On May 16, JSC Ventspils nafta (NASDAQ OMX RIGA: VNF1R) organized its first Investor Conference Online Webinar for investors. During the webinar the Chairman of the Management Board of JSC Ventspils nafta Simon Boddy and Finance Manager Kaspars Bunne analysed the financial results of the year 2011, gave forecasts for the year 2012 and answered questions sent in by investors.
The recorded Ventspils nafta webinar is available online: http://ej.uz/VNieraksts and the presentation is available here: https://newsclient.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=506766&messageId=621975
During the presentation when commenting on the key financial indicators of the Ventspils nafta (VN) group, it was noted that in 2011 the total turnover of the VN Group has reached LVL 118 million, which reflects 49 million lats of revenue from the shipping business, 59 million lats of revenue from the reloading business and 10 million lats of revenue from the pipeline business.
The net loss attributable to the VN Parent Company’s shareholders – e.g. JSC Ventspils nafta shareholders is 6.99 million lats in 2011. The rest of net loss (total net loss of VN group in 2011 was 12.2 million lats) is attributable to the other shareholders in the VN Group’s companies, including Transneftproduct, Eurotank Holdings and the State Social Insurance Agency.
The gross margin, as well as EBITDA (23.69 million lats in 2010; 28.72 million lats in 2011) , EBIT (-0,75 million lats in 2010; 6.48 million lats in 2011) when normalized (which means when large non-recurring impairment changes are removed) all show an improving trend in 2011.
The analysis of the VN parent company’s income and expenses, as well as structure of Income and expenses shows that in 2010 there was significant influence of currency fluctuations on total results of the parent company. There was a change of the currency exposure management in 2011 versus 2010. In 2011 all significant financial assets of the VN parent company are denominated in EUR or lats, therefore VN avoids any significant foreign currency risk.
The total expenses of the VN parent company have increased in the last two years, but that is mostly because of non-cash impairment changes in evaluation of the pledge value of the debt of LASCO Investment. VN parent company has recognized impairment losses in the amount of 4.4 million lats in 2011 and 2,97 million lats in 2010.
Additionally it has to be emphasized that in the last two years VN parent company has achieved substantial savings in administrative expenses.
Here is edited transcribed of the questions and answers asked during the presentation.
Do the frequent changes in the Supervisory Board of Ventspils nafta affect company’s work and, if yes, how much and in what way?
S. Boddy: The simple answer to that is – no. At least since I have been Chairman of the Board the Supervisory Council has always been very supportive and helpful.
Have You defined the short-term and long-term goals for Ventspils nafta? What are they?
S. Boddy: Well, this may sound a cliché, but of course it is to retain and hopefully to increase the share-holder value. And we will continue to do that. We have the best managers operating the companies and in all parts of the business we will look to cut costs where they were excessive, and of course increase the use of all our assets.
Do you consider some possible mergers or acquisitions of other companies?
S. Boddy: At the moment, as we have also said in our business update on December 8, we have a vision of some mergers. But frankly, as of now we don’t think it is possible. This is a dynamic situation. The most obvious potential for merging, as I mentioned earlier, are the terminals to be combined in Ventspils.
Would you yourself invest in Ventspils nafta?
S. Boddy: The question is quite inappropriate for me as a chairman of the board to say yes or no. I don’t think the stock exchange would even allow me. This would be a question to address to the analysts in the banks instead.
When Ventspils Nafta will start to receive any payments from buyers who took over the 49% of VNT shares?
S. Boddy: The answer to this question is that there is a loan note well known to you. The loan note is an absolute guarantee to pay and it is due before or by October 2016. Meantime I would like to point out that Financial Manager Kaspars Bunne made an excellent point – we try to live off our interest. And our only source of interest comes from that loan. (See VN Group’s consolidated financial statements for 2011, note 19)
Do the latest activities – business conference and now webinars – mean that from now on you will focus more on investor relations?
S. Boddy: Yes!
When are you planning the next webinar?
S. Boddy: We plan to have our business up-dates annually and next one is already scheduled for November 28. So book those dates and come along, and bring your friends
Ventspils nafta thanks all participants, who joined the webinar!