Israel's Oil Refineries Q1 profit drops on weak refining margins
ORL, Israel’s largest refining and petrochemicals group, reported on Tuesday a quarterly loss of $146 million, versus a $63 million profit a year earlier.
Revenue fell 10% to $1.42 billion, but the company said the main impact on profit was not revenue but rather refining and petrochemical margins - the difference between sales and the cost of raw materials.
Its adjusted refining margin was $0.5 a barrel in the first quarter, compared with Reuters’ quoted Mediterranean Ural Cracking Margin of $1.9 a barrel and $7.7 a year earlier.
CEO Shlomi Bason said ORL entered the crisis in a strong position, having significantly reduced its financial debt. In 2019, net debt fell by $113 million to $855 million.
ORL said its refining margins are expected to gradually improve and rise in the medium to long term. It also said it sees a recovery in local fuel sales that in June should reach 90% of where it was a year earlier.
The company also said consulting firm IHS has valued its fuels business at $1.7 billion — $300 million above the value in the company’s books.
ORL is controlled by Israel Corp, which holds a 33% stake. (Reporting by Ari Rabinovitch; Editing by Tova Cohen)
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