St1 Nordic Oy, Company Release, Interim Report 1 January – 30 June 2015

Key figures for the group

1 January -
30 June 2015
1 January -
30 June 2014
pro forma
2014
pro forma
2014
Net sales, M€1,612.41,921.13,847.62,720.8
Operating profit/loss, M€45.340.272.645.3
Operating profit % of turnover2.82.11.91.7
Profit for the period, M€46.929.357.038.2
Cash flow from operating activities, M€120.680.2
Return on equity, %20.924.0
Equity ratio32.328.3

The net sales of St1 Nordic group was EUR 1,612.4 million in January–June 2015, which was EUR 308.6 million less than the pro forma figure from the corresponding period of the previous year. The fall in net sales was mainly due to the price reductions in oil products resulting from the fall of crude oil market prices. 42% of the total net sales was generated in Finland, 54% in Sweden and 4% in Norway.

Over the first six months, the group’s operating profit increased to EUR 45.3 million, up from EUR 40.2 million (pro forma) in the corresponding period of the previous year. The development of operating profit was positive across all of the units in the group. Income after taxes increased to EUR 46.9 million, up from EUR 29.3 million for the previous year. The improvement was especially affected by the profit shares from associated companies (in particular, Tuuliwatti Oy and North European Oil Trade (Neot) Oy); these are recorded under financial income.

The pro forma income statement from 2014 includes the entire year for the Swedish retail sales and marketing functions that became a part of the group in October 2014. The pro forma and interim figures are unaudited.

The group’s equity increased to EUR 253.5 million, including EUR 13 million in funds received from a share issue. The share issue is aimed at St1 Nordic Oy’s current owners, and its purpose is to strengthen the group’s equity and liquidity for the future business acquisition in Norway. The shareholders are committed to an additional investment of approx. EUR 21 million before the business acquisition takes place. The share issue will continue until the end of 2015.

Operating cash flow in January–June 2015 was EUR 120.6 million; in addition to the positive profitability trend, this was affected by improvements in the use of working capital and seasonal variation. Investments remained at a planned, moderate level of EUR 11.6 million.

Kim Wiio, CEO of St1 Nordic Oy:

St1’s financial performance remained strong in the first half of 2015 as the market in our industry remained relatively stable. The relatively large variations in oil price have not significantly affected our sales margins or product demand. In the field of renewable energy, a significant event was the opening of St1 Biofuels Oy’s first international delivery of an Etanolix® plant that produces ethanol from waste. The plant was inaugurated in Gothenburg in early June.

Preparations for the implementation of the share purchase of Shell’s Norwegian marketing company Smart Fuel AS, signed in December 2014, have proceeded on schedule. The purchase is expected to be completed in the last quarter of the current year. We received approval for the transaction from the Norwegian competition authority on 31 July 2015. The approval was granted on the condition that St1 sells its current Norwegian operations, consisting of 39 unmanned petrol stations. The merging of Smart Fuel AS into the group will increase annual turnover by approximately one billion EUR at the current price and exchange rate level.

St1 Nordic will be financing the transaction using its liquid assets, existing financial instruments and a share issue directed towards its current shareholders. New external financing will also be taken for the transaction. We anticipate our gearing ratio to settle below 100% at the turn of the year, and our net debt/EBITDA to be clearly below three.

We are continuing our work in order to ensure cost-effectiveness across all our operations. In the field of renewable energy, our attention is especially focused on completing Tuuliwatti Oy’s investment plan, delivering the waste-based ethanol plant in Kajaani by St1 Biofuels Oy, working on St1 Deep Heat Oy’s geothermal plant and increasing St1 Lämpöpalvelu Oy’s service offering. Our goal is to improve on the 2014 financial results in 2015, with the exception of non-recurring items that may occur due to the takeover of the Norwegian operations.

Financial information, the pro forma and interim figures are unaudited

Consolidated income statement 1 January – 30 June 2015, pro forma 1 January – 30 June 2014, pro forma 1 January – 31 December 2014, 1 January – 31 December 2014
Consolidated balance sheet 30 June 2015, 31 December 2014
Consolidated statement of cash flows 1 January – 30 June 2015, 1 January – 31 December 2014

St1 Nordic Oy will publish the financial statement for 2015 on 31 March 2016 and the Annual Report on 30 April 2016.

More information

Kati Ylä-Autio, CFO +358 10 557 5263
Kim Wiio, CEO +358 10 557 11

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