According to the unaudited consolidated report of JSC Ventspils nafta concern
of 2007, consolidated net profit of joint stock company Ventspils nafta concern
has reached LVL 49.5 million in 2007, and it has increased for more than seven
times in comparison with 2006. In accordance with unaudited data, net turnover
of JSC Ventspils nafta concern has exceeded LVL 81 million in 2007, which is
LVL 11.7 million more than in 2006.
“The year 2007 can be specially characterized by continuation of the positive
changes related to involvement by the co-owner of JSC Ventspils nafta -
international oil and gas transport consortium Vitol Group - into management
and development of the concern since public auction of the state-owned shares
of JSC Ventspils nafta organized by Latvian government in autumn 2006,” the
Chairperson of the Management Board of JSC Ventspils nafta Olga Pētersone
points out. O.Pētersone states that the last year for the concern of JSC
Ventspils nafta has turned into a year of changes oriented to future where
directions of development of JSC Ventspils nafta are defined, presence of high
professionals of international level are ensured at the management bodies of
JSC Ventspils nafta, and the transit field of the concern has obtained a new
spirit.
The financially economic results of JSC Ventspils nafta Concern during the
reporting period were influenced especially favourably by the activities in the
transit field of the concern when a new co-owner joined, as well as by the
positive activities of the associated company JSC Latvian Shipping Company, as
well as the stable indices of other companies of the concern corresponding to
budget forecasts.
In April 2007, Euromin Holdings (Cyprus) Limited, which is a company of Vitol
Group, announced about increasing its influence at JSC Ventspils nafta to
47.89% thereby becoming the major and strategic investor of JSC Ventspils
nafta. Corresponding to the operating strategy previously publicly declared,
the major shareholder of JSC Ventspils nafta engaged actively in management and
development of the transit field of the concern - respectively the most
significant events of JSC Ventspils nafta in 2007 are related to development in
this field.
On February 21, 2007, the Competition Council of the Republic of Latvia
resolved that there are no obstacles for Euromin Holdings (Cyprus) Limited and
JSC Ventspils nafta to obtain determinant influence at the JSC Ventspils nafta
subsidiary - crude oil and petroleum product transshipment company Ventspils
nafta terminals Ltd. Taking into account the aforementioned resolution, Euromin
Holdings (Cyprus) Limited purchased 49% of Ventspils nafta terminals Ltd
shares. After conclusion of this transaction, JSC Ventspils nafta continued to
retain majority influence at the terminal. As a result of strategic cooperation
between the major crude oil and petroleum products transshipment terminal in
the Baltic region and the globally influential oil and gas sector company
Vitol, a significant joint company has formed in the scale of the whole region.
The transaction between JSC Ventspils nafta and Euromin Holdings (Cyprus)
Limited provides that 90 million USA dollars are paid for 49% of Ventspils
nafta terminals Ltd shares. Vitol Group on their part also guarantees delivery
of cargos to the terminal or financial compensation if the terminal load is not
ensured in the necessary amount, as well as fixed annual payments irrespective
of the specific transshipment indices. That means that stable activity of
Ventspils nafta terminals Ltd is ensured, income flow and workplaces are
guaranteed in long term, thereby enabling the company to implement its
development and modernization plans. In accordance with the agreement between
Vitol and JSC Ventspils nafta on financing the transaction, the payment will be
implemented within maximum ten years, relating this transaction with Vitol
undertaking to guarantee amount of cargos at Ventspils nafta terminals Ltd and
to retain the role of significant investor at JSC Ventspils nafta holding
company.
Ventspils Nafta Terminals Ltd has ensured 48.3 % of the total amount of cargoes
handled in the port of Ventspils in 2007. During the reporting period,
operating results of Ventspils Nafta Terminals Ltd have more than doubled since
activity of the new co-owner with the handling amount exceeding 10 million tons
again for the first time since 2003. The transshipment amount of Ventspils
nafta terminals Ltd increased by 133.3% last year as against the year 2006,
reaching 13.3 million tons of crude oil and petroleum products transported to
the terminal by railway, sea and diesel pipeline.
“LatRosTrans” Ltd, a transit company of JSC “Ventspils Nafta” concern and owner
and operator of crude oil and petroleum products in the territory of Latvia,
operated under influence of pressure of negative external circumstances related
to Russian oil pipage interruption to the Lithuanian Mažeiķi oil-processing
plant. Oil pipage in the direction of Lithuania was partially ensured by
LatRosTrans Ltd. Tension in the relations of Russia and Lithuania,
unfortunately affecting also activity of LatRosTrans Ltd and JSC Ventspils
nafta concern in the global transit system, started already in 2006 when the
shares of Lithuanian company Mažeiķu nafta were sold to a Polish oil company
Orlen. As a result, business resources of LatRosTrans Ltd have focused only on
petroleum product pipage due to objective reasons with the total amount
reaching 6.5 million tons in 2007. At the same time LatRosTrans Ltd is focused
on reducing economic activity expenses, ensuring balanced position between
income and expenditure without real money damage
In 2007, LatRosTrans Ltd put NPS Skrudaliena commercial registration point of
petroleum product into operation, thereby ensuring automatic and more precise
control of petroleum product flow in the pipeline. The total investments of
LatRosTrans Ltd in formation of the mentioned object and in provision of
maintenance have reached more than 6 million USA dollars. LatRosTrans Ltd has
operated actively on elimination of supernormative loss of petroleum products
resulting from unlawful activities, by hiring a security company on their own
resources, inspecting the pipeline regularly, collaborating with the police,
allocating considerable resources in recovery of the environment, as well as
informing and trying to involve also other state authorities in dealing with
this issue. No supernormative loss of petroleum products were established at
LatRosTrans Ltd in 2007, affirming effectiveness of the measures implemented by
the company.
During the reporting period, JSC Ventspils nafta subsidiary JSC Preses nams,
which is the largest printing concern in Latvia and Baltic States, continued
implementation of large-scale organizational and functional changes by planning
to locate a printing complex in new production plants outside the central part
of Riga. JSC Preses nams has defined specific terms as to when construction
work of the new production units - print shops for journals, newspapers and
books - will be finished. It is planned that the modernized book production
plant of the JSC Preses nams printing complex located at Jāņsili, Silakrogs at
the Ropaži civil parish will start working already in summer 2008, but the new
production plant for newspapers and journals in the territory of the technology
park of the Riga International Airport - in the end of 2008.
In 2007, JSC Preses nams put intense work into introduction of the latest
technical and technological solutions meeting the present-day requirements for
execution of customer orders, therefore offering its customers the utmost
advantageous services, allowing to both increase production efficiency and
decrease costs. Complete introduction of new technologies and operation of
equipment in the new printing plants is planned in 2008.
The positive operating results achieved by JSC Latvian Shipping Company, the
associated company of JSC Ventspils nafta, during the reporting period attests
the company's ability to compete successfully in the global navigation markets
in line with the objectives set by its shareholders. By active work on
modernizing the company's fleet and increasing competitiveness, JSC Latvian
Shipping Company has received already 11 new constructions of tankers from
Croatian and Korean shipyards 3.Maj and Hyundai Mipo Dockyard Co., Ltd. (HMD)
since July 7, 2006. Execution of the mentioned tanker fleet restoration program
is planned to be finished in 2008, and 14 new tankers meeting the requirements
of navigation safety field of European Union and international conventions will
be added to the fleet of JSC Latvian Shipping Company within the framework of
this program. Thereby the concern will obtain a wider geographic coverage of
the fleet, which is reckoned an essential preference along with the company's
considerable experience.
In 2008, JSC „Ventspils Nafta” and its subsidiaries are determined to continue
implementation of the growth and development plans, by continuing as before, to
operate in order to reach goals established by the shareholders, as well as to
ensure increase in concern value.
JSC Ventspils nafta
Further information -
Gundega Vārpa, Public Relations and Advertising Manager
tel. 7229793; e-mail: gundega.varpa@vnafta.lv
