Ladies and gentlemen, thank you for standing by. I'm Poppy, your Chorus Call operator. Welcome, and thank you for joining the HELLENiQ ENERGY Holdings conference call and live webcast to present and discuss the first quarter 2024 financial results. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Andreas Shiamishis, CEO; Mr. George Alexopoulos, Deputy CEO, General Manager, Group Strategic Planning and New Activities; Mr. Vasilis Tsaitas, Group CFO; Mr. Dinos Panas, General Manager, Oil Supply and Sales; and Mr. Nikos Katsenos, Investor Relations Manager. Gentlemen, you may now proceed.
Thank you very much. Good afternoon. Welcome to our first quarter 2024 results announcement and a discussion on the business performance and developments for the first quarter. Without further ado, I would ask you to go to page four, where we have the key highlights of the first quarter. We've tried to put down the sort of four main pillars that we think are important to discuss during this call. Starting with the market, the market performance. We've seen a leveling of the crude oil prices and a material reduction on the output levels for gas and power, of course, including CO2 costs.
Benchmark margins are down compared to last year, but they're still at healthy levels, a bit lower following the first quarter, but at healthy levels for the first quarter. And what we do see, at least in the domestic market, is a continuous increase in the demand for other fuels, which is effectively the backbone of the consumption. Against that backdrop, we have improved our operations with increased utilization of the refineries. It meant that the additional volume was channeled partly to the increased demand for most products, not for Heating Gas Oil, but for most products in increase. And at the same time, we saw an increase in volumes, which is effectively the result of the opening up we've had over the last few years.
So it does signal how important the export markets are for us and the importance that we have to gain to those markets. In terms of our performance in the refineries, how we can improve the net back in the refineries, we have an $18 per barrel realized margin, which is up from previous quarters. Part of that overperformance is down to the crude selection process. We've seen fewer opportunities during this quarter compared to last year, to take advantage of crude differentials in terms of what the price of the barrel is compared to the net back of that barrel. So it meant that we lost a little bit of the upside we had last year, but it is still a very positive overperformance.
On the marketing side, we see increase in premium products across our markets. It is something which had it not been for the regulatory price cap increase and a relatively high, higher than expected percentage of petrol stations not delivering, not in our network, of course, but overall in the market, not delivering the right quantity of products, I think we would be able to have much better results on the Greek marketing business. On the renewables, numbers are improving at the back of increased capacity in operation, which is just under 0.4 GW at the end of the quarter.
We, as we will see, a little while later, subject to load factors, curtailment and operating issues, we are progressing as planned. As a result of that, we have a very healthy adjusted EBITDA number at just under EUR 340 million for the quarter. A bit lower than last year, but still a very good number. An adjusted net income of EUR 164 million. On the reported side, results are even better, around EUR 350 million. Compared to last year, we have a lower inventory negative impact because of the losses we reported last year, which is good.
Cash flow-wise, adjusting for the increased working capital we have due to the Red Sea route problems, necessitating higher number of barrels on water. We have a very strong cash generation, and that is something which is being put to good use when it comes to the refinancing and the refinancing discussions of the group's net debt. So overall, a very good quarter, which sets the scene for another good year for 2024. The outlook looks a little bit weaker than the first quarter. April, at the beginning of May, we've seen refining benchmark margins being at lower levels. Still healthy, but not as high as we've seen them in the past. And we are progressing our initiatives on all fronts.
So as an outlook, I would still maintain a positive outlook, even though we don't expect it to be at the 2022 and 2023 levels, it's still a very good year. All of our projects are progressing well in terms of digital optimization and transformation of the business. Expansion of our international business, growing in the second pillar in the renewables space, and of course improving our internal operations. So this is in a nutshell the big picture for the quarter. I would ask Dinos Panas now to discuss the environment and the market background, please.
Okay, thank you, Andreas. Good afternoon, everybody. On page six, you can see the numbers for the crude oil refining, the natural gas and the CO2 emissions costs. Crude for the quarter at $83 per barrel, very similar to the first quarter of the previous year. We see natural gas and electricity prices being down 50%, compared to 2023. And CO2 emissions at the lowest cost for quite a few time now. Okay, currently they are trading at around 68.something. Going on to the oil business in the next slide, number seven.
We had benchmark margin at $8.8 per barrel, a bit higher than the average of the full year 2023, but definitely lower than the first quarter of the previous year. Mostly because of the weakness in gasoline, ULSD and Naphtha. While on the other hand, the HSFO crack improved significantly from -$24 to -$15 per barrel. And finally, on page eight, we see that the Greek market is still growing, especially in automotive fuels. We see a 3% increase in the gasoline consumption, a 5% increase in the diesel consumption. The overall oil market grew by 2%, quarter-over-quarter, year-over-year.
We see a big increase in the aviation consumption by 19%, and a significant increase also in the bunkers consumption by 9%. And with this, I will pass you to Vasilis Tsaitas to discuss the group performance.
Thank you, Dino. Good afternoon. Moving on to page 10, to look a bit at our results in more detail. So as mentioned before, refining rates are high by 8%, the highest for some time in the last few quarters. In terms of EBITDA, a total adjusted EBITDA of EUR 338 million, driven mainly by refining. Secondly, a little bit lower than last year, given the fact that Q1 2023 was, let's say, the last quarter affected by the energy crisis. We've seen the normalization and a level of macro fundamentals at more or less stabilized in the last few quarters. However, the EUR 338 million is 60% higher versus the fourth quarter, the previous quarter, for quarter-over-quarter.
In terms of of associates' contribution, these are also affected by the environment. Both Elpedison and DEPA reported much lower results than last year. Looking at finance costs, they're almost flat, slightly lower than Q1 2023. We have to consider the fact that base rates versus the same period last year are 1.5% higher. We've been able to fully offset this by reducing the spreads on our banking facilities through the refinancing that we have undertaken last year. The reduction of debt as well as the better use of our cash balances.
Reported results driven by the impact of crude and product prices from inventory valuation are higher than last year, because of higher losses occurred in the first quarter of 2023, resulting to an overall better result. In terms of capital employed, the comparison versus last year is mainly driven by working capital. Andreas mentioned before the impact of the discussion due to the Red Sea crisis, as well as the tax liabilities, which were much higher in the first quarter last year, and have been repaid in the meantime. And that also affects net debt, which is a bit higher versus the end of the year.
Moving on to page 11, we see a visualization of what we discussed, the elements of the environment, mostly, third-party refining margins and the crude differentials that are much tighter, that have affected results. This is partially offset by lower pricing of CO2 and electricity, and certainly, the very good operational performance at our refineries and the rest of the business, mostly in the form of higher production, increased sales in terms of volumes, as well as premium. On page 12, we are in the process where we are finalizing the process for refinancing around EUR 1 billion of bank facilities.
That will be completed in the next few weeks, so we're showing pro forma how the maturity profile will be shaped by the end of the second quarter. So effectively, we're clearing the maturities for the next three years, moving all to 2028 and 2029. We're converting part of our loan portfolio to fixed rates, taking advantage of low rates versus the previous quarters. So a better risk perception of our balance sheet, much lower spreads, even lower than those that are being reflected in the first quarter. So overall, a much more stronger balance sheet. The last maturity to address for 2024 is our Eurobond notes maturing in October.
We're considering our options and finalize our decisions in the next few months. There is plenty of capacity, certainly, to refinance from bank debt. It's around EUR 1.5 billion of headroom, but we'll finalize our plans in the coming months. Now, moving on to discuss the individual business segments, starting from our refining, supplying, trading business. We measured production at 3.8 million tons for the quarter. This is the highest quarterly performance in the last four years, so we're very happy with the operation of our refineries.
That has certainly driven sales volumes higher, and Adjusted EBITDA of EUR 290 million, more or less, which is 25% higher quarter on quarter. CapEx reflects the usual maintenance of the refineries, plus the progress of growth initiatives, mostly in energy autonomy and energy efficiency projects in the three refineries. On page 26, we discuss about production, which reflects high utilization in all our three plants. In terms of sales, all market channels have grown in terms of sales, reflecting also some market share gains in the domestic deliveries. Exports are the highest in the last three years, and they represent a total of 62% of sales.
While crude sourcing reflects, you know, the environment, available opportunities to take advantage of the opportunities which were much more limited given the tighter market in the region. Moving on to page 17, a total realized margin of $17.7 per barrel. This is higher than the last quarter, and reflected also in the adjusted EBITDA numbers, driven by the better margin and certainly our ability to sustain and even increase a bit the overperformance. This is mostly driven by higher exports and very good export premium during the quarter. Moving on to page 19, our petrochemicals business with, you know, very good operations and an adjusted EBITDA performance of EUR 23 million.
That is driven by the recovery of the petrochemical margin of the polypropylene versus propane spread. That is the main driver of our performance. After several quarters of, you know, results at a quarterly rate of anywhere between EUR 10-15 million, it appears that this is at least for the moment driven from the Red Sea crisis and the cost of importing polypropylene from Asia, which has risen given the rerouting of the cargos around the Cape. Moving on to our fuel marketing business on page 21. EBITDA is higher last year, mainly due to the inflation. On an adjusted basis, it's flat.
Our marketing business is delivering better performance in terms of sales volume, which is actually higher than the market, reflecting the market share gains across most of the products. Increased penetration of differentiated products are 98 and 100 octane gasoline and the Premium Diesel. However, despite the fact that, you know, the prices have stabilized at current levels for the last few quarters, the regulatory caps on retail margins have remained in force. And, given also the inflationary pressure on OpEx, they do continue to affect our numbers.
Our international market on page 22, again, a very good performance versus last year, we need to consider, first of all, against the wholesale performance of our OKTA business, which last year we still had the additional volumes of fuel oil for power generation that are not there anymore. And at the same time, OPEX has increased, mainly driven by network development across our portfolio across our countries, which are expenses that will gradually yield better results as the network, the new business development matures in the coming quarters. So at this point, I'll pass you over to George Alexopoulos, who will discuss our renewables and power business. George?
Thank you, Vasilis. Good afternoon, everybody. On the renewables business, we have reached 381 megawatts of installed capacity at the end of the quarter, so this is not yet reflected in the results. EBITDA year-on-year increased to EUR 11 million. We did observe somewhat lower PV load factors, partially due to the weather, but also due to curtailment, which has increased over last year. If we move to page 25, we are progressing towards our goal of 1 GW of installed capacity by the end of next year. We have secured that goal through a number of projects which are currently under construction or about to begin construction.
We are focused on developing a pipeline, which is maturing gradually. Currently standing at 4.3 GW. Expected to deliver in the short term the necessary megawatts to reach the 1 GW goal for the end of next year. If we move to the next page, on Elpedison, this has been a quarter which is lower in performance compared to the same quarter last year, which was an exceptionally good quarter. The performance is more or less in line with the last couple of quarters. The Thisvi unit is back in service, but it wasn't for most of the first quarter.
And in general, the market conditions have not been as favorable. EBITDA of EUR 18 million, and contribution to the group net income of EUR 4 million for Elpedison. And I believe with this, we conclude the presentation, and we can turn it over for questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Those participating via the webcast, you may submit your written questions using the Ask a Question window. To our audio participants, please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from the line of Nikos Athanasoulias with Eurobank Equities. Please go ahead.
Hello, gentlemen. Thank you very much for your presentations. I have three short questions. The first one is regarding the gross production. I see that the utilization rate right now was at 109%, namely well above nameplate capacity. What are the limitations on of that, and what's the ceiling that we should expect regarding refining production? The second question is regarding the overperformance of the realized refining margins compared to the benchmark. Even if the refining margins continue to drop in the coming quarters, should we now expect more resilient overperformance due to improved operations?
And the last one, the last question is, should we take it as a sign that there's no slide for DEPA Commercial, or what are your plans on that end? Are you seeing maybe a potential sale of the stake, or you're doing something like that? Thank you.
Okay. I've got, I think three questions. No, the first one on the production capacity. The actual production of the refineries is driven by the availability, but also by economics.
... So, what we are reporting is better utilization because of availability and economics which were pretty much consistent with full utilization of those refineries. We expect to see similar levels of utilization throughout the year. But it's going to be driven by economics rather than anything else. We do have the odd shutdown of individual units, which is part of the normal maintenance routine, but I wouldn't expect to see anything major. On the refining margins, the over-performance part that we have there, which is $8.9, I would expect that to be relatively consistent throughout the year.
Now, if that is a dollar up or down, it's very difficult for me to project, because there are a number of constituents in this overperformance. You have the commercial margins in the domestic market, you have the trading margins on the international business, you have the crude supply optimization, plus any overperformance on the actual refineries. So I would expect that number to be at similar levels. Definitely not materially different. Now, the third question is about DEPA and why we don't have a page on DEPA. As you may have seen in the press, there is a lot of uncertainty on how they are dealing with the arbitration or the claims between DEPA and Gazprom.
Given that uncertainty and the fact that the visibility to this issue is not available to us in terms of how they are negotiating, how DEPA is negotiating with Gazprom, and what is gonna be the final impact, we chose to include DEPA in our results. So DEPA is included in the results in the associates. There is a small loss reported for the first quarter, which you can see in our accounts. But we did not want to go into a detailed analysis of the performance, given that it is something we don't feel comfortable with, especially during a first quarter where numbers are not audited.
Okay, great, thank you. One follow-up on the utilization rate. So, I guess this is the, the ceiling, if you say that we can only see similar levels of utilization rates in, in the future?
No, I mean, for the remaining part of the year, we don't have any major stoppages scheduled. And, assuming the benchmark projections that we see and expect to be available, utilization rates are gonna be very similar to the ones we've seen in the first quarter.
Okay, that's clear. Thank you.
Thank you.
As a reminder, if you would like to ask a question, please press star and one on your telephone. Once again, to register for a question, please press star and one on your telephone. The next question comes from the line of Fani Tzioukalia with Euroxx Securities . Please, go ahead.
Hi, hello, and thank you for the presentation. Two questions from my side. If you could please, first reiterate the CapEx for the year. And secondly, what do you expect to be the megawatt capacity installed by the end of this year? These two. Thank you.
Vasilis, do you wanna take the first question, and then maybe George can take the second?
Sure. Sure, yeah. Thank you, Fani, for the question. In terms of the CapEx for the year, if you look at the refining, downstream CapEx should be in the EUR 200 million-EUR 250 million area, reflecting maintenance, required maintenance CapEx for growth. There's no major turnaround schedule for 2024, as well as, you know, the expected progress on the polypropylene plant, as well as the other growth projects in refining. And on the renewables, that will mainly depend on the pace of the addition of new capacity. George will tackle the numbers in terms of the capacity that will be added during 2024.
Yes. Hello, Fani. We expect, based on the current progress of the projects under construction, to be between 500 and 600 MW installed capacity, probably closer to the 600 number.
Brilliant. Thank you all.
As a final reminder, to register for a question, please press star and one on your telephone. The next question comes from the line of Constantinos Zouzoulas with Axia Ventures . Please go ahead.
Hello, thank you for the presentation. Just to confirm that the working capital will be normalizing given the fact that in the first quarter was impacted by the Red Sea disruption. My other question has to do with the regulatory caps. Is there any visibility, what's gonna happen there?
Thank you. Thank you, Costa. On working capital, effectively, no, this is a temporary effect. However, we don't know when it's gonna be resolved. As long as the Suez Canal is effectively closed or highly risky to pass cargos through Suez, any crude arriving from the Middle East will have, will have to take a much longer route. We're talking mostly about Iraqi crude lifted from Basra terminal. So for every cargo delivery and process at our refineries, we need to have one going around the cape.
So that burden, which could be anywhere between EUR 100 million-EUR 150 million, perhaps more, we, if we increase the sourcing from Iraq, and, you know, this is a cost benefit analysis of the pricing or the relative pricing of Iraqi crude versus the financing cost of additional working capital will be sustained.
On the regulatory caps?
Well, the idea for regulatory caps, which was the second part of the question, is that they should have been lifted by now. They remain in place. I can only express an expectation that they will be lifted in the next few months. However, this is something which the government has to decide, and it is not up to us. Unfortunately, the rhetoric around inflation and cost increases confuses real domestic cost increases with the cost of imported raw materials, in which case, which is the case for our own products. So we'll see. Unfortunately, I cannot be more specific on that.
Okay. Thank you very much.
Once again, to register for a question, please press star and one on your telephone. There are no further audio questions at this time, and I will now pass the floor to Mr. Katsenos to accommodate any written questions from the webcast participants. Mr. Katsenos, please proceed.
Thank you, operator. We have a written question from Nicholas Payton from Edison. On working capital increase in Red Sea issues, are you expecting a solution to the situation there, and if so, over what timescale? And has this changed your sourcing strategy? Regarding the outlook in terms of benchmark margins, Nicholas also asks, April benchmark margins are at lower levels, but still healthy. Do you have an estimate for margins for full year 2024 versus full year 2023? And another question on aviation, what has driven the strong growth in volumes year-over-year?
Thank you. Thank you, Nicholas and Nicholas, on the first question on working capital, I believe that we have covered that already. It was a similar question from before. In terms of outlook, as we mentioned before, second quarter margins are seasonally lower, as it was the case last year. However, they are at least $1.5 higher versus the same quarter. So that should reflect to a positive read across on our results, at least up until now. In terms of outlook for the year, we do expect some further moderation versus 2023, but still at good levels and above mid-cycle.
In terms of aviation volumes and sales of both refining and marketing, this is driven by increased aviation traffic at the Greek airports. I guess it's a good indicator about reflecting the very positive outlook for the tourist season upcoming in the second and third quarter, given that the first quarter, seasonally, it's the lowest of the year. So, hopefully that gives optimism about stronger air traffic versus last year for the upcoming quarters.
No further questions from the webcast operator back to you.
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference to management for any closing statements. Thank you.
Thank you very much for your time in attending our call today. As I said in the beginning, it's a strong start to the new year. We expect that to remain at relatively strong levels throughout the rest of the year, albeit at marginally lower levels. But in terms of financial performance, I would say that we expect to see a positive year, yet another positive year. In terms of the strategic initiatives or in terms of the operational excellence initiatives, we are progressing with all of them. There are issues. Availability of human capital is becoming a bigger issue, not only for us, but for the whole of the market, especially if you operate in a highly specialized industry like ours.
So it is an issue which, I think everybody in Greece is facing. But, we are committed to actually move forward and make changes to the way we operate our business. In terms of the strategic initiatives, we have focused in expanding our international portfolio, be it in our traditional business, and hopefully over the next few months, we will be able to announce a couple of important, maybe not material, but important transactions and changes that will expand our international portfolio. Also in terms of expanding in our new energy portfolio with the opening up of our green utility trading platform in Cyprus, and also the close to delivery of the first part of the PV projects in Romania.
We are committed to operate the business with a value creation perspective. I think the recent transaction of 11% has helped the stock price to sort of elevate to a higher level. And we prepare for our AGM in about a month from today, which will effectively coincide with the completion of the board tenure. So we'll be able to have a bigger presentation and discussion on what has happened over the last three years. Thank you very much once again, and we look forward to presenting our results for the second quarter.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.