Baltic Oil Terminals plc has today announced its audited results for the year ended 31 December 2011.
Gross profit on turnover decreased to 27 percent last year, from 36 percent in 2010. Baltic Oil said this was expected due to lower trading in 2011 together with a lower relative contribution from Baltic Top as a result of the products dealt with, and the customer base, in the region.
Turnover was up to GBP15.6 million for the 2011 year compared to GBP 6.0 million for 2010. Baltic Oil said the increase reflected a full year of operations from its Dutch subsidiary
Petro Broker International BV (PBI), and also higher sales at
OOO Baltic Top (Baltic Top).
After taxation, the retained profit for the year was GBP 4.7 million compared to GBP 2.4 million in 2010, which the company said was a 'good improvement' on the 2010 result despite the one-off costs incurred during the year.
Please find below a statement by Chairman
Richard Healey and Chief Executive
Simon Escott.
"We are glad to report that 2011 was a better year for your company after the problems in 2010 and that our programme set up to protect shareholders assets in Russia has continued to progress in line with our expectations as set out at the time of the announcement of the 2010 accounts.
"We can report that turnover increased to GBP15.6 million for the year (2010: GBP6.0m), producing profits after taxation of GBP4.7 million (2010: GBP2.4m), reflecting the first full year of operations from PBI, the wholly owned subsidiary that operates fuel oil tanks in Europort Rotterdam and continued contribution from Baltic Top.
"As expected administrative expenses are higher this year mainly due to the one off acquisition costs associated with the purchase of the new terminal,
Dan Balt Tank Lager A/S (Dan Balt) at Aabenraa, Denmark, and also the legal costs required to protect the title and assets of our operations in Kaliningrad, Russia. Whilst these costs are reasonable when viewed against the value of the assets concerned.
"Overall the Group continues to operate on a cost efficient basis as can be evidenced from the reduction of overheads for PBI, and the tight control that has been exercised over central overheads.
"PBI made a profit (before management fees) of just over GBP2.3 million which we view as satisfactory in light of the start-up costs, together with the reduction in the number of incumbent staff, as this is costly in Holland. Baltic Top has performed at maximum capacity and the new General Director, appointed in late 2010, has fully secured this asset for Baltic and completely stabilised the operation in a professional manner.
"The share of profit from associates of GBP3.9 million (2010: GBP3.2m) has been added to the value of our investments in the businesses which are consolidated as associates and are shown on the balance sheet at GBP19.5 million (2010: GBP15.6m).
"The balance sheet reflects the growth of the Group in the year and the total assets now stand at GBP44.0 million (2010: GBP35.7m).
"The improved 2011 results confirm that the Board's strategy to create a diversified European terminals operation that is stand-alone, but also offers a one-stop shop to both traders and oil companies, is a sound one and based on strong market requirements."
"The Dan Balt subsidiary was acquired in November 2011 and as a result has had little impact on the trading results. With the acquisition of the terminal, we also took over existing storage contracts that run through to the end of 2012. We will switch these to transhipment by the end of 2012 as a result of which we expect to increase our margins. Furthermore, we have entered into a marketing agreement with Contango Storage of Sweden, who, as tank marketing specialists in Scandinavia, are well placed to promote our business.
"Subsequent to the year end, we have instigated a fuel optimisation project in Dan Balt, which will allow the terminal to offer clients faster pumping rates and thus lower transhipment throughput fees due to increased efficiency. To fund this project we announced, on 22 May 2012, a placing of new shares to raise £0.95 million before expenses. We are pleased to also note that the Harbour Board of Aabenraa are instigating, subject to government approval, a jetty and draft improvement project that will allow us to handle vessels up to 80,000DWT by 2013.
"In Rotterdam we plan to expand the PBI business by doubling our tank capacity from 120,000 cubic metres to 240,000 cubic metres. The extra capacity will be used to tranship Gasoil rather than fuel oil. We expect this extra capacity to be on-stream by the end of July 2012 and we consider this to be an exciting opportunity for PBI going forward.
"This will result in the Group managing or owning 400,000 cubic metres of storage outside of Russia.
"The Rosbunker terminal has, as in the previous year, been treated as an associated entity in the 2011 report and accounts. The Board is resolute in protecting the Group's assets in Russia, as has been demonstrated by the court cases and rulings that have been concluded during 2011, and that are continuing during 2012.
"The former General Director in Kaliningrad, to whom we referred in our 2010 accounts, has been pursued through the Russian courts successfully in civil cases and further proceedings are being considered by the authorities in Kaliningrad. This sends a powerful message in the region.
"To reflect the business model of expanding our non-Russian assets, your Management proposes, subject to shareholder approval, to change the name of the Company to Pan European Terminals PLC. We will be seeking shareholder approval for the change of name at the forthcoming General Meeting to approve these accounts.
"In summary, continuing the hard work of 2010, that was mainly concentrated on addressing the issues in Russia, the Group has shown in 2011 that growth outside Russia is viable and that with the acquisition of Dan Balt, we can expect significant growth in 2012.
"We also believe that we are now in a position to consider alternatives in dealing with Rosbunker; however, we will ensure that any option taken gives the best value to shareholders: we will not allow ourselves to be rushed into taking any other course of action due to outside pressures.
