BAZAN Group is publishing the results of its Financial Statements for the third quarter and first nine months of 2014:

HAIFA, Israel, Nov. 20, 2014 /PRNewswire/ -- Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter "the Company," "ORL" or "BAZAN"), Israel's largest integrated refining and petrochemical group, announced its financial results for the third quarter and the first nine months of 2014.

Arik Yaari, CEO of BAZAN: "The streamlining measures, while focusing the managing of the Company's activity on a cross-unit group point of view, are continuing to strengthen bottom-line results over time. The optimization of the group's production, alongside improved petrochemical segment margins, contributed to the improved results of this segment, and to a reduction in the influence of market fluctuations in other operational sectors.  We have recorded a net profit each quarter in 2014. The third quarter was characterized by macroeconomic changes and exceptionally strong and fast fluctuations – in oil prices, in price differences between different types of crude oil, in refining margins and in the prices of oil products.  Despite this, and despite the malfunction of the intake pipe at the Hydrocracker plant, we are summing up another positive quarter, with petrochemical activity showing strength and a significant contribution from the beginning of the year, including the current quarter. We are continuing to realize the streamlining plan we announced, as well as additional operational and commercial steps intended to improve the Group's competitive position, profitability and financial fortitude."

Israel Lederberg, BAZAN VP of Finance and Economics: "Over the course of the quarter we finished raising a series of new debentures amounting to 600 million NIS and options for debentures amounting to an additional 300 million NIS, at 6% NIS interest. The successful offering as well as the agreements, concluded this quarter with the holders of Carmel Olefins debentures, on financial covenants for 2015, are in continuation with the significant financial steps the Company carried out this past year, which contributed to improving its stability and its liquidity.

"The successful offering, as well as the options' exercise currently carried out by the company's investors, are a vote of confidence of the capital market in the Company and in its management which is reflected, among other things, in the sharp drop in debenture yields over the past year. We believe that these and additional steps we're advancing are improving the Company's financial flexibility."

Key Indices
2014 has so far been characterized by a challenging margins environment in the refining industry, which constitutes the Company's primary area of activity: the benchmark margin for the first nine months of 2014 was $1.4 per barrel, compared to a benchmark margin of $2.1 per barrel in the corresponding period in 2013. Despite the low benchmark margins, BAZAN's adjusted refining margin was $5.3 per barrel in the reported period, compared to an adjusted refining margin of $5.4 per barrel in the corresponding period in 2013.

The benchmark margin in the third quarter of 2014 was $3.4 per barrel, compared to a benchmark margin of $1.1 in the third quarter of 2013. BAZAN's adjusted refining margin in the third quarter of 2014 was $5.1 per barrel in the reported period, compared to a refining margin of $5.5 per barrel in the third quarter of 2013. The exceptional changes in the market over the past quarter alongside with the intake pipe malfunction at the Hydrocracker facility reduced the Company's added adjusted margin over the benchmark margin in this quarter.

Revenues in first nine months of 2014 amounted to $7.2 billion, compared to $7.4 billion in the corresponding period last year. Revenues in the third quarter amounted to $2.4 billion, compared to $2.6 billion in revenues in the corresponding quarter last year.

Adjusted operating profits in segments of operation in the first nine months of 2014 amounted to $157 million, a 54% increase, compared to $102 million in the corresponding period last year. Adjusted segment operating profits in the third quarter amounted to $61 million, an 85% increase, compared to $33 million in the corresponding quarter last year.

Adjusted net profits in the first nine months of 2014 amounted to $33 million, compared to a $103 million loss in the corresponding period last year. Adjusted net profits in the third quarter amounted to $32 million, compared to a $77 million loss in the corresponding quarter last year.

Adjusted EBITDA in the first nine months of 2014 amounted to $261 million, a 22% increase compared to $214 million in the corresponding period last year. Adjusted EBITDA in the third quarter amounted to $95 million, a 34% increase, compared to $71 million in the corresponding quarter last year.

In the third quarter of 2014 long-term liabilities to banking institutions and debentures were redeemed to the sum of $36 million. Since the start of the year, long-term liabilities to banking corporations and debentures were redeemed to the sum of $244 million.

Group Results by Segment
Since the beginning of the year, the fuels segment and the petrochemical segment have displayed performance that is significantly better than their performance in the same period last year. During the period, the fuels segment is continuing to show a consistently higher refining margin than benchmark margin. Use of natural gas along with the contribution of the Hydrocracker facility, allows the Company to regularly present margins higher than the benchmark margin.

The adjusted refining margin in the first nine months of 2014 was $5.3 per barrel relative to a benchmark margin of $1.4 per barrel, compared to the adjusted benchmark margin in the first nine months of 2013 of $5.4 per barrel, with the benchmark margin for the period being $2.1 per barrel. 

The adjusted refining margin in the third quarter of 2014 was $5.1 per barrel relative to a benchmark margin of $3.4 per barrel, compared to the adjusted benchmark margin in the corresponding quarter of $5.5 per barrel, with the benchmark margin for the period being $1.1 per barrel. 

Petrochemicals Segment
The petrochemicals segment is showing significant improvement in the results of its polymer activity, which derived from an increase in polymer margins, the implications of the use of natural gas and process and operational optimization in the Group. The third quarter was characterized by a drop in the output of aromatic activity products relative to the corresponding period last year, mainly as a result of influences on the production following a fire in one of Gadiv's furnaces.  

EBITDA by operating segments for the period (millions of dollars):

Environmental Issues, Corporate Responsibility and Community Involvement
BAZAN Group is continuing to make significant investments in the field of the environment, with a massive investment in improving air quality and reducing emissions. The Group has purchased two innovative systems for treating odor hazards – installation of one of them has been completed and it has become operational. In addition, the Group installed a system for treating the emission of volatile organic materials, which was activated and began treating some of the emissions. These unique systems were built in accordance with the strictest standards and in full coordination with the Ministry of the Environment.

The BAZAN Group makes full use of natural gas as the main source of energy for the Group's plants, which significantly reduces air emissions.

About BAZAN group
BAZAN group ("Oil Refineries Ltd" "ORL" or "BAZAN"), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries and petrochemical complexes in the Eastern Mediterranean area. BAZAN runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 9, providing a variety of quality products used in industrial operations, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries a range of Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lubricant base oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker symbol ORL. For additional information please visit www.orl.co.il.

BAZAN is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.

The above release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's report.

The above release is a convenience translation of the Hebrew release and is not binding the company.  The only binding information with regard to the company's activities and result is in the company's formal publications on the website of the Tel-Aviv stock exchange and the Israeli Securities Authority.

SOURCE Oil Refineries Ltd.

Related Links

http://www.orl.co.il