1, UZINEI STREET, code , RAMNICU VALCEA, ROMANIA TEL : ,FAX : /

Transcription

1 1, UZINEI STREET, code , RAMNICU VALCEA, ROMANIA TEL : ,FAX : / oltchim@oltchim.ro January 2016

2 Raw materials. Product portofolio Raw materials Plant Products Electric power Salt Propylene Orthoxylene Propylene Ethyleneoxide Chlorine Milk of lime Naphta gasoline C4 cut Ethylene Chlorine CHLOR-ALKALI PLANT CHEMICAL PLANT I CHEMICAL PLANT II PETROCHEMICAL PLANT BRADU PVC PLANT Caustic soda Hydrochloric acid Chlorine Sodium hypochlorite Hydrogen Oxo-alcohols Phthalic anhydride Dioctylphthalate Propylene oxide Propylene glycol Polyether-polyols Ethylene Propylene Polyethylene Ethylenenoxide Aromatics Vinyl chloride PVC

3 Quantity (to) Value (Euro) Main product groups sales Product Quantity (to) Value (Euro) Polyols 71, ,709,486 Caustic soda 92,807 28,532,478 Oxo-alcohols 21,465 17,605, ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, ,709,486 92,807 71,770 28,532,478 17,605,541 21,465 Polyols Caustic soda Oxo-alcohols 120,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0

4 Main Products Sales breakdown Product Export (Euro) Domestic (Euro) Total 2015 (Euro) Polyols 83,320,772 22,388, ,709,486 Caustic soda 19,289,926 9,242,552 28,532,478 Oxo-alcohols 17,536,872 68,669 17,605,541 Intern 21% Oxoalcohols 11% Caustic soda 19% Export 79% Polyols 70%

5 Financial Statement - Preliminary ,4450 4,4450 -th. euro- No. Indicators Implementation of the reorganization plan and other income/expenses not related to current activity Current activity TOTAL = Turnover TOTAL REVENUES operating revenues financial revenues TOTAL EXPENSES operating expenses financial expenses, from which: interests expenses GROSS PROFIT/LOSS operating profit / loss, from which: depreciation financial result INCOME TAX GROSS PROFIT/LOSS EBITDA (operating result - depreciation) 9.636

6 Financial Statement - Main business th. euro- Nr. Crt. Indicatori 2013 actual 2014 actual 2015 preliminary TURNOVER TOTAL REVENUES operating revenues financial revenues TOTAL EXPENSES operating expenses financial expenses, from which: interests expenses GROSS PROFIT/LOSS operating profit/loss, from which: depreciation financial result EBITDA (operating result - depreciation)

7 Financial Statement-Indicators main business (1) OLTCHIM achieved the best value of EBITDA from 2008 to date After entering the insolvency proceedings, the company has resumed its activity from scratch, entering in a comprehensive restructuring process which involved the following main areas: - regaining partners trust, mostly external, to prove that the company is able to deliver products consistently on time and manner requested by them; - drastic reduction in costs to streamline the company. In 2015 the company achieved the best economic & financial performance since the entry into insolvency proceedings and the best value of EBITDA from 2008 to date (the best results in the last 8 years). Thus, the preliminary economic & financial results of OLTCHIM for 2015 are presented as follows, confirming the effectiveness of measures implemented after entering insolvency proceedings: - turnover of 167 million euro, higher by 26 million euro, or by 18 % compared to 2014 and by 54 million euro, or by 48% compared to 2013; - the cumulative EBITDA from current business is approximately + EUR 9.6 million compared to the period when its value was negative.

8 Financial Statement-Indicators main business (2) OLTCHIM achieved 3.0 million euro total profit obtained from the operating plants except the expenses with the mothballing of unoperational plants The gross result from the main business in 2015 is 8.2 million euro showing an improvement by 34.6 million euro compared to 2014 and by 64.2 million euro compared to The gross result of -8.2 million euro consists in: +3.0 million euro total profit obtained from the operating plants; million euro loss caused by the expenses with the mothballing of unoperational plants from Bradu and Valcea sites, plus expenses with severance payments related to personnel dismissal completed in December 2015 and other banking financial costs calculated before the date of the approval of the Reorganization Plan. The increase in turnover was driven by quantitative growth in sales of main products manufactured. Thus, for polyether polyols quantity sales increased by 20% compared to the same period last year, while sales of chlor-alkali products as a share have increased by 3%. Over 75% of turnover comes from export and intracommunity market.

9 Financial Statement-Investments and major repairs In 2015, Oltchim has carried out investment work and overhauls to ensure the operation of production facilities safely and efficiently. They were worth 3.8 million euro, only from own sources: 1.8 million euro for the rehabilitation of two electrolyzers in Membrane Electrolysis Plant, one of which was rehabilitated in September 2015; 0.6 million euro for the overhaul of tank wagons in which the main feedstocks are supplied and the finished products are delivered; 0.6 million euro payment in two installments for the purchasing of the hydrogenation catalyst for the oxoalcohols plant; 0.5 million euro for the overhaul of the lime kiln carried out in the Propylene Oxide Plant early this year; 0.3 million euro investment in other objectives such, the purchase of a heat exchanger for the propylene oxide plant. At the main process plant, the Membrane Electrolysis there are rehabilitated 4 electrolyzers of the total of 7, the next 3 following to be rehabilitated in 2016, the investment being estimated at 2.4 million euro.

10 Production activity Permanent efforts were made to streamline the business, reduce costs and ensure the liquidity required for smooth running of current business, including the rehabilitation required for safe and efficient operation of the production facilities. Utilization of production capacity is currently at a level of about 30% and is achieved by the operation of the following plants: The Membrane Electrolysis is used at the maximum capacity that can be operated under current technical conditions (approximately 95%); to operate at 100% capacity, the other 3 electrolyzers from the total of 7 should be rehabilitated Propylene oxide, Polyether polyols plants are technologically interrelated and are used at about 65% of capacity, their operation being limited by the chlorine quantity produced by the membrane Electrolysis; Oxo-alcohols plant was restarted in June 2015 and operates at about 90% capacity, to reach 100% capacity must be changed hydrogenation catalyst. There are still shut-down the following production lines: Phthalic anhydride-dioctyl phthalate production line totally stopped since August 2012; Mercury Electrolysis plant totally stopped since May 2012; PVC plant totally stopped since September 2011; VCM plant totally stopped since November 2008; Petrochemical Division Bradu stopped since November 2008.

11 Forecast 2016 (1) For 2016 we are considering the following: Operation of the membrane eletrolysis at the maximum technological capacity, by rehabilitation of the 3 electrolyzers; Operation of oxo-alcohols plant starting with April 2016 after replacing the hydrogenation catalyst; Operation of propylene oxide plant based on the amount of chlorine obtained internally and the purchasing of about 10,000 to chlorine; Operation of polyether polyols plants based on propylene oxide production; Production of a new product since July 2016, namely dioctyl terephthalate by revamping the existing dioctyl phthalate plant. The production of this product will drive a diversification of octanol utilization, allowing thus for a smooth and continous operation of the oxo-alcohols plant. The company estimates growth for 2016 compared to 2015 by the production of the following finished products: to caustic soda liquid, i.e. an increase by 3%; to octanol, i.e. an increase by 37%; polyether polyols including propylene glycol, i.e. an increase by 5%; to dioctyl terephthalate, starting with July In these conditions the company expects for 2016 to obtain profit on the entire business, i.e. full coverage of depreciation and financial charges. Last year when OLTCHIM achieved profit on total business was Thus, at a turnover of about same value as in 2015, i.e. 168 million euro, the sale price being lower than the average of 2015 driven by lower oil prices, the company estimates: EBITDA +12,3 million euro, i.e. by 2.7 million euro better than in 2015; operational profit 330 thousand euro; profit on entire business 110 thousand euro.

12 Forecast 2016 (2) BUDGET FOR 2016 YEAR Indicators period Q I Q II Q III Q IV th. euro TOTAL 2016 Turnover Production costs raw material and materials utilities salary and fringes depreciation other production costs EBIT EBITDA Financial expenses TOTAL PROFIT/LOSS The selling prices for finished products and the procurement prices for raw materials and utilities used in budget 2016 are the actual prices for December 2015.