- Business turnaround continues with first full year of positive net income in five years
- Improved liquidity with cash flow from operations standing at USD 330 million for 2022
- Significantly deleveraged the business with divestment proceeds
Puma Energy today announced its financial results for the three-month period and full year ended 31 December 2022.
Throughout 2022, the company continued to focus on turning around and reinvigorating the business with a focus on its core downstream activities. While the year presented various market volatility and macro-economic challenges, the business remained resilient while realising a strong recovery in Africa and across its aviation and bitumen segments.
For the Full Year 2022, the business delivered a net profit of USD 256 million, excluding IFRS 16, its first full year positive net income in five years. In addition, cash flow from operations stood at USD 330 million, representing a USD 300 million improvement from the previous year, while gross profit remained level despite a reduction in the company’s geographic presence. On a constant perimeter basis, EBITDA was USD 130 million higher in 2022 compared to 2021. Overall, improved profitability was underpinned by greater focus on operational performance and efficiency, as well as the businesses ability to capture opportunities from the market volatility.
The main completion of Puma Energy’s marine infrastructure divestment represented a major milestone for the company in 2022 and contributed significantly to deleveraging the business whereupon gross debt was reduced by USD 752 million. Adjusting the company’s perimeter in the fourth quarter to account for the divestments, the business maintained gross profit and EBITDA broadly in line with the third quarter. In addition, EBITDA on a constant perimeter basis in the fourth quarter was USD 34 million higher than the same quarter in 2021, excluding IFRS 16.
Highlights Full Year 2022
Health and Safety
Maintaining and enhancing safety standards remains a top priority. After a good performance in 2021, safety performance in 2022 slipped with a Lost Time Injury Frequency Rate for employees and contractors working on Puma Energy sites of 0.15, compared to 0.06 in 2021. This means it has returned to around the level of 0.13 recorded in 2020. In 2022, Puma Energy employees completed 40,000 hours of health and safety training and a number of initiatives such as the #BePumaSafe and launched an in-vehicle monitoring system (IVMS) program in partnership with transport partners to help improve safety performance.
Strengthened Balance Sheet
Puma Energy strengthened its balance sheet in 2022 with net debt reduction of USD 752m from USD 1,472 at the end of 2021 million to USD 720 million at the end of 2022. Gross debt reduced by USD 385 million from USD 1,946 million to USD 1,561 million] compared to the end of 2021.
Simplified the Business
In September 2022, Puma Energy completed the sale of 19 of its marine infrastructure terminals to ITG Sàrl, the parent company of Impala Terminals. The fourth quarter of 2022 was the first full quarter without these assets and EBITDA remained steady on a constant perimeter. A second phase will see divestment of further terminals to ITG Sàrl in the second quarter of 2023.
Focused on Core Downstream
Opitmisation of the core downstream business continued in 2022 with a focus on driving growth in the company’s most profitable markets and optimising the retail network. This led to a net increase of 67 new to industry and new to Puma Energy sites in Latin America. In Latin America, non-fuel retail sales increased by 40 per cent as a result of our investment in upgraded Super7 convenience stores, which saw a USD 9 million increase in non-fuel related EBITDA.
In Africa the focus was on optimising the network and the net number of sites reduced by 70, driven mainly by the sale of Ivory Coast and the divestment of less profitable sites in Ghana. An overall reduction of 90 sites in Africa was partially offset by the opening of 20 new to industry and new to Puma Energy sites in core African markets. On a constant perimeter EBITDA in Africa was USD 95 million in 2022 compared to 2021 across all Puma energy businesses. As at 31 December the total number of retail sites globally stood at 1,934 a net decrease of three sites across the business.
Transition Fuels and Clean Energy
Puma Energy published its refreshed ESG Strategy in July 2022. As part of this strategy, the company aims to expand the business into clean and transition fuels. In line with this aim, Puma Energy Tanzania launched a pilot project to offer customers LPG for cooking as a cleaner, healthier alternative to cooking with wood, charcoal and oil. The LPG offer will be extended to other African markets during 2023.
Puma Energy exceeded its target of installing 200 solar projects by the end of 2022. By the end of 2022, the company installed solar power projects at 203 sites with a total operational capacity of 6.6 MWp. The aim of this installation programme is to develop in-house expertise in order to offer commercial customers solar power installation as an integrated package alongside more traditional fuel offers and to scale up the clean energy business. In 2023 customers in several Puma Energy markets will be offered solar energy installation as part of the range of energy solutions Puma Energy offers.
Hadi Hallouche CEO, said:
“In 2022, Puma Energy delivered its first full year of net positive income in five years. This is an encouraging result indicating we are on track to turnaround the business. This result is thanks to the hard work of all our colleagues as well as the continued support from our banking partners. Furthermore, the main completion of the infrastructure transaction demonstrates our capacity to execute major M&A activity.
As we look ahead, we see a fragile equilibrium in energy markets, an uncertain geopolitical environment, tectonic shifts in energy transition policy and innovation, and a resolute long-term trend of growth across emerging markets. These are dynamics that Puma Energy is well positioned to navigate and build on. With our now materially improved balance sheet, we plan to pursue a cautious and prudent growth strategy.”
Carlos Pons, CFO, said:
“We are pleased with the businesses performance in 2022 and in particular the strong recovery of the Africa businesses as well as our bitumen and aviation segments. We were able to manage our liquidity despite the heightened market volatility in 2022. Overall, our EBITDA and cash flow from operations were higher in 2022 compared to 2021—demonstrating the positive impact of our ongoing efforts to strengthen and turn the business around. We also made significant progress in deleveraging the business and we remain focused on actively reducing our debt.”