the backwardation have negatively
impacted the oil product demand.
The German wholesale activities have been stabilised and the second
quarter was slightly negative at a net income level.
The Swiss marketing activities had a strong second quarter benefiting
from its land locked market with additional business generated due to
supply disruptions at one of the main competitors.
The United Kingdom (UK) wholesale activities continue to be adversely
affected by lower margins due to the strong competition. Growth of
specialty products such as Pulsar and Bioplus continue to be good.
The anticipated tax incentive on 10 ppm ULSD as per 1 September 2004
has been postponed by the UK government and is now expected early
2005.
Bunkering
Both Frisol and NSP had a challenging quarter due to the market
circumstances. Both companies are impacted by the strong Euro against
the US dollar and the high crude prices resulting in depressed net
margins in the ARA region (Amsterdam, Rotterdam, Antwerp). As a
result, the earnings of Frisol and NSP were down relative to the
first quarter 2004 as well as the second quarter last year.

Logistics

EUR (000) January - June
Q2 2004 Q2 2003 % Logistics 2004 2003 %
unaudited unaudited
5 636 5 908 -5% Net Sales 11 863 13 103 -9%
6 557 7 108 -8% Gross Profit 14 107 15 695 -10%
1 704 2 986 -43% EBITDA 4 287 6 685 -36%
576 1 954 -71% Net Operating Income 2 210 4 722 -53%
Note: Gross Profit and EBITDA are not stated in the audited and
reviewed financial accounts
See end notes of press release for definitions


HY 2004 vs HY 2003
The division showed a 10% decrease in gross profit over the first 6
months which is explained by the backwardated market and very high
oil prices. Net operating income decreased by EUR 2.5 million to EUR
2.2 million (HY 2003: EUR 4.7 million).

Q2 2004 vs Q2 2003
The gross profit over the second quarter was down 8% from EUR 7.1
million last year to EUR 6.6 million in the second quarter of 2004.
Over the second quarter, the average backwardation for gasoil was USD
6.4 per MT while in the same period last year, the market was flat.
Net operating income decreased to EUR 0.6 million (Q2 2003: EUR 2.0
million).

Operational developments
There were no significant events or developments within the tank
storage activities of the logistics division in the second quarter.
Dragon LNG
Petroplus continues to make good progress with the development of
Dragon LNG, the Liquefied Natural Gas (LNG) project in Milford Haven,
Wales. As previously announced, Petroplus expects to develop and
operate the project together with BG Energy Holdings Limited, a
subsidiary of BG Group plc, and Petroliam Nasional Berhad
("Petronas"). BG and Petronas will also become shareholders in the
project for 50% and 30% respectively. Key milestones in the coming
months include the signing of a shareholders agreement, obtaining
regulatory exemption for the operating of the terminal, selecting an
engineering contractor and arranging the financing of the project.
Dragon has received bids for the engineering contract that are in
line with previous estimates made during the negotiations with BG and
Petronas. Petroplus anticipates to realise a book profit at financial
close later this year which is significantly higher than EUR 50
million. The facility is due to become operational in the fourth
quarter of 2007.


Other Businesses & Central Overheads

EUR (000) January - June
Q2 2004 Q2 2003 % Other Businesses 2004 2003 %
unaudited unaudited
42 713 30 060 42% Net Sales 78 000 66 223 18%
2 127 1 949 9% Gross Profit 4 201 4 510 -7%
( 1 981) ( 1 756) n.a. EBITDA 43 868 (1 495) n.a.
( 2 ( 1
( 1 981) ( 1 756) n.a. Adjusted EBITDA * 475) 495) n.a.
( 2 492) ( 2 449) n.a. Net Operating Income 42 847 (2 732) n.a.
( 3 ( 2
( 2 492) ( 2 449) n.a. Adjusted NOI * 496) 732) n.a.
* Adjusted = excludes non-recurring items
Note: Gross Profit and EBITDA are not stated in the audited and
reviewed financial accounts
See end notes of press release for definitions


HY 2004 vs HY 2003
Gross profit for the Other Businesses activities and Central Overhead
costs was down 7% relative to 2003 and amounted to EUR 4.2 million
(HY 2003: EUR 4.5 million). The adjusted net operating income was
minus EUR 3.5 (HY 2003: minus EUR 2.7 million).

Q2 2004 vs Q2 2003
The gross profit over the second quarter was EUR 2.1 million, a 9%
increase relative to last year (Q2 2003: 1.9 million). The adjusted
net operating income was minus EUR 2.5 million (Q2 2003: minus EUR
2.5).

Operational developments
There were no significant developments within the Other Businesses
group in the second quarter.

Recent Developments
Syndicated Working Capital Facility
On 13 July 2004, Petroplus announced it had extended its existing
Secured Revolving Trade Finance Facility ("Facility") for a period of
12 months. The total Facility amount of USD 525 million and level of
committed lines there under of USD 450 million remained unchanged.
The Facility continues to be in the name of, and will be used by, two
of Petroplus' main operating companies in Switzerland and the United
Kingdom. The Facility is used to finance transactions in oil and oil
related products including amongst others the related inventories.
Public Offer
On 27 July 2004, a joint press release was made by Petroplus and RIVR
Acquisition BV with regard to the completion of the confirmatory due
diligence in connection with the intended public offer for the
Petroplus share capital and Senior Notes. The offers are expected to
be made after the August holiday period.
Please see that press release for exact details as well as the
preceding press releases issued on 18 May and 17 June 2004 for
details and background to the intended public offer.


Outlook
Petroplus faces a number of important developments in 2004:
finalisation of the restructuring of the Antwerp refinery;
realisation of a number of important milestones for the Dragon LNG
project ultimately leading to the financial closing in the latter
half of the year and streamlining the German wholesale activities.

Even though refining margins have improved in 2004, the current
market is still characterised by extremely high crude prices,
backwardation and a weak US dollar. With continued uncertainty
surrounding economic recovery and the above mentioned developments,
Petroplus will maintain its cautious position towards market
developments and therefore refrain from providing an outlook for
2004.



IFRS
Petroplus has conducted an analysis of evaluate the consequence the
switch over from Dutch GAAP to International Financial Reporting
Standards (IFRS) will have on its reported financials. An explanation
of the consequences of the transition to IFRS has been included in
the appendix of this press release.

Webcast announcement
A presentation of the 2004 semi annual results by the Executive Board
co-chairmen of Petroplus will be webcast live at 10:00 CET on 20
August 2004. The presentation can be accessed through the Petroplus
website (www.petroplusinternational.com). The presentation will also
be archived on the website permitting viewing after the 20 August.



2004 non recurring items

2003 non recurring items


Definitions Key Performance Indicators and Financial Terms

Petroplus Theoretical Refining Margin
Definition: The Petroplus theoretical margin is based
upon Cressier and Teesside only (Antwerp has been excluded while it
is in reorganisation mode). The theoretical margin assumes both
refineries are fully operational and producing products in line with
their published yield and is exclusive fixed & variable costs.
Time frame: Maximum, minimum and average margin per
financial quarter

10 ppm ULSD premium vs GO fob:
Definition: The difference (premium) between 10 ppm ULSD
barges FOB Rotterdam and Gas oil 0.2 barges FOB Rotterdam (source:
Platts)
Time frame: Maximum, minimum and average premium on a
daily basis

10 ppm ULSD premium vs GO cif:
Definition: The difference (premium) between 10 ppm ULSD
barges FOB Rotterdam and Gas oil 0.2 cargoes CIF NWE (source: Platts)
Time frame: Maximum, minimum and average premium on a
daily basis

Rhine Freight Tariff:
Definition: The published Rhine freight tariff for Gasoil
Rotterdam to Basel (source: Reuters)
Time frame: Maximum, minimum and average tariff on a daily
basis

Dated Brent Crude:
Definition: The published Dated Brent price (source:
Platts)
Time frame: Maximum, minimum and average premium on a
daily basis

USD/EUR exchange rage:
Definition: Exchange rate (source: www.oanda.com)
Time frame: Maximum, minimum and average rate on a daily
basis

Contango (Backwardation) for GO & Brent:
Definition: The difference between the first and second
month futures price of GO and Brent respectively. If the first month
is higher than the second month, the difference is negative
(backwardated market). If the first month is lower than the second
month, the difference is positive (market in contango). (source:
Platts)
Time frame: Maximum, minimum and average premium on a
daily basis

Gross Profit:
Definition: Net Sales proceeds minus Cost of Sales,
defined as direct operating costs including the purchase of raw
materials, refinery production costs and other costs of goods sold

EBITDA:
Definition: Earnings Before Interest, Tax, Depreciation
and Amortisation

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Note to editors

Profile of Petroplus International NV
Petroplus International NV ("Petroplus") was established 10 years ago
and has since developed into a leading player in the European
midstream oil market. The midstream sector encompasses refining,
marketing and logistics (predominantly tank storage).

Petroplus is the owner of refineries in Antwerp (Belgium), Cressier
(Switzerland) and Teesside (United Kingdom) with a total capacity of
240,000 barrels per day including the Antwerp desulphurisation
capacity. Petroplus has a sales volume in excess of 23 million tonnes
a year of oil products and a storage capacity of almost 5 million m³
throughout Western Europe.

Petroplus, with its head office in Rotterdam and regional head
offices in Zug and Hamburg, has branch offices in more than 20
countries and employs approx. 1000 employees. Petroplus International
NV has been listed on the Official Market of Euronext Amsterdam since
14 July 1998.

Reuters: PPV.AS
Bloomberg: PETR NA

For further information, please contact Petroplus International NV

Executive Board
Marcel van Poecke (co-chairman)
Willem Willemstein (co- chairman)
Paul van Poecke
Theo Zwijnenberg

Investor Relations Manager
Martijn Schuttevâer,
tel: +31 10 242 5900

www.petroplusinternational.com
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