The terrible year of Zen – is it possible to just get up from here? Gas and oil

Reports of the refinery company

In the variety
+ 2.88%

Base:72.9

opening:74

High:75.2

low:73.7

change:5,659,580

Page Quote News Graphs Company Profile Recommendations


More articles on the subject:




The “Corona Year” teaches about the depth of the damage to society that began with the outbreak of the crisis in the country – in March last year. In 2020, Zen made a net annual loss of approximately $ 274 million, compared to an annual profit of approximately $ 99.3 million in 2019, a decrease of 377%.

In the fourth quarter, Zen recorded a net loss of $ 68 million, compared to a loss of NIS 50 million in the previous quarter, and a loss of about $ 3.7 million in the fourth quarter of 2019.

Annual EBITDA was $ 121 million, while in the fourth quarter EBITDA was $ 39 million, compared to about $ 20.5 million in the third quarter. The improvement in the fourth quarter will continue into 2021 in parallel with the increase in energy prices and especially the increase in refining margins. The margins were negative at some point last year and in the last quarter they rose to $ 3.4. Bazen says that the margin continues to rise, and this of course improves the business results – this margin is actually a kind of gross profit margin of the company.

Moshe Kaplinsky, CEO of the Zen Group, said in the light of the results: “Despite the challenging market environment in the refining sector, the polymer sector continued to demonstrate stability in demand and a high level of profitability, achieved thanks to the synergy with the refining sector. In total, the segment contributed to its financial results EBITDA of $ 122 million for the entire 2020, and EBITDA of $ 36 million in the fourth quarter. ”

“Since the beginning of 2021, there has been a significant increase in refining and polymer margins – close to the date of approval of the report, the average Azeri Bloomberg margin is about $ 4.8 per barrel and the polymer margins above naphtha are over $ 1,100 per ton. In addition, the volume of orders in March 2021 is a sign of a return to routine in the consumption of diesel and gasoline in the Israeli market. The Zen Group continued to ensure the needs of the local market during the Corona period, and our essential products continued to reach hundreds of factories, the medical, food, high-tech and agricultural industries throughout the year, driving the wheels of industry and the economy as a whole. We have ensured continuity and employment for all our employees, and Zen will continue to be a key anchor for Israel and an employment anchor in the north. ”

Following the Corona crisis, Zen has taken steps to try to reduce risks and adverse effects in the short term, saving costs of about $ 21 million a year. In addition, the company has begun implementing an early retirement plan with the goal of reducing the company’s salary costs and is also expected to save on natural gas purchase costs an estimated amount ranging from $ 30 million to $ 45 million, mainly during 2021.

Zen reduced the volume of capital investments (CAPEX) in 2020 to $ 88 million, with capital investments expected for 2021 of about $ 120 million. According to the company, “this is due to the postponement of the periodic renovation planned at some of the company’s facilities, and postponed for implementation until 2022 after planning and examining all the engineering considerations in terms of safety, environment and operation.”

Despite the crisis, Bazen has completed the full needs of its long-term debt cycle for 2020 as well as an additional $ 90 million for 2021. Its working capital needs, in relation to suppliers and customers, in the total amount of over $ 700 million (at current oil prices). Zen’s net financial debt decreased and amounted to approximately $ 653 million.

According to forecasts by consulting firm IHS Markit, which formed the basis for valuing the activity of the Zen refinery sector, conducted by EY, demand for global transportation fuels is expected to return to pre-Corona crisis during 2021, except for demand for DSL, which is expected to recover more slowly and profitably. The refineries, which began to recover in the fourth quarter of 2020 and continue to recover from the beginning of 2021, are expected to continue the trend of improvement in the medium and long term as well. Stands at about $ 1.8 billion and reflects a refining margin of over $ 8 per barrel in the long run. The value of this activity is exactly the value required so that the company does not have to reduce / write off its assets (capital of about $ 1.1 billion and debt of about $ 700 million – activity value based on the books of $ 1.8 billion).