Russia and Draghi make Moratti’s Saras cry
Saras closed a difficult semester: revenues fell by 30 percent on an annual basis; Ebitda and the net result are both more than halved. The role of refining margins and the decree on extra profits. All the details
Shares of Saras, the oil refining and electricity generation company led by Massimo Moratti and controlled by his family for 40 per cent of the shares, lost up to 6.5 per cent on the stock market yesterday after the publication of less than exciting results of the first half of 2023. The stock is also down today in Piazza Affari.
THE RESULTS OF SARAS
In the first half of the year, Saras' revenues fell by 30 percent compared to the same period of 2022, to 5.4 billion euros instead of 7.6 billion. The gross operating margin, Ebitda, went from 688.5 to 282 million (-59 percent). The net result from 292.5 to 122.3 million (-58 per cent).
THE DIFFICULTIES IN REFINING
The decline in results is mainly linked to the reduction in oil refining margins, i.e. the difference between the price of raw material and that of refined products, which compared to the first quarter of 2023 decreased from 10.1 dollars a barrel to 4, 2 dollars. The margin ( crack spread ) on diesel, in particular, fell from 30.6 to 16.8 dollars a barrel between the first and second quarters: this is due to the increase in imports of refined products and a slowdown in industrial demand in Europe.
RUSSIA AND IRAQ
In the press release Saras specifies that "given the permanent embargo situation, and the impossibility of supplying Russian crude oils, starting from 2023 […] it has chosen to no longer indicate the Russian crude oil 'Urals' as a reference for the type of crude oil at high sulfur, and replaced it with the Iraqi crude "Basrah Medium", which is regularly marketed both in Europe and in Asian countries and therefore constitutes a valid alternative reference".
In June 2021, the Saras headquarters in Sarroch, Sardinia, had been raided by the Guardia di Finanza as part of investigations relating to Iraqi-Kurdish oil supplies between 2015 and 2017. More specifically, Saras was under investigation for the alleged irregular purchase from Iraqi Kurdistan, an area of Iraq, of non-marketable barrels of crude oil (that is, not sold through a regular channel), which may have benefited the Islamic State militias. In those years, in fact, a civil war was underway in Iraq and the oil wells in Iraqi Kurdistan had ended up under the control of the Islamic State.
THE IMPACT OF THE TAX ON EXTRA PROFITS
The tax on extra profits , applied by the government of Mario Draghi on the higher revenues reported by energy companies thanks to the increase in the price of raw materials (especially natural gas) in 2022 contributed to the drop in the net result. The impact of the tax it had not been counted by Saras at the end of 2022, but this year it weighed 170 million, out of a total of 305 million in taxes paid.
The 575 megawatt IGCC Saras gas-fired power plant produces over 4 billion kilowatt hours of electricity a year, almost half of Sardinia's needs.
THE FORECASTS FOR THE REST OF 2023
Despite a complicated first half, Saras confirmed its forecasts for the whole of 2023. Chairman Massimo Moratti spoke of a "positive oil scenario" and of a "second quarter which saw the conclusion of the ten-year turnaround of the IGCC power generation plant , which will allow us to continuously guarantee the supply of energy and contribute substantially to the stability of the electricity grid in Sardinia. Having concluded the main maintenance scheduled in the first half, we will be able to seize the opportunities of a market that looks positive in the second half of the year”.
Saras intends to expand its business sector and be not only an oil refining company, but also a producer of energy from low-emission sources. On this last point, it intends to reach 1 gigawatt of installed renewable capacity by 2028: it currently owns three wind farms, all in Sardinia, with a total capacity of 171 MW.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/saras-risultati-primo-semestre-2023/ on Tue, 01 Aug 2023 08:39:05 +0000.