EBITDA, (Earnings before Interest, Taxes, Depreciation and Amortization) for the quarter totalled $10.9 million, an improvement of $3.8 million over 2008 first quarter EBITDA, despite sales and operating revenues of $161.7 million, which was a $30.8 million decrease from the first quarter of 2008.
Business Segment Results
During the quarter the midstream refining business generated a net profit of $10.3 million, compared with a net profit $0.2 million for the same quarter in 2008. This was primarily due to gains resulting from lower cost of sales in the quarter following the December write-down, an improved Naptha premium, a gain on hedge accounted transactions and non-hedge accounted contracts, as well as positive price movements applicable to sales of our refined products in Papua New Guinea under the applicable pricing formula. Gains were partially offset by adverse currency fluctuations and decreased margins on low sulphur waxy residue. Refining EBITDA in the quarter totalled $14.7 million, up from $5.7 million in the previous year.
The company’s midstream liquefaction segment posted a net loss of $2.6 million for the quarter, being our share of expenses incurred by the PNG LNG Inc. joint venture during the quarter to progress the liquefied natural gas (LNG) project in Papua New Guinea.
The downstream segment derived a net profit of $1.0 million compared with a net profit of $2.2 million in the first quarter of 2008. The decrease was mainly due to lower petroleum product pricing upon which this segment’s margins are based. Downstream EBITDA in the quarter totalled $3.2 million compared to $4.5 million in the prior year period.
During the first quarter, the upstream business segment recorded a net loss of $2.1 million, in line with a net loss of $2 million in the comparable 2008 quarter. Decreased rig and administrative expenses were offset by higher interest expense resulting from inter-company loan balances.
