Oil Refineries slashes loss in quarter
Company reported that it ended the three months with a $6 million net loss, down from $13 million the same period in 2011.
Profits from oil refining helped to halve the losses at Oil Refineries Limited in the first quarter, compared with a year ago, even as results at the company's Carmel Olefins unit worsened.
Oil Refineries, which is controlled by The Israel Corporation and Petrochemicals Industries, reported yesterday that it ended the three months with a $6 million net loss, down from $13 million the same period in 2011.
The company's refining business posted an operating profit of $50 million for the quarter, turning around from a $7 million loss the same time in 2011. The reason was a sharp increase in refining margins to $3 a barrel from 50 cents a year ago, after refineries owned and operated by Petroplus in Europe tightened supply.
Revenue climbed 19% to $2.45 billion as refinery revenues increased 22% to $1.9 billion. The average price of oil it sold rose in the quarter, while the quantity of oil refined grew 5% and sales of aromatic products doubled to $206 million.
The company, Israel's biggest refiner, utilized 90% of its capacity in the quarter, up four percentage points from a year earlier. Costs were lower than a year ago, as well, as the company relied on natural gas for 40% of the power at its facilities in place of heavy fuel oil. However, disruptions to supply of the gas from Egypt probably knocked off between $25 million and $30 million from operating profit, Oil Refineries, popularly known as Bazan, said.
Looking ahead to the current quarter, the company said refining margins rose sharply in April because of the drop in global crude prices, although that gain will be partly offset by a decline in the value of its crude inventories. In addition, the company announced yesterday that it would be supplying the Palestinian Authority with fuel products over the next two years at a value of NIS 1.9 billion annually, equal to half the PA's requirements. It was the first time Oil Refineries won a supply contract from the PA, previously a Paz Oil monopoly.