August 27, 2012 / 2:55 PM / 5 years ago

UPDATE 1-Motor Oil profit falls 74 pct as austerity hits demand

* First-half net income down 74 pct to 27.6 mln euros

* Analysts’ profit estimate was 28.6 million euros

* Exports help mitigate stagnant fuel demand at home (Adds details)

ATHENS, Aug 27 (Reuters) - Greece’s second-biggest refiner Motor Oil reported a 74 percent profit drop for the first six months of the year, weighed down by falling crude prices and shrinking fuel demand in the austerity-hit country.

Net income was 27.6 million euros, ($34.5 million) down from 105.1 million euros in the year-ago period, broadly in line with an average analyst forecast of 28.6 million euros in a Reuters poll..

Falling crude prices reduced the value of the company’s oil inventories by 45 million euros, Motor Oil said in a results presentation. The company also reported a foreign exchange loss of 12.3 million euros in the second quarter.

However, rising exports helped mitigate stagnant fuel demand in Motor Oil’s austerity-hurt domestic market, where it runs a petrol station network it acquired from Royal Dutch Shell.

Exports, mainly to other countries in the Mediterranean, rose 22 percent to 3.45 million metric tons, accounting for 60 percent of the company’s overall sales volume.

As a result, adjusted EBITDA profit dropped by just 10 percent year-on-year, to 165.2 million euros. Adjusted EBITDA strips out the value of oil inventories, which fluctuates with oil prices. ($1 = 0.7989 euros) (Reporting by Harry Papachristou; Editing by Helen Massy-Beresford)

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