The Ministry of Energy of the Republic of Lithuania (hereinafter – the Ministry of Energy), legal entity code 302308327, address Gedimino av. 38, LT01104 Vilnius, implementing the rights and duties of shareholder of AB Klaipedos nafta, legal form public limited liability company, legal entity code 110648893, registered address Burių tr. 19, LT92276 Klaipeda, hereby announces selection of candidate for 1 (one) independent member of the Supervisory Board of AB Klaipedos nafta (hereinafter – the Company).

References:
Company’s website: www.kn.lt/en
Summary of the Company’s strategy published on the Company’s website: https://2030.kn.lt/en/
Reference to the State letter of expectations to the Company: https://www.kn.lt/uploads/files/dir92/dir4/18_0.php
Reference to the Monitoring and Forecasting Agency published information on selection: https://vkc.sipa.lt/en/kolegialus-organai/
The selection of independent Supervisory Board member is conducted according to the 17 June 2017 Resolution of the Republic of Lithuania No 631 “Regarding the approval of the description of the selection of candidates for the collegial supervisory or management body of a state or municipal enterprise, a state or municipal owned company or its subsidiary” (hereinafter – the Description). Reference to the Description: https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/f0173961199a11e5bfc0854048a4e288/asr
The Supervisory Board consists of 3 members including its Chairman, 2 of which shall be independent and shall meet with the Description established criteria of independency for candidates of State-owned Enterprises members of Collegial bodies. One of the Supervisory members is delegated by Ministry of Energy of the Republic of Lithuania. The Supervisory Board is elected by General Meeting of Shareholders for the period of 4 years.
For Independent Supervisory Board member is payed a fixed remuneration of EUR 725 excluding VAT per month. Should the Independent Supervisory Board member be elected as a Chairman of the Supervisory Board, during the term of his office as a Chairman instead of hereinabove stipulated remuneration the Company shall pay to the Independent Supervisory Board member a fixed remuneration of EUR 965 excluding VAT per month.
The reference where the candidates may familiarize with the draft of agreement on the activities of a member of collegial body:
LT: https://www.kn.lt/uploads/files/dir103/dir5/1_0.php   
EN: https://www.kn.lt/uploads/files/dir103/dir5/2_0.php
 
Requirements for the candidates. Candidates for independent Supervisory Board members of the Company shall meet:

General requirements	Nature of the requirement
Must have higher (university) or equivalent education;	Mandatory
The candidate is not related to relations with any other natural person, legal entity, which performing independent member of collegial body duties may cause the conflict of interest	Mandatory
The candidate must not be deprived or suspended the right to hold the corresponding position, in which applying, or to perform to the position assigned functions	Mandatory
Over the past 5 years the candidate must not have been suspended from the single-person or collegial body of a legal entity due to improper fulfilment of his duties	Mandatory

 

Independence requirements	Nature of the requirement
The candidate must not have held the position of the member of collegial body of the Company, to which collegial body is applying, selection initiating subject‘s or for him subordinate legal entity public servant or employee and within the last one year must not have held such position	Mandatory
The candidate must not have been Company‘s, to which collegial body is applying, or supervisor of related legal entity or employee and within the last one year must not have held such position and must not have received remuneration from that company or related legal entity, except for remuneration for the duties of a member of a collegial body or committee	Mandatory
The candidate must not be company‘s, to which collegial body is applying, or related legal entity participant, representative of such legal entities participants	Mandatory
The candidate must not have significant business relations with the company, to which collegial body is applying, or with related legal entity neither directly, nor as having such relation legal entity participant or supervisor. Having significant business relations, it is deemed to be natural person or legal entity, which income within the last 12 months is higher than 1000 EUR, expect for salary or remuneration for collegial body or member of committee position	Mandatory
The candidate must not have been a partner, participant, manager, member of the collegial body or employee of the audit firm that conducts or has performed the audit of the company to which the collegial body is applying or of the related legal entity for the last two years	Mandatory
The candidate must not have been company‘s, to which collegial body is applying, member of the collegial body longer than 10 years. This period shall be calculated to forthcoming position of member of the collegial body, for which the candidate would be assigned, adding the previous terms of office of a member of the collegial body of the same company, which is not more than one year apart	Mandatory
The candidate must not be a member of more than three (including the company, in which collegial body applies) collegial bodies of the companies managed by the same selection initiating entity.	Mandatory

   
Selection method – interview.

2. Candidates must submit:

1. The candidate’s application for participation in the selection and the declaration of good faith according to the Description No 1;
2. The candidate’s curriculum vitae (free form);
3. A copy of the identity document;
4. Cover letter to the selection board (free form);
5. Copies of documents certifying higher education.

The deadline for the submission of documents –until 31 August 2020 (inclusive).

Submission of documents. The candidates shall submit documents to the Company in one of the following ways:
1. In person. When delivering copies of documents, you must have the original documents with you.
2. By mail. (registered mail or courier service) or e-mail. Copies of the documents are attached, and the original documents may be requested if the candidate is recognized as the winner of the selection.
The place of documents submission: UAB Master Class LT, address: Ž. Liauksmino str. 3, LT- 01101 Vilnius.

Contact persons:
UAB Master Class LT, the person responsible for receiving the documents – leading partner Laura Duksaitė-Iškauskienė, +370 699 37170, e-mail: laura@masterclass.lt
Energy of Ministry responsible person consulting on selection execution issues –Advisor of Law and Personnel Departament Renata Adomaitytė-Šliogerienė, +370 5 203 4830 additional 2, e-mail: renata.adomaityte-sliogeriene@enmin.lt
 

Taking into account the upheaval caused by the coronavirus in the global and local market, during the first half of 2020 KN (AB Klaipėdos Nafta), the operator of oil and LNG terminals, mostly focused on efficient cost management and operational efficiency. Although the company managed to achieve the planned result of the net profit, the focus on the improvement of operational efficiency will remain throughout the second half of the year.

During the first half of 2020, KN group earned 8.1 million euros of adjusted net profit, i. e. 73% more than a year ago, when adjusted net profit was 4.7 million euros. This year Group’s adjusted EBITDA is 14 million euros and is 25% higher compared to the respective period of last year (last year - EUR 11.3 million). Consolidated revenue of KN over 6 months was EUR 40.7 million (EUR 51.2 million in 2019, respectively),

In 2020 alone adjusted net profit for the second quarter is EUR 4.2 million (EUR 1.3 million a year ago) and adjusted EBITDA is EUR 7.2 million (EUR 4.9 million a year ago). During the second quarter, KN earned EUR 20.7 million of consolidated income

“After the assessment of the result of the first half of the year, I am grateful to the team, which was looking for the solutions that would be the best for customers during the difficult period of quarantine, and was thinking how to make use of all opportunities in the market more effectively. However, while the financial result is indeed positive, there is no time to relax - the effect of the reduction in demand for oil and gas due to the limitations of COVID-19 becomes clear only now. We are closely monitoring the situation in the markets, assessing how the industry will recover and how the demand for oil and gas products will change, as well as how the oil refining margin curve will adjust,” says Darius Šilenskis, CEO of KN.

During the first half of the year, 2.6 million tons of oil and its products were transshipped at KN oil terminals, i. e. 8 percent. less than a year ago. Revenue of KN oil terminals in 2020 of the first half of the year was EUR 16.1 million and the net profit amounted to EUR 3.1 million. During the first half of this year, about 669 thousand tons of crude oil (8 tankers) were transshipped at the KN oil terminal in Klaipėda.

“This year is really exceptional in the oil business industry - they were marked by both the impact of the coronavirus and the disruption of oil supply to the Belarus oil refineries, which was caused by geopolitical factors. These are exceptional for us, because they significantly increased the handling of crude oil. Furthermore, for the first time in the history of the terminal, we accepted oil cargo originating from the US. We see that we are a global market player in both oil and gas logistics chains. Being efficient and having sufficient capacity, we are able to flexibly adapt to customer needs. I believe that our customers appreciate this as well: one of the main customers of KN - compared to last year BNK (UK) Limited has increased the volume of cargo transshipped through Klaipėda by about 39%,” emphasizes the head of the KN.

The first half of this year was very successful for the operation of Klaipėda LNG Service Center as well. Due to extremely favorable international LNG prices, the demand for the services of LNG terminal in Klaipėda increased significantly. During the first half of the year, the LNG terminal received as many as 35 gas carriers - more than twice as many as in 2019. Accordingly, 11.1 TWh of LNG were regasified and transhipped during this period (6.3 TWh a year ago). In 2020 the net operating profit of the LNG terminal was EUR 5.5 million, i. e. 67% higher than in the corresponding period in 2019. LNG terminal revenue decreased from EUR 36 million in the comparable period to EUR 22 million.

“From 2020 KN implements decisions that are related to the reduction of LNG terminal costs for gas consumers in Lithuania, which is reflected in the operating revenue of the LNG terminal. Nevertheless, while focusing on operational efficiency, we managed to ensure high profitability of this activity. By comparing the results of only the first half of the year, according to the results of LNG regasification and transshipment, 2020 is the most successful year for the operation of the LNG terminal,” points out D. Šilenskis, CEO of KN.

Income from KN LNG commercial activities, including Klaipėda LNG reloading station and international LNG projects, reached EUR 2.3 million in the first six month of 2020.

KN group is comprised of KN and KN subsidiaries and companies that they control.

Regarding the publication of adjusted financial results

The financial (accounting) result of KN is affected by the 16th International Financial Reporting Accounting Standard “Leases”, which entered into force last year. This standard significantly disrupts the balance of the published financial results, because the result is recorded with the consideration of the influence of the exchange rate on the last day of the reporting quarter and does not allow to compare the actual operating results. As we show the managerial (adjusted) result, the investors and those interested in the company’s activities can easier and more accurately understand how the company is performing during the reporting period, eliminating the influence of factors that the company does not actually experience.



 

At the beginning of August, Klaipeda oil terminal operated by KN (AB Klaipedos Nafta) is expecting to receive the tanker UMLMA, which will deliver the second crude oil cargo from US to Belarus. The tanker will bring approximately 75 thousand tons of crude oil and it will be the 9th crude oil tanker for Belarus received in KN’s terminal this year. 
 
The tanker UMLMA will visit Klaipeda oil terminal for the first time. A tanker arriving from the US Port Neches (Beaumont) in Texas, built in 2006 sailing under Qatar flag, should reach Klaipeda port between 6-8th August.
 
Crude oil will reach the Belarusian refinery from Klaipeda port by rail.
 
KN, according to the long-term contract signed in 2016 with the Belarusian Oil Company (BNK), ensures the transit of oil products and crude oil through the KN’s Klaipeda oil terminal. This agreement, which was renewed last year, is valid until the end of 2021.
 
"Our cooperation with BNK lasts for more than a decade: KN is part of the supply chain to ensure the export of oil products and this year – the supply of alternative crude oil to Belarusian refineries. This year, as many as 64 percent oil imported by BNK from the maritime market travels to Belarus through a terminal operated by KN. In this way, KN contributes to Belarus' aspiration to diversify oil supply sources – this year Belarusians are importing the second oil cargo from the US via Klaipeda. Over the last few years, our company has been consistently investing in the development and improvement of infrastructure to meet the changing needs of customers and the market. We have been able to accept various types of crude oil since 2019 and at the same time not to limit our customers' opportunities to continue exporting oil products”, - comments Darius Šilenskis, CEO of KN.
 
During the first half of this year, approximately 669 thousand tons of crude oil (8 tankers) were handled in KN’s Klaipeda oil terminal, while in 2019 – about 100 thousand t (two tankers) were handled during a whole year.
 
According to the head of KN, the 9th crude oil import tanker this year allows to assume that this service becomes relevant to customers and its continuity is likely in the long run.
 
The first cargo for Belarus with 77 thousand t of crude oil originating from the US was delivered to KN in May.