​• Operational profit EBITDA LIFO of CZK 350 m in 1Q16
• Revenues reached CZK 17.686 bn
• Sales volumes of refinery products increased by 46% y/y, driven by higher refining capacity, maximization of fuels production, increase in fuels imports and sales of steam cracker unit feedstock
• Benzina increased market share to 16.3%
• The company concluded dealings with MERO regarding transport tariffs for crude oil

In Q1 of 2016 the financial results of the company Unipetrol were affected by the limited production due to steam cracker extraordinary situation from 13 August 2015 as well as planned turnaround at Litvinov chemical complex, which started in March. The company recorded operational profit (EBITDA LIFO) of CZK 350 m and net loss of CZK 25 m. The financial results of the company were positively affected especially by the significant increase in refinery sales and higher sales of retail segment y/y. At the end of 1Q16 the company recorded very strong net cash position of CZK 9.6 bn.

Regarding the extraordinary event at the steam cracker unit from August 13, 2015, Unipetrol is insured against both property & mechanical damages and business interruption. The Group expects that, based on the insurance policies, it should be in a position to recover lost business profits estimated at CZK 2.9 billion in 1Q16. Also to recover repair costs estimated at approximately CZK 4 billion, as well as lost business profits estimated at CZK 2.4 billion in 2015.

"Repairment works on the steam cracker are proceeding according to the approved schedule, in recent weeks we have successfully transported four new furnaces to their location. At this point, we expect to complete all repairment works in July and restart partial operation of the steam cracker unit at the level of 80% in August," says CEO and Chairman of the Board of Directors of Unipetrol, Marek Świtajewski. “In the first quarter of 2016 we also proceeded with intensive preparatory works for construction of the new polyethylene unit. The main part of the project, the construction of the modern production facility, will begin in June, "adds Marek Świtajewski.

In the downstream segment that combines refinery and petrochemical parts, the company recorded EBITDA LIFO of CZK 132 m in 1Q16. Segment results were negatively affected by lower refining margins y/y, significant limitation of petrochemical production resulting from steam cracker accident and the effect of inventory revaluation due to the decline in crude oil prices. In March Unipetrol also launched the turnaround at Litvinov chemical complex. The company also recorded higher fixed costs in Ceska rafinerska (after taking over the stake from Eni). On the other hand the results of the segment were positively affected by higher petrochemical margins and higher sales volumes of refinery products y/y, resulting from higher refining capacity, maximization of fuels production, increase in fuels imports and sales of steam cracker unit feedstock.

In the refinery part of the downstream segment, the volume of crude oil processed in Q1 reached 1,429 kt, which represents y/y growth, thanks to higher refining capacity after completion of acquisition of ENI stake in Česká rafinérská on April 2015 and reliable production at Kralupy refinery. Refining utilization ratio declined to 66% due to steam cracker accident and turnaround at Litvinov chemical complex. The sales of refinery products increased by 46% y/y to 1.538 mt.

The results of petrochemical part of downstream segment were significantly affected by the extraordinary event at the steam cracker unit. The sales volumes of petrochemical products decreased to 193 kt (-57% y/y). The company continues to work intensively on relaunching of the steam cracker unit. The standard operation of the steam cracker at maximum capacity utilization is expected in October 2016.

The retail segment recorded operational profit EBITDA LIFO of CZK 201 m in 1Q16. The y/y operational profit increase (+67 m CZK) was reached by higher fuel sales, higher fuel margins and better sales results also in the area of non-fuel segment. The company continues to enlarge the STOP CAFE fast-food restaurants network, carries out a set of activities in sales and marketing area. Following the recent approval of OMV transaction by the antitrust authority, Unipetrol is preparing for a gradual takeover of 68 gas stations. The network of Benzina fuel stations increased its market share to 16.3% (the data from the end of January 2016).

In March the dealings about crude oil transportation to the Czech Republic were concluded. Representatives of Česká rafinérská and MERO ČR have signed an amendment concerning transportation tariffs to the existing Contract on storage and transportation of crude oil via the IKL and Družba pipelines from January 2016 and also new contract for TAL deliveries. The annual value of the contracts exceeds one billion crowns. The signed amendment to the contract is a part of a broader agreement defining terms of cooperation of both companies on the crude oil supply to the Czech Republic and this way it strengthens the resource security of domestic economy.

	1Q15	4Q15	1Q16
Revenues	23,975	22,957	17,686
EBITDA LIFO	3,111	807	350
EBITDA	2,897	708	559
EBIT	2,426	243	103
Net profit	1,995	182	-25

	1Q15	4Q15	1Q16
EBITDA LIFO	3,111	807	350
Downstream	2,986	553	132
Retail	134	288	201