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Annual Report 2016

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E. Tsotsoros Photo
E. Tsotsoros
Chairman of the BoD
G. Stergioulis Photo
G. Stergioulis
Chief Executive Officer

Message to the Shareholders

Dear Shareholders,

In 2016, after seven years of recession, the Greek economy has shown signs of stabilization, with growth at +0.4% compared with 2015. Although some uncertainties remain, regarding the implementation of funding programs, especially in regards to reforms, the ground for the gradual return of the economy to growth has been laid.

With regard to the international environment, the international crude oil prices recovery towards the end of the year - following a change in OPEC’s policy for the control of production and exports - was the main development in 2016, despite prices averaging the lowest since 2004.

The evolution of the euro against the dollar, reflected monetary policy and, in the last months of 2016, political developments in Europe and North America; the dollar remained strong against the euro, favoring European refiners.

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Our Activities

Founded in 1998, Hellenic Petroleum is one of the most important groups in the energy sector in South-eastern Europe and is active in 6 countries.

The Group is engaged in a range of activities which are summarised below:

Refining, Supply and Trading of oil products, both in Greece and internationally. The Group owns three, out of the four, refineries operating in Greece (Aspropyrgos, Elefsina, Thessaloniki) with a total capacity of 340kbpd and a market share of approximately 65% of the Greek market in wholesale oil products trading. It also supplies 65% of domestic market needs in FYROM, through the VARDAX pipeline and the OKTA facilities.

Oil & Gas Exploration and Production in Greece.

Fuels Marketing both in Greece and South-eastern European markets, with a network of approximately 2,000 petrol stations and a leading position both in the domestic market, through its subsidiary ΕΚΟ with a market share exceeding 30%, as well as in Cyprus, Serbia, Bulgaria, Montenegro and FYROM.

Power Generation and Trading. The Group operates two combined cycle natural gas plants with a total capacity of 810 MW, through ELPEDISON, a joint venture with the Italian company EDISON. It is also active in renewables, with a portfolio exceeding 200 MW in various development stages.

Petrochemicals/Chemicals Production & Trading. The Group owns and operates the only vertically integrated petrochemicals complex in Greece that produces polypropylene, with a significant export orientation.

Supply, Transportation and Trading of Natural Gas. The Group has a 35% participation in the Public Gas Corporation S.A. (DEPA) which is the main importer and supplier of natural gas in Greece. DESFA, a 100% subsidiary of DEPA, which comprises the high pressure gas transportation system and the LNG terminal at Revithousa, is currently in strategic review process.

Refining, Supply and Trading of oil products, both in Greece and internationally. The Group owns three, out of the four, refineries operating in Greece (Aspropyrgos, Elefsina, Thessaloniki) with a total capacity of 340kbpd and a market share of approximately 65% of the Greek market in wholesale oil products trading. It also supplies 65% of domestic market needs in FYROM, through the VARDAX pipeline and the OKTA facilities.

Oil & Gas Exploration and Production in Greece.

Fuels Marketing both in Greece and South-eastern European markets, with a network of approximately 2,000 petrol stations and a leading position both in the domestic market, through its subsidiary ΕΚΟ with a market share exceeding 30%, as well as in Cyprus, Serbia, Bulgaria, Montenegro and FYROM.

Power Generation and Trading. The Group operates two combined cycle natural gas plants with a total capacity of 810 MW, through ELPEDISON, a joint venture with the Italian company EDISON. It is also active in renewables, with a portfolio exceeding 200 MW in various development stages.

Petrochemicals/Chemicals Production & Trading. The Group owns and operates the only vertically integrated petrochemicals complex in Greece that produces polypropylene, with a significant export orientation.

Supply, Transportation and Trading of Natural Gas. The Group has a 35% participation in the Public Gas Corporation S.A. (DEPA) which is the main importer and supplier of natural gas in Greece. DESFA, a 100% subsidiary of DEPA, which comprises the high pressure gas transportation system and the LNG terminal at Revithousa, is currently in strategic review process.

The Group in 2016 - Key Highlights

Financial Information

Group Strategy

Having successfully implemented an important growth and transformation program during the five year period 2007-2012, the Group’s objective is to now take advantage of its investments and maximize their economic benefit, through a strategy based on sustainable development, competitiveness and export orientation. The Group’s strategic priorities are as follows:

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Hellenic Petroleum in the Capital Markets

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Business Environment

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Group Business Activities

Hellenic Petroleum Group’s Adjusted EBITDA amounted to €731 million while Adjusted Net Income reached €265 million. The strong operating performance at the Group’s refineries, which benefited from the refineries’ increased availability resulted in a 16% increase in production, leading exports to 8.6 million tones. Increased production and sales offset the negative impact on profitability, compared to the previous year, from the decline in benchmark refining margins, which stood at levels above the last five years’ average. As a result, the Group maintained its operating profitability close to the historical highs of 2015.

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Safety & the Environment

Person Image
EKO completed
2,000,000
hours without an accident in December 2016.
Arrow Down Image
Up to
23%
Reduction of air emissions
16%
Reduction of CO2/tn crude feed
emission index
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Society

Hellenic Petroleum has defined its stakeholders (interested parties) as parties with which it communicates, converses or cooperates, or who possess a direct/indirect interest in its operations.

Our Sustainable Development Goals

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Risk Management

The Group is exposed to a variety of macroeconomic (foreign exchange, crude oil price, refining margins), financial (capital structure, liquidity, cash flow, credit), as well as operational risks.

In line with international best practices and within the context of the local markets and regulatory framework, the Group’s overall risk management policies aim at reducing possible exposure to market volatility and / or mitigating its adverse effects on the financial position of the Group to the extent possible.

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Corporate Governance

Corporate Governance refers to a set of principles on the basis of which the proper organisation, operation, management and control of the company is carried out with the objective of maximising value and safeguarding the legitimate interests of all those related to it.

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Financial Information

Selected Financial Data / Group Consolidated Financial Statements / Segmental Information / Parent Company Financial Statements

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Downloads

Contact Information

Shareholders’ Contact

Shareholders, investors and financial analysts can contact the Group’s Head Office, 8A Chimarras st., GR-151 25 Maroussi, for the following Services:

Website:
www.helpe.gr

E-mail:
ir@helpe.gr

Annual Report Feedback

The present report of HELLENIC PETROLEUM is addressed to all our stakeholders, who wish to be informed regarding the Group’s strategy, policy and business performance in 2016.

Any suggestion, concerning further improvement of the present report, as a tool for a two-way communication between the Group and its social partners, is welcome.

Contact info:
Investor Relations Division
8A Chimarras str., GR-151 25 Maroussi
Τel.: (+30) 210 63 02 904

E-mail:
ir@helpe.gr