OREANDA-NEWS. August 29, 2008. According to the unaudited financial results of JSC Ventspils nafta Group in the first six months of 2008, the consolidated net turnover of the company has reached LVL 40.7 million and net profit – LVL 7.8 million. Although the mentioned results exceed the budget forecast for 2008 published before by JSC Ventspils nafta, the economic processes in the first six months of 2008 globally and in Latvia have unfortunately attested that the cautious forecasts of JSC Ventspils nafta have been correct, by planning what would be the potential influence of external factors to the work of several subsidiaries of the holding – including exchange rate fluctuations resulting in the Group losing more than 4 million lats in total.


The Management of JSC Ventspils nafta emphasized before that the year 2008 is very complicated for JSC Ventspils nafta and its subsidiaries due to the influence of both the global circumstances and the internal economic situation in Latvia. A considerable part of the consolidated turnover of JSC Ventspils nafta is formed by income in US dollars, gained for example, by the subsidiaries working in the transit area of the Group – the crude oil and petroleum products transshipment company Ventspils nafta terminвls Ltd and the owner and operator of crude oil and petroleum products pipelines in the territory of Latvia LatRosTrans Ltd. These results were therefore affected by the considerable fall of the USD/LVL exchange rate by 13% in comparison with an analogue period in 2007.

“The results of Ventspils nafta Group in the first half-year of 2008 support that companies of JSC “Ventspils nafta” are able to sustain stable development despite the complicated circumstances of global economic crisis, which affects several companies of the Group working in international markets and has profound effect on the Latvian economy, as the inflation and various expenses continue to increase for significant period of time. Various effective solutions positively affect operations of JSC Ventspils nafta Group companies from a viewpoint of long-term development prospects despite negative macroeconomic tendencies as showed by the reached budget results. While along with launching a new production plant, the challenge of the printing branch is to acquire broader international markets,” says the Chairperson of the Management Board for JSC Ventspils nafta Olga Pзtersone.

The JSC Ventspils nafta subsidiary Ventspils nafta terminals Ltd continued active implementation of modernization during the reporting period, by planning optimization of the company’s labor process and procedures, as well as increase in labor force efficiency and introduction of higher requirements in terms of environment protection. Modernization of the terminal was commenced along with involvement of a new strategic partner – the international oil and gas company Vitol – in summer of 2007. Although a stable high level of petroleum products transshipment volume can be observed at Ventspils nafta terminвls Ltd (more than 6.6 million tons in the first half-year of 2008), additional safety is ensured in the complicated economic circumstances by the fact that the contract with the foreign investor guarantees regular income for the terminal in any case.

The aim of modernization is to strengthen the positions of Ventspils nafta terminвls Ltd as the major crude oil and petroleum products transshipment complex in the Baltic region, by developing its work by following similar principles as in other companies under the Vitol Group worldwide, such as EuroTank in Rotterdam and Amsterdam. International competition in the business of crude oil and petroleum products terminals is incresing. For that reason, modernization and diversification of the company’s economic activity is currently the only way for the terminal how to adapt to the new economic circumstances, by maintaining and at the same time strengthening its positions in the global market. According to the development plans of Ventspils nafta terminвls Ltd, its development will make a considerable contribution for promotion of competitiveness of both the company and also the entire port of Ventspils.

Several relevant measures have been already taken during the initial modernization stages of the company, for example, improving crude oil and petroleum products transshipment security, making the work of the shore-tank farm more efficient, developing a system of continuous notification of the employees, etc., making investments of about 1 million lats in total.

According to the previous forecasts of JSC Ventspils nafta, in the reporting period, external circumstances still substantially affect another Group’s company LatRosTrans Ltd, which is working in the sensitive transit area. Oil transportation in the direction of Lithuania via the pipeline owned by LatRosTrans Ltd is still not resumed due to the geopolitical situation, and technical reasons, such as repair works at the pipeline section in the territory of Byelorussia, have influenced also transportation volumes of petroleum products to Ventspils – these have decreased by 0.5 million tons. Moreover, negative impact was made by the difference of the USD/LVL exchange rate and its fluctuations in the first half-year of 2008.

In the first six months of 2008, The JSC Ventspils nafta subsidiary – the major Baltic printing company JSC Preses nams actively and purposefully continued implementation of production development, optimization and acquisition plans of new markets, which enabled official opening of the new book production plant at Jansili, Silakrogs located in Riga District, Ropazhi parish already after the reporting period ended. The technical capacities and technological possibilities of the new plant have lined JSC Preses nams not only in the ranks of the largest printing companies in the Northern Europe but also 300 largest book production companies worldwide. A sum of LVL 13.5 million has been invested into the book production plant, and it opens up an opportunity for the company to strengthen in the existing markets and to acquire new markets in Scandinavia, CIS and Western Europe, as well as other countries.

The strategic development plans of JSC Preses names include finishing construction of another printing plant – that is the newspaper and journal production plant in the territory of the industrial park of the airport Riga. The plant could be launched in 2009.

In the reporting period, JSC Ventspils nafta as the central holding company of the multi-branch Group successfully implemented its tasks in relation to investment administration in the subsidiaries, thereby furthering increase in the total value of the Group, as well as the value of each subsidiary.

Although the situation of economic development and growth is currently unfavorable, the companies of the JSC Ventspils nafta Group have worked according to the budget forecasts in the reporting period, taking into account the interests of its shareholders.