July 2019

Viru Keemia Grupp to continue strong

The Group’s sales turnover in the 2nd quarter of the current year was a record 66.6 million euros, which is a third more than in the same time in 2018. Net profit for the same period doubled, amounting to 12 million euros.

“Although the markets were volatile in the second quarter – the Brent crude oil price kept moving up and down in the range of 60 and 75 dollars per barrel and the average price level of 68 dollars a barrel was even 9% lower than during the same period last year –, the strengthened dollar and the increased demand for sweet heating oils ensured that the price of VKG’s shale oils was on the average 6% higher. The steadily strong production, the extraordinarily high sales of oils and the absence of future transactions with a low fixed price gave us a substantial financial result,” VKG’s Financial Director Jaanis Sepp summarised the quarter.

The production volume of commercial oils grew to 162,000 tonnes in the 2nd quarter, which is 6% more than in the 2nd quarter of 2018. On account of stocks, the sales volume of oils grew by as much as 16%, amounting to 167,000 tonnes. At the same time, oil shale production decreased by 10%, dropping to 993,000 tonnes, and thanks to the considerably improved efficiency of production equipment, the workers of the Ojamaa Mine were granted a collective holiday in June.

The production of electricity from shale gases decreased by 5% in the 2nd quarter, to 127 GWh, as the increased efficiency of the production process allowed us to place more added value into oil products. The 6% drop in the sales of heating energy was caused by the weather being warmer than in the preceding year.

The Group’s investments amounted to nearly 6 million euros (+26%), the majority of which was placed in improving production efficiency and reliability, e.g. the acquisition of semi-coke gas cooling equipment and the major repair of VKG Energia’s boiler. In the second quarter, work continued on the implementation of the measures foreseen in the odour management plan as well as on the second stage of the reconstruction of the Ahtme–Jõhvi district heating mainline.

In the 2nd quarter of 2019, the Group’s activities generated 11.1 million euros worth of tax revenue to the state budget, which is 15% more compared to the previous reporting period. The main contributors to tax revenue were labour taxes with 4.9 million euros (+14%) and various environmental charges with 4 million euros (+14%). As at the end of the quarter, the Group had 1,751 employees.