Despite sales growth the Slovnaft Group ended with a loss in 2011

Despite sales growth the Slovnaft Group ended with a loss in 2011
Net sales of the Slovnaft Group in the past year increased year-on-year by 35 per cent up to EUR 4.73 billion.

The increase was supported by higher quoted prices of refined products and improved sales structure. However, even these factors had not been able to avoid the impact of adverse external environment developments completely, due to which the Group’s economy got worse. Slovnaft Group ended the year of 2011 with the negative result of EUR 19 million, which was caused particularly by worse results in the last quarter.

The operation loss of the Slovnaft Group amounted to 12 million euros in last year. Deterioration of the operation result was affected primarily by higher costs of production due to increased oil prices, higher energy costs and reduced integrated petrochemical margin, as quoted prices of polymer products did not correspond to high raw material prices.

„Given the uncertain global situation in the industry, we are very careful in forecasting the next period, and therefore we focus on production efficiency increasing projects in order to maintain the company's performance in this harsh environment. The projects include construction of a new LDPE unit with planned completion in 2015, which in addition to increasing our flexibility also aims at taking the opportunities of enlarged production chain“, Oszkár Világi, the Chairman of Board of Directors and CEO of Slovnaft commented on the outcomes.

Despite worse results in 2011, the Group continued in its strong investment programme. Capital expenditures increased year-on-year by 19 per cent to EUR 119 million. Significant part of investments totalling EUR 81 million was spent on projects ensuring production efficiency improvement, keeping of operational reliability and improving the production process quality.

Crude oil processing in 2011 increased year-on-year by 10 per cent to 5991 kt, which was supported by a lower scope of turnarounds in the first half of the year. Compared to 2010, gasoline production increased year-on-year by 12 percent in 1474 kt, diesel production increased year-on-year by 13 per cent to 3,203 kt due to higher demand. Production of petrochemicals increased, too. The majority, nearly 72 percent of revenues from sales of petroleum products, were received from exports.

As of the end of December 2011 the Company operated 209 petrol stations - the number remained unchanged compared to the previous year. Reconstruction of stations continued in the last year; 35 stations offer services to customers in the new NEO design concept. Replacement of refuelling stands and reconstruction of shops helped maintain the market share of the Slovnaft network within the Slovak Association of Petroleum Industry and Trade (SAPPO) above the level of 36 per cent.