KN reports preliminary revenue for August 2020

The operating segments of the company include:

• Oil terminals activity, that includes Klaipeda oil terminal and Subacius oil terminal.
• Regulated LNG activity in Klaipeda.
• Commercial LNG activity, that includes the small scale LNG reloading station in Klaipeda and business development projects.

The preliminary sales revenue of the company’s oil terminals for August 2020 comprised €2.6 million – lower by €0.4 million (13.3 %) compared to August of 2019. The preliminary sales revenue is lower due to decrease of transshipment quantities of oil products, compared to the same period of 2019. The preliminary sales revenue of the company’s oil terminals for the first eight months of 2020 comprised €21.1 million and is in the same level as compared to the same period of 2019.

The preliminary sales revenue of the company’s LNG terminal for August 2020 comprised €3.4 million (during the same month of 2019 – €5.8 million). LNG terminal revenue consists of the regasification tariff fixed part (for booked annual capacities), variable part for amount of regasified LNG, and reloading revenue from regulated activities. The level of Klaipeda LNG terminal revenue (for booked annual capacities) does not depend on regasification volume. Revenue is confirmed by the National Energy Regulatory Council (NERC) based on the approved methodology of State regulated prices in the natural gas sector and is calculated for the whole upcoming year. The preliminary sales revenue of the LNG terminal for the first eight months of 2020 decreased by 38.5 % due to the reduction of the security supplement for the Klaipeda LNG terminal from 1 January 2020.

The preliminary sales revenue of the company’s commercial LNG activity for the August 2020 comprised €0.2 million. If compared to the respective period last year, the preliminary sales revenue is higher due to business development projects consultation revenue and an increase in small scale LNG station revenue. The preliminary sales revenue of the company’s commercial LNG activity for the first eight months of 2020 comprised €1.8 million.

Total preliminary sales revenue of the company for January - August 2020 amounted to €52.0 million – lower by 24.5 % compared to the same period of 2019 (€68.9 million).

Comment by company management

In August there still has been a lot of uncertainty, which has been influenced by COVID-19’s impact on economies, which has also affected the results of KN. Our clients seek to preserve their profitability, wherefore the demand for the oil products storage has increased, however, transhipment quantities of oil products have been negatively influenced. Despite the unfavourable circumstances, KN managed to secure same preliminary sales revenue of the company’s oil terminals for the eight months of 2020 compared to the same period of 2019. Furthermore, we expect that our long-term partners in Belarus will meet their annual commitments to tranship agreed quantities of petroleum products and political activity will not be affect the dialogue on cooperation for the next contractual period.

The main factor, which influenced the total company’s revenue result in January - August, 2020, was lower revenue of the Klaipeda LNG terminal, following from the KN decisions, adopted in 2019, to optimise the Klaipeda LNG terminal’s costs and reduce the cost of the LNG terminal infrastructure for consumers, starting from 2020.

Read the article online at: https://www.lngindustry.com/regasification/08092020/kn-reports-preliminary-revenue-for-august-2020/