Israel's Oil Refineries reports Q4 loss, sees improving margins in 2021

Israel’s Oil Refineries (ORL) swung to a loss in the fourth quarter, hit by the coronavirus pandemic, and said it had saw signs of recovery so far in 2021.

ORL, Israel’s largest refining and petrochemicals group, said it lost $68 million in the October-December period compared with zero profit a year earlier. Revenue dipped 39% to $952 million.

Its adjusted refining margin was $4.3 a barrel in the fourth quarter, compared with $5.2 a year earlier but above Reuters’ quoted Mediterranean Ural Cracking Margin of a negative $0.1.

ORL said that since the start of 2021, refining and polymer margins have risen sharply.

“In March, the volume of orders was a sign of a return to routine in the consumption of diesel and gasoline in the Israeli market,” said CEO Moshe Kaplinsky, adding that ORL continued to supply essential products to factories, and the medical, food, high-tech and agricultural industries throughout 2020.

ORL said it was in the process of formulating a strategic plan that will focus on strengthening core areas, along with a gradual transformation in the refining of fuels and production of polymers.

Its fixed expenses declined by $21 million last year, while implementing an early retirement plan that is expected to reduce wage costs in coming years.

ORL also said it projects saving as much as $45 million on natural gas purchases in 2021.

Reporting by Steven Scheer, editing by Louise Heavens

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