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PRELIMINARY REPORT, 2018
March 4, 2019
OVER 115 YEARS OF EXPERIENCE
DISCLAIMER
2
•This presentation called Preliminary Report 2018” is prepared
by CONPET S.A. (“CONPET”) with the purpose of presenting
the operational and financial results of CONPET to the investing
public (shareholders, creditors, analysts, financial media), thus
bearing a strictly informative nature. The presentation was
realized exclusively for information and is not a buy/sale offer,
nor an inquiry for the buy/sale of the shares or the financial
instruments, nor an invitation to take part to a commercial
partnership. The presentation does not stand for an offer or a
buy invitation or shares subscription and no information
contained herein shall set the grounds the conclusion of an
agreement, engagement or investment decision.
•The detailed financial statements and the report prepared
pursuant to the requirements of FSA (The Financial Supervision
Authority) are made available on the company’s website
www.conpet.ro.
•The reporting period is January 1, 2018 – December 31, 2018.
•The preliminary unaudited financial statements and for the
financial year ended December 31, 2018 have been prepared in
compliance with the accounting regulations compliant with the
International Financial Reporting Standards approved by Order
of the Ministry of Public Finances no.2844/2016.
•The Presentation canot be copied, distributed, directly or
indirectly delivered to any person for any purpose, in absence of
CONPET’s knowledge and consent. The copy, submission,
distribution or delivery of this Presentation to any person of any
jurisdiction is subject to certain lawful restrictions and the
persons who might have received or have received this
presentation shall become acquainted with these restrictions and
observe them. The failure to comply with these restrictions
may be interpreted as breach of the applicable laws.
• This Presentation does not contain a complete and exhaustive
financial or commercial analysis of CONPET, nor does it provide
views and forecasts in a complete and exhaustive manner.
CONPET conducted the Presentation carefully, but there might be
some inconsistencies or omissions. Therefore, it is recommended
that any person who intends to make an investment decision
regarding CONPET equities should rely solely on the information
provided by means of a formal communication of CONPET, in
accordance with the legal provisions that are binding on CONPET.
•CONPET and the managers or the representatives thereof shall
have no liability in relation to the Presentation. Moreover, no
information contained in the Presentation shall constitute an
obligation or legal engagement of CONPET, its managers or
shareholders.
Preliminary Report 2018
1. Preliminary financial results
2. Factors having influenced the transport revenues
3. Factors having influenced the operating expenses
4. Profitability of the transport subsystems
5. Main economic-financial indicators
6. Investments
7. Stock market performance
8. Annexes
4
7
8
9
10
11
16
13
418.4 / 411.2 mil. RON ▲ 1.8%
OPERATING REVENUES. o/w:
380.6 / 372.4 mil. RON ▲ 2.2%
TRANSPORT REVENUES
353.6 / 328.1 mil.RON ▲ 7.8%
OPERATING EXPENSES
109.3 / 127.5 mil. RON ▼ 14.3%
EBITDA
59.5 / 74.4 mil. RON ▼ 20.1%
NET PROFIT
4
The increase in transport revenues by 8.2 million RON (2.2%) in 2018, compared to 2017, led to higher revenues from the
operating activities, by 1.8% YoY
The operating expenses 25.5 mil RON higher (7.8%) compared to 2017. The expenditure items that register increases in 2018, compared to 2017, are: electricity expenses (1.7 million RON ), personnel expenses (28 million RON) and adjustments on current assets and
provisions (6.4 million RON).
Net profit decreasing by 14.9 million RON (20.1%).
The late approval by ANRM of the new transport tariffs, updated according to the modification of the substantiation
data of the tariffs applied in 2017, has adversely affected the financial results of 2018.
2018 / 2017
1. PRELIMINARY FINANCIAL RESULTS, 2018
The preliminary financial statements at the date and for the financial year ended 31.12.2018 are not audited
5
Revenues from transport accounts for
91% of total operating income and is
records an increase by 2.2% in 2018
compared to 2017. The increase is
mainly driven by higher tariffs since June
19, 2018.
The Company recognizes reserves on a
monthly basis in the operating income -
the modernization quota for the
depreciation of tangible assets funded
out of this share. In 2018, the revenues
from the modernization quota were 28.8
million RON, lower by 1.0 million RON
compared to 2017.
Indicators (mRON)2018 2017
Changes
2018/2017
mRON %
Revenues from transport services 380.6 372.4 +8.2 ▲ 2.2%
Rental revenues 1.5 1.4 +0.1 ▲ 6.0%
Other turnover revenues 3.0 2.9 +0.1 ▲ 5.1%
TURNOVER 385.1 376.7 +8.4 ▲ 2.3%
Write-back of the reserve
established based on the expenses
with the modernization quota
28.8 29.8 -1.0 ▼ 3.3%
Other operating revenues 4.5 4.7 -0.2 ▼ 4.5%
TOTAL OPERATING REVENUES 418.4 411.2 +7.2 ▲ 1.8%
1. PRELIMINARY FINANCIAL RESULTS, 2018
1.1 OPERATING REVENUES
2018 / 2017
Preliminary financial statements for the year and for the year ended 31 December 2018 are not
audited
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
2018 2017
1.4% 1.3%
19.4% 16.5%
79.2% 82.2%
Other clients Lukoil OMV Petrom
SHARE IN TURNOVER (%)
CLIENTS 2018 2017
Changes
2018/2017
mRON %
305.0 309.7 -4.7 ▼ 1.5%
74.7 62.0 +12.7 ▲ 20.5%
OTHER CLIENTS5.4 5.0 0.4 ▲ 7.4%
TOTAL TURNOVER 385.1 376.7 +8.4 ▲ 2.3%
TURNOVER-CLIENTS (mRON)
1.2 TURNOVER BY CLIENTS
2018 / 2017
6
Turnover (mRON)
1. PRELIMINARY FINANCIAL RESULTS, 2018
Preliminary financial statements for the year and for the year ended 31 December 2018 are not
audited
385.1 376.7
2. FACTORS HAVING INFLUENCED THE TRANSPORT REVENUES
2018 / 2017
2018 2017
2018 2017
-58 thousand tons ▼ 1.6%
QUANTITIES TRANSPORTED ON THE DOMESTIC
SUBSYSTEM
+39 thousand tons ▲ 1.3%
QUANTITIES TRANSPORTED ON THE IMPORT SUBSYSTEM
+54 thousand tons ▲ 24.3%
OTHER TRANSPORT OPERATIONS
+4.0 mRON ▲ 1.4%
REVENUES FROM TRANSPORT ON THE DOMESTIC
SUBSYSTEM
-2.4 mRON ▲ 2.8%
REVENUES FROM TRANSPORT ON THE IMPORT
SUBSYSTEM
+1.8 mRON ▲ 46.2%
OTHER TRANSPORT OPERATIONS
7
TRANSPORTED QUANTITIES
thousand
tons
mRON
TRANSPORT ON THE IMPORT SUBSYSTEM
TRANSPORT ON THE DOMESTIC SUBSYSTEM
OTHER CRUDE OIL TRANSPORT
OPERATIONS
TOTAL TRANSPORT
The charged quantities transported on the Import subsystem
were 39 thousand tons higher but the revenues obtained from
the transport of this volume did not compensate the decrease
of the revenues on the Domestic subsystem, which was
triggered by 58 kTons lower quantities transported on this
subsystem.
TRANSPORT REVENUES
Preliminary financial statements for the year and for the year ended 31 December 2018 are not
audited
3,362 3,2693,493 3,551
6,855 6,820
6.579222
6.598
222
3.047
276
3.086
276
90.4 87.5
290.2 284.9
380.6 372.4
2.7
87.7
5.7
374.9
2.2
85.3
368.5
3.9
3.0
287.2 283.2
1.7
8
Indicators (mRON) 2018 2017
Changes
2018/2017
mRON %
Material expenses 7.0 7.1 -0.1 ▼ 1.0%
Expenses with energy, gas
and water11.2 9.5 +1.7 ▲17.1%
Personnel expenses 140.3 112.1 +28.2 ▲25.2%
Expenses related to the
amortization of the tangible
and intangible assets
44.5 44.5 - -
Expenses with the crude oil
rail transport54.4 56.4 -2.0 ▼ 3.5%
Oil royalty 29.6 28.6 +1.0 ▲ 3.2%
Modernization quota
expenses41.8 52.2 -10.4 ▼19.9%
Other operating expenses 24.8 17.7 +7.1 ▲39.7%
Total operating expenses 353.6 328.1 +25.5 ▲ 7.8%
3. FACTORS HAVING INFLUENCED THE OPERATING EXPENSES
2018 / 2017
The increase in prices with energy and gas
triggered, in 2018, 17.1% increased expenses
with their procurement.
The salary increases awarded starting
01.01.2018 as per the approved Collective Labor
Agreement determined an increase by 25% of
the personnel expenses.
Preliminary financial statements for the year and for the year ended 31.12.2018 are not audited
9
4. PROFITABILITY OF THE TRANSPORT SUBSYSTEMS
2018 / 2017
Indicators
Variation 2018 / 2017
Domestic
Subsystem
Import
Subsystem
Total
subsystems
Transport profit ▼ 21.6% ▼ 10.8% ▼ 17.2%
Transport expenses ▲ 6.3% ▲ 11.1% ▲ 7.2%
Transport revenues ▲ 1.9% ▼ 3.4% ▲ 2.2%
DOMESTIC
SUBSYSTEM
IMPORT
SUBSYSTEMmRON
TOTAL
SUBSYSTEMS
Transport Profit
Transport Revenues
Transport Expenses
285
290
239
254
46
36
5 205
2017
2018
87
90
57
63
30
27
5 205
2017
2018
372
380
296
317
76
63
5 205
2017
2018
Preliminary financial statements for the year and for the year ended 31 December 2018 are not
audited
5. MAIN ECONOMIC - FINANCIAL INDICATORS
2018 / 2017
10
Indicators2018 2017
Sales gross margin 18.3% 23.0%
Gross profit rate 16.6% 20.9%
Return on equity 9.0% 11.3%
Net profit per share(RON/share) 6.87 8.59
EBITDA margin 28.4% 33.9%
2018
2017
EBITDA
margin
Return on equity
rate
Gross profit rateSales gross
margin
Preliminary financial statements for the year and for the year ended 31 December 2018 are not
audited
11.3%
16.6%20.9%
23.0%
9.0%
28.4%
33.9%
18.3%
68
52
63
39
0
20
40
60
80
2018 2017
Programat Realizat
9 126
10
0
20
40
60
80
2018 2017
Programat Realizat
776469
49
0
20
40
60
80
100
2018 2017
Programat Realizat
6.INVESTMENTS
6.1 EVOLUTION OF THE ACHIEVED/ESTIMATED INVESTMENTS2018 / 2017
11
mRON mRON
TOTAL
INVESTMENTS
PUBLIC DOMAIN OPERATING DOMAIN
mRON
12
The value of the expenses related to the investment objectives proposed in 2018-2020
Investments Program is:2
01
8
76.6 mRON
20
19
80.1 mRON
20
20
79.6 mRON
The main investment objectives realized / estimated in 2018 include modernization works
of the National Transport System, consisting of:
Pipeline replacements 22.5 mRON;
Safe disposals 9.8 mRON;
Modernization and monitoring of the cathodic protection system 5 mRON;
Pilot system for detection and location of oil leaks 3.2 mRON;
Tanks modernization 14.5 mRON;
SCADA system optimization and Hardware and Software upgrade of remote transmission units 3.6 mRON;
Other objectives 18 mRON.
2018
6. INVESTMENTS
6.2 INVESTMENTS PROGRAM 2018-2020
The evolution of COTE share (RON) vs. BET index (rebased)
January – December 2018
13
7.1 LATEST PROGRESS AND CORPORATE EVENTS
7. STOCK MARKET PERFORMANCE
trading volume
Stock Market Capitalization
Share price : 99.5 RON
Jan. 2018 Dec. 2018
Share price : 77.7 RON
Market capitalization : 861 mRON Market capitalization : 673 mRON
0
10000
20000
30000
40000
50000
60000
70000
80000
70
80
90
100
110
120
130
140
0.54
0.72
0.90
1.04
1.64
1.69
2.80
4.99
8.04
45.38
ALRO S.A.
SOCIETATEA ENERGETICA ELECTRICA S.A.
S.N. NUCLEARELECTRICA S.A.
TRANSILVANIA BROKER DE ASIGURARE
BRD - GROUPE SOCIETE GENERALE S.A.
BURSA DE VALORI BUCURESTI SA
TRANSILVANIA CONSTRUCTII SA
S.N.G.N. ROMGAZ S.A.
CONPET SA
S.N.T.G.N. TRANSGAZ S.A.
7.2 EVOLUTION OF COTE SHARE VS. STOCK MARKET INDICES (REBASED) WHERE IS
INCLUDED (JAN. – DEC. 2018)
CONPET S.A.
7.43 %6.2 %
7.72 %9.26 %
26.56 %
8.94%
2013 2014 2015 2016 2017 2018
14
7. STOCK MARKET PERFORMANCE
Dividend Yield (%)
At the dividend yield was considered the share price from the last day
of every year.
Top dividends distributed by the companies in 2018 (RON)
60
70
80
90
100
110
120
130
COTE BET-BK (rebased) BET-NG (rebased) BETPlus (rebased)
BET-TR (rebased) BET-XT (rebased) BET-XT-TR (rebased)
7. STOCK EXCHANGE PERFORMANCE7.4 RECENT AND FUTURE EVENTS
16
June 19, 2018
NAMR has approved the modification of
crude oil transport tariffs for the domestic
and import subsystems
October 9, 2017
Bucharest Stock Exchange publishes the 3rd
edition of the Whitebook on Communication
of Listed Companies. Following the
assessment made, the company CONPET
S.A. obtained one of the highest scores,
respectively 9.75 out of 10
November 9, 2017
CONPET S.A. wins the prize for
the highest dividend yield at the
BSE within the National Top of
Companies
March 5, 2018
The GMS approves the start of the selection
procedure of a new Board of Administration
in accordance with the provisions of the
Government Emergency Ordinance no.
109/ 2011
June 20, 2018
FTSE Russell decided to
include CONPET S.A. in the
FTSE Frontier Markets Index
August 22, 2018
The OGMS elects new
members for the Board of
Administration with a 4 years
mandate.
December 18, 2018
The OGMS was convened for the
approval of the financial and non-
financial performance indicators
which will be annexed to the
administrators' mandate contract.
April 26, 2018
The Ordinary General Meeting of
Shareholders approved the allocation
of dividends related to 2017 in
amount of 8.04 RON/share
November 6, 2018
Appoinment of Mr. Chis Timur -Vasile and
Mrs. Sanda Toader as Director General,
namely Economic Director of CONPET S.A.,
starting 07.11.2018, with a 4-year mandate
September 4, 2018
CONPET S.A. announces
the initiation of the
recruitment and selection
procedure for the capacities
of Director General and
Economic Director
8. ANNEXES
17
Indicators (mRON) 2018 2017VARIATION
mRON 2018/2017
Sales revenues 385.1 376.7 +8.4 ▲ 2.3%
Other operating revenues 33.3 34.5 -1.2 ▼ 3.5%
out of which rev. from
modernization quota28.8 29.8 -1.0 ▼ 3.3%
TOTAL OPERATING REVENUES 418.4 411.2 +7.2 ▲ 1.8%
Inventories Expenses 7.0 7.1 -0.1 ▼ 1.0%
Outside expenses – energy and
water11.2 9.5 +1.7 ▲ 17.1%
Personnel expenses 140.3 112.1 +28.2 ▲ 25.2%
Value adjustments on tangible and
intangible assets44.5 44.5 - -
Current assets adjustments 1.7 (1.2) +2.9 -
Third party expenses 99.0 99.2 -0.2 ▼ 0.2%
Other operating expenses
(modernization quota expenses. etc)44.9 55.5 -10.6 ▼ 19.0%
Provisions adjustments 5.0 1.5 +3.5 ▲ 227.1%
TOTAL OPERATING EXPENSES 353.6 328.1 +25.5 ▲ 7.8%
OPERATING RESULT 64.8 83.1 -18.3 ▼ 21.9%
Financial revenues 5.5 3.6 +1.9 ▲ 51.2%
Financial expenses 0.01 0.04 -0.03 ▼ 76.1%
FINANCIAL RESULT 5.5 3.5 +1.9 ▲ 52.8%
GROSS RESULT 70.3 86.6 -16.3 ▼ 18.9%
Income tax expenses 10.8 12.2 -1.4 ▼ 11.6%
NET RESULT 59.5 74.4 -14.9 ▼ 20.1%
EPS (net profit/no. of shares) 6.87 8.59 -1.72 ▼ 20.0%
EBITDA 109.3 127.5 -18.2 ▼ 14.3%
Indicators (mRON)31 December
2018
31 December
2017
Tangible assets 430.6 407.3
Non-tangible assets 2.8 1.4
Financial investments 0.9 1.0
Receivables related to the deferred income tax 3.1 1.0
TOTAL FIXED ASSETS 437.4 410.7
Inventories 8.5 9.0
Trade receivables and other receivables 43.1 46.8
Short-term investments 0 70.6
Cash and cash equivalents 259.7 209.9
Prepaid expenses 1.8 1.8
TOTAL CURRENT ASSETS 313.1 338.1
TOTAL ASSETS 750.5 748.8
Share capital o/w: 28.6 28.6
Subscribed and paid-up share capital 28.6 28.6
Legal Reserves 5.7 5.7
Revaluation Reserves 25.7 31.0
Other Reserves 494.6 478.5
Retained Earnings 46.1 40.2
Result for the period 59.5 74.4
TOTAL EQUITY 660.2 658.4
Investment Subsidies 1.2 1.3
Prepaid Revenues 0.01 0.01
TOTAL PREPAID REVENUES 1.2 1.3
Long-term provisions 14.7 12.8
Long–term trade receivables 1.8 -
TOTAL LONG-TERM LIABILITIES 16.5 12.8
Trade liabilities 18.3 30.6
Current income tax 3.7 3.8
Other liabilities 36.8 32.3
Short-term provisions 13.8 9.5
TOTAL CURRENT LIABILITIES 72.6 76.2
TOTAL LIABILITIES 89.1 89.0
TOTAL EQUITY AND LIABILITIES 750.5 748.7
PROFIT & LOSS ACCOUNT FINANCIAL STANDING
Preliminary financial statements for the year and for the year
ended 31 December 2018 are not audited
18
COMPARISON WITH 2018 BUDGET
Indicators (mRON)Forecasted
2018
Achieved
2017
Budgeted
2018
Achieved
2018 vs. 2017
Variation Forecasted
vs. Budgeted
2018
mRON % mRON %
Operating revenues
Turnover revenues 385.1 376.7 381.1 +8.4 ▲ 2.2% +4.0 ▲ 1.1%
Other revenues 33.2 33.6 31.5 -0.4 ▼ 0.9% +1.7 ▲ 5.1%
proceeds from disposal of assets 0.1 0.9 0.1 -0.8 ▼ 93.3% - -
TOTAL OPERATING REVENUES 418.4 411.2 412.7 +7.2 ▲ 1.8% +5.7 ▲ 1.4%
Operating revenues
Inventories Expenses 7.0 7.1 7.6 -0.1 ▼ 1.0% -0.6 ▼ 7.6%
Expenses with energy and water 11.2 9.5 11.5 +1.7 ▲ 17.1% -0.3 ▼ 3.3%
Personnel expenses 140.3 112.1 141.0 +28.2 ▲ 25.2% -0.7 ▼ 0.5%
Value adjustments on tangible and intangible assets44.5 44.5 44.3 - - +0.2 ▲ 0.4%
Current assets adjustments 1.7 (1.2) (0.02) +2.9 - +1.7 -
Third party expenses 99.0 99.2 103.4 -0.2 ▼ 0.2% -4.4 ▼ 4.2%
Other expenses 44.9 55.5 44.5 -10.6 ▼ 19.0% +0.7 ▲ 1.0%
Provisions adjustments 5.0 1.5 7.6 +3.5 ▲227.1% -2.6 ▼ 34.5%
TOTAL OPERATING EXPENSES 353.6 328.1 359.9 +25.5 ▲ 7.8% -6.3 ▼ 1.8%
OPERATING PROFIT 64.8 83.1 52.8 -18.3 ▼ 21.9% +12.0 ▲ 22.8%
Financial revenues 5.5 3.6 1.6 +1.9 ▲ 51.2% +3.9 ▲ 250.7%
Financial expenses 0.01 0.05 0.1 -0.04 ▼ 76.1% -0.09 ▼ 89.2%
FINANCIAL PROFIT 5.5 3.5 1.5 +1.9 ▲ 52.8% +4.0 ▲ 274.0%
GROSS PROFIT 70.3 86.6 54.3 -16.3 ▼ 18.9% +16.0 ▲ 29.5%
Income tax expenses 10.8 12.2 8.5 -1.4 ▼ 11.6% +2.3 ▲ 27.1%
NET RESULT 59.5 74.4 45.8 -14.9 ▼ 20.1% +13.7▲ 29.8%
EPS (net profit/no. of shares) 6.87 8.59 5.29 -1.72 ▼ 20.0% +1.6▲ 29.9%
Preliminary financial statements for the year and for the year
ended 31 December 2018 are not audited
19
Ministry of
Energy
58.72%
Legal
Persones
28.56%Natural
Persones
12.72%
Operator of the national crude oil, rich gas and condensatetransport network;
Natural monopoly position on the Romanian market;
30 years concession agreement to operate the transport network,concluded, in July 2002 with the National Agency for MineralResources;
Core business includes:
transport of crude oil, rich gas and condensate via theDomestic transport subsystem (75.3 % in turnoverachieved in 2018 )
Transport of crude oil via the Import subsystem from OilTerminal, Constanta to two refineries in Romania (23.5% inturnover forecasted for the year 2018).
Company’s business is regulated by NAMR, which sets tariffsfor:
The transport of domestic crude oil, rich gas andcondensate (last update in June 2018)
Import crude transport (last update in June 2018)
Company’s Brief Overview Transport Network Overview
Shareholding Structure (15.01.2019)
CONPET S.A. operates 3,800 km of pipelines with a
total transport throughput of 18.1 million tons/year, the
system being divided into three main subsystems:
1. Subsystem for crude oil and condensate domestic
transport eases transport from the extraction fields to
Petrobrazi, Arpechim and Petrotel Lukoil refineries; it is
1,700 km in length, 6.1 million tons/year transport
throughput and 126 k m3 storage capacity;
2. Subsystem for rich gas transport eases the
products transport from the extraction fields to Petrobrazi
and Arpechim refineries; it is 289 km in length and has a
capacity of 0.2 million tons/year;
3.Subsystem for imported crude oil transport, eases
transport from Oil Terminal, Constanta to Petrobrazi,
Arpechim, Petrotel Lukoil and Petromidia refineries; it is
1,343 km in length, 11.8 million tons/year transport
capacity and 45 thousand m3 storage capacity;
For the railway transport of crude oil, condensate
and rich gas to Petrobrazi and Lukoil refineries,
CONPET has the following facilities: 12.7 km of railway,
13 loading/unloading ramps, 13 locomotives, 40 tank
cars for crude, 29 tank cars for rich gas. This supporting
infrastructure provides the transport services to OMV
PETROM and LUKOIL refineries.
CONPET BUSINESS
20
THE BOARD OF ADMINSTRATION
21
POPA Claudiu
Aurelian
Member
GHEORGHE Cristian
- Florin
Chairman
GAVRILĂ Florin -
Daniel
MemberALBULESCU Mihai -
Adrian
Member
IACOB Constantin
Ciprian
Member
PAVĂL Karina
Member
MEȘCA Darius -
Dumitru
Member
Thank you for your kind attention!
2015 CALENDAR FINANCIAR
www.conpet.ro
