OREANDA-NEWS. May 17, 2012. In 2011 the audited consolidated losses of JSC Ventspils nafta (hereafter – VN) (NASDAQ OMX RIGA: VNF1R) and its subsidiaries (hereafter – the VN Group) have considerably decreased – they were 12.2 million lats in 2011, which is five times less than a year ago – in 2010 the Group’s losses were 65.57 million lats. Out of these losses, the audited losses referable to shareholders of the parent company were 7 million lats in 2011, but in 2010 – 30.49 million lats.

Turnover of the VN Group in 2011 was 118.2 million lats, which is over 5.5% more than in 2010 (112 million lats).

A significant change that should be mentioned is that when preparing the audited consolidated financial statements of the VN Group for 2011, the VN Group has changed its accounting policy. As a result, for the first time financial statements of JSC Latvijas kuмniecоba (LK) Group are consolidated into the financial statements of the VN Group. Changes in the accounting policy are the main reason why the audited financial statements of the VN Group for 2011 differ substantially from the previously published unaudited financial statements of the VN Group for 2011 where the VN Group evaluated its investment into the LK Group according to equity method in the same way as in the previous reporting years. In the financial statements, comparatives for 2010 have also been restated to conform to the new accounting policy.

The overall annual results of the VN Group are substantially affected by losses of the related company JSC Latvijas kuмniecоba. While they have reduced three times compared to last year, still in 2011 they reached 24 million lats.

On December 31, 2011, the audited assets of the JSC Ventspils nafta Group were 629.48 lats.

Parent company of the VN Group

In 2011, audited turnover of the VN Group’s parent company was 323 thousand lats, which is about 192 thousand lats or 147% more than in 2010. Within the rendered management consultations, the emphasis is mainly on organizing united procurements for the VN Group’s companies, as well as receiving various corporate service discounts, thus achieving decrease of administrative costs for the JSC Ventspils nafta Group.

In 2011 the net profit of JSC Ventspils nafta reached 362 thousand lats, and the Management Board has proposed to transfer it to other reserves.

In 2011 the Group’s parent company continued implementing the strict cost cutting policy that was commenced in 2010 with the most substantial savings achieved in administrative expenses, which have decreased from LVL 1.47 million in 2010 to LVL 1.1 million in 2011 having a decrease in the reporting year by 25.2%. JSC Ventspils nafta has achieved that administrative expenses have more than halved over a period of two years, saving approximately 1.3 million lats in 2011 versus the 2009.