Quarterly Report For The Financial Period Ended 30 September 2017
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Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Third Quarter Ended 30 September 2017
Condensed Consolidated Statement Of Financial Position As At 30 September 2017
Review of Performance – YTD Q3 2017 vs. YTD Q3 2016
Revenue exceeded market expectations for the third quarter ended 30 September 2017 against the same period last year due to an unforeseen spike in the average prices of market traded refined products, following unplanned production outages caused by hurricanes in the Gulf of Mexico and a fire incident reported in a world-scale European refinery. The Company also achieved additional sales of 0.6 million barrels in the current quarter, complemented by improved plant reliability following a minor turnaround in May 2017 compared to lower production volumes in the corresponding period last year.
Similarly, revenue for the 9-month period ended 30 September 2017 was 46% higher than revenue for the corresponding period last year, due to higher average product market prices at $63.50 per barrel, compared to $48.80 per barrel for the corresponding period last year.
As a result, gross profits for the quarter ended 30 September 2017 were supported by strong refining margins due to the above-mentioned unexpected production outages in the global market, and a gradual recovery of traded crude prices resulting in a stockholding gain of $2.64 per barrel. Refining margins for the similar quarter last year were significantly lower, whilst stockholding gain was recorded at USD0.76 per barrel.
Market average refining margins for the 9-month period ended September 2017 approximated USD8 per barrel. Market refining margins for the same period last year averaged below USD4 per barrel.
Profit after taxation for the current quarter was comparably higher against the corresponding period last year due to improved gross profit margins and foreign currency exchange gains arising from RM denominated revenues as RM strengthened against USD. Operating expenditure for the current quarter in review improved against the corresponding period last year, offset by a higher depreciation/amortisation and financing cost in the current quarter.
The improved average gross profit margins and foreign currency exchange gains contributed positively to the net profit for the 9 months ended 30 September 2017. These were marginally offset by the minor turnaround maintenance costs, software subscription charges, higher finance costs and additional amortisation of intangible assets recognised in the period under review.
Current Year Prospects
Refining margins are expected to be lower in the near term based on market published forward prices and refining margins. Operational efficiency, product quality, hydrocarbon and financial risk management continue to remain key areas of focus in optimising the Company’s performance for the current financial year.