Hellenic second quarter core profit drops, refining margins at five-year low

FILE PHOTO: A view of the Hellenic Petroleum refineries is seen at Aspropyrgos town, west of Athens, February 24, 2012. The sign reads, "Hellenic Petroleum S.A." REUTERS/John Kolesidis

ATHENS (Reuters) - Greece's biggest oil refiner, Hellenic Petroleum HEPr.AT, reported a 31% drop in second-quarter core profit on Thursday, hurt by refining margins which recorded a five-year low.

Adjusted for oil inventory holdings, earnings before interest, tax, depreciation and amortization (EBITDA) fell to 130 million euros ($144.87 million) in April-to-July, from 187 million a year earlier.

The figure was above an average forecast of 114.2 million euros in a Reuters poll.

Hellenic, which operates three refineries in Greece, said that refining margins deteriorated to their lowest level in five years due to tighter crude supplies from Russia.

UN agency the International Maritime Organization (IMO) will prohibit ships from using fuels with sulphur content above 0.5 percent from Jan. 1, 2020, compared with 3.5 percent today, unless they are equipped with exhaust gas cleaning systems.

The group, which exports more than half of its output, said it was on track with its plans to deliver very low sulfur fuel oil by the beginning of 2020.

Reporting by Angeliki Koutantou; Editing by Alexandra Hudson