Hellenic Petroleum sees stronger Q3 as refining margins rise

Greece’s biggest oil refiner Hellenic Petroleum expects stronger financial results in the third quarter thanks to higher refining margins, it said on Thursday.

Hellenic, which runs three refineries and exports more than half its output, reported an 18 percent drop in second-quarter core profit.

Lower refining margins, a stronger euro against the dollar, provisions for carbon emission rights and maintenance costs for two of its refineries weighed on profits. But conditions have been improving in the third quarter.

“Clearly, third quarter margins have been very strong,” Deputy Chief Executive Officer Andreas Shiamishis told an analysts call.

“We have been able to run the refineries at very high utilisation rates which means we would expect to see a very strong third quarter at the end of September,” he added.

Iranian crude oil has been a major source of supply for Hellenic but the refiner has stopped any purchases from the country since June after the United States imposed sanctions on Tehran, Shiamishis said.

Hellenic was replacing it with other sources, including Europe and Saudi Arabia, without any material financial impact.

The refiner reported earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for oil inventory holdings, of 187 million euros ($218 million) in April to June, down from 228 million euros in the same period a year earlier.

Its shares trade at 7.8 times its 12-month forward earnings, compared with 17.5 times for rival Neste and 13.7 times for Saras. [Reuters]