Petroplus Announces Second Quarter and Half Year 2007 Results

Petroplus Holdings AG (SWX: PPHN) today reported net income of $48.3 million, or $0.72 per share, for the three months ended June 30, 2007. For the six months ended June 30, 2007, Petroplus reported net income of $98.6 million, or $1.54 per share. The financial and operational results for the three and six months ended June 30, 2007 are not comparable to the corresponding periods in 2006. Excluding prior period hedging activity and gains on sales of discontinued operations, 2006 would have resulted in net income of $14.7 million for the three months ended June 30, 2006 and a net loss of $3.4 million for the six months ended June 30, 2006. During 2007, the timing of refinery acquisitions and turnaround maintenance activity in the second quarter limits the comparability of the financial and operational results between the first and second quarters of 2007. For the second quarter of 2007, refining and marketing EBITDA (refining and marketing "earnings before interest, taxes, depreciation and amortization”) of approximately $158 million reflects the operations for five refineries, Coryton for one month, Ingolstadt, BRC, Cressier and Teesside. Both the BRC and Cressier refineries were down for turnaround maintenance activity in the second quarter of 2007. For the first quarter of 2007, refining and marketing EBITDA of approximately $55 million reflects the operations for three refineries, BRC for one month, Cressier and Teesside. Regarding the second quarter results, Thomas D. O’Malley, Petroplus’ Chief Executive Officer, said, "The growth in refining and marketing EBITDA in the second quarter of 2007 of about 185%, above that of the first quarter 2007, reflects solid refining margins and our successful execution of our growth strategy. In the second quarter, we had the very successful and smooth transitions of both the Ingolstadt and Coryton refinery acquisitions. Second quarter results reflect three months of operations for the Ingolstadt refinery and one month of operations for the Coryton refinery. However, our results for the second quarter were limited by the scheduled plant-wide turnaround maintenance at both the Cressier and BRC refineries. The turnarounds, which have been completed, included maintenance activity on all the major units at the refineries. The Cressier turnaround, which lasted 35 days, proceeded as planned and was completed on time. The turnaround at BRC was the most significant maintenance effort that the BRC refinery has undergone in its history. In order to complete additional work necessary for continued safe operations at the facility and to put in place further improvements to enhance the safety, reliability and profitability of the site, the Company made the decision to extend the program approximately 30 days past its original completion date. The refinery was only fully operational for 10 days during the quarter. We restarted the facility in late-July and all units are now running as expected. There are no other scheduled major maintenance for our refineries for the remainder of 2007.” Looking ahead, Robert Lavinia, Petroplus’ President, commented, "The third quarter of 2007 will be the first quarter reflecting the operations of all five of our refining assets. In one year’s time, our nameplate refining capacity has grown almost 240%, from about 185,000 barrels per day to 625,000 barrels per day. Today we have a well run, geographically dispersed, and reasonably complex refining asset base.” Regarding the market heading into the third quarter, Mr. O’Malley said, "Refining cracks have started out lower on average than the second quarter of 2007. With the rise in crude oil prices, oil markets shifted into backwardation, while product markets remained better supplied. This resulted in refining cracks being squeezed. This volatility of refining cracks in the short-term is not unusual. However, despite the higher oil prices, oil products demand growth continues to be very strong. In the long-term, the forecasted world-wide new refining capacity coming on-line does not appear sufficient to meet incremental demand forecasts over the next few years. The strength of the current refining cycle, that really began around 2004, should continue to be supported, well into the end of the decade, by the tight fundamentals in the refining industry.” Commenting on the capital markets activity in the quarter, Karyn F. Ovelmen, Petroplus’ Chief Financial Officer said, "During the second quarter of 2007 we issued $1.2 billion in corporate bonds and an additional 7.6 million shares for total proceeds of about $1.8 billion to the company. The proceeds were used to pay down existing indebtedness and fund the Coryton refinery acquisition.” With regards to the balance sheet, Ms. Ovelmen remarked, "We ended the quarter with approximately $150 million in cash, $1.6 billion of debt outstanding and $2.3 billion of shareholders equity. Our net debt-to-net capitalization ratio at June 30 was approximately 39 percent. We expect to further reduce the gearing ratio with the free cash flows generated through the end of the year. The Company is in a strong financial position, and will be able to fund both its capital program and take advantage of any additional high-return growth opportunities that the market may bring.” Throughput rates by refinery for the third quarter and 2007, including intermediate feedstocks, should average approximately as follows: Coryton at 200,000 to 210,000 bpd for the third quarter and 200,000 to 210,000 for the seven months; Ingolstadt at 95,000 to 100,000 bpd for the third quarter and 95,000 to 100,000 for the nine months; BRC at 85,000 to 90,000 bpd for the third quarter and 70,000 to 80,000 bpd for the year (impacted by turnaround); Cressier at 55,000 to 60,000 bpd for the third quarter and 50,000 to 55,000 bpd for the year (impacted by turnaround); and Teesside at 75,000 to 80,000 bpd for the third quarter and 80,000 to 85,000 bpd for the year. The company’s conference call concerning the half year results will be webcast live today, August 10, 2007, at 11:00 a.m. CET on the investor relations section of the Petroplus Holdings AG website at www.petroplusholdings.com. Petroplus Holdings AG is the largest independent refiner and wholesaler of petroleum products in Europe. Petroplus focuses on refining and currently owns and operates five refineries across Europe: the Coryton refinery on the Thames Estuary in the United Kingdom, the Ingolstadt refinery in Ingolstadt, Germany, the Belgium Refining Company refinery in Antwerp, Belgium, the Cressier refinery in the canton of Neuchâtel, Switzerland, and the Teesside refinery in Teesside, United Kingdom. The refineries have a combined throughput capacity of approximately 625,000 bpd. Petroplus has signed a letter of intent to acquire the Petit Couronne and Reichstett Vendenheim refineries, located in France, from Shell International Petroleum Company Limited. The refineries have a total nameplate crude capacity of 239,000 barrels per day. This press release contains forward-looking statements, including the company’s current expectations with respect to future market conditions, future operating results, the future performance of its refinery operations, and other plans. Words such as "expects,” "intends,” "plans,” "projects,” "believes,” "estimates,” "may,” "will,” "should,” "shall,” and similar expressions typically identify such forward-looking statements. Even though Petroplus believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Petroplus Holdings AG and Subsidiaries Earnings Release   (in millions of USD, except for per share amounts) For the Three Months Ended June 30, For the Six Months Ended June 30, 2007 2006 2007 2006 INCOME STATEMENT DATA:   Revenue $ 2,742.5 $ 1,538.6 $ 4,457.6 $ 3,009.6 Materials cost   2,488.3   1,489.8   4,076.5   2,812.3   Gross Margin $ 254.2 $ 48.8 $ 381.1 $ 197.3 Personnel expenses 57.5 31.6 89.5 50.6 Operating expenses 67.2 23.9 103.1 48.1 Depreciation and amortization 36.4 11.0 55.5 23.2 Other administrative expenses   13.8   1.9   23.6   6.5   Operating Profit $ 79.3 $ (19.6) $ 109.4 $ 68.9 Financial (expense)/income, net (19.7) 10.2 (16.2) 2.3 Financial currency exchange (losses) (1.7) - (0.1) (0.8) Share of loss from associates   0.0   (0.1)   0.0   (0.2)   Profit/(loss) before income taxes $ 57.9 $ (9.5) $ 93.1 $ 70.2 Income tax (expense)/benefit   (5.6)   0.2   11.9   (17.8)   Net Income/(loss) from continuing operations $ 52.3 $ (9.3) $ 105.0 $ 52.4 Discontinued operations, net of tax   (4.0)   6.0   (6.4)   95.7   Net income/(loss) $ 48.3 $ (3.3) $ 98.6 $ 148.1   Net income attributable to shareholders of parent $ 48.3 $ (3.5) $ 98.6 $ 147.9   Net income per common share: Basic Income from continuing operations $ 0.78 $ (0.25) $ 1.64 $ 1.37 Discontinued operations   (0.06)   0.16   (0.10)   2.51 Net income $ 0.72 $ (0.09) $ 1.54 $ 3.88   Weighted average shares outstanding (in millions)   66.6   38.1   63.8   38.1   Diluted: Income from continuing operations $ 0.76 $ (0.25) $ 1.59 $ 1.37 Discontinued operations   (0.06)   0.16   (0.10)   2.51 Net income $ 0.70 $ (0.09) $ 1.49 $ 3.88   Weighted average shares outstanding (in millions)   68.7   38.1   65.8   38.1       OTHER FINANCIAL DATA: Hedging (loss)/gain(1) $ (10.6) $ (24.0) $ (2.1) $ 55.8   (1) Represents the gains and losses on refining margin hedges recorded to materials cost Petroplus Holdings AG and Subsidiaries Earnings Release   For the Three Months Ended June 30, For the Six Months Ended June 30, (unaudited) 2007 2006 2007 2006 Selected Volumetric and Per Barrel Data   Total Production (Mbbls per day) 312.0 165.5 278.3 171.5   Total crude throughput (Mbbls per day): Coryton (3) 47.2 ** 23.7 ** Ingolstadt (3) 94.5 ** 47.5 ** BRC (3) 6.9 33.3 45.2 16.8 Cressier 32.6 62.5 45.1 63.6 Teesside 93.2 67.7 93.5 89.9 Total crude throughput (Mbbls per day) 274.4 163.5 255.0 170.3   Total other throughput (Mbbls per day): Coryton (3) 20.6 ** 10.3 ** Ingolstadt (3) 2.8 ** 1.4 ** BRC (3) 6.5 - 6.2 - Cressier 0.7 1.9 1.3 1.8 Teesside 0.2 - 0.1 - Total other throughput (Mbbls per day) 30.8 1.9 19.3 1.8   Total throughput (millions of barrels) 27.8 15.1 49.6 31.2   Gross margin (USD per barrel of total throughput):(1) (2) Coryton (3) 10.00 ** 10.03 ** Ingolstadt (3) 8.10 ** 8.10 ** BRC (3) 24.11 3.99 7.95 3.98 Cressier 8.78 6.84 5.35 5.47 Teesside 6.21 1.35 5.06 2.15   Operating expenses (USD per barrel of total throughput):(1) Coryton (3) 3.60 ** 3.61 ** Ingolstadt (3) 2.54 ** 2.54 ** BRC (3) 14.35 1.62 3.67 1.61 Cressier 3.98 1.83 2.98 1.93 Teesside 1.21 1.77 1.25 1.35   Market Indicators (USD per barrel)(5)   Dated Brent 68.73 69.80 63.36 65.86 Benchmark Refining Margins (4) 5-2-2-1 (Coryton) (3) 9.26 ** 9.26 ** 10-1-3-5-1 (Ingolstadt) (3) 12.63 ** 12.63 ** 6-1-2-2-1 (BRC) (3) 3.34 3.20 2.45 3.20 7-2-4-1 (Cressier) 8.98 8.66 7.51 7.13 5-1-2-2 (Teesside) 4.14 2.64 3.86 2.87       (1) The Company manages its refinery business, including feedstock acquisition and product marketing, on an integrated basis; however, for analytical purposes the business results shown here have been allocated to the individual refineries. Since crude oil is often purchased and priced well in advance of the time that it is consumed and the value of refinery production can be fixed before or after it is produced, our actual results may significantly vary from those that would be determined with reference to benchmark market indicators. We manage this price risk on a total Company basis and may purchase futures contracts that correspond volumetrically with all or a portion of our fixed price purchase and sale commitments. As a result, the individual refinery realized gross margins presented here do not reflect the results that would be reported if separately accounted for in accordance with IFRS. The Company believes that this individual refinery information is helpful in understanding our overall operating result.   (2) Excludes minimum operating stock and refining margin hedging activities that are not expected to occur in the future.   (3) We acquired the BRC refinery on May 31, 2006. We acquired the Ingolstadt refinery on March 31, 2007. We acquired the Coryton refinery on May 31, 2007 and total throughput for the three months ended June 30, 2007 reflects 30 days of operations over that period. Total throughput averaged 205,000 bpd during the 30 days of operations for the second quarter. Benchmark indicators reflect the applicable periods for each acquisition.   (4) Per barrel margin indicator for the conversion of crude oil into finished products. For the Coryton refinery, the 5-2-2-1 represents five barrels of Dated Brent crude oil converted into two barrels of gasoline, two barrels of heating oil and one barrel of 3.5% fuel oil. For the Ingolstadt refinery, the 10-1-3-5-1 represents 10 barrels of Dated Brent crude oil converted into one barrel of naphtha, three barrels of gasoline, five barrels of ULSD and one barrel of 3.5% fuel oil. For the BRC refinery, the 6-1-2-2-1 represents six barrels of Dated Brent crude oil converted into one barrel of premium 95 gasoline, two barrels of heating oil, two barrels of VGO and one barrel of 3.5% fuel oil. For the Cressier refinery, the 7-2-4-1 represents seven barrels of Dated Brent crude oil converted into two barrels of premium 95 octane gasoline, four barrels of heating oil and one barrel of 1% fuel oil. For the Teesside refinery, the 5-1-2-2 represents five barrels of Dated Brent crude oil converted into one barrel of nap.   (5) Source: Bloomberg   ** Not relevant Petroplus Holdings AG and Subsidiaries Earnings Release   (in millions of USD) June 30, 2007 December 31, 2006 BALANCE SHEET DATA: (end of period)   Cash and short-term deposits $ 154.2 $ 91.6 Total assets $ 6,716.2 $ 3,014.8 Total interest-bearing loans and short-term borrowings $ 1,631.1 $ - Shareholder's equity $ 2,270.1 $ 1,555.1