Oil Refineries Ltd. (TASE:ENT) (Bazan) is showing signs of recovery from the coronavirus crisis, with positive financial results for the first quarter of 2021, for which it reports net profit of $ 55 million.

In the first quarter of 2020, the oil refineries, controlled by the Israel Corporation of Idan Ofer (TASE: ILCO), recorded a loss of $ 146 million. In 2020 as a whole, the company lost $ 274 million.

Oil refineries are Israel’s largest refining and petrochemical group, with a refining capacity of 9.8 million tonnes of crude oil per year. The company produces oil distillates and raw materials for industry.

The company’s revenue fell 10% in the first quarter from the first quarter of 2020 to $ 1.28 billion. Despite this, the company posted gross profit of $ 113 million, which compares with a gross loss of $ 128 million in the corresponding quarter. The main reason is the sharp rise in polymer prices and petroleum refining margins.

Oil refineries CEO Moshe Kaplinsky said today: “Oil refineries started 2021 with a gradual exit from the coronavirus crisis and recoded a consolidated EBITDA of $ 74 million. environment, demonstrated impressive strength, with EBITDA of $ 59 million in the quarter “

In Israel, orders for benzene and diesel have returned to normal, but internationally the situation is different. Demand for jet fuel, for example, remained weak in the first quarter, but is expected to improve later in the year. Falling demand has led oil refineries to adjust production quantities and implement cost-cutting measures.

Oil refineries last week reported an outage at its CCR (Continuous Catalytic Reforming) plant. He had to shut down the plant to carry out repairs that would take several weeks. The company estimated a loss of profits of $ 20 million to $ 30 million following the shutdown. It now appears that actions taken over the past few days will keep the loss at the lower end of this estimate.

Kaplinsky also commented on the plan to evacuate the petrochemical industry from Haifa Bay. “The Committee of Directors General of the Government recently released its draft conclusions on the future of Haifa Bay, from which it appears that the committee understood the importance of continuity in the energy sector, and recommended the establishment of a special team to negotiate with the industry in a spirit of cooperation to jointly plan the future of Haifa Bay. “

The company believes that the idea of ​​moving its operations to southern Israel is unrealistic, as its oil refinery must be close to a seaport. The choice being considered is either to shut down the oil refinery or to reuse it for the production of cleaner energy sources, such as hydrogen.

Oil refineries naturally oppose the shutdown option and are therefore taking steps to switch to fuels that will power global transportation in the future. Kaplinsky himself was recently appointed chairman of the company, a position he will take on when a new CEO is appointed.

Oil refineries have a market capitalization of around NIS 3 billion, after a 38% drop in their adjusted share price over the past three years. Over the past three months, however, the share price has risen 44%, as Israel’s economy reopens and expectations for oil refinery operations improve. In today’s session, the stock price is up 3.78%.

Posted by Globes, Israel Business News – fr.globes.co.il – on May 9, 2021

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