Supplementary information from the Investor Call August 31, 2016
Corral Petroleum Holdings AB (publ) (“Corral Petroleum Holdings” and, including its consolidated subsidiaries, the “Group”) hosted an international conference call for investors and analysts on August 31, 2016 following publication on August 25, 2016 of Corral Petroleum Holding’s report (the “Report”) for the second quarter and six months ended June 30, 2016. Due to technical issues at the end of the international conference call, this additional information is being posted for all investors simultaneously.
The Report is available at http://www.preem.se/en/in-english/investors/corral/
Please note that the matters discussed below include forward-looking statements about our current expectations with respect to the future. Because forward-looking statements are subject to change based on future events and circumstances, we cannot guarantee that those expectations will prove correct.
Norway
The operation in Norway has started and is developing according to plan. This is an organic entrance to the market with limited capital investment. During the second quarter our Norway operation had very limited effects on our results and we expect that it will continue to have limited effects on our results for the rest of the year.
Marketing division
Our retail operation is operated at arm’s length with regard to prices from the Supply & Refining division.
Covenants
Preem was in compliance with all financial covenants under its revolving credit facility as of June 30, 2016.
Term loan
Payments on the term loan portion of Preem’s credit facility were made during the first 6-months period and the final payment of the term loan was made in July. Preem had a positive cash flow from operating activities for the first six months and also for the seven first months of the year, exceeding the total of payments on the term loan.
Cash flow the second quarter 2016
Cash flow from operating activities for the second quarter of 2016 was negative, mainly due to increase in working capital from a low working capital level at the end of the first quarter to a more normal level at the end of the second quarter.
Leverage
The Group’s ratio of Net Leverage to Adjusted EBITDA was 2.8x as of June 30, 2016.
Adjusted EBITDA is not an IFRS measure. Please see page 13 of the Report for a discussion of Adjusted EBITDA, including its limitations and a Reconciliation of operating profit to EBITDA and EBITDA to Adjusted EBITDA.
The Corral Bond
As communicated in the first quarter Corral Petroleum Holdings’ current intention remains to pay the cash interest payments on Corral Petroleum Holdings’ PIK toggle Senior Notes due 2021.