The Petrol Group s operations significantly affected by the energy commodity price regulation

Ljubljana, 10 November 2022 – At its 21st meeting, the Supervisory Board of Petrol d.d., Ljubljana, was briefed on the Report on the Operations of the Petrol Group and Petrol d.d., Ljubljana, in the first nine months of 2022. In the period concerned, the Petrol Group continued to operate in a complex economic environment marked by the energy crisis and government regulation of motor fuel and energy commodity prices. In the relevant period, the Petrol Group’s EBITDA amounted to EUR 98.3 million and net profit to EUR 24.0 million. As a result of the government measures imposed on the motor fuel market, the Petrol Group’s adjusted gross profit was by EUR 108.9 million lower in Slovenia and EUR 34.6 million in Croatia. Additional drop in the adjusted gross profit in Slovenia resulted from the electricity and natural gas price regulation.

Despite the demanding situation, the company Petrol d.d., Ljubljana has stayed a reliable employer and a responsible partner to households, the economy, and the state, investing in the development of its operations and employees with a focus on digitalisation and decarbonisation. In the period concerned, the integration of Crodux derivati dva d.o.o. into the Petrol Group was being successfully completed.

At the moment, it is not yet possible to provide an estimate of the Petrol Group’s operations until the end of 2022.

Further exacerbation of business conditions

In the first nine months of 2022, the Petrol Group’s sales revenue stood at EUR 7.0 billion, a year-on-year increase of 128 percent. Compared to the same period last year, revenue growth was affected by the rising cost and selling prices of motor fuels and energy commodities, increased volumes of fuels and fuel products sold, the merger of Crodux derivati dva, d.o.o. into the Petrol Group and fuel price regulation. A major part of revenue (50.2 percent) stems from the Energy and Solutions product group, followed by 44.2 percent from sales of fuels and fuel products, and 5.5 percent from sales of merchandise and services. In the period concerned, adjusted gross profit stood at EUR 405.3 million, a year-on-year decrease of 1 percent. The positive effect from the integration of Crodux derivati dva d.o.o. into the Petrol Group on the growth of the adjusted gross profit was fully annulled by the effect of fuel price regulation in Croatia because the regulated prices did not enable us to cover the operating costs. Due to the government-imposed measures on the motor fuel market, the Petrol Group’s adjusted gross profit, based on its internal estimate, was by EUR 108.9 million lower in Slovenia and EUR 34.6 million in Croatia. Additional loss was incurred in Slovenia in the period between 21 June and 16 August 2022 due to the imposed maximum permitted margin which it did not enable covering all costs. Due to the electricity network charge regulation between 1 February and 30 April 2022 and equalisation of household natural gas customers and floor owners from 1 January 2022 onwards (both in Slovenia), we an additional loss of EUR 2.4 million in adjusted gross profit was recorded.

In the current difficult time, the Petrol Group is focused on managing costs which have mostly stayed within the planned values despite the increased sales of fuel. Operating costs stood at EUR 350.5 million in the first nine months of 2022, a year-on-year increase of EUR 62.6 million or 22 percent, of which EUR 39.1 million because of the integration of Crodux derivati dva d.o.o. into the Petrol Group and the rest mainly on account of the rising prices of energy commodities and costs directly linked to a higher volume of fuels sold and a higher cost of motor fuels.

Despite the intensified business situation, the Petrol Group continues to fulfil its financial covenants to banks and the criteria arising from the investment credit rating assigned by Standard & Poor's Rating Services.

Development projects and significant events

Despite the difficult business conditions, the Petrol Group continues to drive its development-oriented projects which will help to boost its competitiveness and success in the long run.

The Petrol Group continues to pursue its strategy for 2021–2025. Being one of the largest and most ambitious energy groups in the region, it is building its future by offering integrated and sustainability-oriented range of energy commodities and solutions. By offering green electricity and making investments in renewable energy sources, it supports companies, local communities, and households in their energy transition, improves energy independence and long-term stability in the region, and at the same time helps to protect the environment.

The Management Board of the Company presented the Report on the Effect of Fuel and Energy Commodity Price Regulation on the Petrol Group’s Business Plan for 2022, including the possible scenarios, to the Supervisory Board. In the report, the Management Board presented the estimated effect of the already imposed motor fuel price regulation measures and scenarios of the announced energy commodity price regulation measures until the end of the year.

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mag. Barbara Jama Živalič