Israel's Oil Refineries slides into loss
TEL AVIV, March 26
TEL AVIV, March 26 (Reuters) - Israel's Oil Refineries swung to a loss in the fourth quarter due to a reduction in refining margins, in part due to the economic downturn and debt crisis in Europe.
Oil Refineries, Israel's biggest refinery, posted a quarterly net loss of $78 million, against net profit of $24 million a year earlier.
"2011 was a very uncharacteristic and unstable year for the company," Chairman Yossi Rosen said on Monday.
The company is taking several steps to improve efficiencies, including the merger of several subsidiaries, upgrading equipment and the transition to natural gas.
Its new hydrocracker for the production of clean fuels, in which it invested $326 million, is expected to be activated in the third quarter. This will improve margins by increasing the production of more profitable products.
Oil Refineries said its fourth-quarter adjusted refining margin was $2.60 a barrel compared with the average Reuters' quoted Mediterranean Ural Cracking Margin of $1.40 a barrel.
Its adjusted refining margin was $3.60 a year ago.
Oil Refineries, controlled by Israel Corp, plans to increase production capacity of propylene in early 2013, which is expected to bring annual cashflow of $55 million. (Reporting by Tova Cohen; Editing by David Hulmes)