Oil Refineries Announces Results for Fourth Quarter and Full Year 2013

HAIFA, Israel, March 24, 2014 /PRNewswire/ --

Oil  Refineries  Ltd.  (TASE:  ORL.TA)  (hereinafter  "the  Group,"  "ORL"), Israel's largest integrated refining and petrochemical group, announced its financial results for the fourth quarter and full year 2013.  The Company will be hosting its earnings call for Monday, March 24, 2014 at 13:30 UK (08:30 ET, 15:30 Israel time).  Results are reported in US Dollars and under International Financial Reporting Standards (IFRS).  

FOURTH  QUARTER  AND  2013  FULL  YEAR  HIGHLIGHTS

• The fourth quarter was characterized by lower benchmark refining margins, which is the main area of operation for the Company.
• In the fourth quarter of 2013, the adjusted refining margin totaled $5.2 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $0.3 per barrel. In same period of 2012, the adjusted refining margin totaled $4.1 per barrel as compared with the Reuter's quoted Mediterranean Ural Cracking Margin of $3.1 per barrel.  The refining margin for the full year 2013 totaled $5.3 per barrel as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $1.7 per barrel.  
• Revenues for fourth quarter totaled $2.6 billion compared with $2.4 billion in the same quarter last year.
• Adjusted operating income across all sectors totaled $14 million in the fourth quarter compared with a loss of $5 million in the same quarter last year.  Adjusted operating income across all sectors for the full year 2013 totaled $117 million compared with nill last year.
• Adjusted EBITDA totaled $52 million in the fourth quarter compared with $23 million in the same quarter last year.  Adjusted EBITDA for the full year 2013 totaled $267 million compared with $117 million last year.
• Net loss for the quarter totaled $58 million compared with a net loss of $57 million in the same quarter last year. This can be mainly attributable to early retirement costs and assets write-offs recorded in the quarter. The net adjusted loss for the full year totaled $160 million of which $71 million onetime expenses, attributable mostly to a change in tax rates in the Capital Investments Law, as amended during the third quarter, early retirement costs and assets write-offs recorded in the fourth quarter .
• Net financing expenses for the quarter totaled $42 million compared with $54 million in the same quarter last year. For the full year 2013 financing expenses totaled $177 million compared with $169 million last year.
• Since the beginning of this year the Company paid of $384 million of its debt.
• During the second half 2013 and January 2014 the Company succeeded in raising $300 million in bonds, and $151 in a form of issue of rights. This extends the average maturity of the debt, improves liquidity and increases the Company's financial flexibility.  

• Mr. Arik Yaari, CEO of Oil Refineries, notified the Board of Directors that he wishes to step down during summer 2014, for private reasons.

 Mr.  Arik  Yaari,  CEO  of  Oil  Refineries:  "We conclude the 2013 with better operating results than in 2012, thanks to the implementation of the business strategy and the investment plan of the Group in recent years. These results are particularly noticeable due to the worsening business environment that accompanied us most of 2013, where the company has achieved throughout the year a significantly higher refining margin relative to the benchmark margin, which dived at almost historic lows last quarter.

During 2013 we began to enjoy the benefits from the implementation of the strategic plan -with emphasis on the operating of the hydrocracker and the completing of the transition to the full use of natural gas. During the fourth quarter we have announced and completed our plan to improve the liquidity, mainly by issuing of debentures, raising capital by issuance of rights and reducing costs, improving profitability and implementing efficiency measures.

With the improved liquidity ORL, into 2014, is more stable, more efficient and competitive and has enhanced financial capabilities

RESULTS  ACCORDING  TO  SECTORS:

Refining

• The Company continues to generate higher refining margins than the benchmark average due to the optimal utilization of the Company's upgraded refining capabilities. The transition to natural gas and the contribution of the hydrocracker since the first quarter of 2013, enabled the Company to demonstrate ongoing higher refining margins, reducing the impact of the historically low benchmark average margins.  
• In the fourth quarter of 2013, the adjusted refining margin totaled $5.2 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $0.3 per barrel. In the fourth quarter of 2012, the adjusted refining margin totaled $4.1 per barrel as compared with the Reuter's quoted Mediterranean Ural Cracking Margin of $3.1 per barrel.
• In the full year 2013, the adjusted refining margin totaled $5.3 per barrel, as compared with the average Reuter's quoted Mediterranean Ural Cracking Margin of $1.7 per barrel. In 2012, the adjusted refining margin totaled $4.9 per barrel as compared with the Reuter's quoted Mediterranean Ural Cracking Margin of $4.2 per barrel.
• Adjusted operating income for the fourth quarter totaled $7 million, compared with a loss of  $4 million in the corresponding period last year.  For the full year 2013 adjusted operating income totaled $66 million, compared with an operating loss of $54 million last year.
• Adjusted EBITDA for the fourth quarter totaled $30 million, compared with $11 million in the corresponding period last year. Adjusted EBITDA for the full 2013 totaled $158 million, compared with $118 million in the corresponding period last year.  

Polymers

• In looking at the Company's results over 2013, the improvement in polymers can be attributed to improved polymer spreads over Naphtha and the Company's transition to natural gas.
• Operating income for the fourth quarter totaled $4 million, compared with $6 million in the corresponding period last year.  For the full year 2013 operating income totaled $31 million, compared with an operating loss of $38 million last year.
• EBITDA for the fourth quarter totaled $16 million, similar with the corresponding quarter last year.  EBITDA for the full 2013 totaled $79 million, compared with $7 million in the corresponding period last year.  

Aromatics  and  Oils

• Operating income for the fourth quarter totaled $5 million, compared with a loss of$4 million in the corresponding quarter last year.  For the full year 2013 operating income totaled $23 million, compared with an operating loss of $4 million last year.
• EBITDA for the fourth quarter totaled $7 million, compared with a loss of $1 million in the corresponding quarter last year.  EBITDA for the full year 2013 totaled $33 million, compared with $7 million in the corresponding period last year.  

Environmental  &  Social  Responsibility

Maintaining compliance within the social and environmental realm, while maintaining good relations with the relevant authorities, is a strategic goal for ORL. In the Company's facilities there are numerous environmental projects, including the transition to Natural Gas which significantly lower the emissions

FOURTH  QUARTER  RESULTS  2013 ($  millions)

Adjusted  Operating  Income  by  Sector

                         2013              2012             Q4 '13            Q4 '12
    Operating
    Income         Reported Adjusted Reported Adjusted Reported Adjusted Reported Adjusted
    Refining       56       66       8        54       7        7        (25)     (4)
    Polymers
    (CAOL)         31       31       (38)     (38)     4        4        6        6
    Aromatics
    (Gadiv)        29       29       3        3        7        7        --       --
    Lube-Oils
    (HBO)          (6)      (6)      (7)      (7)      (2)      (2)      (4)      (4)
    Trade          (4)      (4)      (9)      (9)      (2)      (2)      (2)      (2)
    Adjusted
    Consolidated   1        1        (3)      (3)      -        -        (1)      (1)
    Operating
    Income Sectors 107      117      (46)     --       14       14       (26)     (5)

EBITDA  by  Sector

                         2013              2012             Q4 '13            Q4 '12
    EBITDA         Reported Adjusted Reported Adjusted Reported Adjusted Reported Adjusted
    Refining       148      158      72       118      31       31       (10)     11
    Polymers
    (CAOL)         79       79       7        7        16       16       16       16
    Aromatics
    (Gadiv)        38       38       11       11       9        9        2        2
    Lube-Oils
    (HBO)          (5)      (5)      (6)      (6)      (2)      (2)      (3)      (3)
    Trade          (4)      (4)      (9)      (9)      (2)      (2)      (2)      (2)
    Adjusted
    Consolidated   1        1        (4)      (4)      -        -        (1)      (1)
    EBITDA         257      267      71       117      52       52       2        23

Conference  Call

The conference call will take place on Monday March 24, 2013 at 13:30 UK (08:30 ET, 15:30 Israel time). On the call, management will review and discuss the third quarter 2013 financial results and will be available to answer questions.

To participate, please call one of the following teleconferencing numbers.  Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

US  Dial-in  Numbers:          1-866-744-5399

UK  Dial-in  Number:          0-808-101-2717

Israel  Dial-in  Number:          03-918-0663

International  Dial-in  Number:     +972-3-918-0663

at: 14:00 UK Time, 9:00 ET, 6:00 PT, 16:00 Israel time.  A replay of the call will be available after the call on the Company's website at http://www.orl.co.il.

The  conference  call  will  be  accompanied  by  a  presentation  available  for  download  from  the  Company's  website, http://www.orl.co.il,  under  investor  relations. 

Oil Refineries' earnings press release and financial statements will be available on the Company's website - http://www.orl.co.il for the call.  

About  Oil  Refineries  Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 9, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.

ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.

The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's report

Company  Contact:
Rony Solonicof
Chief Economist and Head of Investor Relations
Tel. +972-4-878-8152
Contact IREn@orl.co.il

Investor  Relations  Contact:
Jonathan Eilat
The Investor
Tel. +972-54268-1977
Contact john@theinvestor.co.il