Released: 15/02/2010
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Baltic Oil Terminals Plc
15 February 2010
15 FEBRUARY 2010
Baltic Oil Terminals PLC
("Baltic" or "the Group")
Trading Update
Statement re Russian Press Comment
Baltic owns and operates oil product terminals in the strategically vital Russian port of Baltysk, Kaliningrad on the
Baltic Sea and through its subsidiaries is engaged in matched refined oil product trading.
Baltic Oil Terminals is pleased to provide an update on its terminals business in Kaliningrad and on the trading activities
of Baltic Hydrocarbons Limited. Overall, Baltic's performance in the second half of 2009 was a significant improvement on
the first half of the year. As a result, the Group's results for the year ended 31 December 2009 are expected to show a
substantial reduction in the losses reported in the previous year.
As previously reported, throughput at the Rosbunker terminal steadily increased in the last quarter of 2009. Rosbunker has
been operating at around full capacity since the end of 2009 and this gives us confidence for 2010. As the winter trading
period ends, Rosbunker's activity will be supplemented by additional volumes generated by the trading activities of Baltic
Hydrocarbons.
The Board of Baltic has become aware of comments in the Russian trade press suggesting operational issues at the Rosbunker
terminal and alleging that, inter alia, there are quantities of oil products waiting outside the Rosbunker terminal, which
are yet to be trans-shipped. The Board of Baltic believes these reports are exaggerated and mistaken, although it should
be noted that any suggestions of a backlog of product only confirm that the Rosbunker terminal is operating at full
capacity.
The Board of Baltic is now conducting a full investigation of all the allegations. If any of them prove to have
foundation, a further statement will be made. In the meantime, the Board would like to point out that similar allegations
regarding the Rosbunker terminal have previously appeared in the Russian press and have subsequently proved unfounded. On
this basis, the Board remains optimistic regarding Rosbunker's current and future performance.
The Joint Venture between Baltic Hydrocarbons ("BHL") and Exoy A.G. continues to perform well and is now making a
significant contribution to the Group's revenues. The Joint Venture's offices in Novorossiysk are fully operational.
Looking forward, Exoy's ability to source trades of oil products from all parts of the world, combined with BHL's execution
skills, should produce a wide range of trading opportunities.
Baltic has continued to make good progress on reducing costs and improving operational efficiencies. Cash burn steadily
decreased during 2009 and the Company is now cashflow positive.
Simon Escott, Chief Executive of Baltic, commented:
"Since September 2009, Baltic's performance has steadily improved. The progress we have made and the positive outlook
suggests we have turned the corner. Trading conditions and overall sentiment in the markets in which we operate are
increasingly favourable. With our terminals businesses performing strongly and the additional contribution of our trading
joint venture, our prospects for 2010 are encouraging."
Baltic expects to announce its results for the year ended 31 December 2009 at the end of May 2010, around the same time as
last year, following agreement of its Russian subsidiaries' accounts with the Russian tax authorities.
Enquiries:
Baltic Oil Terminals plc
Simon Escott, Chief Executive Tel: +44 (0)20 7337 1509 (until 2.00pm)
+44 (0)20 3145 1908 (thereafter)
Arbuthnot Securities Limited Tel: +44 (0)20 7012 2000
Alastair Moreton, Corporate Finance
Pelham Bell Pottinger
Archie Berens Tel: +44 (0)20 7337 1509 / +44 (0)7802 442486
Pelham Bell Pottinger
Archie Berens
Tel: +44 (0)20 7337 1509 / +44 (0)7802 442486
About Baltic Oil Terminals
Over the last four years, Baltic has built up a terminals business in the Russian ports of Baltysk and Kaliningrad. A
separate enclave located between Poland and Lithuania, Kaliningrad is Russia's only year round access to the Baltic Sea.
Other ports in the region, such as St Petersburg, are frozen for much of the winter, as are many rivers, including the
Volga River, one of the most significant commercial waterways in the world. As Russia relies on year round export of its
vast supplies of petroleum products, Kaliningrad is thus a trading centre of major strategic importance.
Baltic's key asset is a 50% interest in the Rosbunker terminal, which is located at Baltysk, right on the Baltic Sea at the
mouth of the Pregol River leading into Kaliningrad. It is the only port in the region at which all types of ship can take
on cargo, as the channel into Kaliningrad is too shallow for many vessels. Trains are able to deliver products from all
over Russia, the Former Soviet Union and Asia directly to the terminal.
Since 2007, the Rosbunker terminal has been handling consignments of oil refined products, specialising in fuel oil
(mazut), a product that requires heating and special equipment and as such is not handled by other terminals in the area.
Baltic earns tolling fees for processing the unloading of cargo from trains into storage tanks and then onto vessels.
Baltic is also able to trade in these products in its own right, taking advantage of local price differences. Since the
financial crisis in Russia, this market has become increasingly interesting to Baltic. Baltic's transportation and trading
activities utilises its extensive network of industrial partners and refineries.
In addition to Rosbunker, Baltic also has interests in several other oil product assets in Kaliningrad, which derive
revenues through processing and distribution of oil products to domestic markets.
Baltic's executive management have a wealth of experience of the oil services industry. The team has worked in the
industry for more than 40 years, constructing and operating oil rigs, terminals and other infrastructure in world wide
locations, including the Former Soviet Union.
Baltic has been listed on AIM since May 2006. It is headquartered in Kaliningrad, with a small representative office in
London.
This information is provided by RNS
The company news service from the London Stock Exchange