"We benefitted from previous investments
to create value in all parts of the business and, in our 25th year in business, delivered our best-ever financial results.
These reflect good manufacturing and origination margins in the UK as well as particularly strong sales and margin growth
in our international businesses."
Andrew Owens, Chief Executive
April 2016 - April 2017
Diesel and petrol components were again in plentiful supply in Europe as a result of increased refinery production in the Middle East and North America. We were able to access lowest-cost products into our import and blending facilities.
The market for oil products remained in contango this period, meaning that prompt prices were again lower than forward prices. With the level of the contango continuing to exceed tankage and working capital costs, we extended our diesel storage at Thames Oilport.
In the UK, rationalisation of refinery capacity has made the UK structurally reliant on imports to meet its fuel requirements. We are well positioned to meet this shortfall with supply through our import terminals.
In Brazil, the major oil company abruptly ended its commitment to supply 100% of the market, creating demand for alternative sources of supply, and began making regular market price revisions. This move from a static price environment towards fluctuating prices caused significant and rapid market change, allowing us to significantly expand our diesel imports into Brazil.
We continued to invest in infrastructure to develop cost and operational efficiencies and achieved particularly strong margin growth in international markets with similar import dynamics to the UK.
In the highly competitive UK road fuels market, access to import infrastructure continues to be strategically important, allowing us to minimise product costs and provide supply resilience for customers. The opening of Thames OIlport for diesel supply shortly after year end was a significant milestone, creating capacity for further growth in the busy South East region.
We also increased sales to independent forecourt operators. As we earned trust and respect in the sector as a flexible and high service fuel supplier, we won new businesses from all competing brands.
We have drawn on our UK experience and capabilities to expand in new regions. In each case we are applying our supply chain, risk management and infrastructure skills, as we do in the UK, to source products at lowest cost and supply fuel reliably to customers.
In Canada sales rose 33% on the prior year and were particularly strong from Toronto, where our rail-to-road supply concept has proved popular with our customers. Work to double the size of the existing Toronto facility completed after year end and we plan to expand further by developing rail-to-road facilities at new locations.
In Brazil we significantly expanded our diesel import operations. We have established ourselves as a reliable supplier early on, as the market begins to open to imports and move towards world prices.
We made efficiency and capacity investments in our biodiesel manufacturing infrastructure and extended our raw material supply chains globally, to ensure we can continue to source increasing qualities of the right types of waste oils. This resulted in:
• A significant increase in the volume of biodiesel we produced
• A reduction in our unit cost of production.
Contango market conditions made it advantageous to store fuel products in FY16 and FY17. Recognising early on the potential to generate revenue by storing diesel at Thames OIlport, we fast-tracked works to restore pipeline connections and refurbish tanks for diesel storage. This opened facilities that were needed to commence diesel throughput and supply from Thames Oilport shortly after year end.
We have continued to expand our haulage capability within Greenergy Flexigrid to meet our growing supply requirements in the UK. We recruited more drivers to improve efficiency and in preparation for further growth.
15 April 2014 - 14 April 2015