Ventspils nafta
JSC Ventspils nafta gains considerable profit in 2008 in difficult economic circumstances
Ventspils nafta / Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. ---------------------------------------------------------------------- By selling in an advantageous transaction the JSC Ventspils nafta assets in the areas not related to transit business, the company's long-term assets were transformed in assets of high liquidity, whereas the shareholders of JSC Ventspils nafta have gained significant profit, as the JSC Ventspils nafta parent company's profit after tax reached 40.2 million lats in 2008 according to the results of unaudited report of JSC Ventspils nafta for 2008. The shareholders of JSC Ventspils nafta will decide at the general shareholders' meeting about utilization of this profit, which also reflects the profit gained from the transaction implemented as a result of reorganization of JSC Ventspils nafta Group. Whereas according to the unaudited report of JSC Ventspils nafta for 2008, the JSC Ventspils nafta Group's consolidated profit after tax in the reporting period amounts to 20.8 million lats, which is almost four times more than was planned in the JSC Ventspils nafta Group's consolidated budget for 2008, which was 5.3 million lats. According to the unaudited report for 2008, consolidated net turnover of JSC Ventspils nafta Group in the reporting period has reached 78.5 million lats, which is 18.5 million lats more than in the planned consolidated budget of JSC Ventspils nafta for 2008. Due to global and national economic turmoil, year 2008 presented numerous challenges and complicated issues for JSC Ventspils nafta Group meanwhile forcing for immediate assessment and reevaluation of the company's further development scenarios for timely response and maximum efficiency and effectiveness - resulting in sustainable and optimal future growth model. Of course, considering the current financial and economic situation worldwide, the year 2009 will clearly be more difficult and only the most competitive ones will endure in this situation, emphasizes the Chairperson of the Management Board for JSC Ventspils nafta Olga Ptersone. As a result of a comprehensive risk analysis, Supervisory Council for JSC Ventspils nafta approved the company's development strategy in December 2008 focusing specialization on development on transit industry related assets as oppose to functions previously pursued by the holding in wider industry range that JSC Ventspils nafta Group implemented for several years as a result of active business industry risk diversification policy. By optimizing and reorganizing core business focus JSC Ventspils nafta Group as of beginning of 2009 following end of previous reporting period, the parent company manages investments into the transit area - transportation, storage, transshipment of crude oil and petroleum products and international shipping business. The decision to refocus all attention to development of the historical core business of JSC Ventspils nafta in transit industry was made in accordance with recommendations and based on local and international experts and advisers with the main intention to ensure adequate return on investments in the interests of all shareholders of JSC Ventspils nafta in the conditions of global economic turmoil. The selected strategy enables JSC Ventspils nafta to focus on one industry area, focusing on growth and improvement of its assets, especially taking into account several decades of experience and success in this industry, as well as the international know-how, which has been actively acquired particularly in the recent years along with involvement of the international shareholder - oil an gas transport and trade conglomerate Vitol Group. In the reporting period, JSC Ventspils nafta proved its ability of working also in conditions of the global economic downturn that has notably affected several JSC Ventspils nafta subsidiaries working in international markets. At the same time, the economic processes in 2008 globally and in Latvia have confirmed that the conservative planning of JSC Ventspils nafta has been prudent and adequate by regularly assessing and planning potential influence of external factors on the operations and financial results of holding companies. The JSC Ventspils nafta subsidiary Ventspils nafta terminls Ltd ensured stable cargo volume level in the reporting period by transshipping in total more than 11.6 million tons of crude oil and petroleum products. Events in the global economy, the unfavorable global oil market situation in the last months of the reporting period and the international competition in the transit area have had and after the end of the reporting period still have a significant impact on operating results of Ventspils nafta terminls Ltd, which were affected several months in the reporting period also by the repair works of the main petroleum products pipeline Polotsk-Ventspils in the territory of Belarus, which resulted in a reduced diesel fuel flow in the direction of Ventspils. At the same time, Ventspils nafta terminls Ltd continued active implementation of modernization in 2008, by optimizing company's operational processes and procedures, increasing workforce efficiency and introducing higher requirements in terms of environment protection, thereby adapting to the new economic conditions and strengthening its positions in international market. The aim of modernization is to strengthen the positions of Ventspils nafta terminls Ltd as the major crude oil and petroleum products transshipment complex in the Baltic region, by developing its work by following similar principles as in other companies under the Vitol Group worldwide, such as EuroTank in Rotterdam and Amsterdam. The most remarkable contribution that Ventspils nafta terminls Ltd made into improvement of environment protection in the reporting period was launching the new, modern wastewater treatment plant that is unique in the Baltic region. According to the previous forecasts of JSC Ventspils nafta, in the reporting period, external circumstances still substantially affected another Group's company LatRosTrans Ltd, which is working in the sensitive transit area. Oil transportation in the direction of Lithuania via the pipeline owned by LatRosTrans Ltd is still not resumed due to the geopolitical situation, and technical reasons, such as repair works at the pipeline sections in the territory of Belarus and corresponding decrease in its capacity, influenced also transportation volumes of petroleum products in direction of Ventspils, as its total transshipment volume has reached 5 million tons in 2008. According to the approved schedule, LatRosTrans Ltd continued renovation and repair works of the petroleum products pipeline in the reporting period. As before, LatRosTrans Ltd has actively worked on elimination of supernormative loss of petroleum products resulting from illegal activities by hiring a security company, regularly inspecting the pipeline, collaborating with the police, allocating considerable resources in recovery of the environment, as well as informing and trying to involve other state authorities in dealing with this issue. In the reporting period, the JSC Ventspils nafta associated company JSC Latvian Shipping Company has been continuing to pursue its strategic goal - ensuring increase of the Group's value and retaining its position among the top ten medium range tanker owners in the world. According to the unaudited report for 2008, JSC Latvian Shipping Company Group worked with net profit of 58.6 million US dollars in the reporting period. In comparison with the result of analogue period in 2007, the last year's profit is 8.4 million US dollars or 13% lower, reflecting general unfavorable shipping market trends in the reporting period, especially in the end of it. In the circumstances of global financial and economic turmoil, JSC Ventspils nafta is taking appropriate actions to reduce risks and ensure profit, by careful, focused and purposeful managing of assets owned by it as well as resourcefully planning to achieve goals set by shareholders. According to budget forecasts of JSC Ventspils nafta Group for 2009, consolidated net turnover this year is planned to be not les than 60 million lats and net profit - not less than 2 million lats. JSC Ventspils nafta For further information - Gundega Vrpa, tel.: +371 67229182; e-mail: gundega.varpa@vnafta.lv News Source: NASDAQ OMX 27.02.2009 Financial News transmitted by DGAP ---------------------------------------------------------------------- Language: English Issuer: Ventspils nafta Latvia Phone: Fax: E-mail: Internet: ISIN: LV0000999001 WKN: End of News DGAP News-Service ---------------------------------------------------------------------------
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