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A flexible refiner in a challenging time

Hellenic Petroleum 12 March 2021 Update
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Hellenic Petroleum

A flexible refiner in a challenging time

FY20 results

Oil & gas

12 March 2021

Price

€5.79

Market cap

€1,769m

US$1.20/€

Net debt (€m) at 31 December 2020 (excl lease liabilities €201m)

1,672

Shares in issue

305.6m

Free float

19%

Code

ELPE

Primary exchange

ASE

Secondary exchange

LSE

Share price performance

%

1m

3m

12m

Abs

8.0

6.6

11.4

Rel (local)

(1.6)

(2.3)

(21.1)

52-week high/low

€6.55

€4.14

Business description

Hellenic Petroleum operates three refineries in Greece with a total capacity of 344kbod. It has sizeable marketing (domestic and international) and petrochemicals divisions.

Next event

Q121 results

13 May 2021

Analyst

Marta Szudzichowska

+44 (0)20 3077 5700

Hellenic Petroleum is a research client of Edison Investment Research Limited

Despite continued low benchmark refinery margins during H220 due to the impact of COVID-19 on oil products demand, Hellenic Petroleum was able to maintain high production levels and generate substantial positive operating margin thanks to the flexibility of its refining system and increased exports. We anticipate a potentially slower recovery of benchmark margins in 2021 than previously assumed due to continued sluggish demand, at least during H121. However, with Greece looking to prioritise tourism with reduced restrictions on travel, we anticipate this could accelerate a recovery in domestic demand, especially for jet and road fuels. We have updated our estimates and valuation to reflect the Q420 results and peer multiples, and include a contribution from the recently announced 204MW Kozani PV project. Our valuation is unchanged at €6.55/share, representing 13% upside to the current share price.

Year-end

Revenue
(€m)

Adjusted EBITDA* (€m)

Net debt
(€m)

P/E
(x)

Dividend yield
(%)

12/19

8,857

570

1,544

9.5

8.6

12/20

5,782

333

1,672

N/A

1.7

12/21e

7,319

525

1,618

12.1

4.1

12/22e

7,339

634

1,443

7.5

5.4

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items, and share-based payments.

Higher exports and flexibility boost Q4 results

Hellenic experienced a challenging Q420 as benchmark refining margins remained at record low levels due to continued low demand for global crude oil and oil products. Despite these adversities, Hellenic achieved a better-than-expected operating performance and minimised the impacts of COVID-19. This was possible due to the flexibility of its refining system allowing it to adjust production to changes in demand; increased exports (+14% y-o-y in Q420); and its storage capacity allowing for contango trades. A dividend announcement of €0.10/share for FY20 (subjected to AGM approval), is a signal of the improving outlook for 2021–22.

Chance to benefit from Greece opening for tourists

We expect to see a global recovery of refining margins in 2021, although the pressure from lockdown restrictions is likely to continue for longer than previously anticipated. However, domestic demand in Greece could increase relatively quickly as the country plans to lift a number of restrictions and re-open its tourist sector in May, faster than other countries in Europe. Lifting restrictions and opening the tourist season will lead to an increase in demand both for jet and road fuel, which should result in improving operational and financial performance for Hellenic.

Valuation: Blended valuation of €6.55/share

Our valuation is based on a blend of discounted cash flow (DCF), EV/EBITDA and P/E. Hellenic continues to trade at a premium to European peers (7.3x FY21e EV/EBITDA versus 5.6x, and 12.1x FY21e P/E versus 9.7x) but at a discount to US peers on most metrics. Our blended valuation remains unchanged at €6.55/share.

Benefiting from a high complexity refining system

Hellenic Petroleum operates three refineries in Greece with a total capacity of 344kbd and 65% of the Greek refinery output. It also has sizeable marketing (domestic and international) and petrochemicals divisions. Two of the refineries (Aspropyrgos and Εlefsina) are complex, integrated and provide significant flexibility of feedstocks/throughput. The third, Thessaloniki, is small and simple but houses Hellenic’s petrochemicals units, which have significant Greek and Mediterranean sales and complement Hellenic’s refining system. Hellenic has a large storage capacity (41.8mmbbl) that allowed it to benefit from trading opportunities in H220 (contango trades).

Despite COVID-19, Hellenic’s operations were uninterrupted in 2020. When some refiners in the region curtailed production or terminated activities due to lower demand, Hellenic sourced new customers, including outside Greece, and its exports increased 11% y-o-y in 2020 (+14% in Q420). The company also benefited from the flexibility of the refineries and switched production away from jet fuel (Greek demand for jet fuel dropped 67% y-o-y in 2020 due to the decline in tourism and air traffic) towards other mid-distillate grades. This allowed the refineries to continue operating at a high level and deliver outperformance relative to benchmark margins.

In November, Hellenic successfully completed the full (five-year) maintenance turnaround and upgrade programme for the Aspropyrgos refinery, despite significant challenges due to the pandemic restrictions. It was the largest turnaround project in Hellenic’s history, at a cost of over €130m. In addition to the maintenance work and financial performance uplift, the refinery will also benefit from improved energy efficiencies and a reduction in PM emissions by 50%, reflecting the company’s investment of over €35m in environmental projects.

Progress on renewable energy projects

The company’s increasing commitment to sustainability and environmental improvement projects is seen in its capital investments, with 20% of total capex in FY20 spent in this area and a plan for a corresponding share for FY21 exceeding 35%. This is driving the gradual transition to cleaner forms of energy and improving the environmental footprint of the company’s core business. Hellenic is targeting a 50% reduction in its carbon footprint in the current decade.

The acquisition of a 204MW photovoltaic (PV) project in Kozani, completed in Q420, was a milestone for the implementation of Hellenic’s strategy in Renewable Energy Sources (RES). Hellenic has a target of an overall 600MW installed capacity by 2025, supported by organic growth and acquisitions. The company holds a diversified project portfolio amounting to 1.3GW (PV, wind energy, biomass), in various stages of development (projects and permits).

The construction of the Kozani PV project began in November 2020, with a budget of €130m (€24m deployed in FY20, a further €80–100m in FY21), financed with a €99.9m Eurobond issued in October 2020 (the European Bank for Reconstruction and Development participated at 75% of the issue). The project is expected to be fully operational in Q122 and to generate c 350m kWh of electricity per year. Management expects a stable annual EBITDA of c €17m from 2022 as the previous owner, Juwi, had already secured the purchase price of electricity produced at the facility at 5.73 eurocents per kWh (for 20 years). We include the Kozani project in our valuation model for the first time.

Apart from the Kozani PV project, Hellenic has capacity of 26MW, which is already operational through seven PV parks with a total capacity of 19MW and a wind farm with capacity of 7MW in Pylos in Messinia.

Results: Refining margins up quarter-on-quarter but remain weak

In Q420, Hellenic reported adjusted EBITDA of €77m versus €66m in Q320 and €118m in Q419. FY20 adjusted EBITDA was €333m, down 42% from €572m in FY19. As can be seen in Exhibit 1, the main downturn was in refinery and benchmark margins, followed by the effect of COVID-19 on markets. These combined to a negative impact of €350m. There was also the negative effect of the full turnaround at Aspropyrgos, completed in November.

Exhibit 1: Adjusted EBITDA bridge (FY20 vs FY19)

Source: Hellenic Petroleum

Crude oil prices averaged c US$44/bbl in Q420, significantly lower than the Q419 average of c US$63/bbl. This nevertheless represents a recovery from the multi-year lows recorded in Q220, following the OPEC+ countries’ agreement for the control of crude oil production and exports. In Q420 and in early Q121, refining margins recorded a small recovery as inventory started to clear.

Exhibit 2: Benchmark margins ($/bbl) for FCC

Exhibit 3: Benchmark margins ($/bbl) for hydrocracking

Source: Hellenic Petroleum. Note: FCC = Fluid catalytic cracking.

Source: Hellenic Petroleum

Exhibit 2: Benchmark margins ($/bbl) for FCC

Source: Hellenic Petroleum. Note: FCC = Fluid catalytic cracking.

Exhibit 3: Benchmark margins ($/bbl) for hydrocracking

Source: Hellenic Petroleum

Demand for refinery products in the Greek domestic market was affected mainly by reduced economic activity due to the lockdown in Q420. Demand for transport fuel sharply declined in Q420, affected by the second lockdown (-16% y-o-y). Hellenic still saw a recovery in demand compared to Q220 lows, but it remained materially below 2019 levels, especially in the aviation and bunkering subsectors.

Exhibit 4: Domestic market fuel demand (MT 000s)

Exhibit 5: Aviation and bunkers fuel demand (MT 000s)

Source: Hellenic Petroleum

Source: Hellenic Petroleum

Exhibit 4: Domestic market fuel demand (MT 000s)

Source: Hellenic Petroleum

Exhibit 5: Aviation and bunkers fuel demand (MT 000s)

Source: Hellenic Petroleum

Currently, the refining sector remains affected by low demand from the lockdown measures; however, the macroeconomic environment should improve in 2021 supported by the vaccine rollout programme. Hellenic should also benefit from Greece reopening to tourists relatively quickly, likely in May, as pandemic restrictions are lifted. This should drive the increase in domestic demand both for jet and road fuel in the region.

Financials: Net debt increases modestly, after accommodating high capex

Hellenic improved its capital structure in FY20, drawing on additional liquidity and reporting end December net debt of €1.7bn compared to €2.1bn at end Q320 and €1.5bn at end FY19. It completed refinancing of €900m credit facilities maturing in Q420/H121, leading to further finance cost reductions of €104m in FY20, down 10% y-oy. Operating cash flow of €450m (€486m in FY19) covered a high level of capital expenditure of €295m in FY20 (€246m in FY19) and dividend payments of €154m. The elevated capex included costs of the Aspropyrgos turnaround, the digital transformation project and the Kozani PV project. We expect a similar level of capex in FY21, which will include €90m investment in the Kozani PV project.

Changes to estimates

Key changes to our financial estimates and market expectations include: weaker global demand for oil products caused by the ongoing COVID-19 pandemic; we have reduced our Q121 refining margin estimate; the adverse impact of a weaker US dollar versus the euro (-4% versus previous forecasts); updated forecast oil prices; and the impact of the Kozani PV project, which we now include in our model for the first time. We have lowered our refining margin estimates for Q121 as most countries have maintained pandemic-related lockdown measures. We expect margins to remain under pressure for at least three to six months, with subsequent improvements starting in the summer tourist season and a gradual recovery of the global economy. Our oil price assumptions, based on the most recent US Energy Information Administration’s forecasts for FY21, are up 29% compared to our November estimates.

All in all, our FY21 total adjusted EBITDA estimate is 8% lower compared to our previous estimate on account of ongoing weakness in the benchmark margins and weaker US dollar (mainly affecting the refining segment), partially offset by higher oil prices (affecting the petrochemicals segment, as oil price drives changes in polypropylene price). Our FY22 total EBITDA includes €18m from RES with the 204MW Kozani PV project expected to be operational in Q122.

Exhibit 6: Changes to Edison forecasts

€m

Actual

Edison new

Edison old

Difference

 

FY20

FY21e

FY22e

FY21e

FY22e

FY21e

FY22e

Adjusted EBITDA, refining

187

307

394

362

N/A

-15%

N/A

Adjusted EBITDA, petrochemicals

61

107

103

84

N/A

27%

N/A

Adjusted EBITDA, marketing

97

118

119

134

N/A

-12%

N/A

Adjusted EBITDA, RES

-

-

18

-

N/A

-

N/A

Other

(13)

(8)

0

(8)

N/A

0%

N/A

Total Adjusted EBITDA

333

525

634

573

N/A

-8%

N/A

Associates

30

10

10

10

N/A

-3%

N/A

Adjusted EBIT

85

287

391

331

N/A

-13%

N/A

Finance costs

(115)

(102)

(85)

(107)

N/A

-5%

N/A

Adjusted net income

5

147

237

176

N/A

-16%

N/A

Source: Hellenic Petroleum data, Edison Investment Research

Valuation

We value Hellenic using a blend of DCF, leveraged and unleveraged FY21e EV/EBITDA and FY21e P/E multiples, arriving at a valuation of €6.55/share, unchanged versus our last published estimate. Changes to our forecasts are shown in Exhibit 6 above.

Hellenic trades on FY21e multiples of 12.1x P/E and 7.3x EV/EBITDA compared to the European group averages of 9.7x and 5.6x, respectively. Its free cash flow (FCF) yield is broadly in line with the peer group average at 10.5% in FY21e and its EV per complexity-adjusted barrel is higher than European peers at $1,471/bod. At the same time, the company trades at a discount to US peers on the majority of valuation metrics.

Our DCF valuation is based on discounted cash flows to 2025, using a 7% cost of capital. We incorporate a terminal value, which assumes the unwinding of working capital and 1% terminal growth. This results in a DCF valuation of €7.00/share versus our previous estimate of €7.13/share. The DCF valuation was positively affected by the addition of the Kozani PV project (€0.10/share) and an increase in oil price assumptions (€0.13/share); however, this was more than offset by the adverse impact of the weaker US dollar versus the euro (-€0.33/share) and a lower refining margins assumption for Q121 (-€0.02/share).

Exhibit 7: Hellenic valuation

Source: Edison Investment Research, Refinitiv. Note: Priced at 11 March 2021

In 2020, the market caps of Hellenic and its peers decreased by an average of c 35%, hitting low points in March and November. Concerns about lower global demand for oil and petrochemicals had a negative impact on global refining systems. Nonetheless, compared to its European peers, Hellenic benefits from a flexible refining system with large storage capacity. Since November, its share price has increased 39%, albeit lagging peers (weighted by bigger companies with operations in the United States), as the market responded favourably to the vaccination programme and higher forecast oil prices.

Exhibit 8: Share price performance of Hellenic and its peers since January 2020

Source: Edison Investment Research, Refinitiv. Note: Priced at 11 March 2021.

Exhibit 9: Peer group valuation table

 

Market cap
($m)

EV
($m)

P/E
FY21e
(x)

P/E
FY22e
(x)

EV/EBITDA
FY21e
(x)

EV/EBITDA
FY22e
(x)

FCF yield
FY21e
(%)

FCF yield
FY22e
(%)

P/CF
FY21e
(x)

P/CF
FY22e
(x)

Net debt/
EBITDA FY21e
(x)

Net debt/
EBITDA FY22e
(x)

Div yield
FY21e
(%)

Refining capacity
(kbod)

EV/bod of complexity adjusted capacity
($/kbod)

Edison estimate – Hellenic

1,764

3,854

12.1

7.5

7.3

6.1

10.4%

20.7%

3.8

3.2

3.2

2.6

4.1%

344

1,471

Europe average

3,011

4,694

9.7

13.6

5.6

4.7

10.5%

12.5%

4.3

4.0

1.4

1.2

3.5%

385

1,185

Grupa Lotos

2,288

2,924

12.1

7.9

5.4

3.9

5.0%

11.7%

5.7

4.5

1.4

1.0

1.7%

211

1,253

Hellenic Petroleum (consensus)

2,110

4,441

10.4

8.3

7.0

6.0

18.5%

21.7%

3.4

3.1

3.6

3.1

7.6%

344

1,520

Motor Oil Hellas Corinth Refineries

1,698

2,880

9.2

6.5

6.0

4.9

4.8%

13.0%

4.0

5.2

0.8

0.7

7.5%

185

1,290

Polski Koncern Naftowy Orlen

7,646

11,478

7.1

5.9

4.1

3.7

0.4%

0.7%

3.2

2.8

1.3

1.2

1.2%

707

1,561

Saras

751

1,290

-

46.0

5.4

4.6

27.4%

16.9%

2.8

3.2

-0.4

-0.4

1.6%

300

331

Turkiye Petrol Rafinerileri

3,574

5,150

9.4

7.0

5.8

5.3

6.9%

11.3%

6.6

5.5

1.7

1.6

1.3%

564

1,156

Americas average

23,825

37,999

17.0

18.3

7.9

8.2

8.2%

9.7%

6.8

7.2

2.2

2.3

3.3%

1,789

1,475

CVR Energy

2,618

3,842

20.8

28.9

7.8

10.8

9.9%

9.2%

6.8

8.9

2.1

2.9

0.0%

185

1,222

HollyFrontier

6,703

9,038

14.1

13.2

6.6

6.4

6.8%

9.8%

6.7

6.5

1.3

1.3

3.4%

457

1,178

Marathon Petroleum

37,774

76,964

19.7

20.2

9.1

8.3

8.9%

10.5%

5.7

4.9

3.7

3.4

4.0%

3,021

2,111

Phillips 66

38,332

54,250

14.0

13.8

8.6

8.3

7.1%

9.6%

8.1

9.5

2.1

2.0

4.3%

2,184

1,876

Valero Energy

33,698

45,903

16.2

15.4

7.3

7.3

8.0%

9.5%

6.5

6.2

1.8

1.8

4.9%

3,100

987

Average

12,472

19,833

13.3

15.7

6.7

6.3

9.4%

11.3%

5.4

5.5

1.8

1.7

3.4%

1,023

1,317

Source: Edison Investment Research, Refinitiv. Note: Prices as at 11 March 2021. FX = US$1.20/€.

Exhibit 10: Financial summary

IFRS, year-end: 31 December

€m 

 

2018A

2019A

2020A

2021E

2022E

Income statement

 

 

 

 

 

 

 

Total revenues

 

 

9,769

8,857

5,782

7,319

7,339

Cost of sales

 

 

(8,770)

(8,052)

(5,818)

(6,297)

(6,449)

Gross profit

 

 

999

805

(36)

1,022

871

SG&A (expenses)

 

 

(475)

(470)

(453)

(453)

(453)

Other income/(expense)

 

 

(10)

6

(13)

(11)

(12)

Exceptionals and adjustments

 

 

(19)

2

(587)

271

15

Reported EBIT

 

 

514

341

(501)

558

406

Finance income/(expense)

 

 

(146)

(151)

(115)

(102)

(85)

Profit (loss) from JVs / associates (post tax)

 

 

(2)

18

30

10

10

Other income (includes exceptionals)

 

 

2

(1)

5

0

0

Reported PBT

 

 

369

207

(582)

466

331

Income tax expense (includes exceptionals)

 

 

(154)

(43)

185

(117)

(83)

Reported net income

 

 

215

164

(397)

350

248

Basic average number of shares, m

 

 

306

306

306

306

306

Basic EPS (€)

 

 

0.7

0.5

(1.3)

1.1

0.8

 

 

 

 

 

 

Adjusted EBITDA

 

 

730

570

333

525

634

Adjusted EBIT

 

 

533

339

85

287

391

Adjusted PBT

 

 

388

205

5

196

316

Adjusted net income

 

 

296

185

5

147

237

Adjusted EPS (€)

 

 

0.97

0.61

0.02

0.48

0.78

DPS (€)

 

 

0.75

0.50

0.10

0.24

0.31

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

Property, plant and equipment

 

 

3,269

3,298

3,380

3,418

3,365

Intangible assets

 

 

106

104

106

106

106

Other non-current assets

 

 

529

744

797

804

812

Total non-current assets

 

 

3,903

4,146

4,283

4,328

4,283

Cash and equivalents

 

 

1,276

1,088

1,203

808

982

Inventories

 

 

993

1,013

694

965

980

Trade and other receivables

 

 

822

840

582

533

538

Other current assets

 

 

3

6

12

12

12

Total current assets

 

 

3,094

2,947

2,492

2,318

2,513

Non-current loans and borrowings

 

 

1,627

1,610

2,131

1,681

1,681

Other non-current liabilities

 

 

420

617

465

465

465

Total non-current liabilities

 

 

2,047

2,227

2,597

2,147

2,147

Trade and other payables

 

 

1,349

1,402

1,547

1,549

1,560

Current loans and borrowings

 

 

1,109

1,022

745

745

745

Other current liabilities

 

 

97

115

38

38

38

Total current liabilities

 

 

2,555

2,539

2,329

2,332

2,342

Equity attributable to company

 

 

2,331

2,262

1,786

2,106

2,244

Non-controlling interest

 

 

64

65

62

62

62

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

Profit before tax

 

 

369

207

(582)

466

331

Depreciation and amortisation

 

 

197

231

248

238

243

Other adjustments

 

 

237

172

233

92

75

Movements in working capital

 

 

(296)

26

528

(219)

(9)

Income taxes paid

 

 

(5)

(149)

23

(117)

(83)

Cash from operations (CFO)

 

 

503

486

450

460

557

Capex

 

 

(157)

(241)

(288)

(276)

(190)

Acquisitions & disposals net

 

 

(16)

(5)

(6)

0

0

Other investing activities

 

 

311

29

17

13

10

Cash used in investing activities (CFIA)

 

 

138

(218)

(277)

(263)

(180)

Net proceeds from issue of shares

 

 

(1)

0

0

0

0

Dividends paid in period

 

 

(151)

(155)

(154)

(31)

(110)

Movements in debt

 

 

(97)

(111)

252

(450)

0

Other financing activities

 

 

4

(160)

(144)

(112)

(92)

Cash from financing activities (CFF)

 

 

(244)

(458)

(47)

(592)

(202)

Increase/(decrease) in cash and equivalents

 

 

397

(189)

125

(395)

175

Currency translation differences and other

 

 

5

2

(11)

0

0

Cash and equivalents at end of period

 

 

1,275

1,088

1,203

808

982

Net (debt) cash

 

 

(1,460)

(1,544)

(1,672)

(1,618)

(1,443)

Source: Hellenic Petroleum, Edison Investment Research. Note: Net debt excludes lease liabilities (€0.2bn at end FY20).


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Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Hellenic Petroleum and prepared and issued by Edison, in consideration of a fee payable by Hellenic Petroleum. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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