Rompetrol Rafinare 4Q 2009 results

To cope with the oil sector's difficult environment, RRC reduced refinery's throughput by 25% yoy to 890 ts tons. The domestic motor fuel sales remained relatively strong (-4% in terms of volume), while export sales went down 35%. Lower throughput coupled with tiny Brent-Ural differential (0.62 USD/bbl) and weak cracking margins had a negative impact on RRC's net refining margins, which turned negative in 4Q 09 (-1.95 USD/bbl). Thus, refining EBITDA came in at minus USD 12.5 mn. Although the bottom line stayed in the red territory (-USD 52 mn), the loss was however smaller in comparison with 4Q 08 (-USD 88 mn). On the marketing side, the company enjoyed more favorable conditions, reporting higher wholesale sales (up 13% yoy), while the retail sales decreased by 6% yoy in volume terms. Both retail and wholesale gross margin remained strong in comparison with 4Q 08 as well as 3Q 09 (66 USD/t), which helped RRC post a positive EBITDA of USD 10 mn. The petrochemicals segment reported better results versus 4Q 08, but still had a negative performance in terms of EBITDA (-USD 1.1 mn). On a consolidated basis, the top line stood at USD 654 mn, down 11% yoy on lower volume sales. In terms of EBITDA, the company posted a small loss of -USD 3.9 mn. The bottom line however, came in deeply in red, as expected, at USD 72.5 mn.

All in all, the results are in line with our expectations (though we do not have detailed quarterly estimates) therefore we consider them as neutral. Moreover, with the MPTO price approved and the offer about to be launched, we think that the financial results do not matter much for the market.

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