TIDM74JJ
RNS Number : 9060V
Petrol AD
06 December 2023
PETROL AD
Legal Entity Identifier (LEI): 4851003SBNLWFQX4XS80
06 December 2023
Petrol AD ("74JJ"), announces the publication of its
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OF PETROL GROUP
AND CONDENSED EXPLANATORY NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS FOR THE PERIODED SEPTEMBER 30, 2023
(This document is a translation of the original Bulgarian
document,
in case of divergence the Bulgarian original shall prevail)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the period ended September 30
2023 2022
BGN'000 BGN'000
Continuing operations
Revenue 436,341 559,208
Other income 665 5,144
Cost of goods sold (392,118) (504,971)
Materials and consumables (3,441) (5,525)
Hired services (15,424) (25,208)
Employee benefits (18,033) (15,921)
Depreciation and amortisation (9,701) (2,444)
Impairment losses (53) (39)
Other expenses (859) (582)
Finance income 1,822 1,015
Finance costs (4,448) (3,316)
Profit (loss) before tax (5,249) 7,361
--------- ---------
Tax income (expense) 130 (159)
--------- ---------
Profit (loss) for the period from
continuing operations (5,119) 7,202
--------- ---------
Discontinued operation
Loss from discontinued operation (net
of income tax) - (273)
Profit (loss) for the period (5,119) 6,929
--------- ---------
Total comprehensive income for the
period (5,119) 6,929
Profit (loss) attributable to:
Owners of the Parent company (5,119) 6,929
Non-controlling interest - -
Profit (loss) for the period (5,119) 6,929
========= =========
Total comprehensive income attributable
to:
Owners of the Parent company (5,119) 6,929
Non-controlling interest - -
--------- ---------
Total comprehensive income for the
period (5,119) 6,929
========= =========
Profit (loss) per share (BGN) from
continuing operations and discontinued
operation (0.19) 0.25
Profit (loss) per share (BGN) from
continuing operations (0.19) 0.26
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Sept. 30 Dec. 31
2023 2022
BGN'000 BGN'000
Non-current assets
Property, plant and equipment and
intangible assets 80,234 44,434
Investment properties 1,564 1,601
Right-of-use asset 44,003 52,578
Goodwill 5,999 57
Deferred tax assets 1,063 1,896
Trade loans granted 3,022 2,808
Other long-term receivables 55,000 -
Total non-current assets 190,885 103,374
--------- ---------
Current assets
Inventories 17,740 26,306
Loans granted 36,457 19,641
Trade and other receivables 38,045 34,051
Cash and cash equivalents 3,447 8,773
Total current assets 95,689 88,771
--------- ---------
Total assets 286,574 192,145
========= =========
Equity
Registered capital 109,250 109,250
Reserves 46,702 47,415
Accumulated loss (141,051) (136,645)
--------- ---------
Total equity attributable to the
owners of the Parent company 14,901 20,020
--------- ---------
Non-controlling interests 38 38
--------- ---------
Total equity 14,939 20,058
---------
Non-current liabilities
Loans and borrowings 154,588 49,811
Liabilities under lease agreements 36,000 42,834
Employee defined benefit obligations 807 807
Total non-current liabilities 191,395 93,452
--------- ---------
Current liabilities
Trade and other payables 69,269 64,517
Loans and borrowings 703 1,184
Liabilities under lease agreements 9,589 12,912
Income tax liability 679 22
Total current liabilities 80,240 78,635
--------- ---------
Total liabilities 271,635 172,087
--------- ---------
Total equity and liabilities 286,574 192,145
========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to the Non-controlling Total
owners of the Parent company interests equity
Registered General Reval. Accumulated Total
capital reserves reserve profit
(loss)
BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000 BGN'000
Balance at
January 24, ( 149,199
1, 2022 109,250 18,864 414 ) 3,329 2 4 3,353
Changes in equity
for 2022
Comprehensive
income
for the period
Profit /(loss)
for
the year - - - 11,705 11,705 (1) 11,704
Remeasurement on
defined
benefits
obligations - - - 86 86 - 86
Remeasurement on
property,
plant and
equipment - - 5,445 - 5,445 17 5,462
Other
comprehensive
income - - (545) - (545) (2) (547)
---------
Total other
comprehensive
income - - 4,900 86 4,986 15 5, 001
----------- ---------- --------- ------------ -------- ---------------- --------
Total 4
comprehensive , 9
income - - 00 11,791 16,691 14 16,705
----------- ---------- --------- ------------ -------- ---------------- --------
Transfer of
revaluation
reserve of
assets to
the accumulated
profit,
net of taxes - - (763) 763 - - -
----------- ---------- --------- ------------ -------- ---------------- --------
Balance at
December
31, 2022 109,250 18,864 28,551 (136,645) 20,020 3 8 20,058
=========== ========== ========= ============ ======== ================ ========
Changes in equity for the
period of 2023
Comprehensive
income
for the period
Loss for the
period - - - (5,119) (5,119) - (5,119)
Total
comprehensive
income - - - (5,119) (5,119) - (5,119)
----------- ---------- --------- ------------ -------- ---------------- --------
Transfer of
revaluation
reserve of
assets to
the accumulated
profit,
net of taxes - - (713) 713 - - -
Balance at
September
30, 2023 109,250 18,864 27,838 (141,051) 14,901 38 14,939
=========== ========== ========= ============ ======== ================ ========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended September 30
2023 2022
BGN'000 BGN'000
Cash flows from operating activities
Receipts from customers 537,083 721,736
Payments to suppliers (517,092) (734,529)
Refunded (paid) VAT and excise to the budget,
net 4,460 (2,038)
Payments related to personnel (17,464) (14,193)
Income tax paid (22) (143)
Other cash flows from operating activities,
net 507 17,985
---------- ----------
Net cash flows from operating activities 7,472 (11,182)
Cash flows from investing activities
Payments for purchase of property, plant
and equipment (198) (2,129)
Proceeds from sale of property, plant and
equipment 1,760 5,919
Payments for loans granted (2,330) (3,469)
Proceeds from loans granted 3,503 3,043
Interest received on loans and deposits 50 713
Payments for investments acquired (50,431) (25)
Proceeds from other investments (55,000) 3
Net cash flows used in investing activities (102,646) 4,055
Cash flows from financing activities
Proceeds from loans 106,498 9,600
Repayment of loans and borrowings (1,850) (513)
Lease payments (12,049) (1,649)
Interest, bank fees and commissions paid,
net (2,098) (1,917)
Other cash flows from financing activities,
net (682) (287)
Net cash flows from financing activities 89,819 5,234
Net decrease in cash flows during the period (5,355) (1,893)
Cash at the beginning of the period 8,773 4,027
Effect of movements in exchange rates (12) 203
---------- ----------
Cash as per cash flow statement at the
end of the period 3,406 2,337
Restricted cash 41 41
---------- ----------
Cash as per statement of financial position 3,447 2,378
========== ==========
I. General Information
Petrol AD (the Parent company) was registered in Bulgaria in
1990 and entered in the Commercial Register to the Registry Agency
with UIC 831496285. The headquarter address of the Parent company
is 12 Tyrgovska Str., Hotel Lovetch in Lovetch city. As at the end
of the reporting period shareholders are legal entities, the
country - through the Ministry of Economy and Industry and
individuals.
The main activity of Petrol AD and its subsidiaries (the Group)
is related with trading of petrol products, non-oil products,
merchandise and services.
These explanatory notes are prepared according to the
requirements of Art. 100o1, par.5 of the Public Offering of
Securities Act (POSA) and Appendix 4 to the Ordinance No 2 of
November 09, 2021 for initial and subsequent disclosure of
information during public offering of securities and admission of
securities to trading on a regulated market by the public companies
and other issuers of securities, and represent information about
important events occurred during the third quarter of 2023. The
explanatory notes reflect their influence on the results in the
statements for the third quarter of 2023 and describe of the main
risks and uncertainties, which stay ahead of the Petrol Group for
the rest of the financial year and comprise information for
transactions with related parties and/or interested parties, as
well as information for emerging significant receivables and/or
payables during the same period.
II. Information on important events, occurred in the third
quarter of 2023 and cumulatively from the beginning of the
financial year to the end of the current quarter
General
These interim consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the Commission of the European Union
(EU).
These interim consolidated financial statements have been
prepared under the historical cost convention, except for
provisions, assets and liabilities under IFRS 16 reported at the
present value of expected future payments. When compiling it, the
same accounting policy and calculation methods applied in the last
annual financial statement have been followed.
Property, plant, equipment, intangible assets and non-current
assets held for sale
The initial revalued (to fair) value of property, plant and
equipment and intangible assets has been initially determined by an
independent appraiser's through market valuation prepared and
applied in the accounting policy as of 1 January 2020. Based on the
NSI Consumer Price Index in December 2022 compared to the same
month in 2021, which shows an annual inflation rate of 16.9%,
Management has made a judgement that there could be a material
variance in the fair values of the assets and has assigned new
market valuations as at December 31, 2022. In these interim
consolidated financial statements, property, plant and equipment
and intangible fixed assets are presented at the valuations
prepared by an independent valuer as at December 31, 2022, which
used the intermediate comparisons method, capitalised rental income
and property value methods to determine fair value.
As at September 30, 2023 the Group has property, plant,
equipment and intangible assets with total carrying amount of BGN
80,234 thousand.
Property, plant and equipment with a carrying amount of BGN
61,534 thousand are mortgaged or pledged as collaterals under bank
loans, granted to the Group and to unrelated parties, under credit
limit agreements for issuance of bank guarantees.
Investment property
The investment properties of the Group, representing a land and
a building, were acquired in December 2016 through a business
combination. The carrying amount of the investment property is the
maximum approximation of their fair value, which as at September
30, 2023 is BGN 1,564 thousand. The Group measures the fair value
of investment property for disclosure purposes using an appraisal
of an independent appraiser done using the methods of market
comparison, rental income capitalization and the method of
depreciated replacement cost. As at September 30, 2023 the fair
value of the investment properties is BGN 2,061 thousand. The
investment properties are part of a set of assets serving to secure
liabilities of up to BGN 1,500 thousand under a revolving credit
line agreement signed in 2016.
Leases
The consolidated statement of financial position as at September
30, 2023 presents the following items and amounts related to lease
agreements:
Consolidated statement of financial position September
30, 2023
BGN'000
Right-of-use assets, incl.: 44 , 033
Properties (lands and buildings) 43 , 414
Transport vehicles 581
Machinery, plants and equipment 8
( 45 , 589
Liabilities under leases, incl.: )
Current liabilities ( 9,589 )
( 36 , 000
Non-current liabilities )
Depreciation costs of right-of-use assets,
incl.: 8,666
Properties (lands and buildings) 8,386
Machinery, plants and equipment 254
Transport vehicles 26
Interest for right-of-use assets on lease
agreements 1,720
-------
Total 10,386
=======
As a result of the amendments entered into in 2022 to the
operating lease agreements for the retail outlets, which extended
the term of the agreements to the end of 2027 in order to secure
the Group's operations in the long term and provided for a
significant termination penalty in respect of each retail outlet,
these agreements ceased to meet the criteria for exceptions under
the standard and assets and liabilities under lease agreements were
recognised in accordance with the requirements of IFRS 16.
Long-term Deposits in Banks
In September 2023, the Group provided cash to a commercial bank
under the Debt Product Agreement against interest tied to the
Bank's Base Interest Rate (BIR) plus an allowance of 2.9093 points
for a period of ten years. As of September 30, 2023, the deposited
amounts total BGN 55,000 thousand. The Group has entered into an
agreement for the blocking of these funds in order to ensure the
fulfillment of the credit line granted by the same bank, with the
same term.
Loans Granted
As at 30 September, 202 3 the Group reports receivables on
short-term trade loans, net of impairment at the total amount of
BGN 39,479 thousand, including BGN 36,457 thousand short-term
receivables. The loans are granted to unrelated parties with the
following interest rates and maturity:
Debtor Net Receivables Principal Interest Annual
- Local as at Accrued interest
Legal Entity Sept.30,202 impairment
3
BGN'000 BGN'000 BGN'000 BGN'000 % Maturity
Company 7,843 7,909 - (66) 7.00 % 31.dec.23
Company 5,830 5,830 - - 7.00 % 31.dec.23
Company 5,700 5,410 1,377 (1,087) 6.70% 31. dec.23
Company 5,559 4,672 1,937 (1,050) 6.70% 31. dec.23
Company 4,749 3,555 1,727 (533) 5.00% 31. dec.25
Company 3,612 3,645 - (33) 7.00 % 31. dec.23
Company 3,508 3,000 1,040 (532) 5.00% 31. dec.23
Company 1,138 1,204 163 (229) 6.70% 31. dec.19
Company 1,068 1,036 32 - 5.00% 31. dec.23
Company 400 313 87 - 7.00% 07.aug.23
Company 67 65 2 - 6.70% 31. dec.23
Company 5 121 12 (128) 5.00% 31. dec.23
Company - 5,190 - (5,190) 0.00% 28.oct.15
Company - 2,210 - (2,210) 9.50% 28.oct.15
Company - 1,500 133 (1,633) 8.75% 17.jul.15
Company - 1,258 388 (1,646) 6.70% 31.dec.23
Company - 44 - (44) 9.50% 21.jan.17
Company - 23 4 (27) 6.70% 31.dec.23
Company - 12 1 (13) 8.50% 26.aug.15
Company - - 429 (429) 6.70% 31.dec.19
39,479 46,997 7,332 (14,850)
=============== ================ ========== ========= ============ ========== ===========
Cash and cash equivalents
As at September 30, 2023 the Group reported cash amounted to BGN
3,447 thousand as BGN 41 thousand are blocked as collateral under
enforcement cases.
In the notes under Art.15 par.1 of Ordinance No2 and the Public
Offering of Securities Act (POSA), as cash equivalents of BGN 2,407
thousand, is presented the cash collected from the trade sites as
at the end of the reporting period and actually registered in the
Group's bank accounts at the beginning of the next reporting
period.
Registered capital
The Group's registered capital is presented at its nominal
value. The registered capital of the Group represents the
registered capital of the Parent company Petrol AD.
As at the end of the reporting period shareholders in the Parent
company are as follows:
Shareholder Sept. 30,
2023
Alfa Capital AD 28.85 %
Yulinor EOOD 23.11 %
Perfeto Consulting EOOD 16.43 %
Trans Express Oil EOOD 9.82 %
Petrol Bulgaria AD 7.05 %
Gryphon Power AD 5.49 %
Storage Invest EOOD 3.66 %
VIP Properties EOOD 1.79 %
The Ministry of Energy of the Republic of Bulgaria 0.65 %
Other minority shareholders 3.15 %
----------
100.00
%
==========
The Management of the Parent company has undertaken series of
measures related to optimization of its capital adequacy. At
several General Meetings of Shareholders (GMS) held in the period
of 2016 - 2017 a decision for reverse-split procedure for merging 4
old shares with a nominal value of BGN 1 into 1 new share with a
nominal value of BGN 4 and consequent decrease of the capital of
the Parent company in order to cover losses by decreasing the
nominal value of the shares from BGN 4 to BGN 1, was voted. In
March 2018, following a decision of the Lovech Regional Court,
which repealed the refusal of the Commercial Register to register
the decision voted on EGMS for merging 4 old shares with a nominal
value of BGN 1 into 1 new share with a nominal value of BGN 4, the
applied change was registered in CR resulting in registered capital
of the Parent company of BGN 109 249 612, distributed in 27 312 403
shares with a nominal value of BGN 4 each. The change in the
capital structure of the Parent company was registered also in
Central Depositary AD. The submitted on April 2018 application for
registration of the voted on EGMS decision for the second stage of
the procedure of the Parent company's capital to be decreased by
decreasing the nominal value of the shares from BGN 4 to BGN 1 in
order to cover losses, was refused by the Commercial Register.
At the EGMS of Petrol AD held on November 8, 2018 the decision
to decrease the capital of the Parent company in order to cover
losses by decreasing the nominal value of the shares from BGN 4 to
BGN 1 was voted again. A refusal of the application for
registration of the decision in CR was enacted, which was appealed
by the Parent company within the legal term. Minority shareholders
disputed the decision of the EGMS and additionally to the refusal,
the application proceedings was postponed until the pronouncing of
the Lovech Regional Court on the court proceedings, initiated on
minority shareholders request. In March 2019 Lovech Regional Court
enacted a decision, which indicates CR to register the decrease of
the capital after a resumption of the registration proceedings
after the pronouncing on the legal proceedings initiated by the
minority shareholders.
In February 2019 was held a new EGMS, where the decision for
reduction of capital was voted again and a decision for
substitution of the deceased member of Supervisory Board Ivan
Voynovski with Rumen Konstantinov was taken. A refusal on the
application for registration of these circumstances in the file of
the Parent company was enacted, which was appealed by the Parent
company within the statutory term. In addition to the refusal, the
registration proceeding was ceased on request of minority
shareholders until the Regional Court - Lovech rules on.
In May 2019 the Lovech Regional Court enacted a decision, which
repealed the enacted refusal and turn back the case to the Registry
Agency for registration of the application after a resumption of
the ceased registration proceedings. At present, the court
proceedings requesting a cancellation of the decisions taken on
EGMS in February 2019 are pending.
At the EGMS of Petrol AD convened on March 29, 2023, a decision
was again voted to reduce the capital of the Parent company in
order to cover losses by reducing the nominal value of the shares
from BGN 4 to BGN 1.
Current income tax liabilities and tax audits
As at September 30, 2023 the Group has current corporate tax
liabilities of BGN 679 thousand.
In August 2022 the Parent company received an ordinance for tax
audit of the declared and paid corporate tax and taxes on expenses
for the period 2016-2021 and value added tax for the period
December 2016 - July 2022. The term for the completion of the
revision, according to the latest extension order, is September 30,
2023. As of the date of issuance of these explanatory notes, the
audit was completed without significant findings and an audit
report was delivered to the Parent company.
Loans and borrowings and factoring liabilities
As at September 30, 2023 the Group has total liabilities under
received bank, debenture and trade loans of BGN 155,291 thousand,
including BGN 703 thousand current liabilities.
Bank loans
In September 2018 the Group entered into a credit-overdraft
agreement on current account in commercial bank, intended for
working capital with maximum allowed amount of BGN 2,000 thousand
and repayment period until January 31, 2019 and contracted interest
rate as Savings-based Interest Rate (SIR) plus added amount of
6,1872 points, but cumulatively not less than 6.5 per cent
annually. The credit is secured with a special pledge of its goods
in turnover, representing oil products and with pledge of
receivables on bank accounts. In December 2018, as a result of a
signed annex to an agreement from 2016 for revolving credit line
with the same bank, the Group negotiated an increase of the amount
of the credit line of BGN 9,500 thousand with an additional amount
of BGN 11,500 thousand, by which the total amount of credit line
rose to BGN 21,000 thousand. The line is separated in total limit
of BGN 13,500 for issuance of bank guarantees and BGN 7,500 for
refinancing of the received credit-overdraft of BGN 2,000 thousand
and the rest for working capital.
The increased amount of the credit limit on the revolving credit
line is covered additionally with establishment of mortgages and
pledges of properties, plants and equipment and special pledge on
goods in turnover, representing oil products. In June 2019 the loan
was partially repaid and the limit for working capital decreased
from BGN 7,500 thousand to BGN 7,000 thousand as at December 31,
2020. In January 2020 the Parent company renegotiated the terms of
the used credit line granted to it by a commercial bank under a
revolving credit line agreement and achieved a reduction of the
annual compound interest of SIR + 5,2802 per cent, but not less
than 5.5 per cent. In March 2021 and September 2021 the Group
repaid BGN 1,650 thousand principal of this tranche of the credit
line. In December 2021 the bank granted additional tranche for BGN
100 thousand and the repayment term is extended to December 15,
2024. As at September 30, 2023 the Group has a principal liability
under this loan for BGN 5,400 thousand.
In April 2022 the Parent company negotiated an increase for
working capital under this credit line by a new tranche with a
maximum amount of BGN 4,500 thousand, as with the same amount the
line for bank guarantees was decreased. The amount is received and
as at September 30, 2023 the Group has an principal liability under
this tranche for BGN 4,500 thousand. The contracted annual interest
is Savings-based Interest Rate (SIR) plus added margin of 4.174
points, but not less than 4.25 per cent. The payment term is until
December 16, 2024.
In June 2022 the Parent company negotiated another increase for
working capital under this credit line by a new tranche with a
maximum amount of BGN 3,600 thousand, as with the same amount the
line for bank guarantees was decreased. The amount is received and
as at September 30, 2023 the Group has an principal liability under
this tranche for BGN 3,600 thousand. The contracted annual interest
is Savings-based Interest Rate (SIR) plus added margin of 4.1764
points, but not less than 4.25 per cent. The payment term is until
December 14, 2024.
On September 30, 2022 the Group received a letter from the
bank-creditor for one-sided increase of the added margin to the
interest rate by 0.5 per cent on the granted by the bank three
tranches, due to changed interest environment and high inflation
rates.
In April 2023, the Parent company negotiated a new tranche for
working capital in the amount of BGN 1,000 thousand under the
granted revolving credit line with a repayment term of May 31,
2023. As a result of the new tranche, the total limit under the
granted revolving credit line amounts to BGN 19,900 thousand. The
agreed annual interest is in the amount of Savings-based Interest
Rate (SIR) per BGN, increased by a margin of 5.3608 points, but not
less than 5.5 per cent. The maturity date of this tranche is
November 1, 2023, and a repayment plan of five equal monthly
principal installments of BGN 200,000 each has been agreed upon.
The amount under the tranche has been fully utilized, and the
obligation under the tranche as at the date of this report is BGN
402 thousand.
In July 2023, the Parent company entered into an agreement with
a commercial bank for the granting of a revolving credit line in
the amount of BGN 220,000 thousand, intended to be used including,
but not limited to, investment purposes, working capital, issuing
bank guarantees and letters of credit. The funds can be used and
repaid multiple times until August 15, 2033, and the deadline for
repayment of all obligations arising from the credit line is until
September 15, 2033. The annual interest that is due on the borrowed
amount consists of the Bank's Base Interest Rate (BIRa) for BGN
applied by the bank plus an allowance in the amount of 3.21 points,
but not less than 5.9 per cent. The credit line is secured by a
special pledge of a commercial enterprise of Petrol AD, the
subsidiaries Kremikovtsi Oil EOOD, Shumen Storage EOOD, Office
Estate EOOD, Crystal Asset Property EOOD, Crystal Assets Trade EOOD
and unrelated legal entities, guarantee by an unrelated entity,
contractual mortgages on real estate properties of co-debtors,
including unrelated entities, financial security on account
receivables in the bank and cash deposited by the borrower under a
debt product agreement.
The funds under the revolving credit line with a total credit
limit of BGN 220,000 thousand are provided in tranches,
additionally approved by the bank and with additional agreed terms
and annexes between the parties.
In July 2023, based on the revolving line agreement with a total
limit of BGN 220,000 thousand, a tranche No1 in the amount of BGN
90,000 thousand is agreed with an Annex No.1, as an investment loan
for the purchase of assets and company shares with an utilization
period until October 30, 2023. The interest rate and repayment term
do not differ from those agreed in the main agreement. As at
September 30, 2023, the Group has an obligation under this tranche
for a principal in the amount of BGN 49,750 thousand.
In July 2023, based on the revolving credit line agreement with
a total limit of BGN 220,000 thousand, a tranche No2 in the amount
of BGN 30,000 thousand is agreed with an Annex No.2, for working
capital, for refinancing obligations under an existing revolving
credit line granted by the same bank and for payment under bank
guarantees and letters of credit. The term of utilization is until
August 14, 2033. The interest rate and repayment term do not differ
from those agreed in the main agreement. As at September 30, 2023,
the Group has no utilization or obligation under this tranche.
In July 2023, based on the revolving line agreement with a total
limit of BGN 220,000 thousand, tranche No.3 in the amount of BGN
55,000 thousand is agreed with an Annex No.3, for working capital
in the form of an overdraft. The deadline for repeated utilization
and use of the amount under this tranche is until August 14, 2033.
The interest rate and repayment term do not differ from those
agreed in the main agreement. As at September 30, 2023, the Group
has an obligation under this tranche for principal in the amount of
BGN 39,998 thousand.
In July 2023, based on the revolving line agreement with a total
limit of BGN 220,000 thousand, tranche No.4 in the amount of BGN
45,000 thousand is agreed with an Annex No4, as a revolving credit
for working capital. The term for utilization and use of the amount
under this tranche is until August 14, 2033. The interest rate and
repayment term do not differ from those agreed in the main
agreement. As at September 30, 2023, the Group has an obligation
under this tranche for principal in the amount of BGN 15,000
thousand.
Debenture loans
In October 2006, the Parent company issued 2,000 registered
transferable bonds with fixed annual interest rate of 8.375 per
cent and emission value of 99.507 per cent of the nominal, which is
determined at EUR 50,000 per bond. The purpose of the bond issue is
to provide funds for working capital, investment projects financing
and restructuring of previous Group's debt. The principal was due
in one payment at the maturity date and the interest was paid once
per year. At the general meetings of the bondholders conducted in
October and December 2011, it was decided to extend the term of the
issue until January 26, 2017. On December 23, 2016, a procedure for
extension of the bond issue to 2022 and reduction of the interest
rate in the range from 5.5 per cent to 8 per cent was successfully
completed.
In September 2020, the Parent company successfully completed a
procedure for renegotiation of the terms of the debenture loan. The
maturity of the principal of the debenture loan is deferred until
January 2027, and the agreed interest rate is reduced to 4.24 per
cent per year, as the periodicity of the due interest (coupon)
payments is every six months - in January and in July of each year
until the maturity of the loan.
As at the date of preparation of these financial statements the
nominal value of the debenture loan is EUR 18,659 thousand.
The liabilities under the debenture loan are disclosed in the
statement of financial position at amortised cost. The annual
effective interest rate after the term extension of the bond issue
is 4.67 per cent. (incl. 4.24 per cent annual coupon rate).
Factoring
In February 2019 the Group entered into an agreement with a
commercial bank for factoring with special terms and without
regress for transferring of preliminary approved receivables with a
maximum period of the deferred payments up to 120 days from the
date of invoice issuance with a payment in advance of 90 per cent
of the value of the transferred receivables including VAT. The
commission for factoring services is 0.35 per cent of the total
value of the transferred invoices plus additional annual taxes. The
interest for the amounts paid in advance is Base Deposit Index for
Legal Entities + 1.95 per cent, accrued daily and paid on monthly
basis at the end of every calendar month. In November 2021 a new
Annex for special terms with a regression right, decrease of the
commission to 0.13 per cent on the total amount of the transferred
invoices including VAT, and decrease of the interest to Base
Deposit Index for Legal Entities + 1.60 per cent accrued daily and
paid on monthly basis at the end of every calendar month, was
signed. As at September 30, 2023, the Group has BGN 167 thousand
exposure under this factoring agreement.
Operating lease agreements
The Group is lessee under operating lease agreements. As at
September 30, 2023 the recognised rental expenses in the statement
of profit or loss and other comprehensive income, include expense
at the amount of BGN 488 thousand for renting of fuel stations
under operating lease, which fall within the exceptions of IFRS 16
and which agreements include clause stipulating that both parties
have the right to cease the agreement for each separate fuel
station or as a whole with an immaterial penalty.
Subsidiaries
The Parent company (the Controlling company) is Petrol AD. The
subsidiaries included in the consolidation, over which the Group
has control as at September 30, 2023 are as follows:
Subsidiary Main activity Ownership
interest
Petrol Properties Trading movable and immovable property 100 per
EOOD cent
Varna Storage EOOD Trade with petrol and petroleum 100 per
products cent
Petrol Finance EOOD Financial and accounting services 100 per
cent
Elit Petrol -Lovech Trade with petrol and petroleum 100 per
AD products cent
Lozen Asset AD Acquisition, management and exploitation 100 per
of property cent
Kremikovtsi Oil Processing, import, export and trading 100 per
EOOD with petroleum products cent
Shumen Storage EOOD Processing, import, export and trading 100 per
with petroleum products cent
Office Estate EOOD Ownership and management of real 100 per
estates cent
Svilengrad Oil EOOD Processing, import, export and trading 100 per
with petroleum products cent
Varna 2130 EOOD Trade with petrol and petroleum 100 per
products cent
Petrol Export EOOD Export wholesale trading with fuels 100 per
cent
Bulgaria Cargo Rail Export and transport of petrol and 100 per
EOOD petroleum products cent
Crystal Asset Trade Local and international trading 100 per
EOOD with goods and services cent
Crystal Asset Property Local and international trading 100 per
EOOD with goods and services cent
Petrol Oil Recycling Management, collection and recycling 100 per
EOOD of wastes of petrol products cent
Petrol Investment Acquisition, management and exploitation 99,98 per
AD of property cent
Petrol Finances Financial and accounting services 99 per
OOD cent
Petrol Technologies IT services and consultancy 98,80 per
OOD cent
Petrol Technology IT services and consultancy 98,80 per
OOD cent
In June 2023, a new subsidiary company named Petrol Oil
Recycling EOOD was established by a cash contribution. In return
for the cash contribution, the Parent company acquires 5,000 (five
thousand) company shares, representing 100% of the capital.
In July 2023, a contract for the purchase and sale of company
shares was signed, according to which the Parent company must
transfer to a third party 1,841,700 company shares, each with a
nominal value of one lev, representing 100% of the capital of
Svilengrad Oil EOOD. No payments were made under this contract and
in November 2023 an agreement for retrospective cancelation of the
contract was signed.
In September 2023, with a contract for the transfer of company
shares and an investment bank loan, Petrol AD acquired 364,512
company shares with a nominal value of one share of 100 BGN, which
represent 100 per cent of the capital of Crystal Asset Property
EOOD. The transferred remuneration is in the amount of BGN 42,000
thousand. As of the date of acquisition, the assets and liabilities
are presented at their fair value assessed by a licensed appraiser.
According to the valuation report, a difference between carrying
value and fair value was identified only for property, plant and
equipment. As a result, the Group has recognized goodwill in the
amount of BGN 4,426 thousand. The payment of the consideration for
the acquisition of Crystal Asset Property EOOD is entirely with
bank credit and is presented in the consolidated statement of cash
flows net of the acquired cash and is in the amount of BGN 41,990
thousand.
In September 2023, with a contract for the transfer of company
shares and an investment bank loan, Petrol AD acquired 66,958
company shares with a nominal value of one share of 100 BGN, which
represent 100% of the capital of Crystal Assets Trade EOOD, for
consideration in the amount of BGN 8,500 thousand. As of the date
of acquisition, the assets and liabilities are presented at their
fair value assessed by a licensed appraiser, as there is a
difference between the transfer value and the fair value only for
property, machinery and equipment. The Group recognized goodwill in
the amount of BGN 1,516 thousand. The consideration for the
acquisition of Crystal Assets Trade EOOD was paid in full with a
bank loan. In the consolidated statement of cash flows, the payment
is presented net of the acquired funds and is in the amount of BGN
8,441 thousand.
Contingent liabilities, including information for newly arising
significant liabilities for the reporting period
As at September 30, 2023 the Group has contingent liabilities,
including issued mortgages and pledges of property, plant and
equipment and non-current assets held for sale, which serve as a
collateral for bank loans granted to the Group and unrelated
parties and credit limits for issuance of bank guarantees with
total carrying amount of BGN 61,534 thousand, including in favour
of First Investment Bank AD BGN 56,083 thousand, Investbank AD -
BGN 3,383 thousand and DSK AD - BGN 2,068 thousand.
Pursuant to an agreement from October 17, 2018 and its annexes,
the Group is a joint debtor and a guarantor on a promissory note
for the amount of BGN 48,750 thousand in favour of Investbank AD
under a credit facility on unrelated party - supplier, including,
including limit for overdraft and limit for stand-by credit for
issuance of bank guarantees in favour of Customs Agency. The total
amount of the utilized funds and issued bank guarantees of all
borrower's exposures to the Bank shall not exceed BGN 44,000
thousand. In relation to this credit agreement, the Group has
established a special pledge on its cash in the bank account opened
in Investbank AD with total amount of BGN 10 thousand as at
September 30, 2023 and a special pledge on receivables from
contractors for BGN 4,000 thousand average monthly turnover.
Pursuant to an agreement from June 17, 2021 the Group is a joint
debtor in favour of Investbank AD under credit line for bank
guarantees for BGN 600 thousand, received by an unrelated party -
supplier.
Pursuant to an agreement from February 24, 2022 the Group is a
joint debtor in favour of Investbank AD under an investment credit
line agreement for USD 1,260 thousand, granted to an unrelated
party - supplier, repaid in full on June 26, 2023, and the
joint-liability is waived.
The Group bears a joint obligation according to an debt
agreement from January 13, 2017 on an obligation of a subsidiary
until March 2018 - Elit Petrol AD for BGN 2,346 thousand as at
September 30, 2023.
Under a bank agreement for revolving credit line signed on
September 21, 2016, bank guarantees were issued for a total amount
of BGN 5,378 thousand as at September 30, 2023, including BGN 2,850
thousand in favor of third parties - Group's suppliers, BGN 500
thousand in favour of Ministry of Economy for securing the
operations of the Parent company related to its registration under
the Law on the Administrative Regulation of Economic Activities
Related to Oil and Petroleum Products, and BGN 2,028 thousand to
secure own liabilities related to contracts under the Public
Procurement Act. As at September 30, 2023, the contract is secured
by a pledge on all of the Group's receivables on bank accounts to
secure liabilities up to the amount of the credit limit with a book
value as at September 30, 2023 in the amount of BGN 262 thousand,
as well as with mortgages of properties and pledges of machinery
and equipment, as well as with a set of assets of a subsidiary at
the amount of BGN 1,500 thousand.
There is a pending litigation in relation to a signed in 2015
guarantee contract of the liabilities of a subsidiary until
February 2018, arising of a cession contract of BGN 245 thousand.
In April 2020 a final decision on the pending case was ruled. The
court held that the Group is responsible as a guarantor for the
obligations of the subsidiary under the cession contract. The Court
of Appeal annulled the decision of the first-instance court in its
entirety and found that the Group's claim under the warranty
agreement had been established jointly with the other related
party. The decision of the Court of Appeal was appealed by the
Parent company in the Supreme Court of Cassation, but was not
allowed to appeal. The Group has filed a claim to establish the
non-existence of these receivables, and the case initiated is
pending. A collateral at the amount of BGN 25 thousand to the
court's account was admitted for a future claim against the
provision of a guarantee in favor of the Group, as a result of
which the enforcement proceedings initiated against the Group for
these receivables were suspended. By a decision of November 2021,
the Court recognized as established on the negative claim filed
by
the Parent company that the Group does not owe the defendant
these claims. The decision of November 2021 was appealed by the
defendant and the case is currently pending at second instance. In
August 2022, the Sofia Court of Appeal overturned the decision of
the first instance court in its entirety. The decision of the CAS
has been appealed and the case is currently pending before the
Supreme Court of Cassation.
The funds given as collateral under Art. 180 and Art. 181 of the
Law on Obligations and Contracts (LOC) at the amount of BGN 245
thousand in the case initiated against the Group in 2015, together
with the amount of BGN 93 thousand, were collected by the bailiff
in the course of the enforcement proceedings initiated against the
Group. However, they have not been distributed due to the
suspension of the enforcement case, based on the security of a
future claim provided in favor of the Group and remain blocked on
the account of the bailiff until the final conclusion of the
litigation.
In the previous reporting periods Group's companies have entered
into the debt under two loan agreements of a subsidiary with a
bank-creditor (until December 2015) for USD 15,000 thousand and USD
20,000 thousand, respectively. In 2015 the bank -creditor acquired
court orders for immediate execution and receiving orders against
the subsidiaries - joint debtors. In relation to the claims filed
by the subsidiaries, the competent court has revoked the immediate
enforcement orders and has invalidated the receiving orders. In
October and December 2015 the creditor has filed claims under Art.
422 of Civil Procedure Code (CPC) against the subsidiaries for the
existence of the receivables under each loan agreement. The court
proceedings of the creditor are still pending.
In December 2016 the first-instance court decreed a decision
(the Decision) which admit for established that the bank has a
receivable amounted to USD 15,527 thousand from the subsidiaries -
joint debtors, arising from a signed loan agreement for USD 15,000
thousand. With the same decision the court has ordered the
joint-debtors to pay BGN 411 thousand to the bank - creditor for
legal advisory fees and court dispute expenses and BGN 538 thousand
state fee in favor of the judiciary state for the ordered
proceedings and BGN 538 thousand state fee for claim proceedings.
In January 2017, the co-debtors have filed in time appeals against
the court decision, because of that the decision did not come into
force. As at the date of the preparation of these explanatory
notes, the court dispute is pending in the appeal court. The
Group's Management considers that there are grounded chances the
Decision to be entirely repealed.
As at the date of the preparation of these explanatory notes,
the filed proceedings against the subsidiaries - joint debtors for
estimation of the bank receivables due to the loan agreement for
USD 20,000 thousand is pending before the first-instance court. The
Management expects favorable decision by the competent court. In
2018 the Parent company sold its interest in one of co-debtor
subsidiaries and the potential risk for the Group is reduced to the
court proceedings against the second subsidiary.
A creditor of a subsidiary (until December 2015) unreasonably
claimed in court the responsibility of the Parent company under a
contract of guarantee for liabilities arising from a contract for a
framework credit limit as a result of that the bank accounts of the
Parent company amounting to USD 29,983 thousand were garnished.
This claim was disputed in court by Petrol AD because the liability
as guarantor has not occurred and / or extinguished pursuant to
Art. 147, par. 2 of the LOC. At the time of conclusion of the
guarantee deadline of the arrangements between the lender and
subsidiary contractual framework for credit limit was July 1, 2014.
The term of the framework credit limit was extended without the
consent of the customer, therefore the responsibility of the latter
has fallen by six months after initially agreed period, during
which the creditor has brought an action against the principal
debtor. The term under Art. 147, par. 1 of the LOC is final and
upon its expiration the Parent company's guarantee has been
terminated, so the objection of the Parent company was granted by
the court and imposed liens on bank accounts were lifted.
Following the cancellation of the writ of execution, pursuant to
order proceedings, which imposed liens on bank accounts of the
Parent company, the creditor has initiated legal claim proceedings
under Art. 422 of the CPC to establish the same claims against the
subsidiary (until December 2015) and the guarantor Parent company.
In these proceedings the objections are repeated that liability as
guarantor has not occurred and / or extinguished pursuant to Art.
147, par. 2 of the LOC, and therefore the Management expects that
the claim of the creditor against the Parent company will be
dismissed permanently by a court decision on those cases. At
present, the case is suspended due to the existence of a
preliminary ruling, which is important for the correct resolution
of the case.
The Group claims its receivables to the subsidiary (until
December 2015). The presented claims are included in the list of
accepted claims prepared by the receiver under Art. 686 of the
Criminal Code, but the same are contested by another creditor in
the bankruptcy proceedings. Currently, the pending legal
proceedings to establish the existence of these claims pursuant to
Art. 694 of the Criminal Code ended with a decision, and the court
accepted the claims of the Group up to the amount of BGN 4,794
thousand.
In March 2021, the Group signed with First Investment Bank AD an
agreement for the purchase of receivables under commercial invoices
(standard factoring). The agreement is secured by a pledge of
receivables on the Group's bank accounts opened in the bank, with a
book value as of September 30, 2023 in the amount of BGN 262
thousand.
In November 2021, the Group signed with Allianz Bank Bulgaria AD
a factoring agreement with regress and interest rate of Base
Deposit Index for Legal Entities +1.6 per cent, but not less than
1.6 per cent per year on the amount of the advance provided. As at
September 30, 2023, the Group has liabilities at the amount of BGN
167 thousand related with financing received under this factoring
agreement.
As at September 30, 2023, funds in the Group's bank accounts in
the amount of BGN 41 thousand have been blocked in enforcement
cases to which the Group is a counterparty.
As collateral, a promissory note in the amount of BGN 15,000 was
issued to a counterparty of the Parent company under a contract
concluded in 2023 for the purchase of fuels with deferred
payment.
According to an agreement for a revolving credit line signed in
2023 with a total limit of BGN 220,000 thousand, in July 2023 a
pledge of a commercial enterprise was established as a set of
rights and obligations and factual relations of Petrol AD,
Kremikovtsi Oil EOOD, Shumen Storage EOOD, Office Estate EOOD,
Crystal Asset Property EOOD, Crystal Assets Trade EOOD. For a
security under the same agreement, the Group has provided a pledge
of receivables on bank accounts opened in the bank, including
deposited funds under a contract for a debt product with a book
value as at September 30, 2023 in the amount of BGN 55,000
thousand.
Other significant events occurred during the reporting quarter
and cumulatively from the beginning of the financial year
With a Decree No. 739 of 26.10.2021, amended by a Decree No. 771
of 06.11.2021 and a Decree No. 885 of 16.12.2021, the Council of
Ministers adopted a program for compensating non-residential end
customers of electricity. The program aims to protect and assist
all non-residential end-users in coping with the effects of
fluctuating electricity prices. At the end of the reporting period,
the Group received and reported revenue from financing under this
program in the amount of BGN 141 thousand.
III. Disclosure of transactions with related parties
The total amount of the accrued remunerations of the members of
Management and Supervisory Board of the Parent company, included in
the personnel expenses, amounted to BGN 923 thousand, and the
unsettled liabilities as at September 30, 2023 are at the amount of
BGN 68 thousand, including BGN 56 thousand to personnel and BGN 12
thousand obligations to related entities.
During the reporting period of 2023 no other related party
transactions took place.
IV. Risks and uncertainties ahead of the Group for the rest of
the financial year
Macroeconomic environment
The Petrol Group's activity is influenced by the general
economic condition of the country and in particular the degree of
the successful adoption of the market-oriented economic reforms by
the government, changes in the gross domestic product (GDP) and the
purchasing power of the Bulgarian customers. In the long term the
change in the fuels consumption in the country is commensurate with
the GDP.
At the end of 2019, a new coronavirus was identified in China.
Due to the fast widespread of the virus across the world at the
beginning of 2020, the World Health Organization declared a global
pandemic. On March 13, 2020 the Parliament declared a state of
emergency on request of the Government of Republic of Bulgaria and
on March 24, 2020 the Law on Measures and Actions during a State of
Emergency became effective. In order to restrict the widespread of
coronavirus infection, an Order of the Health Minister was issued
for the introduction of anti-epidemic measures, which directly
affect the business activity of the Group. Part of the measures
include extension and interruption of the administrative deadlines,
extension of the of administrative acts, suspension of the
procedural court terms and the statute of limitations, changes in
the labor legislation, referring to new working hours, suspension
of work and / or reduction of working hours and use of leave, etc.
The pandemic causes a significant reduction in economic activity in
the country and raises significant
uncertainty about future processes in macroeconomics in 2020 and
beyond.
The Group's Management monitors the emergence of risks and
negative consequences in the outcome of the pandemic with COVID-19,
currently assessing the possible effects on the assets, liabilities
and activities of the Group, striving to comply with contractual
commitments, despite the uncertainties and force majeure
circumstances. In view of the introduced anti-epidemic measures and
restrictions in the pandemic, which cause a significant reduction
in economic activity and creates significant uncertainty about
future business processes, there is a real risk of a decline in
sales of the Group. However, Management believes that it will be
able to successfully bring the Group out of the state of emergency
in which it is placed.
At the end of February 2022, a number of countries (including
the United States, the United Kingdom, Canada, Switzerland, Japan
and the EU) imposed sanctions on certain legal entities and
individuals in Russia due to its official recognition of two
regions separating from Ukraine, the Donetsk Republic and the
Luhansk Republic and the military operations on the territory of
Ukraine started on February 24, 2022. Subsequently, additional
sanctions against Russia were announced. The recent events arising
from the military conflict in Ukraine have created challenges for
businesses located and operating there. As a result of the
beginning of 2022, there has been a significant increase in the
fuel prices - a sector in which the Group also operates.
The Group has no assets in the affected countries, no direct
relationships with counterparties operating in these countries. The
Management is in the process of analyzing the risks and effects on
the Group.
The arising military conflict and the imposed by EU, US
economic, financial and other sanctions on Russia to end the
conflict are blocking economic activity between the European Union
and Russia, restricting payments and the free movement of people,
goods and services.
The military conflict has further affected the prices of many
goods, resources and services, as Russia is a major exporter of
fossil fuels, metals and other resources, and the purpose of
sanctions imposed by the European Union and the United States is to
limit Russia's economic activity. Fossil fuels are still a major
part of the process from the creation to final consumption of
almost all goods in the EU, as a result of which a future
uncertainty about prices and availability of fossil fuels and other
resources worsens the economic prospects for the EU and Bulgaria in
particular.
As the main activity of the Petrol Group is wholesale and retail
trade and storage of fuels and other petroleum products, a lasting
increase in international fossil fuel prices will have a negative
impact on the Group's sales, leading to significant losses and
deterioration of the financial condition and operational results of
the Petrol Group. As the majority of fossil fuel supplies in the
country are of Russian origin, a potential complete ban on fuel
supplies from Russia could lead to a shortage of fuels in the
country and problems for the Petrol Group to secure its sales, with
the risk of closure of retail petrol stations, temporary working
hours and other negative consequences. To respond to this scenario,
the Group's management is examining the possibility of importing
fuels from third countries, thus being able to reduce the potential
future consequences for the Petrol Group of the EU and the US
sanctions imposed on Russia and potential reciprocal sanctions.
The Group's results from operations are affected by a number of
factors, including macroeconomic conditions in Bulgaria,
competition, variation of gross margins, fluctuations in crude oil
and petroleum
product prices, product mix, relationships with suppliers,
legislative changes, and changes in currency exchange rates,
weather conditions and seasonality. In 2023, the Group continues to
suffer negative consequences from the drastic increase in the
prices of electricity and raw materials, both on the domestic and
global markets.
The plans for the future development of the company are closely
related and depend to a greater extent to the stated expectations
for changes in the market environment. The Management continues to
follow the program outlined and started in the beginning of 2014
for restructuring the activities of Petrol Group, aiming to
concentrate the efforts to optimize and develop the core business -
wholesale and retail trading with fuels. With the aim to improve
the financial position, the Management continues to analyze
actively all expenses and to look for hidden reserves for
optimization.
Future uncertainty about the ability of customers to repay their
obligations, in accordance with the agreed conditions, may lead to
an increase of impairment losses on interest loans granted, trade
receivables, financial assets available-for-sale and other
financial instruments, as well as the values of other accounting
estimates in subsequent periods might materially differ from those
specified and recorded in these consolidated financial statements.
The Group's Management applies the necessary procedures to manage
these risks.
The Group's Management activities are directed to validation of
the principles and traditions of good corporate governance,
increasing the trust of the interested parties, namely
shareholders, investors and counterparties, and to disclosure of
timely and precise information in accordance with the legal
requirements.
Legislature
The Parent company is supervised by a number of regulatory
bodies in the country and a potential change in the regulatory
framework, regulating the Parent company's activity may have a
negative impact on the Group's financial results. In July 2018 the
Government of the Republic of Bulgaria adopted a new Law for
Administrative Regulation of the Economic Activities, Related to
Petrol and Petroleum Products, which aims to provide security and
predictability in trading with petrol and petroleum products and
increase the energy security of the country. Due to its core
business, this law will affect the Group. As at the date of
issuance of these financial statements, the Parent company is
entered in the register to the Ordinance on the terms and
conditions for keeping a register of entities carrying out economic
activities related to oil and petroleum products for the wholesale
trading activity and has issued a bank guarantee in favor of the
Ministry of Economy at the amount of BGN 500 thousand. As at the
date of issuance of these financial statements, the registration
procedure of the Parent company for retail trading with oil and
petroleum products is finished.
Suppliers
Due to the specific of the primary business of Petrol Group,
namely retail and wholesale trading with fuels, the Group's fuels
supplies are provided by a small number of suppliers, as a result
of which the Group is at risk of discontinuation of relationships
with key suppliers, which may lead to a short-term depletion of
inventories and trading activity difficulties;
Petrol Group's wholesale and retail trading with fuels,
lubricants and other goods, and storage of fuels is carried out
through its own and rented from third parties petrol stations and
storage facilities. There is a risk from a suspension of the
relationships with the lessors and termination of the lease
agreements for the petrol stations and/or storage facilities, which
can have a significant negative impacts on Petrol Group as
deteriorating of sales, worsening of the financial results and
substantial loss of market share.
Competition
In the last few years, there has been a tendency for consumers
to increasingly turn to established and well-known brands with a
tradition in fuel retail. As a result, some small retailers were
forced to close down or enter into franchise or dealership
agreements with one of the major market participants. Due to the
general decline in economic activity, consumer attitudes and the
introduction of additional regulatory control by the government,
the share of small independent players continues to decline.
The lack of strategic deals and significant investments by large
participants in the retail fuel market has led to a minimal change
in the market shares of companies in the sector;
Price risk
The Group is at risk of frequent and sharp changes in prices of
fuels and non-petroleum goods. Because of that, the future
financial results may diverge significantly from the expectations
of the Group's Management. Any future sharp fluctuations in the
price of fuels and non-petroleum goods may lead to a deterioration
of the financial position of the Group;
Market risk
The Group is exposed to the risk of change in currency rate,
movement in the interest rates and the prices of the capital
instruments, which may impact the Group's financial instruments or
the value of its investments.
Interest rate risk
Risks arising from the increase in the price of the Group's
financing;
Credit risk
The risk of inability of the Group's trade partners to fulfill
their contractual obligations, which may lead to losses for the
Group;
Exceptional costs
There is a risk of incurring unforeseeable costs, which to
affect negatively the financial position of the Group;
Political risk
Risks to the Group arising from global and regional political
and economic crises;
Climate conditions and seasonality
Climate conditions and seasonal fluctuations in demand for
certain petroleum products affect the Group's operating results.
Gasoline and diesel demand peaked in the second and third quarters,
due to both the summer holiday season and the increased demand from
farmers, who traditionally increase their consumption during the
autumn season.wa
Liquidity risk
Liquidity risk is the risk that the Group may not be able to
meet its financial obligations when they fall due. The policy is
aimed at ensuring sufficient liquidity with which to serve
liabilities when they fall due, including abnormal and emergency
situations.
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END
QRTUPGMPPUPWGPQ
(END) Dow Jones Newswires
December 06, 2023 07:38 ET (12:38 GMT)
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