New long-term strategy of AB „Klaipėdos nafta“ (KN) focuses on
energy transformation and climate neutrality of operations
The Supervisory Council of AB „Klaipėdos Nafta“
(further referred to as KN), an energy terminal operator, has
approved KN's corporate strategy for the period 2023-2050. The
strategy takes effect on June 14, 2023, and is centred around
efficiency of current activities, preparation for the energy
transformation and transitioning towards activities in the new
energy field. It aims to achieve complete climate neutrality for
KN's operations by 2050, with a target of reducing emissions by
over 30 percent by 2030 and approximately 70 percent by 2040.
KN aspires to become a significant contributor
to the future energy supply and value chains, generating further
value in the energy sector, ensuring energy security and
competitiveness of energy resources in the region, and delivering
financial returns to shareholders.
In the light of these goals, the KN’s strategy
emphasizes improving current businesses and efficiency to retain
competitive advantage and enhance profitability. It outlines the
aim of achieving profitable growth by developing existing core
business areas while investing a share of profit into the
infrastructure and competence of the new energies.
The KN strategy is based on medium-term growth
and long-term portfolio diversification, divided into three phases
until 2050:
-
2023-2030: Increasing profitability in existing activities and
securing financing for investments in new and more sustainable
energy sources.
-
2031-2040: Focusing on the development of the LNG business and
diversifying transshipment of liquid energy products.
-
2041-2050: Expanding activities in the market of new energies,
including investments in new energy sources like synthetic fuels,
hydrogen and hydrogen carriers, other alternative energy carriers,
and carbon capture and storage (CCS).
KN envisions a world where sustainable liquid energy as
well as chemicals and feedstock solutions empower industries
and communities, creating a cleaner, safer, and more
prosperous future for all. KN strives to be at the
forefront of this transformation, continuously innovating
and expanding portfolio of services to support the global
energy transition and achieve climate neutrality by 2050.
The new strategy sets a long-term target for a
return on capital employed (ROCE) of approximately 8% (compared to
4.4% in 2022). It also aims to achieve an average revenue of €172
million for the KN group of companies from 2041 to 2050, with
revenue increasing by 122% in 2050 compared to 2022. The target for
the KN group of companies is to achieve an average EBITDA of €85
million from 2041 to 2050. It aims for 172 percent higher EBITDA in
2050 compared to 2022. Additionally, the EBITDA margin is expected
to increase from 45 percent in 2022 to 55 percent in 2050.
Starting in 2026, KN aims to pay annual
dividends of at least €5 million, targeting a dividend yield of
approximately 5%. The total dividend payments are expected to reach
at least €240 million for the period of 2031-2050.
Key Highlights in the Short Term
(2030)
By 2030, KN aims to establish a strong
foundation for the new and more sustainable energy activities and
plans to achieve a 50% revenue growth.
Operational targets in key segments:
-
Liquids Terminals: The strategy involves a
heightened emphasis on product and customer portfolio
diversification. This includes expanding the handling of biofuels
and entering the storage and handling market for chemical products
such as methanol. Emphasis will continue to be placed on
operational excellence, commercial and operational efficiency, and
delivering enhanced value to customers.
-
LNG Segment: The focus will be on continued value
creation in the regional and global LNG market. By 2030, decisions
will be made regarding the expansion of the capacities of the
Klaipėda LNG terminal, taking market demand in consideration.
Additionally, decisions regarding the strategy of the LNG reloading
station will be determined. Gradual expansion of LNG business
development activities in growth markets is also planned.
-
New Energy Segment: By 2030, KN aims to develop at
least three business opportunities in the hydrogen carrier handling
and storage market. It also seeks to establish a CO2 storage and
handling business to contribute to controlling and reducing carbon
emissions. Additionally, a pilot battery project and a sustainable
business model for participating in the energy storage/balancing
market will be developed. The exploration of new energy sources
will facilitate KN's transition towards a greener economy.
KN plans to invest approximately €300 million by
2030, with over 45% of capital investments dedicated to building
new infrastructure and competences for the handling and storage of
new energies, as well as to enhancing the sustainability and
reducing emissions across all of KN activities.
The updated strategy also corresponds with the
Letter of Expectations from the Ministry of Energy of the Republic
of Lithuania, received by KN on 8 March 2023. As the majority
shareholder holding 72.47% of KN's shares, the Ministry outlines
the company's objectives and financial expectations concerning
Lithuania's energy independence, transformation, and international
development.
For more detailed information about the KN
strategy, please refer to the attached document.
Reminder of an Investor Conference Webinar
We would like to remind that KN invites
shareholders, investors, analysts, and other stakeholders to join
its investor conference webinar scheduled on June 14th of
2023 at 9.00 am (EET). The presentation
will be held in English.The webinar will be hosted by KN Chief
Executive Officer Darius Šilenskis and Chief Financial Officer
Mindaugas Kvekšas who will introduce new KN corporate strategy for
the period of 2023-2050.
To join the webinar, please register via
following link:
https://nasdaq.zoom.us/webinar/register/WN_Tv65DFNpQ5Gml_ffDtf0Ww
You will be provided with the webinar link and instructions how to
join successfully. When joining the webinar for the first time, you
will be asked to register on the Zoom platform. The webinar will be
recorded and available online for everyone at the company’s website
on www.kn.lt/en/ and on Nasdaq Baltic youtube.com account.
Legal disclaimerAB „Klaipėdos nafta“
(hereinafter – KN) prepared this document on presentation of
strategy solely for the informational purposes. It does not
constitute financial or investment advice and this document should
not be followed for adopting a decision on investment.
The information provided in the document is based on the KN‘s
current understanding, assumptions, and
expectations.
The presented document contains forward-looking statements that
reflect the KN's current intentions, expectations, projections, and
beliefs about future events. These statements involve risks,
uncertainties, and assumptions that are beyond the KN's control.
Actual results may differ materially from the statements made in
the document.
Unless required by law, the KN undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
In case of inconsistencies between the Lithuanian and English
versions of the prepared document, please refer to the English
version of the prepared document.
The KN, its directors and employees shall not be liable for any
direct, indirect, or incidental damages arising out of or in
connection with the presented document or use of the information
provided therein.
Mindaugas Kvekšas, Chief Financial Officer, +370 46 391772Orinta
Barkauskaitė, Head of Communication, +370 611 27985
- ENG_20230614_KN Strategy Summary
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