2009 Annual Report - Rompetrol.com

The whole volume handled by crude oil tank farm in 2009 was
7,753 kt (both receiving and delivery).
Rompetrol Ukraine
2009 Key Achievements:
• increasing the operating margin in wholesales by 15%;
• becoming the third largest importer of RON 95 on the Ukrainian
market. The company’s share represents approximately 10%
of the total volumes of RON 95 imported by Ukraine
• from the financial point of view, 2009 has proved to be successful for
Rompetrol Ukraine, the company’s EBITDA registering 4.65mil. USD.
The trading activity has been carried out through three terminals:
Ilichiovsk, Odessa and Zaporojie.
Although the development of the retail channel is not a primary
activity for Rompetrol Ukraine, a second gas station was launched
in April 2009 (a DOCO station located on the most important
Ukrainian highway Odessa-Kiev).
At the beginning of 2009, the main shareholder of Rompetrol
Ukraine – The Rompetrol Group N.V. purchased the 30% stake
of Rompetrol Ukraine becoming the 100% shareholder of the
company. Also, at the end of 2009 the consolidation by merger of
Rompetrol Ukraine LLC subsidiary - Rompetrol Donetsk LLC was
finalized.
Business Unit Trading has been strengthening its role of the supply
chain optimizer within the Group.
2008 has witnessed increased integration of teams in Petromidia
Refinery, in Vector and Retail companies with the purpose of
improving inventory management, crude and product scheduling
and exploiting market opportunities as they arise.
Coordinated efforts translated into higher product volumes sold
on the international market, to an expanding client portfolio, and
to increasing security of supply to Dyneff operations. Vector has
become the sole supplier of crude oil to the refinery.
Retail
Despite prolonged negative effect of the financial crisis, the
Group increased the volumes of petroleum products sold by Retail
Business Unit by 4 % as compared to 2008.
In Romania despite aggressive price competition from the major
players in the market, Rompetrol was able to maintain its market
share. During 2009 the retail network in Romania further increased
by 10 new own stations, 11 Expres stations, 44 Internal Bases and
145 cuves.
During 2009, Rompetrol Gas has substantially increased its sales
(by 33%), especially in the retail segment (by 88%).
Dyneff was able to increase its sales by 8% in France and by 19%
in Spain market as compared to the previous year. The increase
is mainly attributed to trading, wholesale and small wholesale
volumes. Sales through the retail channel maintained at almost
the same level as in 2008, despite closing of 7 company owned
(COCO) gas stations due to expired licenses and low profitability.
Non- Core and Other Activities
All activities not directly related to trading in crude and oil
products, refining, and sales of oil products are grouped together
in the Business Unit Non-Core.
Rominserv, the Group’s engineering company, has increased its
technical capabilities, being able to successfully complete complex
projects at the highest quality standards and on time. Rominserv is
the general contractor for all upgrade projects in the refinery.
During 2009 Rompetrol Logistics has taken several initiatives
to optimize the usage of the fleet of rail and road tankers in
order to sustain profitability in the Romanian market in the crisis
environment.
Ecomaster increased its efforts put into Group’s environmental
projects, demonstrating the high importance given to ecological
friendly solutions to the production and distribution of oil
products.
Restructuring
During 2009, the Group has further defined the restructuring plan.
During 2009 there was no disposal of subsidiaries. The Group
intends in 2010 to perform a detailed analysis of the non-core
activities and assess the options to streamline its structure.
Financial instruments and risk management
Financial instruments in the balance sheet include investments,
trade receivables and other receivables, cash and cash equivalents,
short-term and long-term debts, trade and other payables. The
estimated fair values of these instruments approximate their
carrying amounts.
The Group’s activities expose it to a variety of risks including the
effects of: changes in the international quotations for crude oil
and petroleum products, foreign currency exchange rates and
interest rates. The Group’s overall risk management main objective
is to minimise the potential adverse effects on the financial
performance of the Group companies.
Commodity Price Risk
The Group is exposed to changes in commodity prices for
purchases of crude oil and sales of petroleum products. The
prices of crude oil and petroleum products bought or sold are
determined by reference to or strongly influenced by international
quotations.
Due to significantly increased volatility of crude oil, the
management developed a risk management policy which was
presented to the Group’s Board of Directors and expected to be
approved during 2010.
Interest Rate Risk
Interest rate price risk is the risk that the value of a financial
instrument will fluctuate due to changes in market interest rates
relative to the interest rate that applies to the financial instrument.
The Group has long-term debt and short-term debt that incur
interest at fixed and variable interest rates that exposes the Group
to both fair value and cash flow risk.
Foreign Currency Risk Management
The Group’s functional currency is United States Dollar (“USD”)
whereas crude oil imports and a significant part of petroleum
products are all denominated in foreign currencies, principally US
Dollars. In addition certain assets and liabilities are denominated
in foreign currencies, which are retranslated at the prevailing
exchange rate at each balance sheet date. The resulting differences
are charged or credited to the income statement but do not affect
cash flows. Group Treasury is responsible for handling the Group
foreign currency transactions.
Capital Risk Management
The Group manages its capital to ensure that entities in the Group
will be able to continue as a going concern while maximizing the
return to stakeholders through the optimization of the debt and
equity balance. The capital structure of the Group consists of bank
debt, shareholders loans, cash and cash equivalents and equity
attributable to equity holders of the parent, comprising issued
capital, reserves and retained earnings.
2009 Annual Report 62