OREANDA-NEWS. November 14, 2008. AB Mazeikiu Nafta Group earned 220.5 million Litas consolidated net profit during the nine months of this year under International Financial Reporting Standards (taking into consideration the historical value of the assets), which was by 65 percent higher than a year ago, reported the press-centre of Mazeikiu Nafta.

Sudden and significant decrease of prices for crude oil and petroleum products in the third quarter of 2008 made the material impact on the financial results for the entire nine-month period.

The Company refined 7.244 million tons of feedstock, including 6.962 million tons of crude, within nine months of this year. The Company’s throughput has increased by 45 percent in comparison with the nine-month period of the last year (4.981 million tons of feedstock, including 4.005 million tons of crude).

The feedstock quantity refined in the third quarter of the year 2008 was 2.57 million tons (including 2.51 million tons of crude), and this is by 42 percent more than in the same period of 2007. Crude processing volumes in the third quarter remained on the same record level as in the second quarter.

In the year 2008 the Company continued implementation of the projects under Modernization Program. In the third quarter of the year the Company started connection of modernized Diesel Hydrotreatment Unit into the system of other process units of the Refinery, with completion and start-up of the unit in October. Realization of this investment project will allow the Company to produce low-sulphur diesel fuel with the sulphur content up to 10 ppm (10 mg/kg). The product will enable the Company to retain its sales on the European Union markets when new requirements will come into force from the beginning of the year.

In the third quarter of the year 2008 AB Mazeikiu Nafta implemented the projects related to the improvement of the Company’s management processes. OHSAS 18001 Certificate issued to the Company evidences high quality of AB Mazeikiu Nafta management system in the area of occupational safety and health.

The Company continues its restructuring activities by spin-off of its non-core businesses, i.e. those not associated with crude refining and production of petroleum products. Housekeeping and territory attendance activities have been separated from AB Mazeikiu Nafta structure. The described services are provided by the Company by UAB Paslaugos Tau, the subsidiary of AB Mazeikiu Nafta, which started its activities in the third quarter of this year.

From the beginning of the year the number of employees in the Company reduced by 150 (excluding the employees who were transferred to the newly established subsidiaries).  “Efficiency improvement activities implemented from the beginning of this year give their positive results, – better utilization of the refining capacities, increase of productivity and efficiency of the Company’s operations”, told General Director of AB Mazeikiu Nafta Marek Mroczkowski.

AB Mazeikiu Nafta Group operating profit (EBIT – profit before interest and taxes) during the nine months of 2008 reached 340.1 million Litas and was by 140 percent higher than in the same period last year. AB Mazeikiu Nafta Group earned 220.5 million Litas of consolidated net profit during the nine months of this year, which was by 65 percent higher than for the same period of 2007 (133.7 million Litas). Revenues of the Company during the nine months of 2008 reached 14.4 billion Litas and were higher by 110 percent in comparison to the same period of 2007 (6.8 billion Litas).

In the third quarter of 2008, sudden drop in crude prices was recorded – from more than 140 US dollars at the beginning of the period to 90 US dollars per barrel at the end of September. Slip of prices influenced the depreciation of petroleum products and crude oil inventories at the end of the quarter by more than 60 million US dollars, making a negative impact on the Company’s performance results.

Operating profit of AB Mazeikiu Nafta Group (EBIT) during the third quarter of 2008 reached 12.8 million Litas and was lower by 96 percent in comparison to the second quarter of the year (335.5 million Litas). The loss of the Company in the third quarter of 2008 amounted to 59.8 million Litas.

The investments realized in the third quarter of this year as well as restructuring and improvement of work organization will have positive effect on performance results of AB Mazeikiu Nafta Group in future.