Puma Energy announces Q1 2020 results - strong underlying performance based on execution of our customer-led strategy
20 May 2020
Singapore, 20 May 2020 – Puma Energy (or the “Company”) today announced its financial results for the three month period ended 31 March 2020.
Puma Energy delivered a strong underlying performance throughout the first quarter, demonstrating the positive impact of the execution of its customer-led strategy and focus on priority growth markets. Related operational improvements for the period totalled US$15 million, an uplift on the contribution of US$10 million delivered in Q4 2019.
First quarter sales volumes rose 4% year-on-year, bolstered by a solid performance in the Americas and Europe. While March volumes were higher than expected, there were declines in some segments, particularly aviation, due to the impact of the COVID-19 pandemic.
Puma Energy has been proactively managing the challenging impacts of the pandemic as well as volatility in global oil prices, and will continue to do so to ensure it is well positioned for global economic recovery. Gross profit in the period was negatively impacted by the steep decline in oil prices and the impact of COVID-19 on demand during March, leading to some volume reduction, notably in aviation and stock holding accounting losses of around US$16 million.
Puma Energy is delivering results against its commitments, and despite the impact of COVID-19, the Company will continue to focus on maximising performance in the short-term and building the right foundations for medium-term growth.
The Company’s headline first quarter EBITDA fell 15% to US$111 million. Adjusting for the recent oil price volatility and impacts of COVID-19, underlying EBITDA for the quarter was US$134 million. This represents a 7% increase compared to first quarter 2019 at US$125 million, when adjusting for the Paraguay perimeter at US$5 million.
The Company made progress in reducing its fixed costs while cash from operations of US$45 million more than covered capex expenditure for the period.
The successful renewal of the Company’s one-year RCF at US$310 million, completed post-period on 30 April 2020, is strong evidence of the continued support of its lending banks for Management’s execution of its sustainable and profitable growth strategy, despite the difficult credit climate. Market volatility is not new in Puma Energy’s operating markets and the Company is well placed from both operational and management perspectives to navigate the current challenges.
In order to ensure that the business is not materially affected by the expected trading conditions in Quarter 2 and Quarter 3 as a consequence of COVID-19 related volume and margin reductions, Puma Energy has taken the following actions:
- Reduced 2020 capital expenditure programme from $200 million from $130 million alongside a reduction of operating costs across the business during 2020 totalling $40 million.
- Remains on track to close the sale of the Australian fuels business by the end of the second quarter, supporting deleveraging efforts.
- Targeting non-core asset disposals of $100 million.
- Exploring opportunities to renegotiate contract terms with suppliers.
- Agreed with our core shareholder suppliers an interim price adjustment under their supply arrangements anticipated to realise $100 million over a 5 month period.
Commenting on the results, Emma FitzGerald, CEO, said:
“Against a backdrop of unprecedented challenges, Puma Energy delivered robust first-quarter sales volumes growth and is continuing to execute on our stated commitments as we drive forward with our customer-led strategy. It’s clear that this is delivering results and our strong underlying performance reflects responsible and focused management.
While we can expect continued macroeconomic uncertainty we are proactively managing the impacts of COVID-19 across our business and focusing on controlling what we can control in our core markets. Our highest priority is the health and safety of our people and the communities we serve. We demonstrated an encouraging safety performance in the first quarter and implemented rigorous safety and hygiene protocols across all our key activities.
During the pandemic we have responded swiftly to our changing customer needs in the markets we serve, by partnering with strong brands and platforms to improve access to groceries for local communities as well as innovating unique solutions such as ‘click and collect’ facilities in a number of our retail sites. Now more than ever, our retail business is playing a key role in supporting the communities we serve.
We are also reinforcing our commitment to the Energy Transition by investing US$5 millon in key solar energy projects in nine markets. This is an important first step towards reducing our Scope 1 and Scope 2 greenhouse gas emissions, at the same time as reducing operating costs at our sites.
In summary, we have created a strong platform to build upon as we navigate the months ahead. By reinforcing and accelerating the implementation of our strategy, I am confident we will emerge from this crisis - stronger, more resilient and well positioned for the future opportunities.”
- ENDS -
For press queries, please contact:
Elizabeth Adams | Genevieve Ryan
Tel: +44 (0) 20 3727 1000
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Further information can be located at: https://www.pumaenergy.com/en/investor-relations/home/
About Puma Energy
Puma Energy is a leading global energy business with a customer-focused approach to safely providing energy solutions in 46 countries across six continents. Puma Energy has around 3,000 retail sites, a presence at over 80 airports and a network of 100 storage terminals. Our purpose is to energise communities to help drive growth and prosperity by sustainably serving our customers’ needs in high potential countries around the world.
For further information visit: www.pumaenergy.com
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