AB Mazeikiu Nafta’s (MN) preliminary un-audited consolidated net profit for the year 2006 is 192.058 million LTL (65.996 million USD or 55.624 million EUR) according to the International Financial Reporting Standards (IFRS).

In 2005, AB Mazeikiu Nafta earned 887.764 million LTL (319.478 million USD or 257.114 million EUR) of consolidated net profit.

The Company’s revenues reached 11.865 billion LTL (4.300 billion USD or 3.436 billion EUR) in 2006, compared to the Company’s revenue of 11.156 billion LTL (4.006 billion USD or 3.231 billion EUR) in 2005.

“The fire in autumn did not prohibit us from ending the year 2006 with profit. We worked under difficult and complicated conditions but we managed to ensure quality of our products and satisfy the demand of our target markets all the while focusing upon retaining and expanding our customer base,”—said Paul Nelson English, General Director of AB Mazeikiu Nafta. “The Baltic market did not suffer fuel shortages thanks to MN and our willingness to cover shortages in production by purchasing from the market, many times at a net loss to MN. Contrary to the earnings picture in 2005, following the fire, MN suffered a steep decline in earnings, i.e. some of what the market gave in 2005 it took back in 2006“.

The Company notes that the main reasons for such preliminary net profit, which is lower than the revised profit forecast announced on October 27, 2006, are as follows:
— Decline in the world refining margins and petroleum product prices in the period between August and December 2006;
— Higher costs of crude oil purchases due to the fact that since August 2006, the Company has not been receiving crude oil by pipeline; crude oil import via Butinge Terminal is more expensive, if compared to the pipeline deliveries; additionally, no revenue was received from transportation of crude oil by pipeline and transshipment via Butinge Terminal;
— Decreased efficiency of crude oil processing as a result of the fire in the Company in October 2006; hence there was a reduction in the production of quantities of light petroleum products.

The Company consistently increased sales in the target markets. In 2006, sales of petroleum products in the Lithuanian market amounted to 1,834 million tons, i.e. it increased by 4.9 percent in comparison to the 2005. Sales on the Latvian and Estonian markets last year amounted to 1.122 million tons (it increased by 3.2 percent if compared to 2005).

In 2006, the Company sold 7.963 million tons of petroleum products, compared to product sales volumes of 8.511 million tons during the previous year. Western Europe remained AB Mazeikiu Nafta’s largest market with 39 percent of total sales volumes of petroleum products (3.091 million tons). The other large markets of the Company’s petroleum products were Lithuania (with 23 percent of total sales volumes of petroleum products) and the USA (with 16 percent of total sales volumes of petroleum products or 1.250 million tons). Latvian and Estonian markets received 7 percent of total sales volumes of petroleum products each, while Poland — 6 percent (566 thousand, 556 thousand, and 453 thousand tons respectively). 214 thousand tons of petroleum products (3 percent of total sales volumes of petroleum products) were sold in Ukraine and Moldova.
Mazeikiu Nafta collected and paid over 3.489 billion LTL in taxes during the year 2006, which is by 431 million LTL more than in 2005.  
The Company also repaid 25.347 million LTL (9.243 million USD or 7.34 million EUR) in principal on long-term loans and a total of 84.334 million LTL (30.795 million USD or 24.425 million EUR) in interest payments, including 56.302 million LTL (20.506 million USD or 16.306 million EUR) in interest paid to the state budget.

AB Mazeikiu Nafta’s audited annual financial reports for 2006 will be published on 19 April 2007.

Mindaugas Voldemaras
AB Mazeikiu Nafta
Tel.: +370 443 9 26 08
Fax: +370 443 9 25 79
mindaugas.voldemaras@nafta.lt