"The quarter was characterized by strong results in the refining sector, in contrast to refineries around the world, while the retail sector was unexpectedly strong, both at gas stations and the Yellow convenience stores," Paz Oil Company Ltd. (TASE:PZOL) CEO Yona Fogel said following the publication of the company's financial report for the third quarter of 2010 yesterday.
Revenue rose 13.4% to NIS 3.8 million for the third quarter from NIS 3.35 billion for the corresponding quarter and rose 1.5% from NIS 3.1 billion for the preceding quarter.
Paz's net profit fell 59% to NIS 102 million for the third quarter from NIS 246 million for the corresponding quarter of 2009.
International Financial Reporting Standards (IFRS) strongly affect Paz's results, because of the company's hedge deals on its oil inventory, a switch from the dollar to the shekel as the currency of operations at the Paz Ashdod Refinery, and swap deals on the company's Consumer Price Index (CPI) linked bonds.
Discounting these factors, Paz's adjusted net profit rose 70% to NIS 109 million for the third quarter from NIS 64 million for the corresponding quarter. The company attributed most of the increase to its refining business.
In contrast to Oil Refineries Ltd. (TASE:ORL), Paz does not disclose its refining margin, however, the Reuters Benchmark for the Mediterranean Basin was $1.70 per barrel during the third quarter. Fogel said that the Paz refinery operated continuously without breakdowns during the quarter, reaching a utilization ratio of over 90%.
Paz opened two gas stations and convenience stores during the third quarter, bringing the total to 273 gas stations (242 of which are independently operated) and 230 convenience stores. The company also operates 46 retail compounds. Retail and wholesale segment profit rose 7.6% to NIS 127 million for the third quarter from NIS 118 million for the corresponding quarter.
Paz's share price rose 1.6% today to NIS 607.40, giving a market cap of NIS 6.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2010
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