Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Saras SpA (SAAFY, Financial) reported a significant increase in group comparable EBITDA, reaching EUR90 million in Q2 2024 compared to EUR27 million in the same period last year.
- The company completed its solar plant, Helianto, in June, which started commercial production, contributing to the renewable segment.
- Net comparable results improved to EUR29.7 million, a positive turnaround from a negative EUR22 million in the previous year.
- Operations generated a healthy cash flow of EUR208 million in the first half of the year.
- The company maintained a positive net financial position with EUR10 million net cash at the end of the first half of 2024.
Negative Points
- Higher interest rate costs and negative exchange rate effects impacted financial results.
- The company faced a negative change in working capital amounting to EUR139 million.
- Refining margins are expected to decrease in the second half of the year due to increased refining capacity and weaker demand.
- The company anticipates a stable cash position by year-end, but with significant cash outflows expected for taxes and capital expenditures.
- The renewable segment faced lower average tariffs, impacting the financial performance despite increased production.
Q & A Highlights
Q: With OPEC likely to increase production in the second half of the year, how is Saras preparing for this, and do you foresee any changes in your crude slate?
A: Marco Schiavetti, Chief Commercial Officer, stated that it's difficult to predict OPEC's actions, but any potential increase in crude supply would likely occur at the end of the year or early 2025. Therefore, it's too early to forecast significant changes in the crude slate or benefits from this scenario.
Q: Refining margins have been declining since the start of the year. Given your exposure to international markets, where do you see demand strength for oil products?
A: Franco Balsamo, Deputy CEO, noted that global oil demand is still growing, with an increase of about 1 million barrels per day. This growth is primarily driven by regions like the Middle East and North Africa, while demand in Europe and OECD countries is decreasing.
Q: Can you provide an update on your net cash position by year-end?
A: Franco Balsamo mentioned that they expect to maintain a stable cash position similar to the current level, despite anticipated cash outflows for taxes, excess duty, and capital expenditures in the second half of the year.
Q: What are the potential synergies with your new owner, Vitol, regarding crude supply and product distribution?
A: Franco Balsamo explained that Saras and Vitol will operate as separate entities, but Vitol's expertise in the commodity market could help Saras exploit market opportunities and enhance its trading capabilities. However, it's too early to quantify potential synergies.
Q: What is the expected contribution of the Helianto solar plant to third-quarter EBITDA?
A: Franco Balsamo indicated that the Helianto plant is expected to contribute approximately EUR5 million to EBITDA in the second half of the year, given current electricity prices.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
