Nynas last Friday reported that net sales for the fourth quarter amounted to SEK 3,184 (USD352) million compared to SEK 3,141 million during the prior year fourth quarter. Total product sales volumes (excluding fuels and other) increased 3 per cent compared to last year.

EBITDA excluding non-recurring items amounted to SEK 44 million (compared to SEK 265 million in the 2015 fourth quarter), including unrealised open hedge position result of oil and currency derivatives of SEK -73 million (compared to SEK -8 million) in the fourth quarter. The result was driven by a stable underlying business but impacted by lagging market price recovery from crude price impact. Net financial items for the fourth quarter amounted to SEK -77 million (compared to SEK -61 million), of which SEK -46 million (compared to SEK -36 million) is related to net interest expenses. The higher net interest costs are explained by approximately 50 per cent higher net debt from increased inventory levels by the addition of Harburg partly offset by lower interest rates.

Non-recurring items in the quarter affecting the result totalled SEK -9 million (compared to SEK -99 million), with the negative result impact coming from more extensive sourcing due to the late Harburg start-up offset by a release of the remaining restructuring reserve in the Nynas NV Continental Europe
bitumen business.

Net sales during the year amounted to SEK 12,525 million (compared to SEK 16,248 million) primarily as a consequence of lower crude oil prices and to a lesser extent by the weaker British pound. Total product sales volume increased by 1 per cent compared to last year.

EBITDA excluding non-recurring items amounted to SEK 1,009 million (compared to SEK 1,265 million), including an unrealised open hedge position result of oil and currency derivatives of SEK -173 million (compared to SEK -434 million). Earnings in 2016 include the increased cost from the delayed start-up of the Harburg refinery, taken over from 1 January 2016, and the relatively lower sales prices influenced by the lagging oil market prices due to low crude oil prices during the first part of the year. The EBITDA in 2016 includes an income compensation of SEK 262 million (compared to SEK 0) for a discontinued tolling agreement.

Naphthenics segment sales volumes in the fourth quarter 2016 increased more than 7 per cent compared to the same period in 2015, still constrained by available supply rather than sales opportunities. Full year 2016 sales volumes grew almost 6 per cent compared to the previous year, with record sales volumes achieved in Europe and AMEA regions, and sales maintained in the Americas, the region most heavily impacted by the supply constraints.

European sales volumes in the fourth quarter were according to expectations, and well above the same period in 2015. Overall for 2016, sales volumes increased well above the level seen in 2015, distributed across most major countries except for Italy.

Americas sales volumes in the fourth quarter 2016 were unchanged from the level in the same period in 2015. Overall for 2016, sales volumes were at a similar level to 2015 and below expectations, mainly due to supply constraints. Sales in Brazil and Mexico increased compared to 2015, with Mexico achieving record sales volumes.

AMEA (Asia, Middle East and Africa) sales volume increase was the highest of all regions in the fourth quarter 2016 compared to the same period in 2015. Overall for 2016 the AMEA sales volumes achieved a significant increase compared to 2015, setting a new record for total sales in the region. China, India, Indonesia, Middle East and South East Asia all achieved record sales.

Fourth quarter external sales increased to SEK 1,949 million (compared to SEK 1,685 million) as a consequence of slightly higher oil price levels and increased sales volume. Operating result before depreciation (EBITDA) decreased to SEK -10 million (compared to SEK 180 million), including an unrealised oil and currency hedge result of SEK -83 million (compared to SEK 48 million) and an inventory write-down of SEK 0 million (compared to SEK -13 million). Margins in the fourth quarter 2016 were negatively impacted by the lagging market price recovery from low crude oil price impact.

Full year 2016 net sales decreased to SEK 6,749 million (compared to SEK 8,364 million) as a consequence of a 20 per cent lower crude oil price, partially offset by increasing volumes and positive currency impact from a weaker Swedish krona. Operating result before depreciation (EBITDA) decreased to SEK 506 million (compared to SEK 642 million), including an unrealised hedge result of SEK -222 million (compared to SEK-170 million).