Good morning. I would like to welcome you to Klepados NAFTA meeting with investors. I'm Emilia, an Account Manager at Nasdaq Vilnius, and I'm delighted to be the moderator for today's event. We will start with a presentation from the management, which will be followed by the Q and A session. As always, I encourage every one of you to ask questions during or after the presentation in the question box of your screen.
With that said, I am pleased to introduce today's presenters: the Chief Executive Officer, Darus Chelenskis and the Chief Financial Officer, Indrek Kiselyena. Dear management, please, the floor is yours.
Good morning, Emilio. Good morning, investors and those who have joined today's presentation of KN first half of the year results.
Good morning, everyone.
So as usually, we will start from reminding what is mission and vision of KN Group Companies. They remain the same. Mission is to ensure safe, reliable and efficient access to global energy markets by sustainable development, investment and operation of multifunctional terminals worldwide. And our aim remains to assist our customers on cleaner and energy transition and to maintain their competitiveness. Vision as well is still actual and applicable.
We would like to become top LNG terminals operator worldwide and the most competitive oil and refined products handling hub in the Baltic region. So next slide. Since we are still in a COVID pandemic threat And as we can see worldwide, 3rd or even in some countries, even 4th wave is racing again with new cases of COVID. So company is still maintaining its focus on health and on the continuity of the businesses and activities in the light of this challenge, global challenge. So probably main message which I would like to say today is that company have, let's say, significant amount of employees who has got full immunity.
And approximately, it's about 2 thirds. And to be more precise, last week, we were checking it's about 76% of those who have both let's say vaccinated and immunity. And of course COVID pandemics is still affecting let's say, our mainly oil business because of, let's say, interruptions in mobility. Let's say refining margins are still let's say not so stable as they used to be before the pandemic times. So talking about the main announcements, I will not read the slide, but I think the main messages are related with the dividends, both what we distributed for the 2020 result and as well latest and freshest news that yesterday board of the company has approved the renewed dividend policy.
So for the 2020 results, KN has paid dividend equal to €0.098 per share. And total amount of the dividends distributed to shareholders amounted €7,500,000 Another important message is to underline that, let's say, our FSRU customers list has been supplemented by 1 more international company, by one more major company, by Norwegian Energy Company, Equinor SAA. And as well, I think it's worth to underline that it's already second time when company prepared social responsibility report for 2020. So report is prepared following the International Global Reporting Standard, GRI. And you can find report either by clicking link, which is here in presentation or even by visiting our website.
And of course, talking about dividend policy, there was a lot of questions during past few, let's say, webinars. So finally, we have the new version approved. And probably main message is that, let's say, dividends for the years 2021 to 2024 is and will be calculated by eliminating from the company's distributable profit, unrealized foreign exchange rates impact and other unrealized gains. So talking about the main highlights, first of those highlights in this slide are about, let's say, efficiency and margin protection measures, which company is doing. So we are successfully implementing and continuing implementation of the lean method in our processes.
So we already, let's say, certified and established 3 of them, Asahiichi, 5S and Kaizen TM. And now we are starting to implement Wacker method, which as well will improve our processes and will bring some benefit back to our bottom line. And also probably this name is not well known to not for industry players and experts, but we thought that it's worth to mention that this efficiency improvement, let's say, tools are not limited to what we already done. We started as well we concluded an agreement with Salomon Associates, which is actually probably biggest and most known company for benchmarking of the terminals and as well refineries around the globe. So we will revise our business processes.
We will benchmark whether we are doing fine in some particular areas of our performance. And of course, this is all for further efficiency improvement and competitiveness improvement of KN terminals. Another important message is that Mr. Piotr Naimski, representative of Polish Government Strategic Energy and responsible for strategic energy infrastructure visited KN terminals, including our FSRU together with Minister of Energy and we have discussed the energy cooperation between Poland and Lithuania and the possibilities of the lateral economic cooperation between Lithuania and Poland. As you probably know end of this year connection gas grid connection between 2 countries is planning to be open.
So it's really important for us to let's say to discuss with Poland as a potential partner on the exchange of natural gas between our markets. Of course, I'm proud to announce that despite of the challenges which company is facing, presently we've been announced as a number one employee in logistics segment by the Business Magazine, Versalaginos Business News. And we among all the companies which have been evaluated, we took the 5th place. Another important message is related with our ESG or environmental social governance areas of our activities. So Minister Environmental Minister also visited our oil terminal where we have presented our latest investment into, let's say, environmental sustainability, new air pollutant treatment plant, which cleans, let's say, pollutants collected from oil product tanks and rail loading platform.
Why it is important? It is important because glycobrol terminal is located within a city. So let's say, we are giving our contribution to the surrounding societies and to the city. So let's switch to presentation of main topic for today of the financial results and I will ask Indre to make a brief summary of how we were doing. So please
Thank you, Darce. Let me introduce financial results of first half year of 2021. So, here I presented financial results on quarterly basis. So in Q2 as well as in Q1, revenue level is at the same and we see the decrease comparing to the quarters of 2020. So net profit loss is impacted by foreign exchange rates and you can see that net profit adjusted for Q2 and Q1 is balancing around 0.
And for more details, let's move to half year results. So revenues of half year one twenty twenty have decreased in €9,000,000 compared to the same period of last year and the main reason for the decrease is the loss of Berlach and Cargo starting from February of 2021. Also revenues in regulated activities in LNG part has decreased also. And the main impact is that quite significant amount of LNG surplus which will be returned to consumers starting from 2023 has been collected in 2020. That's why the level of 2021 compared to previous year is lower.
Also LNG securities supplement amount in 2021 has been reduced in SEK1.9 million and the impact to half here is €1,000,000 with a surplus of 1st regulated period which had ended in 2019. Yes, the decrease in EBITDA is also noted. As I already mentioned, the main impact is the decrease in revenues. We have a net loss of SEK 6,800,000 and it is the effect of SEK 9,000,000 of loss of foreign exchange rates. Let me remind you that it is products arise from IFRS 16 requirements and capitalized assets and liabilities, which most are denominated in US dollars in KN.
Also, we are calculating deferred tax assets and liabilities which has significant impact to net profit and we have financial derivatives. So what the company is doing is calculating adjusted net result when unrealized ForEx horizon from IFRS 16 is eliminated as well as respective impact of deferred tax, which is calculated 15% from unrealized parks and the impact of financial derivatives is eliminated also. So we have net adjusted loss of EUR 2,000 for first half year twenty twenty one. And let me remind you that the company is calculating dividends starting from 2020 by from net profitlossadjusted and it is based on dividend resolution, which has been amended in April 2021 and it is in line with approved amended dividend policy, which has been announced yesterday. I would also like to say that net profit loss adjusted has been impacted by the increase in environmental pollution expenses and significant increase in permits prices in 2021 has made a huge impact.
It's almost 2 €1,000,000 compared to 2020 during the first half year. Here is presented the structure of revenues, EBITDA and net profit loss on segment basis. So in the first block, you can see ForEx based and in the second part, you can see adjusted result. So from the diagram, it's obvious that adjustments comes from regulated LNG activities and it comes from financial activity parts that I have already mentioned. Yes, and we are happy to announce that from commercial LNG activities, the revenue part has increased in 2021 and this segment has become profitable and started to generate returns.
So, Darrus, I will pass over to you.
Yes. So thank you, Andrea. Talking about each segment separately. So as it has been communicated many times before about the COVID pandemic's effect and geopolitical effects to our activities. So as you can see, we have, let's say, accounted during first half of twenty twenty one loss of €635,000 in our oil terminal segment.
The reasons are listed on the left side of the slide. But in general, as we already said, 1st of all, restrictions around the globe due to COVID. And as a consequence, negative refining margins is influencing still reduced amount of cargoes which are being exported to receivable markets. Talking about the Belarusian situation, yes, we have in June, let's say, new package of sanctions applied to the Belarusian regime. But it's worth to mention that for KN oil terminals, actually, this effect of the sanctions materialized even much earlier in the year.
So starting from February, we are not having any revenues from the Russian, let's say, cargoes. And of course, as a consequence, because we don't have part of a, let's say, conventional flow, we were looking for opportunities in the market. So it's worth to comment briefly how we were doing with that. Redundant capacities, which appeared, let's say, as a consequence of loss of the Russian cargoes. The potential, let's say, utilization of those capacities is entrance of storage market.
Let's say during first half of the year this market was, let's say, influenced or demand in this market was influenced by backwardation on oil products on markets. So we had a bit less demand as it was expected. But nevertheless, we were quite successful on renting our tanks and capacities for storage of the gasoline with one of the most active, let's say, gasoline traders in the region. And also we have extended this cooperation just recently by adding fuel oil storage services. So let's say mitigation plans are in action, but the market, let's say, consequences is not the best presently.
So let's hope we will have another let's say, another opportunities within, let's say, remaining year. Other, let's say, flows of revenues, which is worth to mention is that biofuels is continuing, let's say, bullish trend. Probably you don't remember, but last year we had a record growth by 6 or 7 times. I don't remember exactly. So this year, it's continuing.
And comparing even with the last record year, we have, let's say, about 63% more transhipment of various biofuels during first half of twenty twenty one. Also, we added into our portfolio contracts and activities respectively related with imports of FAME, which is, let's say, as well biofuel or feedstock for biofuel and monoatylamglucol, which is used for PET production, it's actually petrochemical market products. And also, we signed a contract for handling of bitumen, which is also a new activity for our terminal, and we are planning to start deliveries and our LNG our regional LNG activities mostly were influenced by the index pricing and supply demand balance around the globe of LNG. So summarizing, LNG terminal was utilized by 42% and actually rate is in line with utilization of other European terminals during same period. Why it is slightly less comparing to 2020?
That's because, let's say, higher LNG demand in Asian markets, particularly in China, have been recorded. And of course, record low injections to European gas storages impacted this low utilization rate. So LNG security supplement reduction impact is minus €13,400,000 It remains the same or approximately the same. Just to remind that Kvaerner SNAVTA is implementing, let's say, the security supplement reduction, so to say, project starting 2020. Talking about amount of cargoes, as you can see, it's quite similar to what has been trans shipped or re gassed during the same period 2020.
2 more cargoes, but here it's very important what is the size of the cargo. So during half first half of the year twenty twenty, we had 9 large scale deliveries, 26 small scale and we have performed 2 cargo reloading operations, ship to ship operations of LNG. Talking about the market shortly, so natural gas consumption in first half of the year in Lithuania increased by 17%. So imports by LNG terminal accounted about 64% of entire supplies to Lithuanian market. And talking about the pricing index, it remains quite high.
So Dutch PTF index was equal to average index was equal to €19.5 per megawatt hour, while during the first half of the year. Last year, it was even more than twice cheaper. The average was €9.2 per megawatt hour. So talking about our commercial LNG activities, which includes our global LNG development projects and, let's say, operations of our small scale LNG infrastructure in Klaipira. So as Inder already mentioned, we during the second quarter sorry, during the first half of twenty twenty one, It's a breakeven period since we came finally with net profit into our P and L from both activities.
And we as already it was mentioned about €129,000 of net profit has been gained. So talking about further developments, so we are on the same strategic line. We are looking for potential, let's say, projects, terminals and investment opportunities globally. So focus regional focus remains the same. So mainly it's Europe, Southeast Asia, Middle East and South America.
So that's all probably about main messages from all our business segments. Indra, I'm giving back to you presentation of profitability and market value ratios.
Thank you, Daims. So here it goes main financial ratios, it is through a 5 years comparative period, the first half years. So you can see, as I suppose already mentioned many times in previous webinars that EBITDA margin has changed from 2019 due to IFRS 16 as the accounting of lease payments has been changed based on IFRS 16 requirements, those have been capitalized, so not directly accounted in P and L. So the effect comes here and seen in EBITDA margin. As well as RARE and RAR ratios are presented for the same period, you can see price and rent ratios.
Those 3 blocks of ratios are calculated based on moving annual average method and earnings per share are calculated based on profit, loss, suggest that other reporting periods. So also please be noted that all the ratios here are presented based on net profit loss adjusted. And here let me briefly comment on the structure of balance sheet. So total assets has decreased in approximately €24,000,000 and the main reason is the depreciation of property, plant and equipment and right of use assets. Also we have changes in cash and cash equivalent balances.
At the year end 2020, the company had the deposit in other current asset side and it has been returned to the company and now we can see it in the cash and cash equivalents. So cash also has decreased as dividends of EUR 7,500,000 has been repaid in 2021. Non current lease liabilities has decreased also mainly due to finance lease obligations decrease and net amount of loans payables has increased to €5,000,000 So as Dyrus already talked, let me remind you that we have LNG secured to supplement reduction projects and it means that the company has loans from Nordic Investment Bank in EUR 26,800,000 per annum additionally. Other non current liabilities has reduced due to decrease in deferred tax liabilities amount of EUR 1.3 million and also other liabilities has reduced, mainly due to the decrease in payables and the changes in value of financial derivatives. So equity has reduced respectively due to mostly dividend payments and accumulated net profit.
Yes. So probably that's it from our side and we can switch, Emilia, to questions and answers part.
Thank you very much for the presentation. And before going to the questions, I would like The first question that we received before the webinar is, what are the last projects implemented by Klepados NAFTA with your own or EU funds? Thank you.
Yes. Thank you for the question. It's quite extensive because it consists from 2 parts. So meaning with own or EU funds, with own meaning everything, which all the projects which we have done recently. So talking about the biggest own, let's say, financed projects, I think it's reconstruction or construction of additional jetty at Klepida oil terminal.
And let's say, the expansion, the last phase of expansion of our, let's say, tank farm, adding petrochemical and let's say more flexible tanks for our oil thermal strategy implementation. Talking about projects which has been financed or granted by European funds, The last one was already mentioned earlier today. It's a vapor collection unit and filtering unit from railway trestles and heavy fuel oil tank farm. And this project was partially funded by KN and by the Environmental Projects Management Agents in Lithuania. Project is actually on a testing or infrastructure is on a testing phase and final dunes of it has been done.
Value of, let's say, this project reached about €1,500,000 from which about €130,000 were funded by EU funds. So that's probably it with this question.
Thank you very much. The next question is as following. What acquisitions are planned for the next 2 to 5 years in Oil and LNG segments? Thank you.
It's worth to mention that company presently is under a revision phase of our Strategy 2,030. So probably more precise directions of potential M and A activities will be identified during Q3 and Q4 of the year. But talking about the nearest acquisitions, which we are planning to implement is, of course, acquisition of FSRU, which, as you know, till 2025 is leased from Hoegh, Norwegian Company. And of course, as a part of our strategy, we are looking into various opportunities, including M and A opportunities in a field of LNG projects worldwide with the main focus on floating technologies where we have, let's say, competitive edge and where we can capitalize our know how accumulated with the implementation of life and FSRU project. Thank you.
Thank you very much. Also another question, which is to what extent does the strategy of Klepa dos NAFTA relate to that of Ignitus Group? Does the implementation of Klepa does NAFTA strategy depend on the success of Ignitus Group? What is the economic relationship with the company in question? Thank you.
Thank you for the question. So I think first of all, we should start from the basics. KOLIPIOS NAFTA and Ignitus Group has different representatives of the main shareholders, while Ignitius Group is reporting to finance Ministry of Finance well, main shareholders, Ministry of Finance, in KNKs, it's Ministry of Energy as a major or main shareholder. So talking about calibration of a strategy so to say, I think we are a bit different nature companies where KN is operator of logistics infrastructure and is a part of the supply chain of the liquid energy, let's say, the shape of oil products, crude oil itself and liquid natural gas. So strategies is and I believe remain different.
I think the directions of let's say, our strategies which can be common is definitely vision on a greener less polluted fuels part where Ignitus is, let's say, already defined what are both directions. We are, as already mentioned, on the way and in progress of finding our additional legs or, let's say, activity directions in the greener topics such as hydrogen and such as maybe CTS or other alternatives. So some part of our updated strategy definitely will have some, let's say, similarities or some connections to Ignite's group. Nevertheless, as I already said, we are different nature companies and strategies is different. Another part of the question was what is economic relationship with the company in question.
So Ignites Group has few Ignites Group and KN has few crossing points and few angles of a commercial relationship. So first of all, Ignite's Group is a supplier of, let's say, of energy to Kilometers. Was is now we have some competition in that market. But in general, from time to time, we are concluding transactions with Fibonitis Group on acquisition of electricity or gas. Since it is treated as a related counterparties, you can find detailed information in our publicly accessible sources such as our website.
And of course, Ignite's group, on the other hand, is a customer of ours in light of the FSRU infrastructure. And actually, Ignitigroup is a client, which is a dedicated supplier of LNG to Lithuania. So this is an answer from our side.
Thank you very much. I would like to remind everyone that you can send in your questions in the question box of your screen. So let's proceed with the 4th question, which is when is it planned to purchase the SS RU from Norway and of what capacity? Thank you.
Thank you for the question. So it's worth to clarify here a bit. There is no plan to buy Norwegian or other Origin FSRU. We are now performing or starting public or already started public procurement, international public procurement process. And the goal is to seek for to seek and select economically and the most advantageous offer of FSRU.
And of course, we have a so called buyout option with EHAO, with an Norwegian FSRU supplier in the time charter party agreement. And as I already mentioned about in acquisitions part of question part, KJAN will become the owner of SRAU latest in December 2024. Size of SRAU as it is described in the conditions of public tender will not be lower than 150,000 cubic meters and other technical characteristics of FSRU should remain same or similar or better as they are today. But all the details are also available in the publicly assessable sources because it's a very big international acquisition process with a lot of regulations. So if you need some additional information, you can find it on our website about technical parameters, about the criteria, about everything what is related to this acquisition.
Thank you very much. And could you please comment if the pension funds invest in Kleipa dos NAFTA? And if so, which countries? Thank you.
Yes. We checked a bit. So yes, pension funds as well as financial institutions among our investors or shareholders and most of them are from Baltic region.
Thank you. To what extent is Klepados NAFTA able to adapt its existing infrastructure to hydrogen? Could LNG terminal infrastructure be adapted for that? Thank you.
Yes. Thank you for the question. I will start from, let's say, physics probably or physical differences between the liquid hydrogen and LNG. So it's completely different molecule. It's completely different, let's say, source of energy.
And the question about possibility to adopt LNG or liquefied natural gas infrastructure is simple and straightforward. No, it's not suitable. Why? I just will give few examples. First of all, liquid temperature of a liquid natural gas is about -160 degrees while temperature of liquid form of hydrogen is 250, around 250.
So technologically, LNG infrastructure was not built for that and cannot resist more cold or more cryogenic temperatures. 2nd of all, I already mentioned the size of the molecule and the difference is as well significant. Talking about density of the liquid LNG, it's 450 kilograms in a cubic meter, while liquid hydrogen, it's about 70 kilograms per cubic meter. So it's significant differences and the answer here is no. Talking about adoption of, let's say, our Jetty or the pipeline, which we operate from FSRU till gas metering stations, which is about 18 kilometers.
Yes, theoretically, with some CapEx investments, we can adopt, but not for pure hydrogen transportation, but for some part of, let's say, of share in natural gas. But still, it's not possible without the technological changes and investments into infrastructure. The percentage is various opinions. Percentage can be up to 10%, but some scientists are saying no, it should be less than 3%. And it's not only a problem about infrastructure.
The problem is if you are adding hydrogen molecule into the mix of natural gas, what about consumption because you should adopt then not only the logistics or grid infrastructure, you should adopt as well the, let's say, end users infrastructure or power generation or heating generation whatsoever. Thank you.
Thank you very much. As we have one more question remaining, I would like to remind all the attendees that your questions are very much welcome to the question section of your screen. So the 7th question that we have is, what age of natural gas has begun in Africa with limited infrastructure? Does Klipa does NAFTA have plans to invest in Africa? Thank you.
Yes. Thank you for the question. Yes, so now a lot of regions are extracting natural gas. So Africa maybe was the first, I don't know exactly. But nevertheless, our strategy, as already mentioned in the global LNG development, includes all the globe, all the geographical regions, of course, subject to, let's say, country crediting and, let's say, even safety risks.
So let's say, all the projects which meet appetite of the mentioned risks is subject to let's say to our decision. Thank you.
Thank you very much. We just received one more question, which is as following. Any chance that transshipment FRMB and Key can resume in the near future, please?
Can you spell one more time? Okay. I can see it now on the screen. You know that this question probably is more political in nature, not economical in nature. The infrastructure which we operating.
And of course, we can physically restart transshipment of any product, which can be produced in the Russian refineries. But as I mentioned, it's a question of political decisions and it's a question of where the Belarus will turn in the nearest future. With existing sanctions, no. If situation changes significantly, yes, of course, we are able and capable to provide services for transshipment of any product out of dollars. Thank you.
Thank you very much. So as all the questions are answered, on behalf of Nasdaq Prelnos, thank you, everyone. It was our pleasure being with you today. Recording of the presentation will be available in the Nasdaq Baltic YouTube channel. Thank you, dear management, for the presentation and very interesting Q and A session.
Have a good day, everyone, and goodbye.
Thank you. Goodbye, everybody.
Thank you. Have a nice day.