PRESENTATION OF RESULTS 9 months 2019 November 18 th , 2019 - - PowerPoint PPT Presentation

OVER 115 YEARS OF EXPERIENCE

PRESENTATION OF RESULTS 9 months 2019

November 18th, 2019

• This

presentation

• f

the results for the period January – September 2019, called “Presentation” is prepared by CONPET S.A. (“CONPET”) with the purpose of presenting the operational and financial results

• f

CONPET to the investing public (shareholders, creditors, analysts, financial media), thus bearing a strictly informative nature. The presentation was realized exclusively for information and is not a buy/sale offer, nor an inquiry for the buy/sale of the shares or financial instruments, nor an invitation to take part to a commercial partnership. The presentation does not stand for an offer or a buy invitation or shares subscription and no information contained herein shall set the grounds of the conclusion of an agreement, engagement or investment decision.

• The

detailed financial statements and the report prepared pursuant to the requirements of FSA (The Financial Supervision Authority) are made available

• n

the company’s website www.conpet.ro.

• The reporting period is January 1, 2019 – September 30, 2019.
• The financial statements to date and for the 9 months period

ended September 30, 2019 have been prepared in compliance with the International Accountancy Standard 34 “Interim Financial Reporting” approved by Order of the Ministry of Public Finances no.2844/2016 and have not been audited.

• The

Presentation cannot be copied, distributed, directly

• r

indirectly delivered to any person for any purpose, in absence of CONPET’s knowledge and consent. The copy, submission, distribution or delivery of this Presentation to any person of any jurisdiction is subject to certain lawful restrictions and the persons who might have received or have received this presentation shall become acquainted with these restrictions and observe them. The failure to comply with these restrictions may be interpreted as breach of the applicable laws.

• This Presentation does not contain a complete and exhaustive

financial or commercial analysis of CONPET, nor does it provide views and forecasts in a complete and exhaustive manner. CONPET conducted the Presentation carefully, but there might be some inconsistencies or omissions. Therefore, it is recommended that any person who intends to make an investment decision regarding CONPET equities should rely solely on the information provided by means of a formal communication of CONPET, in accordance with the legal provisions that are binding on CONPET

• CONPET and the managers or the representatives thereof shall

have no liability in relation to the Presentation. Moreover, no information contained in the Presentation shall constitute an

• bligation or legal engagement of CONPET, its managers or

shareholders.

MENTIONS REGARDING THE DOCUMENT

2

Presentation of the results 9 months 2019

• 1. Financial results 9 months

2019

• 2. Factors that influenced

revenues from transport

• 3. Factors that influenced
• peration expenses
• 4. Investments
• 5. Stock exchange

performance

• 6. Annexes

4 6 7 8 13 10

330.0/308.6 m RON ▲ 6.9% OPERATING REVENUES, of which: 299.2/280.1 m RON ▲ 6.8% TRANSPORT 276.5/260.6 m RON ▲ 6.1% OPERATING EXPENSES 53.5/48.0 m RON ▲ 11.4% OPERATING PROFIT 88.1/81.3 m RON ▲ 8.3% EBITDA 50.1/43.7 m RON ▲ 14.7% NET PROFIT

• 1. FINANCIAL RESULTS 9 months 2019

4

9 months 2019/ 9 months 2018

The increase in the operating revenues by 6.9% (21.4 m RON) was made mainly from transport services (19.1 m RON). The growth of 15.9 m RON was generated by the expenses related to the additional revenues achieved in 2019 as compared to 2018 (by 4 m RON rail transport expenses and by 1.5 m RON oil royalty expenses), but also by the price increase in the utilities, services, as well as personnel expenses (10.4 m RON). Net profit increasing by 6.4 m RON (14.6%).

The financial statements at the date and for the nine-month period ended September 30, 2019 have not been audited and revised by the financial auditor

SHARE IN TURNOVER (%)

CLIENTS 9 months 2019 9 months 2018 ▲ 2019/2018 m RON % 244.2 223.0 +21.2 ▲ 9.5% 52.1 56.5

• 4.4

▼ 7.8% 2.6 0.6 +2.0 ▲333.3% OTHER CLIENTS 5.3 3.6 +1.7 ▲47.2% TOTAL TURNOVER 304,2 283,7 +20,5 ▲ 7.2%

TURNOVER-CLIENTS (m RON) CLIENTS TURNOVER 9 months 2019 / 9 months 2018

5

• 1. FINANCIAL RESULTS 9 months 2019

9 months 2019 9 luni 2018

OMV Petrom, 80,4 Petrotel Lukoil, 17.1 Rompetrol, 0.9 Other costumers, 1.6 78,6 19.9 Rompetrol, 0.2 Other costumers 1.3

The financial statements at the date and for the nine-month period ended September 30, 2019 have not been audited and revised by the financial auditor

78.2 62.5 221.0 217.6 299.2 280.1 2,608 2,637 5,313 5,076 5,199 244 4,832 244

6

IMPORT TRANSPORT SUBSYSTEM DOMESTIC TRANSPORT SUBSYSTEM OTHER CRUDE OIL TRANSPORT OPERATIONS TOTAL TRANSPORT

• 2. FACTORS HAVING INFLUENCED THE TRANSPORT REVENUES

9 months 2019 / 9 months 2018

9 months 2019 9 months 2018

2,195 111 2,594

9 months 2019 9 months 2018

114 TRANSPORTED QUANTITIES TRANSPORT REVENUES 1,1

mRON k tons

77,1 2,3 296,9 2,4 60,1 275,1 5,0 1,2 219,8 215,0 2,6

+399 k tons ▲ 18.2% IMPORT SUBSYSTEM TRANSPORTED QUANTITIES

• 29 k tons

▼ 1.2% DOMESTIC SUBSYSTEM TRANSPORTED QUANTITIES

• 130 k tons

▼ 53.3% OTHER TRANSPORT OPERATIONS +17.0 mRON ▲ 28.3% IMPORT TRANSPORT SUBSYSTEM REVENUES +4.8 mRON ▲ 2.2% VENITURI DIN TRANSPORT SUBSISTEM ȚARĂ

• 2.7 mRON

▼ 54.0% OTHER TRANSPORT OPERATIONS The transported quantities were 237 k tons higher, and the revenues grew by 19.1 mRON, out of which 9.7 mRON from the transported quantity and 9.4 mRON from the increase of the transport tariffs.

2,705 2,439

The financial statements at the date and for the nine-month period ended September 30, 2019 have not been audited and revised by the financial auditor

3 2,605

7

• 3. FACTORS HAVING INFLUENCED THE OPERATING EXPENSES

9 months 2019 / 9 months 2018

➢ The railway transport expenses increased due to growth of the price of railway transport service starting April 01, 2019 and generated an increase of the railway transport expenses by 3.9 mRON. ➢ The augmentation of prices with energy and gas in the period January – September 2019 triggered an increase of these expenses by 1.4 mRON. ➢ The augmentation of salaries granted, following the negotiation of the Collective Labor Agreement led to an increase in personell expenses by 14%. Indicators (mRON)

9 months 2019 9 months 2018

▲ 2019/2018 mRON % Material expenses 5.3 4.9 +0.4 ▲ 8.2% Expenses with energy, gas and water 9.4 8.0 +1.4 ▲17.5% Personnel expenses 119.0 104.0 +15.0 ▲14.4% Expenses related to the amortization of the tangible and intangible assets 34.6 33.3 +1.3 ▲ 3.9% Expenses with the crude oil rail transport 45.2 41.3 +3.9 ▲ 9.4% Oil royalty 23.2 21.7 +1.5 ▲ 6.9% Other operating expenses 39.8 47.4

• 7.6 ▼16.0%

Total operating expenses 276.5 260.6 +15.9 ▲ 6.1%

The financial statements at the date and for the nine-month period ended September 30, 2019 have not been audited and revised by the financial auditor

• 4. INVESTMENTS

EVOLUTION OF THE ACHIEVED INVESTMENTS

8

mRON mRON mRON

TOTAL INVESTMENTS PUBLIC DOMAIN DOMENIUL OPERATOR 53.2 57.6 55.2 51.8

0.0 20.0 40.0 60.0

9 months 2019 9 months 2018 Programme Achieved 47.3 53.4 49.2 49.2

0.0 10.0 20.0 30.0 40.0 50.0 60.0

9 months 2019 9 months 2018 Programmed Achieved 5.9 4.2 6.0 2.6

0.0 10.0 20.0 30.0 40.0 50.0 60.0

9 months 2019 9 months 2018 Programmed Achieved

• 4. INVESTMENTS (CONTINUATION)

IMPORTANT PROJECTS CARRIED OUT IN NINE MONTHS 2019

9

Pipeline replacements 14.1 mRON; Tank upgrades 7.6 mRON; Energy works 3.7 mRON; Safe disposals 6.3 mRON; Modernization and monitoring of the cathodic protection system 3.1 mRON. Telecommunications works 8.0 mRON;

5000 10000 15000 20000 25000 70 75 80 85 90 95 100 105 110 115 120

Jan. 2019 Feb. 2019 Mar. 2019 Apr. 2019 May 2019 Jun. 2019 Jul. 2019 Aug. 2019 Sep. 2019 Oct. 2019

CONPET share volume CONPET BET BET-BK BET-NG BETPlus BET-TR BET-XT BET-XT-TR

The evolution of COTE share (RON) vs. BET index (rebased) which include January – September 2019

SHARE PRICE EVOLUTION

11

• 5. STOCK MARKET PERFORMANCE AND EVENTS

Stock Market Capitalization

Share price: 78 RON Ranking 20 in BSE Top Capitalization

• Jan. 2019

Stock market capitalization: 675

mRON

Stock market capitalization: 691 mRON Share price: 79.8 RON

• Sep. 2019

Share performance at 9 months 2019: CONPET: 2.31 % BET index: 28.15 %

DIVIDENDS

• 5. STOCK MARKET PERFORMANCE AND EVENTS

Dividend Yield (%)

At the dividend yield was considered the share price from the last day

• f every year.

12

Top dividends proposed by the companies in 2019 (RON)

7.43% 6.2% 7.72% 9.26% 26.56% 8.94% 9.59%

2013 2014 2015 2016 2017 2018 2019

1.18 1.26 1.28 1.40 1.64 1.90 4.17 5.09

7.47

21.66 0.00 5.00 10.00 15.00 20.00 25.00 1

SNTGN Transgaz

CONPET

Gastronom Buzau Romgaz Transilvania Constructii BRD - Groupe Societe Generale Erste Group Bank AG Transilvania Broker de Asigurari SN Nuclearelectrica Bursa de Valori Bucuresti

• 5. STOCK EXCHANGE PERFORMANCE

RECENT AND FUTURE EVENTS

12 August 22, 2018 The OGMS elects new members for the Board of Administration with a 4 years mandate November 6, 2018 Appoinment of Mr. Chis Timur - Vasile and Mrs. Sanda Toader as Director General, namely Economic Director of CONPET S.A., starting 07.11.2018, with a 4-year mandate December 18, 2018 The OGMS was convened for the approval of the financial and non- financial performance indicators which will be annexed to the administrators' mandate contract. April 23, 2019 The Ordinary General Meeting of the Shareholders approved the allocation

• f dividends for 2018 worth 7.47

RON/share March 28, 2019 CONPET S.A. concluded for a period of 4 years the contract with CFR MARFA for railway transport services amounting to 242 million RON February 28, 2019 CONPET S.A. concluded with OMV Petrom a contract for crude oil transport services amounting to 309 million RON, for a period of 1 year March 16, 2019 NAMR approved the tariffs charged in relation to Rompetrol Rafinarie S.A April 23, 2019 OGMS has approved the Administrators' Annual Report and the Annual Financial Statements for the year 2018 July 5, 2019 In both calls of the EGMS meeting it has not been met the attendance quorum stipulated by the law necessary to submit to the vote the augmentation of the share capital by contribution in kind June 4, 2019

• Mrs. Paval Karina notified

the company on decision to renounce the mandate of Board of Administration member and she was replaced on July 5th by Mr. BUICĂ Nicușor Marian

• 6. ANNEXES

PROFIT & LOSS ACCOUNT

14

Indicators (mRON)

9 months 2019 9 month s 2018

▲ mRON 2019/2018 Turnover 304.2 283.7 +20.5 ▲ 7.2% Other operating revenues 25.8 24.9 +0.9 ▲ 3.6% TOTAL OPERATING REVENUES 330.0 308.6 +21.4 ▲ 6.9% Stocks 5.3 4.9 +0.4 ▲ 8.1% Expenses with energy and water 9.4 8.0 +1.4 ▲ 17.5% Personnel expenses 119.0 104.0 +15.0 ▲ 14.5% Impairments of tangible and intangible assets 34.6 33.3 +1.3 ▲ 4.0% Value adjustments on current assets (0.48) (0.1)

• Expenses regarding external benefits

80.9 73.7 +7.2 ▲ 9.8% Other operating expenses (modernization quota expenses. etc) 25.7 36.1

• 10.4

▼ 28.8% Provisions adjustments 2.0 0.7 +1.3 ▲ 185.7% TOTAL OPERATING EXPENSES 276.5 260.6 +15.9 ▲ 6.1% OPERATING PROFIT 53.5 48.0 +5.5 ▲ 11.4% Financial revenues 5.9 3.8 +2.1 ▲ 55.3% Financial expenses 0.053 0.007 +0.046 ▲ 657.1% FINANCIAL PROFIT 5.9 3.8 +2.1 ▲ 55.3% GROSS PROFIT 59.4 51.8 +7.6 ▲ 14.7% Corporate tax expenses 9.3 8.1 +1.2 ▲ 14.8% NET RESULT 50.1 43.7 +6.4 ▲ 14.7% EPS (net profit/no. of shares 5.78 5.05 +0.7 ▲ 14.5% EBITDA 88.1 81.3 +6.8 ▲ 8.3%

POZIȚIA FINANCIARĂ

Indicators (mRON) September 30, 2019 September 30, 2018 Tangible assets 451.7 426.2 Intangible assets 2.2 0.7 Financial investments 0.9 0.9 Receivables related to the deferred corporate tax 3.7 1.9 TOTAL FIXED ASSETS 458.5 429.7 Stocks 8.2 9.3 Trade receivables and other receivables 39.5 44.4 Short-term investments 0.0 71.1 Cash and cash equivalents 240.4 174.7 Accrued expenses 0.9 0.9 TOTAL CURRENT ASSETS 289.0 300.4 TOTAL ASSETS 747.5 730.2 Share capital o/w: 28.6 28.6 Subscribed and paid-up share capital 28.6 28.6 Legal Reserves 5.7 5.7 Revaluation Reserves 22.1 27.0 Other Reserves 494.9 494.1 Retained Earnings 45.1 45.9 Result for the period 50.1 43.7 TOTAL EQUITY 646.5 645.0 Investment Subsidies 1.1 1.2 Accrued Revenues 0.009 0.01 TOTAL ACCRUED REVENUES 1.1 1.2 Long-term provisions 14.2 12.8 Long–term trade receivables 0.9 0.0 TOTAL LONG-TERM LIABILITIES 15.1 12.8 Trade liabilities 29.1 20.5 Current corporate tax 3.5 3.8 Other liabilities 36.6 36.6 Short-term provisions 15.6 10.3 TOTAL CURRENT LIABILITIES 84.8 71.2 TOTAL LIABILITIES 99.9 84.0 TOTAL EQUITIES AND LIABILITIES 747.5 730.2

Situațiile financiare la data și pentru perioada de nouă luni încheiată la 30 septembrie 2019 nu au fost auditate și nu au fost revizuite de către auditorul financiar

15

BUDGET COMPARISON 9 MONTHS 2019

Indicators (mRON) Achieved 9 months 2019 Achieved 9 months 2018 Budget 9 months 2019 ▲ 9 months 2019 vs. 2018 ▲ Achieved vs. Budget 9 months 2019 mRON % mRON % Operating revenues Turnover 304.2 283.7 286.8 +20.5 ▲ 7.2% +17.4 ▲ 6.1% Other operating revenues 25.8 24.9 25.4 +0.9 ▲ 3.6% +0.4 ▲ 1.6% TOTAL OPERATING REVENUES 330.0 308.6 312.2 +21.4 ▲ 6.9% +17.8 ▲ 5.7% Operating expenses Stocks Expenses 5.3 4.9 6.4 +0.4 ▲ 8.2%

• 1.1

▼ 17.2% Expenses with energy and water 9.4 8.0 9.0 +1.4 ▲ 18.6% +0.4 ▲ 4.4% Personnel expenses 119.0 104.0 121.4 +15.0 ▲ 14.5%

• 2.4

▼ 2.0% Impairments on tangible and intangible assets 34.6 33.3 34.5 +1.3 ▲ 4.0% +0.1 ▲ 0.3% Current assets adjustments (0.48) (0.1) 0.2

• Third party expenses

80.9 73.7 80.6 +7.2 ▲ 9.8% +0.3 ▲ 0.4% Other operating modernization quota expenses. etc.) 25.7 36.1 21.9

• 10.4 ▼

28.8% +0.4 ▲ 1.6% Ajustări privind provizioanele 2.0 0.7 (1.0) +1.3 ▲ 185.7% +3.0

• TOTAL OPERATING EXPENSES

276.5 260.6 276.4 +15.9 ▲ 6.1% +0.1 ▲ 0.4% OPERATING PROFIT 53.5 48.0 35.9 +5.5 ▲ 11.4% +17.6 ▲ 49.0% Financial revenues 5.9 3.8 2.3 +2.1 ▲ 55.3% +3.6 ▲ 156.5% Financial expenses 0.053 0.007 0.060 +0.046 ▲ 657.1%

• 0.01

▼ 11.7% FINANCIAL PROFIT 5.9 3.8 2.2 +2.1 ▲ 55.3% +3.7 ▲ 168.2% GROSS PROFIT 59.4 51.8 38.1 +7.6 ▲ 14.7% +21.3 ▲ 55.9% Income tax expenses 9.3 8.1 6.5 +1.2 ▲ 14.8% +2.8 ▲ 43.1% NET RESULT 50.1 43.7 31.6 +6.4 ▲ 14.7% +18.5 ▲ 58.5% EPS (net profit/no. of shares 5.78 5.05 3.60 +0.7 ▲ 14.5% +2.2 ▲ 60.6%

The financial statements at the date and for the nine-month period ended September 30, 2019 have not been audited and revised by the financial auditor

▪ Operator of the national crude oil, rich gas and condensate transport network; ▪ Natural monopoly position on the Romanian market; ▪ in July 2002, 30 years concession agreement to operate the transport network, concluded, with the National Agency for Mineral Resources;

▪ Core business includes: ▪ transport of crude oil, rich gas and condensate via the Domestic transport subsystem (72.7 % in turnover achieved at 9 months 2019) ▪ Transport of crude oil via the Import subsystem from Oil Terminal Constanta to two refineries in Romania (25.7% of the turnover achieved at 9 months 2019). ▪ Company’s business is regulated by NAMR, which sets tariffs for: ▪ The transport

• f

domestic crude

• il,

rich gas and condensate (last update in June 2018) ▪ Import crude transport (last update in June 2018) ▪ For the transport relation with Petromidia refinery (last update in March 2019)

Company’s Brief Overview Prezentarea reţelei de transport

CONPET BUSINESS

▪ The transport system via pipelines covers approximately 3,800 km

• f pipelines, of which, for the transport of crude oil, rich gas and

condensate are currently operated 2.561 km of pipelines. The National Transport System for the crude oil, condensate, rich gas and ethane consists of transport subsystems grouped according to the transported products, as follows: ▪ Subsystem for crude oil and condensate domestic transport is made up of pipelines with a length of approximately 1,581 km by which the crude oil and condensate can be transported from the production units of the operation area OMV Petrom, all over the countries, to the refineries. The crude oil and condensate domestic production is being transported via pipelines, by rail tanks or combined (the railway and the pipelines). 6.9 million tons/year transport throughput and 126 k cubic meters storage capacity; ▪ Subsystem for rich gas transport is destined for the transport of rich gas from the degasolinations from Ardeal to Petrobrazi Refinery. ▪ Subsytem for ethane transport provides the ethane transport from the deethanization platform Turburea to Arpechim Pitesti. Currently, due to the inactivity of Arpechim refinery, the subsystem is not being used and only one section of the pipeline is being used for the transport of condensate from Totea warehouse to Petrobrazi refinery. ▪ Subsystem for imported crude oil transport, 1,348 km of pipelines in length provides the crude oil transport from Oil Terminal Constanta to the refineries in Ploiesti, Arpechim-Pitesti and Midia. 20.2 million tons/year transport capacity and 45 thousand cubic meteres storage capacity. For the railway transport of crude oil, condensate and rich gas by rail tanks to Petrobrazi and Lukoil refineries, CONPET has the following facilities: 12.7 km of railway, 13 loading/unloading ramps, 13 locomotives, 40 tank cars for crude, 29 tank cars for rich gas. This supporting infrastructure delivers the transport services to OMV PETROM and LUKOIL refineries. 16

Ministry of Energy 58.72% Legal persons 27.21% Natural persons 14.07%

Structura Acţionariatului (30.09.2019)

17

THE BOARD OF ADMINSTRATION

18

GHEORGHE Cristian

• Florin

Chairman IACOB Constantin Ciprian Member POPA Claudiu Aurelian Member GAVRILĂ Florin - Daniel Member BUICĂ Nicușor Marian Provisional Member MEȘCA Darius - Dumitru Member ALBULESCU Mihai - Adrian Member

Thank you for your kind attention!

2015 CALENDAR FINANCIAR

www.conpet.ro