Petroplus announces a net income of EUR 3.0 million in the third quarter 2004

11/22/2004, 8:00 AM (Source: GlobeNewswire)
Petroplus International ("Petroplus") today announces its 2004 third quarter results. The third quarter net income including non recurring items was EUR 3.0 million compared to a loss of EUR 4.9 million in the same period last year. Over the first nine months of 2004, the net income adjusted for non recurring items, was EUR 4.6 million against a loss of EUR 7.3 million in 2003. The net income including non recurring items over the first nine months of 2004 was EUR 53.5 million (includes EUR 46 million proceeds from the sale of Tango) against a loss of EUR 47.3 million in 2003 (included a EUR 40 million provision for the write down and reorganisation of the Antwerp refinery).

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EUR
(000) January - September
Q3 Petroplus %
Q3 2004 2003 % change 2004 2003 change
unaudited unaudited
1 795 1 452
492 381 24% Net Sales 4 608 897 4 697 356 -2%

48
53 093 270 10% Gross Profit 159 399 155 846 2%
48
52 776 270 9% Adjusted GP* 156 499 155 846 0%

16 034 8 183 96% EBITDA 97 306 38 103 155%
Adjusted EBITDA
15 717 8 183 92% * 48 063 38 103 26%

Net Operating
8 125 226 3495% Income 73 154 ( 26 151) n.a.
7 808 226 3355% Adjusted NOI * 23 911 13 849 73%

( 4
3 009 854) n.a. Net Income 53 486 ( 47 290) n.a.
( 4 Adjusted Net
2 692 854) n.a. Income* 4 620 ( 7 290) n.a.

Earnings per € (€
share 1.73 1.57) n.a.
€ (€
Adjusted EPS * 0.15 0.24) 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 third quarter earnings reflect a quarter with above
mid-cycle refining margins. The impact of the good margins was
however negatively impacted by the weak US dollar and record high oil
prices. In addition, the costs associated with a restructuring of the
refining margin hedging policy from a short term to a long term
oriented strategy negatively impacted the results. The results of the
fourth quarter will also be negatively influenced by this
restructuring. The Marketing division had a fair quarter which was
negatively impacted by the losses from both the German wholesale
activities and the Dubai Supply & Trading office. The results in the
Logistics division showed a slight improvement relative to the weak
second quarter, but continue to be negatively impacted by the high
oil product prices and backwardation in the market.

In the third quarter, the cash position of Petroplus as stated in the
balance sheet further increased. Of the current EUR 172 million shown
in cash at bank and in hand, an amount of approximately EUR 96
million is tied to the day to day activities and supports the trade
finance activities and working capital finance of various
subsidiaries.

In connection with the intended public offer, Petroplus intends to
have a formal review of its 2004 third quarter financials to be
carried out by its external auditors

Key Petroplus Market Indicators

Q3 2004 Q3 2003
min average max min average max
Petroplus
Theoretical
Refining Margin USD/bbl 1.46 2.97 4.97 1.28 1.82 2.61
10ppm ULSD
premium vs GO fob USD/MT 18.63 37.63 52.00 7.63 12.69 25.13
10ppm ULSD
premium vs GO cif USD/MT 11.25 30.38 46.50 1.75 6.93 15.75
Rhine Freight
Premium CHF/MT 10.50 15.63 24.00 28.00 41.41 96.50
Dated Brent Crude USD/bbl 34.82 41.57 47.23 25.39 28.33 30.32
EUR-USD exchange
rate 1.20 1.22 1.25 1.08 1.13 1.16
Contango
(Backwardation)
for Brent USD/MT (0.61) (0.51) (0.38) (0.24) (0.21) (0.17)
Contango
(Backwardation)
for GO USD/MT (6.97) (4.47) (2.59) 0.13 0.33 0.50

See endnotes for precise definition of indicators

Refining

EUR January -
(000) Refining September
Q3 2004 Q3 2003 % change 2004 2003 % change
unaudited unaudited
0 0 n.a. Net Sales 0 0 n.a.
22 506 21 622 4% Gross Profit 66 793 72 206 -7%
5 711 1 979 189% EBITDA 17 493 15 526 13%
Net Operating ( 38
155 ( 2 551) n.a. Income 1 002 766) n.a.
155 ( 2 551) n.a. Adjusted NOI * 1 002 1 234 -19%
* 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


Q3 YTD 2004 vs Q3 YTD 2003
The gross profit over the first nine months of 2004 was EUR 66.8
million, down 7% relative to Q3 YTD 2003 (EUR 72.2 million).
Petroplus' actual average gross margin in Teesside and Cressier over
the first nine months 2004 was USD 2.39 per barrel relative to a 10
year mid-cycle margin of USD 1.93 per barrel. The year to date EBITDA
of EUR 17.5 million is up 13% relative to last year (Q3 YTD 2003: EUR
15.5 million). The Antwerp refinery continues to have a negative
contribution based on the first nine months, however the refinery
approached the breakeven level in the third quarter.

Q3 2004 vs Q3 2003
The gross profit over the third quarter 2004 increased slightly to
EUR 22.5 million (Q3 2003: EUR 21.6 million). Total crude processed
in the third quarter 2004 was 15.4 million barrels relative to 14.8
million in the same period last year. The 2004 third quarter net
operating income was EUR 0.1 million versus minus EUR 2.6 million
last year.

The overall results in the refinery division were negatively impacted
by a decision of Petroplus to restructure its refining margin hedging
policy. Until now, Petroplus hedged up to 20-30% of its forward
refining margins up to two years forward. In line with the company's
strategy aimed at reducing the impact of volatile refining margins on
the company's earnings, the existing refining margin hedging program
has been restructured. Part of the existing hedges, which were below
current high margin levels, have priced out in the third quarter and
have therefore negatively influenced the result. The remainder of the
existing hedges have been rolled into the new long term strategy.
Under the new refinery margin hedge program, a substantially larger
proportion of the output of Cressier and Teesside is structurally
hedged and the hedge fits the output of the Petroplus refineries more
closely. The hedge will however continue to contain basis risk such
as crude premiums and product premiums. The costs associated with
pricing these hedges out are EUR 10.6 million which are included in
the Refinery division's third quarter earnings. The remainder of the
restructuring will be carried out in the fourth quarter of 2004 and
will therefore also have a negative impact on the fourth quarter's
refining results.

Operational developments
The implementation of the reorganisation plan at the Antwerp refinery
is progressing. To produce Ultra Low Sulphur Diesel (ULSD) in the new
operating mode without the crude unit, high sulphur gas oil is
imported as feedstock and hydrogen is produced in the reformer unit.
As a part of the reorganisation, Petroplus intends to close its
reformer unit and source hydrogen through an external supply contract
with a third party as of the first half of 2005. The implementation
of this change is dependent upon the award of a permit for the
construction of a new hydrogen pipeline to connect the Antwerp
refinery to the main hydrogen pipeline network.
Furthermore, Petroplus recently signed a processing agreement for its
Antwerp ULSD production. Under the terms of the agreement that took
effect in September 2004, the counterpart will take all of the
processing capacity on the two hydrodesulphurisation units at the
Antwerp Refinery. The counterpart is delivering gasoil with a higher
level of sulphur and lifting ULSD from the refinery for delivery into
a variety of European markets. Initially for a period of 12 months,
both parties expect however that the cooperation will continue after
that. As a consequence of the agreement, Petroplus has reduced its
exposure to the volatility of refining margins. The technical
availability of the combined ULSD and bitumen plant was 83% in the
third quarter. Early in the fourth quarter, there was a 10 day
unplanned shutdown of the ULSD unit due to a failure in the reformer.
The commercial development of the tank farm has started on a small
scale with an internal customer currently making use of the tank
storage facilities. The development of the envisioned third party
storage is not expected to start until early 2005.

The Teesside refining margin in the third quarter was higher than in
the previous quarters of the year, benefiting from strong ULSD
premiums. The plant availability throughout the remainder of the
quarter was good and the total number of barrels crude processed was
90.4 % of the nameplate capacity (Q3 2003: 77.6%).

The Cressier refining margin in the third quarter was slightly lower
than in the second quarter reflecting a decrease in the gasoline
margins. The total number of barrels crude processed was 90.5% of the
nameplate capacity compared to 88.9% in Q3 2003. 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 third quarter was CHF 15.6 per MT (Q3 2003: CHF 41.4 per MT).

Marketing

EUR January -
(000) Marketing September
Q3 2004 Q3 2003 % change 2004 2003 % change
unaudited unaudited
1 413 4 460 4 578
1 737 258 300 23% Net Sales 799 949 -3%
20 735 17 390 19% Gross Profit 64 447 54 177 19%
20 418 17 390 17% Adjusted GP* 61 547 54 177 14%
7 886 5 222 51% EBITDA 29 220 16 405 78%
7 569 5 222 45% Adjusted EBITDA * 26 320 16 405 60%
Net Operating
7 126 3 407 109% Income 26 252 11 253 133%
6 809 3 407 100% Adjusted NOI * 23 352 11 253 108%
* 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


Q3 YTD 2004 vs Q3 YTD 2003
The gross profit over the first nine months of the year was EUR 64.4
million, an increase of 19% relative to last year (Q3 YTD 2003: EUR
54.2 million). The 2004 result includes a EUR 3.5 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. The adjusted net operating income was EUR 23.4 million
compared to EUR 11.3 million in 2003.

Q3 2004 vs Q3 2003
The third quarter results were impacted by a strong performance from
the Bunkering and Blending activities, however the German wholesale
activities and the Dubai Supply & Trading office suffered a combined
loss of approximately EUR 5 million.
The gross profit of 20.7 million was up 19% relative to last year (Q3
2003: EUR 17.4 million). The adjusted net operating income was EUR
6.8 million, twice the level of Q3 2003 which was a particularly weak
quarter for the marketing division.

Operational developments
Supply & Trading
The Dubai Supply & Trading office had a poor third quarter with a
negative contribution. Petroplus is currently reviewing various
options for the future development of the office.
In the third quarter, Petroplus released an additional EUR 0.3
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 and EUR 0.9 million that was already recovered in the
first and second quarter 2004.

Wholesale
The wholesale activities had a difficult third quarter as a
consequence of the continued high oil prices together with the
backwardation which negatively impact oil product demand and margins.
Following a review of the German wholesale activities, it was
recently announced that a decision has been made to close the Hamburg
office at the end of 2004. As a consequence of this decision, 15
employees are expected to be made redundant and limited restructuring
costs of less than EUR 0.5 million are envisioned. The Germany
wholesale market has been a difficult market with continuous pressure
on margins. The company will honour existing contracts and will
continue its activities of supplying, storing and replenishing
strategic oil reserves on behalf of the German government's strategic
oil reserve agency. These activities will be conducted out of an
existing office at one of Petroplus' tank storage locations in
Germany. The wholesale activities in the Czech Republic which had
previously been conducted from the Hamburg office will be continued
from a sales office in Prague. Petroplus' tankstorage activities in
Germany will not be affected by these developments.

Despite the low Rhine freight rates, the Swiss marketing activities
had a strong third quarter benefiting from strong inland demand.

The United Kingdom wholesale activities had a weak third quarter as a
consequence of lower margins and strong competition.
Bunkering
The Bunkering activities of Frisol and NSP had a strong third
quarter. The blending of Marine Diesel Oil by Frisol from products
that originate from the Antwerp bitumen refinery also contributed to
a strong result in the quarter.

Logistics

EUR January -
(000) Logistics September
Q3 2004 Q3 2003 % change 2004 2003 % change
Unaudited Unaudited
7 204 6 212 16% Net Sales 19 067 19 315 -1%
8 291 7 943 4% Gross Profit 22 398 23 638 -5%
2 811 2 826 -1% EBITDA 7 098 9 511 -25%
Net Operating
1 740 1 863 -7% Income 3 949 6 585 -40%
Note: Gross Profit and EBITDA are not stated in the audited and
reviewed financial accounts
See end notes of press release for definitions


Q3 YTD 2004 vs Q3 YTD 2003
The division showed a 5% decrease in gross profit over the first nine
months. This reflects a difficult period for tank storage as a
consequence of increasing oil prices and market backwardation. The
net operating income of EUR 3.9 million is down 40% relative to last
year (Q3 YTD 2003: EUR 6.6 million).

Q3 2004 vs Q3 2003
The gross profit in the third quarter was EUR 8.3 million, an
increase of 4% relative to last year (Q3 2003: EUR 7.9 million). Net
operating income in the third quarter was EUR 1.7 million (Q3 2003:
EUR 1.9 million).

Operational developments
There were no significant events or developments within the tank
storage activities of the logistics division in the third quarter.
Dragon LNG
Good progress continues to be made in the Dragon LNG project together
with the BG Group and Petronas. Key milestones that are anticipated
to be accomplished in the coming weeks include the signing of a
shareholders agreement, a share sale agreement and a throughput
contract. Further information about the transaction will be provided
at actual signing of these documents. The key remaining milestones
for the coming months include obtaining regulatory exemption for
operating of the terminal and arranging the financing of the project.
The facility is due to become operational in the fourth quarter of
2007. Petroplus anticipates to realise a book profit which is
significantly1 higher than EUR 50 million at financial close which is
scheduled for the second quarter 2005. This had until recently been
expected to take place in 2004. The actual book profit depends on the
outcome of the final negotiations and may be slightly higher than
previously assumed.
__________
1 "Strong" according to the Dutch "scale of Mock" which implies a
range of 20% - 30%


Other Businesses & Central Overheads

EUR January -
(000) Other Businesses September
Q3 2004 Q3 2003 % change 2004 2003 % change
unaudited unaudited
129
51 030 32 869 55% Net Sales 031 99 092 30%
1 561 1 315 19% Gross Profit 5 762 5 825 -1%
( 1 ( 3
( 374) 844) n.a. EBITDA 43 495 339) n.a.
( 1 ( 2 ( 3
( 374) 844) n.a. Adjusted EBITDA * 848) 339) n.a.
( 2 Net Operating ( 5
( 896) 493) n.a. Income 41 951 224) n.a.
( 2 ( 4 ( 5
( 896) 493) n.a. Adjusted NOI * 392) 224) 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


Q3 YTD 2004 vs Q3 YTD 2003
Gross profit for the Other Businesses activities and Central
Overheads was down 1% relative to 2003 and amounted EUR 5.8 million
(Q3 YTD 2003: EUR 5.8 million). The adjusted net operating income was
minus EUR 4.4 (Q3 YTD 2003: minus EUR 5.2 million).

Q3 2004 vs Q3 2003
The gross profit over the third quarter was EUR 1.6 million, a 19%
increase relative to last year (Q3 2003: 1.3 million). The adjusted
net operating income was minus EUR 0.9 million (Q3 2003: minus EUR
2.5).

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

Recent Developments
Syndicated Working Capital Facility
As a consequence of market conditions (a continuous strong increase
in oil prices), Petroplus requested an increase of the Syndicated
Working Capital Facility towards the end of August. Consequently, the
Syndicated Working Capital Facility has been increased from
originally USD 525 million to USD 630 million. The duration of the
increase has been linked to the price development of crude oil. The
overall duration of the Syndicated Working Capital Facility remains
unchanged and the renewal is due in July 2005.

Outlook
Petroplus faces a number of important developments in the remainder
of 2004 and the early part of 2005: key milestones for the Dragon LNG
project leading to Project Close in the next few weeks to be followed
by financial closing in the second quarter of 2005; closing down the
German Marketing office in Hamburg; reviewing the future of the Dubai
Supply & Trading office and the restructuring of the Antwerp refinery
including the closure of the reformer and obtaining a permit for a
hydrogen pipeline.

Even though refining margins have improved in 2004, the current
market continues to be characterised by volatile and 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.




This press release also appears in Dutch. In the event of any
inconsistency, the English version will prevail over the Dutch
version.

>>>> to view full press release including financials, click on link
below <<<<
View document
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 office
in Zug, 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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