Esso SAF (ES) H1 2024 earnings summary

Executive summary

• Net income for H1 2024 was €116M, down from €266M in H1 2023, mainly due to lower refining margins and operational disruptions.

• Revenue reached €9.0B, a 3% decrease year-over-year, reflecting lower sales volumes despite higher product prices.

• Operational challenges included a planned shutdown at Fos-sur-Mer and a fire at Gravenchon, reducing refinery throughput by 24%.

• Positive inventory effects of €118M supported results, contrasting with negative effects of €193M in H1 2023.

• A major asset sale agreement for southern France refining and logistics was signed, expected to close by year-end.

Financial highlights

• Adjusted operating income was a loss of €6M, versus a €335M profit in H1 2023, due to lower margins and operational incidents.

• Adjusted EBITDA was €34M, sharply down from €375M in H1 2023.

• Gross margin (adjusted for inventory effects) fell to €498M from €865M year-over-year.

• Operating expenses decreased by €26M, mainly from lower external costs and taxes.

• Net financial position remained strong with €1.1B in net cash at June 30, 2024.

Outlook and guidance

• Persistent geopolitical and economic uncertainties are expected to maintain market volatility.

• Priorities for H2 2024 include finalizing the Fos-sur-Mer sale and implementing workforce adjustments linked to the EMCF shutdown.

• The group remains exposed to oil price, FX, and refining margin volatility in a globally competitive market.