2009 Annual Report - Rompetrol.com

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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
Overview To offset prolonged negative impact of depressed downstream market, Management of the Group is committing themselves to further reduce costs, complete modernization of the Petromidia Refinery, restructure the business and concentrate on core business, close non-profitable businesses. We will fund our plans through a mix of equity and debt, with a strong support from our shareholders. The average headcount across Group entities during 2009 was 9,426 as compared with 9,070 during 2008, as result of increased workforce in our retail. We expect increases in our retail operations, in line with network development, based on efficiency criteria. We employ best practices for attracting, retaining and motivating our employees, who are the principal contributors to the development of our Group. We are fully committed to our responsibilities for their development and for the communities in which we operate. 2009 Annual Report 63
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Annual Report 2009 2009 Annual Repo
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Contents Letter from the General Ma
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Letter from the General Manager Dea
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Refining and Petrochemicals The Ref
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Product monitoring and RID/ADR insp
Page 11 and 12: Rompetrol Rafinare Vega Ploie[ti Re
Page 13 and 14: to a market share of 14.58%, in a m
Page 15 and 16: Trading The Trading Business Unit m
Page 17 and 18: Trading Romania operations division
Page 19 and 20: 2009 Annual Report 19
Page 21 and 22: Retail 2009 Annual Report 21
Page 23 and 24: Dyneff 2009 Key Achievements: • D
Page 25 and 26: Rompetrol Logistics 2009 Key Achiev
Page 27 and 28: Rompetrol Bulgaria 2009 Key Achieve
Page 31 and 32: Marketing 2009 Annual Report 31
Page 33 and 34: Researches pointed out that, underg
Page 35 and 36: Upstream 2009 Annual Report 35
Page 37 and 38: Rompetrol Well Services 2009 Key Ac
Page 39 and 40: Rompetrol Drilling and Workover Rom
Page 41 and 42: Services Companies 2009 Annual Repo
Page 43 and 44: Palplast 2009 Key Achievements: •
Page 45 and 46: Rominservices Therm S.A. Mangalia 2
Page 47 and 48: port platform, in terms of specific
Page 49 and 50: Global Security Sistem GLOBAL SECUR
Page 51 and 52: Corporate Social Responsibility 200
Page 53 and 54: and children’s rights legislation
Page 55 and 56: Corporate Governance 2009 Annual Re
Page 57 and 58: Creation of the CAPEX Department Cr
Page 59 and 60: Analysis of the Financial Results 2
Page 61: The decrease in Net Revenues in 200
Page 65 and 66: Income Statement (USD ) 2009 2008 C
Page 67 and 68: Statement of changes in equity (USD
Page 69 and 70: Revenue from rendering transportati
Page 71 and 72: Emphasis of matter For a better und
Page 75 and 76: ma]iei I}A eghin U MURE{ F`g`ra[ BV
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2009 Annual Report - Rompetrol.com

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