JSC Ventspils nafta (NASDAQ OMX RIGA: VNF1R) and its related companies (hereafter referred to as the VN Group) have worked with an audited consolidated net profit of LVL 1.32 million in 2011.

 

The Group’s turnover has increased by 29% in the past year and according to the Group’s unaudited consolidated annual report for 2011 it was 69 million lats. Turnover has mainly increased owing to the higher proportion of railway services at “Ventspils nafta terminals” – their amount has increased about two times in the past year in comparison with 2010.

 

Simon Boddy, Chairman of the Management Board of JSC “Ventspils nafta” holds the view that “this year has been successful for all companies in the Ventspils nafta Group – in 2011 both the VN parent company and its subsidiaries have been able to work with higher turnovers than in 2010. Latvian Shipping Company is comparatively in a more difficult situation, but I am satisfied with the performance of this company as well – its losses have considerably decreased. Knowing how difficult the situation is in the shipping sector worldwide - with many large shipping companies on the verge of bankruptcy in the past year – Latvian Shipping Company is in a relatively better situation now than a year ago.”

 

Boddy also emphasises the importance of actions of the state in reforming its transport policy: “It is important that the ports of Latvia become more independent and that their decision-making should be transparent and open. Railway tariffs must allow Latvian ports to compete with the largest ports of the Baltic Sea’s East coast. Only then can Latvia hope to attract new investments, and existing companies can develop their business and operate successfully, as competition for transit traffic intensifies in the region.”

In the last year, value of the unaudited consolidated assets of the VN Group, which is one of the major concerns in Latvia, has not changed particularly – in the end of 2011 it was 350.99 million lats, in the end of 2010 – 350.55 million lats.

 

Also turnover of the VN Group’s parent company has increased considerably – in 2011 it was 323 thousand lats, which is 147% more than a year ago when the turnover was 131 thousand lats. One of the main reasons for the increase in turnover is higher proportion of the rendered management consultations. Within framework of these consultations, a united procurement organization was formed for the Group’s companies, savings were made with the help of various corporate service discounts, thus achieving considerable administrative cost decreases for the entire VN Group. Also the administrative expenses of the VN Group’s parent company have been reduced considerably – in 2011 they were reduced by 25%: from LVL 1.47 million in 2010 to LVL 1.1 million in 2011. Since the change of management in early 2010, administrative expenses have been reduced by more than a half – compared to 2009, thereby allowing the company to save 1.9 million lats.

 

The VN Group’s results are largely affected by operation of the Group’s associated company JSC Latvijas kuģniecība (NASDAQ OMX RIGA: LSC1R ) and its subsidiaries (LK Group) – although the situation is very complicated in the shipping sector globally, and the LK Group has also worked with unaudited losses of 24.9 million lats (USD 49.7 million), still they show a positive tendency – the unaudited net losses have decreased about three times last year compared to 2010. LK Group’s unaudited gross profit of LVL 6.9 million (USD 13 million) in 2011 was considerably higher than a year ago and is sufficient to cover administrative expenses. The new management of LK, which started managing the company in early 2011, has reduced the administrative expenses by 40%, if comparing years 2011 and 2010.

 

The unaudited turnover of the VN Group’s company Ventspils nafta termināls Ltd has increased in 2011, reaching 58.75 million lats. The terminal transshipped 11.37 million tons of petroleum products last year, which is 26% more than a year ago.

 

The unaudited turnover of the VN Group’s company LatRosTrans Ltd in 2011 was 10.1 million lats, which is 2.8% more than in 2010. The amount of petroleum products transported via the pipeline of LatRosTrans has increased by 156 thousand tons in comparison with 2010, and it reached 5.8 million tons in 2011.

 

Year 2011 has marked a turn also in investor relations of VN Group. Being aware that up to now the company’s communication with investors has not been active enough, on December 8 of the last year the VN Group’s companies presented and explained operating results of companies to investors, the media, state representatives and opinion leaders, as well as informed them about future plans. It is planned to arrange such meetings regularly.

Ventspils nafta: http://www.youtube.com/watch?v=f4c1tjfcQ2I

Ventspils nafta termināls: http://www.youtube.com/watch?v=9IBXOITpNas

Latvijas kuģniecīb:a http://www.youtube.com/watch?v=Sy7NixSReLc

LatRosTrans: http://www.youtube.com/watch?v=sEFL7rRm4m4

 

Shares of JSC “Ventspils nafta” ( VNF1R) are quoted in the Baltic Official List of the stock exchange NASDAQ OMX Riga since October 20, 1998.