Ladies and gentlemen, thank you for standing by. I'm Vasileios, your Chorus Call operator. Welcome, and thank you for joining the HELLENiQ ENERGY Holdings conference call live webcast to present or discuss the first quarter 2026 financial results. All participants will be in a listen-only mode. The conference is being recorded. The presentation will be followed by 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 HELLENiQ ENERGY Holdings management team. Gentlemen, you may now proceed.
Thank you very much. We appreciate the time to sit through the results presentation for the first quarter of 2026. Overall, a very good quarter for us on a number of fronts as a company. First of all, we managed to complete the Aspropyrgos Refinery major turnaround safely, on time, on budget. The refinery is back in operation with hopefully all of the expected benefits from this extensive I would say probably the largest turnaround, maintenance turnaround since the start of the new refinery. Over 40 years, over 35 years, actually. That's the first part.
The second part has to do with our ability to change supply sources, to take the crisis with the Hormuz Strait into consideration and be able to react and ensure the continuation of our supply chain, not only for Greece, but also for the other markets that we operate in. That's quite important given that we are operating in an environment and in a geography where effectively three big sources of crude traditionally supplying the East Med with about 60%-70% of the crude, i.e., Russia, Iran and Iraq and Saudi Arabia coming out of the Strait of Hormuz, are not in the market. There is a material change which compounds the problems we already had.
Our team and of course, the additional flexibility we have by having an international trading team in Geneva has been able to replace crude and other feedstocks at a cost. Still, we did not have to suffer any slowdowns. All the markets that we operate in, to the extent that we're concerned, are properly supplied. As far as the performance of the company is concerned, we have a positive quarter, just under EUR 300 million of clean EBITDA, driven by the performance of the refinery supply and trading business and of course, the consolidation of Enerwave into our group results for the first time.
Had it not been for the Aspropyrgos turnaround, the number would be closer to EUR 400 million, maybe a little bit shy of EUR 400 million of clean EBITDA, which is a significant upside on last year. This is clearly driven mainly by the market conditions created since the conflict in Iran and the Gulf. It is also a number of improvements which are gradually being seeded into the performance of the company and helping us to maintain a relatively improved performance. On most of the businesses, I think we have positive news.
News not only relating to the actual financial performance, but to operations, the evolution, the development of our business strategy, the creation of new business strategy and objectives. On all fronts, we're doing quite well. The market, at least in Greece, has not suffered a significant downturn on the demand side, so we haven't seen a big demand destruction on the Greek markets. There is a little bit of a drop in April volumes, and we'll wait to see what's happening in May. With everything happening, having a single-digit drop on auto fuel demand, for example, by 2 or 3 percentage points is to be expected, to be honest.
Going forward, in terms of what we have ahead of us, the startup of the Aspropyrgos Refinery means that the two major refineries in the South have now a clear runway for the next three to four years. The shutdown have been completed safely within expected time and cost budgets. The upside of the performance is actually beginning to be noticeable both from the Elefsina Refinery, which was a few months ago, but also from the Aspropyrgos Refinery. We have the Thessaloniki Refinery, which will be going into a scheduled shutdown much smaller than the other two refineries towards the end of the year.
From the operational point of view, we have ticked off a lot of boxes on effectively things that could take up significant management time and worry levels in the organization. Because safety is our number one priority. When you have two refineries within a space of six months being in such a thorough maintenance shutdown, you always need to be extra careful. From the supply and trading point of view, we see a new equilibrium, which I hope is gonna be short-term in terms of the sources of crude. We haven't suffered any major issues other than maybe increased costs and a little bit of risk aversion on the supply of crude from other markets.
I don't see any problems there, at least not for Q2, but I would dare say that we don't see a lot of issues, even further than that. Demand will be coming down, there is no question about it. I mean, if it's within a few percentage points then, I think we should be able to avoid any material implications. Clearly the profitability is tracking along very well and is expected to be quite positive. Most likely, better than last year.
On the power front, what we used to call new energy, the consolidation of Enerwave has given us new capabilities in the power production, first of all, gas power production, and the combination with the renewables, to be able to behave as a more integrated power business. We have the plan in place so far, and George will be going through that in more detail later. So far, indications are positive, we haven't made any major miscalculations or misexpectations of what we can and what we cannot deliver.
On retail, which is up until now has been an extension of the fuels value chain, we see the conversion into more retail business with non-fuel revenue and also an electro sales point on e-mobility and potentially a combination on the commercial side of cross-selling with Enerwave, purpose developing very well. The portfolio seems to be doing very well. On E&P, we had three developments over the last few months. The first one is the completion of the Chevron- HELLENiQ joint venture process. The new blocks are being effectively under development now. We expect that in the next few quarters we'll be shooting the first wells in those areas.
The second has to do with a commitment to progress with the drilling in North Ionian in west of Corfu, which is something which will take place either Q4 or Q1 next year. If within the next few months, we will know whether there is something worthwhile investigating further. We certainly hope that that is the case. Also we have rebalanced our portfolio, given that we invited new blocks with Chevron and progressing the drilling campaign with ExxonMobil again in the Ionian Sea. We've relinquished part of the Cretan blocks, the West Crete blocks, so that we can focus on the new blocks and the Southwest Crete block for the next two years.
All in all, a very good quarter. I think the fact that without the Aspropyrgos turnaround, we're talking about a quarter which is close to EUR 400 million EBITDA, is indicative of how good it was in terms of results. But as I said at the beginning of the introduction, most importantly, successful completion of maintenance works, safe completion of maintenance works, and good handling of crisis implications. Which I think are more important than maybe EUR 10 million or EUR 20 million up or down in our reporting of results. With that, I will ask Kostas, and I believe with intervention from Vasilis to cover the industry environment for the two main areas, the fuel business and the power business.
Thank you, Andreas. The key metrics for the external environment that dominated our performance was the Brent price, which had started increasing from the start of the year, having started close to $63, $64, was moving in both January and February upwards, and then with the 1st of May, with the geopolitical events spiked to $104 on average, reaching $120 in April, then coming back off those highs. Affecting refining margins, the product tracks the most, the most influential part in all of the abilities this quarter was the ULSD crack, which reached very high levels. This was also true for gas oil, and it was even higher for jet volumes.
Gasoline remained a bit lackluster, so did HSFO, and recorded lower values than previous. In more recent months, weeks have rebounded a bit. Our overall system margin was at 11.4 for the quarter, nearly double that of the same quarter, 2025. Vasilis?
Thank you, Kostas. Good afternoon. In terms of the natural gas and electricity markets, the events in Middle East equally affected those markets as well, especially the gas market with TTF up around 40%-45% versus February just before the crisis. On average, though, TTF price for the quarter are somewhat lower than the equivalent of last year. In terms of electricity prices, due to the fact that renewable and hydro had a significantly higher participation in the energy mix, the effects of the current natural gas prices didn't flow through to electricity with down prices actually slightly lower than when the crisis started in March.
EUAs temporarily declined in March with prices recovering slightly in the last few weeks, but still lower than the highs of the beginning of the first quarter. Important, you know, as I mentioned before, if you look at the production output of the Greek electricity system, it's significantly higher than last year. Mainly driven by increased renewable capacity on stream and hydro generation. A slightly lower natural gas fired generation and overall higher exports for the quarter, significantly higher than last year. Back to Kostas for the domestic fuel market environment.
Thank you. The domestic fuel market sales in the first quarter showed a very small decline overall. Automotive fuels were nearly flat, and the delta that we saw was in the heating fuels, or gas oil, heating gas oil and heating LPG. Aviation sales were up to 10%, which is very much in line with increased passenger traffic from the main airports. Bunkering clients continued the previous trend of having fuel oil substituted by marine gas oil. Same trend was observed in Q1 of this year. Thank you.
Moving on to the group results on page 10. As Andreas mentioned before, the main drivers of the numbers are the refining environment, obviously. The Aspropyrgos turnaround with its impact on CapEx, sales and production, and the consolidation, the inclusion of Enerwave in our numbers. Somewhat lower refining volumes due to Aspropyrgos turnaround, partially compensated by high utilization at the Elefsina and Thessaloniki. Increased sales in marketing, mostly out of our international business in North Macedonia and the other markets. The inclusion of ELPEDISON for power production and overall sales volume. Very good EBITDA numbers mainly driven by refining. Both margins and the operational performance.
In terms of reported numbers, we have a partial gain, a partial offset of the losses that we recorded in 2025 as prices are higher, especially in March. That is affecting our reported EBITDA numbers, close to half a billion for the quarter. In terms of our capital employed and net debt, the turnaround of Aspropyrgos has affected temporarily the supply chain and the working capital requirements. This was further aggravated by the commodity price environment. A temporary increase in working capital and net debt.
As we're flowing through the second quarter, this is reversing very strong cash flow generation up until now, with two-thirds of the build already having reversed and a good positive outlook for the rest of the quarter. In terms of how our numbers compare versus last year, we have close to EUR 30 million from the consolidation of Enerwave . Very good support from refining margins, which was realized to a large extent due to the high utilization at Elefsina and Thessaloniki, as mentioned before. As well as a very good execution of our crude supply program in March when the crisis actually started.
Had Aspropyrgos been operating, that would have made around EUR 100 million of additional EBITDA, mostly in March versus February. Overall, close to EUR 300 million of adjusted EBITDA. In terms of, you know, managing risk, one of the things that we have to look at is certainly liquidity. Aside the fact that, you know, cash flow generation so far is very strong. The crisis came when we had enough cash reserves, headroom in terms of in the form of committed facilities, as well as additional uncommitted and overlaps that we can draw upon if required, or certainly way too far from that.
A very good partnership and capital structure in the sense of low cost of debt. A very good maturity profile. No maturities effective in the next couple of years. Reliance on committed facilities, either markets or mostly the banking system, and a good balance between fixed and floating exposure. Moving on to the business. Starting from, you know, Refining, we went through most of the elements. Obviously, CapEx is affected by the limitation of the turnarounds. The rest of the numbers I think we've been through, no reason to repeat. Andreas before discussed about the turnaround of Aspropyrgos. A very complex work.
It's the largest in scope turnaround that we have ever undertook at Aspropyrgos Refinery. The refinery has successfully completed a five and half-year run. This is in line with the top- class FCC refineries worldwide. We have now started the new run. Apart from, you know, improvement in performance, because of, you know, units are fresh out of the turnaround. With a brand new catalyst so that you have the around $0.5 per barrel of improvement if you compare the end of run versus the beginning of run. On top of that, a number of smaller grade projects have been implemented at the refinery. You have the energy efficiency project that at the reformer unit, which was successfully completed and now operating.
The first phase of a similar project at our large improved unit, which will be finalized in the next couple of months. Together, those will reduce CO2 Scope 1 emissions by around 35,000 tons. Benefit in terms of EUR 10 million. These are conservative. We believe that we can do even better than that. We also completed the first phase of the debottlenecking of isomerization unit that, upon completion next year, will increase the gasoline output. That will be another EUR 5 million-10 million of annualized benefit from next year. A number of other works that will, you know, happen every, you know, 10 or 20 years. The overhaul of our FCC units, heat exchangers, compressors .
Those are small projects that increase reliability, reduce, you know, small trips here and there at units. We expect additional annualized benefit from there. All those will start flowing from 2026 and some of them in 2027. Now, on page 17, as we discussed before, Thessaloniki and Elefsina partially offset the lower products from Aspropyrgos. Certainly, much higher diesel and jet yields driven by Elefsina having high contribution on the overall mix at the right time when the crisis started, obviously. Now, Aspropyrgos is back online. It will increase as production is operating, you know, refinery flat out. The production and sales will resume in the second quarter back to normal levels.
Important to highlight the flexibility of our refining system for meeting business, especially between diesel and jet. Overall, we have surplus production, we're net exporters across all product categories. As HELLENiQ Petroleum Refining System and Greece as a refining hub. It's one of the, you know, very few countries in Europe that do have the surplus. To the extent possible, other than covering the needs of our core markets, we can alleviate a bit of the supply crunch in the South Europe and Black Sea markets. In terms of margin re-realization, we're very happy with the outcome of the first quarter, with around 9 million barrel of our performance on top of benchmark.
So far, we see a very good realization of benchmark margins in the second quarter to date for April and May. We're hoping the same for June, having executed most of the supply program, we're now well supplied for the second quarter as Andreas mentioned before. Moving on to Petrochemicals. The first quarter was not much different in the sense of industry backdrop with very low margins. We also had the lack of propylene production from Aspropyrgos due to the turnaround. That meant imported propylene, which is diluting the realized margin of petrochemical support for two months.
In the second quarter to date, the petrochemical business globally has been equally affected by the Middle East crisis. Reduced utilization mostly in Asian refineries that are producing petrochemical feedstock. The result of that is much higher PP margins than what we've seen in the last year and a half. Moving on to our Fuels Marketing business. You know, again, the focus was to manage the supply crisis and especially during the first couple of weeks of the crisis. Very good performance across the business. High profitability, mostly due to inventory and price gains.
Still, ability to increase market shares and supply the market at, you know, at difficult times. As part of the government initiatives to mitigate the strain on consumers due to high prices, was temporary imposition of a retail gross margin cap from mid-April and to at least to June, as we know so far. Also, a temporary discount on diesel of around EUR 0.20 per liter. Similar situation now in the rest of marketing business, with, you know, the focus to be able to supply our markets in North Macedonia, Serbia, Bulgaria, and Montenegro.
Important to highlight that the crisis in Middle East comes on top of the crisis that due to the sanctions on Russia that has been affecting those markets in the last few months. Additional strain on the supply chains that we've been able to manage and increase our market, improve our market position, increase market share and retain a very good profitability. On that note, I'll pass you over to George, our Deputy CEO, to discuss our Power business.
Thank you, Vasilis. Good afternoon, everybody. Page 25, Power. We show the unit, which includes Enerwave and HELLENiQ Renewables, and we show it for better comparison purposes also on a pro forma basis, as if we owned Enerwave, same quarter of last year. Our operating capacity increased by 58 MW, addition of PV assets in Romania. This also constitutes our entry in the Romanian market in terms of operating capacity. We expect further additions in the next couple of months or so. On in terms of EBITDA comparable, if you look at it on a pro forma basis, a large increase as a result of consolidating Enerwave.
This is generally a good quarter for Enerwave . The volumes, the production is somewhat lower, which followed the general market trend of lower gas utilization. As a result of demand for balancing services, the profitability remains comparable. We also had a good quarter in terms of our commercial business. The turnaround continues with positive results so far. On the renewables side, slightly higher capacity, this only was the case for a few days in March.
Will appear in the second quarter. Profitability at similar levels, higher curtailment, a better capacity factor for wind. Almost the same level of EBITDA. In terms of capital employed, as our program evolves, you can see investments being realized and, thus, increasing capital employed in the form of under-development projects. I will not go through the numbers on page 26. I think we've covered it on the previous page. I do want to spend some time on page 27 and discuss our development plan, which is evolving. According to our targets, we expect to have a gigawatt installed in total capacity installed in the next 18 months.
We currently have 564 MW in operation, and 346 MW, most of which are actually in Romania, under construction. We also have an additional 400 MW, which in the graph, you can see as RTB, but are actually entering the construction phase as well. As a result, we expect to have 1.5 GW operating by 2028. With that, I believe we have concluded the presentation, and I will turn it over for questions.
Ladies and gentlemen, at this time we'll 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 question window. To our audio participants, please use your handset when asking your question for better [inaudible]
In fact, the first quarter without [inaudible] so there's probably finally would be close to EUR 400 million of EBITDA. The second quarter, we don't see any reason so far for that number to be materially different. Now, whether it's EUR 350 million or EUR 450 million, I don't know, but we still have a month and a half to go almost. We do see a relatively strong performance there from the system. Now, for the remaining half of the year, I cannot tell you. I mean, you tell me when the Strait of Hormuz are gonna open, then I can tell you what's gonna happen on the crude supply, which is a big driver. I would definitely expect to see an increase versus last year. Whether it's 10%, 20%, 30%, I don't know.
On the cash generation, that benefit will actually flow through because we have lower capital expenditure in 2026 versus 2025. Subject to any potential new projects under renewable. That is not really maintenance CapEx, it's effectively an M&A type of CapEx because you're adding capacity. It's almost like buying a new business, whether you build it or whether you buy it's almost like adding new business. That CapEx will bring additional cash flows over the future period. I wouldn't say I'm cautious. I would expect to see better numbers than last year. The volatility is so high that we need to make sure that we don't send the wrong signals.
First of all, for ourselves, so we don't relax our follow-up and management and also to the market. I would be expecting a better performance for this year, to be honest.
Thanks. If I may, a separate question. When I look at your pipeline of renewables, and you just mentioned on the 1.5 GW by 2028, and you have the target of 2 GW by 2030. We've seen a more aggressive expansion plan as well in the region for their capacity. Would you expect any increased competition on waiting on potential returns for that for your pipeline, or you're comfortable with the sort of returns you might get as you progress towards the 2 GW?
Look, Ricardo, it's a market which is in growth mode. It's the fastest growing market in in Europe. We definitely see t he environment, including [inaudible] batteries and hybrid projects. In fact, it's interesting to note that our neighbors in the north are further along the progress curve in batteries than Greece. As batteries are deployed and with the projected growth in the market, we should see curtailments in renewables stabilizing and returns improving. Certainly, we would expect good returns in our battery projects, at least for the first few years, given the spreads between, you know, afternoon hours and early evening hours, which are currently quite high. Of course, the more batteries you bring in, these spreads will tend to decrease. We remain confident about our plans.
We will reach our targets, and we expect now with the benefit of an integrated position, which includes Enerwave, we generally expect better realizations for our renewables assets as well.
Okay, thank you very much.
There are no further audio questions. 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 do have some questions from the webcast participant. First question comes from Nick Paton from Edison Group. He asks, could management comment on the sustainability of Mediterranean refining margins relative to both pre-2022 levels and the peak conditions seen since the start of the Ukraine conflict. In particular, to what extent does management believe continued under-investment and rationalization in European refining capacity, fragmentation of global product trade flows since 2022, and increased geopolitical risks around Middle Eastern energy logistics could support refining margins beyond 2026. Additionally, could management comment on whether the current level of realized margin outperformance versus benchmark margins is sustainable over the medium term? The second question has to do with the power business.
The question is: Should investors increasingly view the renewables and power strategy as strategically integrated with refining operations and downstream decarbonization, rather than primarily as diversification in this separate business line?
Okay. Kostas, do you wanna take the first one on refining margins.
Yep. Thank you.
The overall supply and trade flows issues?
Yes. Sustainability of Mediterranean refining margins w e would have to split between time periods. Right now, the margins look well supported. There is healthy middle distillate demand. We're quite confident that it's not going to change very quickly. Long term, it really, as Andreas previously said, it would depend on guessing the dates of two geopolitical events. One is the normalization of the Gulf, the Arabian Gulf trade flows, and it will also be a guesstimate of when Russian hydrocarbon will exit the sanctions regime. That one's a bit hard, folks, to address. In general, we have a positive outlook for margins in the Med.
Currently, Well, the current level of overperformance versus benchmark, parts of it, a significant part of it is sustainable as it relates to ability and flexibility over correct selection of crude that produce a more profitable slate. The parts which relate to market volatility would probably dissipate when markets calm down.
Okay. George, wanna cover the renewables?
Yeah, sure. Sure. It's a good question. I believe both rationales are very relevant, and I will explain why. Starting with the second, yes, it is a diversification into a new business line. It is a forward-compatible approach with the general energy trends, namely, electrification. It's a solid plan which could stand alone, even if we were not a major refinery operator. Nevertheless, we should not forget that we have considerable synergies with our refining operations. We are a major consumer of electricity and gas, which is not relevant for renewables. It's very relevant for our utility business anyway. We have a large, very innovative projects, renewables projects.
Which are going to decarbonize the power supply of our refineries. That's achieving the goal of gradual decarbonization as well. I would say both are relevant. You can look at the business as a standalone business line, but you should not overlook the synergies with the downstream part of our business.
Thank you. We have another question, from Eurobank Equities, and specifically from Christiana Armpounioti . How do you see refining margins in the second quarter? We saw that gasoline cracks, for example, came under significant pressure in April. Regarding petrochemicals, when should we expect additional capacity?
For the cracks going into Q2, the most recent picture is that our distillate cracks, for gas oil, for ULSD and gas oil have remained at relatively good levels. Gasoline and fuel oil cracks have improved since their initial pressure in recent weeks.
Sure. Thank you very much. Operator, back to you to accommodate any other questions through the phone line.
Thank you. The next audio question comes from the line of Yulia Bocharnikova with Goldman Sachs. Please go ahead.
Hi. Thank you for taking my question. Can I please follow up on the crude supply? Could you maybe elaborate how you're adjusting that in terms of replacing Iraqi crudes? Which level of crude differentials you are currently seeing on your crude supply? Maybe also what is the visibility of this supply? Is it a couple of months, is it one month? If you could give us any indication of where you see your current spot realized refining margin, that would be great. Thank you.
Okay. The main diversification, which was for the Iraqi crude, several sources were tapped into. Norwegian crude, Latin American crude, and then more recently, North American crude. Our typical horizon for booking crudes is, and we keep it quite strictly, is a range between one to two months ahead.
Okay. That's clearly, Yulia, this is the case until we discover oil in our exploration attempts, and we don't have to buy any oil increase from third parties. This is probably a little bit further down the road.
Thank you.
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing statements. Thank you.
Once again, thank you very much for spending this part of the afternoon with us. Repeating what I said at the beginning, it has been a very good quarter. A lot of the operational and crisis management issues were dealt with successfully. We've had a good performance. We are expecting an even better performance in the second quarter of 2026. From a product placement point of view and demand destruction, we're not seeing something materially different from last year. Maybe a small drop in demand, but other than that, we see strong demand from the markets. We expect to hear what the tourist market is gonna look like.
For Greece, this is an important part of the year for us as we move into the next four to five months of peak demand for this part of the Med. We sincerely hope that the geopolitically driven disruption issues dealt with as quickly as possible. Clearly, not only from a business point of view, but also from a geopolitical turmoil point of view that will allow us to spend more time in better managing our business and creating value rather than managing crisis. Once again, thank you, and we look forward to seeing you for our second quarter half- year results in a few months. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.