May 30, 2018 - 3:36 AM EDT
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Paz Oil Company, Ltd.: First Quarter 2018 Financial Results

- Adjusted net income in Q1/2018 of NIS 94 million; Reported net income in Q1/2018 of NIS 76 million - Adjusted operating income in the Retail & Wholesale segment increased by 10% compared to Q1/2017 - Revenues from the Yellow Convenience Store chain of 202 million in Q1/2018, an increase of 10% - An increase in global oil prices and a weaker US dollar/shekel exchange rate decreased the refining segment's profitability compared to Q1/2017

YAKUM, Israel, May 30, 2018 /PRNewswire/ -- Yona Fogel, CEO of Paz Group (TASE: PZOL):

"The growth of the Retail and Wholesale segment continues to improve due to efficient management of fueling complexes, as well as an increase in the number of transactions at the Yellow convenience stores. At the same time, the Company expanded both the activities of retail space for rent at the gas stations as well as the range of digital services. The expansion of our various services and the prime locations we operate across the country create strong value for our customers, which is reflected in our results.

"Conversely, the refining segment was adversely affected a number of factors. These include the market transition to backwardation which increased the cost of holding inventory of crude oil, the rise in world oil prices, and the weaker US dollar/shekel exchange rate compared with last year.

"Paz continues to enhance its assets and we invested NIS 125 million in the current quarter. This was mainly used for the purchase of property rights of gas stations, the construction of an off-gas recovery (OGR) facility for recovering and processing refinery gas, the expansion of the retail areas and the development of our digital platform."

Main highlights for Paz Group by Segment:

The Retail and Wholesale Segment

The operating income for the Retail and Wholesale segment in Q1/2018 totaled NIS 99 million, an increase of 10% compared with Q1/2017.

The positive trend in the Retail and Wholesale Division continued, which was due to a 10% increase in the revenues of the Yellow chain to NIS 202 million, an increase in the income from property leases, and continued growth in the quantity of fuel sold at the stations. The Company continued to focus on increasing sales from the retail fueling stations while leveraging its competitive advantages. This is in terms of its national presence at various prime locations and its broad customer base, while expanding the range of products sold at the convenience stores and positioning the sites as collection and delivery points for online sales sites and distributors.

The Refining Segment

The refining segment completed Q1/2018 with an adjusted operating loss of NIS 1 million compared with an adjusted operating income of NIS 74 million in Q1/2017.

The results of the segment were adversely affected by the rise in barrel prices, which raised the cost of consumption and losses, the transition to backwardation market structure which increased the cost of holding the inventory, and the lower dollar/shekel exchange rate (as Paz's sales are in dollars while the production costs are in shekels). In addition, global refining margins declined this quarter, but the Ashdod Refinery maintained a relatively high premium compared to the benchmark refining margins. In Q1/2018 the Ural benchmark margin totaled $4.0/barrel, the KBC benchmark margin $3.5/barrel and the Paz Ashdod refinery margin totaled $7.0/barrel.

The refinery has maintained good operational continuity and is currently completing the construction of an OGR facility (gas separation facility), which is expected to be operational in July. The activity of this facility is expected to improve the refinery's profitability.

The Industries and Services Segment

The Industries and Services segment concluded Q1/2018 with operating income of NIS 66 million, a decrease of 13% compared to Q1/2017. The decrease is primarily due to the warm winter which led to a decrease in Pazgas's sales in the private sector.

 

 

Consolidated Statement of Income



Three months ended, March 31,

 Year ended, December 31,


unaudited

unaudited

 audited

NIS Millions

2018

2017

2017

Revenues

3,050

2,859

11,285

Cost of Sales

2,627

2,286

9,480

Gross Profit

423

573

1,805





Selling and marketing expenses

232

229

935

General and administrative expenses

43

44

191

Other income, net

1

-3

13

Total operating expenses

276

270

1,139

Operating income

147

303

666





Financial income

19

66

201

Financial expenses

66

33

135

Financial income (expenses), net

-47

33

66





Income before income tax

100

336

732

Income tax expenses

23

67

157

Net income for period

77

269

575





Attributable to:




Equity holders of the Company

76

268

572

Non-controlling interests

1

1

3

Net income for the period

77

269

575





Net earnings per share attributable to equity holders of the Company:




Basic net earnings per share (in NIS)

7.50

26.38

56.35

Diluted net earnings per share (in NIS)

7.48

26.33

56.21

 

 

The information presented in this press release is presented solely for the convenience of the reader and does not constitute a basis for making any investment decisions or any recommendation or opinion nor is it a substitute for the exercise of judgment by an investor or a potential investor. This press release is presented in a condensed format only and in order to receive a full picture of the Company's operations, the reader is referred to the Company's full reports as submitted to the Securities Authority and to the Stock Exchange. The Company has included in this press release forward-looking information, as defined in the Securities Law, 1968, in relation to itself and to its investees. Inter alia, such information contains forecasts, objectives, evaluations and estimates, which relate to future events or matters, whose realization is not certain and which are not under the Company's control. Forward-looking information does not constitute a proven fact and it is based solely on the Company's subjective evaluations. When making such assumptions, the Company relied, inter alia, on the analysis of general information available to it at the time of preparing this report, including publicly available information, research work and surveys, which did not contain a commitment as to the correctness or the completeness of the information therein and whose correctness has not been independently tested by the Company. In addition, the realization and/or the non-realization of the forward-looking information will be affected by factors that cannot be evaluated in advance and which are not under the Company's control, including the specific risk factors underlying the Company's operations, as detailed in the periodic report, as well as developments in the general environment and in external factors that affect the Company's operations. Accordingly, even though the Company believes that its expectations, as they appear in this press release, are reasonable, there can be no certainty that the Company's actual results in the future will be in accordance with said expectations, but rather, they may differ from the expectations presented in the forward-looking information presented in this report.

Contact Information:
Omri Arens
Investor Relations and Credit Risk Manager, Finance Division
Paz Oil Company, Ltd.
Office: +972-9-8930656  
[email protected]

Cision View original content:http://www.prnewswire.com/news-releases/paz-oil-company-ltd-first-quarter-2018-financial-results-300656297.html

SOURCE Paz Oil Company, Ltd.


Source: PR Newswire (May 30, 2018 - 3:36 AM EDT)

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