Annual Report 2018
60 Years Producing Energy

2018 Financial Review

The Group’s Adjusted EBITDA amounted to €730 million (- 12%), mainly due to the deterioration of the international refinery environment, with weaker benchmark refining margins and a stronger euro vs the USD, partly offset by supply optimization, strong operational performance and higher production and sales, while Adjusted Net Income amounted to €296 million (-20%).

2018 was a particularly successful year in terms of operational performance for the Group's refineries, as they benefited from opportunities in the Med crude oil market and the supply optimization, which resulted in increased over-performance vs benchmark margins, offsetting weaker benchmark refining margins; total 2018 sales amounted to 16.5 million tons (+3%), on 15.5 million tons (+3%) of production.

€730 mn
Strong Profitability maintained, Adj. EBITDA

All Group activities recorded satisfactory performance, with Petrochemicals increasing their profitability, reporting Adjusted EBITDA of €100 million, on account of increased vertical integration between the propylene unit of the Aspropyrgos Refinery and the chemical plant of Thessaloniki, as well as the higher sales.

In the domestic Fuels Marketing business, motor fuel sales continued to increase and market share improved to 32%. Moreover, in Aviation, sales recorded an increase mainly due to higher tourism while the Group also maintained its leading position in Bunkering.

Reported results were affected by inventory gains of €48 million, due to the recovery of international crude oil prices, as well as by non-recurring items, such as provisions and impairments of assets, driving Reported EBITDA to €711 million. In addition to the above, Reported Net Income was also affected by the IFRS accounting impact of the DESFA sale and amounted to €215 million.

Key figures for 2018
€ m. 2018 2017
Turnover 9,769 7,995
Adjusted EBITDA 730 834
Inventory effect (48) (59)
Non-recurring items 67 41
EBITDA 711 851
Adjusted Net Income 296 372
Net Income 215 384
Capital Employed 3,854 4,173
Net Debt 1,459 1,800
Gearing Ratio 38% 43%

Liquidity & cash flows

During 2017, the Group successfully implemented its financial planning, by refinancing bank loans amounting to approximately €900 million, improving commercial terms, extending average debt maturity and reducing costs, which dropped by 12% y-o-y.

Financial cost 2018 (€ m.)

In 2018, Net Finance costs amounted to €146 million, recording a decrease by 32% over the last 4 years, mainly due to the successful implementation of the Group's financial planning, following the refinancing of bonds and bank loans to improve terms and reduce costs.

2018 operating cash flows (Adjusted EBITDA – CAPEX) amounted to €572 million, which, in conjunction with the proceeds from the sale of DESFA led Net Debt to €1.5 billion and Gearing Ratio (Net Debt / Capital Employed) to 38%, the lowest level in the last 9 years, in line with Group's strategic objectives.

Financial Gearing Ratio, the lowest since 2009