March 3, 2014 [OPIS] - Latvian Ventspils Nafta Group (VN Group) lost 60.1 million euros ($83 million) after tax last year in its Baltic terminal, pipeline and shipping operations as Russian ports grabbed a larger share of export trade, the logistics affiliate of trading house Vitol said Friday.
Ports of the Russian federation “are increasing their share of the country’s export flows,” in line with the government’s strategic goal of creating domestic port infrastructure “to handle all the country’s oil exports by 2030,” the company said in its unaudited financial statement.
Riga-registered VN Group, which is 49.98% owned by Vitol via Cypriot Euromin Holding, recorded a 13.6% drop in revenues to 166.7 million euros while throughput volumes crumbled. An impairment charge of 81.2 million euros pushed the bottom line into the red.
Its terminal division, managed through 51%-subsidiary Ventspils Nafta Terminals and co-owned by Vitol’s VTTI-Eurotank Holding (49%), saw petroleum product volumes shrink by one-fifth year on year to 9.6 million mt.
In late November, the terminal operator had cited a Ukrainian shortage of light products, favorable pricing in the Black Sea and U.S. exports to Europe as other factors affecting throughput volumes.
The terminal, located in the ice-free port of Ventspils, handles crude oil and products such as gasoline, jet fuel, kerosene, naphtha, gasoil, diesel and n-butane from Russia and other Commonwealth of Independent States (CIS) countries for storage and export. Most product arrived via pipeline (56.2%) and the remainder via rail or sea (43.8%).
The VN Group-controlled pipeline business LatRosTrans (66%), in which Russia’s pipeline incumbent Transneft owns 34% through Transnefteproduct, recorded a 13.3% on-year drop in petroleum product shipments to 5.47 million mt. This partly reflected the end of a long-term transportation contract as well as “a strategic shift by Russia to reduce the export of product through the Baltic states,” the parent group said.
However, the group’s medium- and handy-size tanker fleet, managed through Latvian Shipping Company (VN’s share: 49.94%), benefited from improved freight rates and a decrease in operating costs as well as from the sale of several tankers.
“The challenges for 2014 will be to identify and pursue further efficiencies, whilst seeking opportunities to leverage the expertise and infrastructure of the group,” VN Group said, after last year’s focus on restructuring and streamlining.
