<Page>
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the quarter ended March 31, 2002
PREEM HOLDINGS AB (PUBL)
(Translation of registrant's name into English)
Sandhamnsgatan 51
S-11590
STOCKHOLM, SWEDEN
(address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by check mark, whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2 (b) under the Securities Exchange Act of
1934.
Yes No X
----- -----
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Preem Holdings AB (publ)
Date: May 30, 2002 By: /s/ Per Hojgard
------------------ ----------------------------
Name: Per Hojgard
Title: Chief Financial Officer
<Page>
Table of Contents
<Table>
<Caption>
PAGE
------
Cautionary Statement concerning Forward-looking Statements....................................... iii
Presentation of certain information.............................................................. iii
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
Interim Consolidated income statements for
the three months ended March 31, 2001 and March 31, 2002...................................... 1
Interim Consolidated balance sheets as of December 31, 2001 and March 31, 2002................... 2-3
Interim Consolidated statements of cash flow for the three month periods ended March 31, 2001
and March 31, 2002............................................................................... 4
Notes to interim consolidated financial statements............................................... 5-7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS............................................................................ 8-14
</Table>
ii
<Page>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 6-K contains forward-looking statements.
The management of Preem Holdings AB (publ) (the "Company") has based these
forward-looking statements on its current expectations and projections about
future events. Although the Company's management believes that the expectations
reflected in such forward-looking statements are reasonable, the Company can
give no assurance that such expectations will prove to be correct. Important
factors that could cause the Company's actual results, performance or
achievements to differ materially from those in the forward-looking statements
include, among others:
o volatility in refining margins and in market prices for crude oil and
refined products;
o unplanned shut-downs due to technical problems at the refineries;
o the Company's future capital needs;
o the Company's ability to hedge against currency, commodity and interest
rate risks;
o the Company's ability to comply with existing or newly implemented
environmental regimes in the countries in which it operates;
o the Company's liability for violations, known and unknown, under
environmental laws;
o the Company's ability to re-mediate contaminated sites within budgeted
amounts;
o possible adverse effects of the Company's anticipated growth through
joint venture, acquisition or restructuring, including diversion of
management resources, incurrence of additional debt, the terms and
conditions of any joint venture, failure to integrate acquired
businesses and the Company's liability for known and unknown
liabilities of acquired businesses;
o agreements or disagreements among members of OPEC; and
o limitations on the Company's operational flexibility arising under
agreements governing the Company's debt.
All forward-looking statements attributable to the Company or persons
acting on the Company's behalf are expressly qualified in their entirety by
these cautionary statements. Because of the uncertainties associated with
forward-looking statements, you should not place undue reliance on them. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
PRESENTATION OF CERTAIN INFORMATION
Solely for the convenience of the reader, the interim financial
statements for all periods have been translated into U.S. Dollars ($) using the
March 31, 2002 rate of $1.00 = SEK10.34. On May 24, 2002, the exchange rate for
the Krona against the U.S. Dollar was $1.00=SEK9.91, based on data provided by
the Swedish Central Bank.
We present our financial statements in Kronor. Unless otherwise
indicated, all references in this prospectus to "SEK," "Krona" or "Kronor" are
to the lawful currency of Sweden; all references to "$" or "Dollar" are to the
lawful currency of the United States; and all references to "E" or "Euro"
are to the single currency adopted by the member states of the European Union
participating in the European Union's Economic and Monetary Union.
iii
<Page>
PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED
----------------------------------
MARCH 31, 2001 MARCH 31, 2002
-------------- -------------------
SEK SEK $
(IN MILLIONS)
Revenues...................................................... 11,598 10,330 999
Excise duties................................................. (2,295) (2,868) (277)
-------- ------- ------
SALES REVENUE................................................. 9,303 7,462 722
Cost of goods sold............................................ (8,744) (7,141) (691)
-------- ------- ------
GROSS PROFIT.................................................. 559 321 31
Selling expenses.............................................. (219) (233) (23)
Administrative expenses....................................... (103) (106) (10)
Other operating income........................................ 80 73 7
-------- ------- ------
OPERATING INCOME.............................................. 317 55 5
Interest income............................................... 14 13 1
Interest expense.............................................. (67) (115) (11)
Other financial net........................................... (133) 166 16
-------- ------- ------
INCOME BEFORE TAXES........................................... 131 119 11
Income taxes.................................................. (43) (44) (4)
Minority interests............................................ (1) (3) -
-------- ------- ------
NET INCOME.................................................... 87 72 7
======== ======= ======
</Table>
The accompanying notes form an integral part of these
Interim Consolidated Financial Statements.
1
<Page>
PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<Table>
<Caption>
AS OF AS OF
DECEMBER 31, MARCH 31,
2001 2002
-------------- --------------------
SEK SEK $
(IN MILLIONS)
ASSETS
FIXED ASSETS
INTANGIBLE FIXED ASSETS
Goodwill...................................................... 1,303 1,246 121
-------- -------- --------
TOTAL INTANGIBLE ASSETS....................................... 1,303 1,246 121
TANGIBLE ASSETS
Land and building............................................. 905 895 87
Plant and machinery........................................... 3,280 3,197 309
Capitalized turnaround cost, net.............................. 96 80 8
Equipment, tools fixtures and fittings........................ 695 679 66
Construction in progress...................................... 339 461 44
-------- -------- --------
TOTAL TANGIBLE FIXED ASSETS................................... 5,315 5,312 514
FINANCIAL ASSETS
Participation in associated companies......................... 190 190 18
Receivables from associated companies......................... 38 87 8
Deferred tax receivables...................................... - 8 1
Other securities held as fixed assets......................... 2 2 -
Other long-term receivables................................... 135 131 13
-------- -------- --------
TOTAL FINANCIAL ASSETS........................................ 365 418 40
TOTAL FIXED ASSETS............................................ 6,983 6,976 675
CURRENT ASSETS
Inventories................................................... 3,751 4,113 398
Accounts receivable........................................... 3,219 2,959 286
Receivables from associated companies......................... 133 148 14
Other receivables............................................. 267 330 32
Prepaid expenses and accrued income........................... 110 213 21
-------- -------- --------
Cash and cash equivalent...................................... 959 677 65
TOTAL CURRENT ASSETS.......................................... 8,439 8,440 816
-------- -------- --------
TOTAL ASSETS.................................................. 15,422 15,416 1,491
======== ======== ========
</Table>
The accompanying notes form an integral part of these
Interim Consolidated Financial Statements.
2
<Page>
PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<Table>
<Caption>
AS OF AS OF
DECEMBER 31, MARCH 31,
2001 2002
-------------- --------------------
SEK SEK $
(IN MILLIONS)
SHAREHOLDERS' EQUITY, PROVISIONS
AND LIABILITIES
SHAREHOLDERS' EQUITY
RESTRICTED EQUITY
Share capital................................................ 1 1 -
Restricted reserves.......................................... - - -
-------- -------- --------
NON-RESTRICTED EQUITY
Profit brought forward....................................... 3,344 3,120 302
Profit/(Loss) for the year................................... (233) 72 7
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY................................... 3,112 3,193 309
MINORITY INTERESTS........................................... 134 108 10
PROVISIONS
Pension provision............................................ 187 189 18
Deferred tax liability....................................... 109 116 12
Other provisions............................................. 53 54 5
-------- -------- --------
TOTAL PROVISIONS............................................. 349 359 35
LIABILITIES
LONG-TERM LIABILITIES
Shareholder loans............................................ 242 242 23
Bond loan.................................................... 2,874 2,756 267
Liabilities to credit institutions........................... 2,936 3,840 371
Bank overdraft facility...................................... 12 5 1
-------- -------- --------
TOTAL LONG-TERM LIABILITIES.................................. 6,064 6,843 662
-------- -------- --------
CURRENT LIABILITIES
Liabilities to credit institutions........................... 560 258 25
Advanced payment from customers.............................. 150 157 15
Accounts payable............................................. 2,019 1,197 116
Liabilities to parent company................................ 149 128 12
Liabilities to associated companies.......................... 3 18 2
Income tax payable........................................... 18 51 5
Other liabilities............................................ 2,091 1,883 182
Accrued expenses and prepaid income.......................... 773 1,221 118
-------- -------- --------
TOTAL CURRENT LIABILITIES.................................... 5,763 4,913 475
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY, PROVISION ======== ======== ========
AND LIABILITIES.............................................. 15,422 15,416 1,491
======== ======== ========
</Table>
The accompanying notes form an integral part of these
Interim Consolidated Financial Statements.
3
<Page>
PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED
------------------------------
MARCH 31, MARCH 31,
2001 2002
----------- ------------------
SEK SEK $
(IN MILLIONS)
INCOME FROM OPERATION
Income after financial items.............................. 131 119 11
Adjustments for non-cash items
Deprecation and amortization.............................. 200 202 20
Unrealized exchange (profit)/losses....................... 142 (138) (13)
Taxes paid................................................ - (28) (3)
------ ------ ------
CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN
WORKING CAPITAL........................................... 473 155 15
CASH FLOW IN WORKING CAPITAL
Decrease (Increase) in inventories........................ 492 (371) (36)
Decrease (Increase) in current receivables................ (114) 74 7
Increase (Decrease) in liabilities........................ 4 (456) (44)
CASH FLOW FROM (USED IN) OPERATING ACTIVITIES............. 382 (753) (73)
INVESTMENT ACTIVITIES
Investment in intangible fixed assets..................... (2) - -
Investment in tangible fixed assets....................... (98) (163) (16)
Sale of tangible fixed assets............................. 3 1 -
Increase in financial fixed assets........................ - (45) (4)
------ ------- ------
CASH FLOW USED IN INVESTMENT ACTIVITIES................... (97) (207) (20)
FINANCING OPERATION
New loans from credit institutions........................ 199 736 71
Payment of loans from credit institutions................. (128) (207) (20)
Payment of loans from parent company...................... -- - -
Group contributions paid.................................. (900) - -
------ ------ ------
CASH FLOW FROM (USED IN) FINANCING ACTIVITIES............. (829) 529 51
CASH FLOW OF THE PERIOD................................... (71) (276) (27)
Liquid funds at the beginning of the period............... 370 959 93
Exchange-rate difference.................................. - (6) (1)
Cash and cash equivalents at the end of the period........ 299 677 65
SUPPLEMENTARY DISCLOSURES
Cash flow interest and dividend received
Interest received......................................... 15 12 1
Interest paid............................................. (76) (212) (21)
Items included in liquid funds
Cash and bank balance..................................... 299 451 44
Short-term investment..................................... - 226 21
TOTAL LIQUID FUNDS........................................ 299 677 65
</Table>
The accompanying notes form an integral part of these
Interim Consolidated Financial Statements.
4
<Page>
PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTH PERIOD ENDED MARCH 31, 2002
NOTE 1. BASIS OF PRESENTATION
Preem Holdings AB (publ) (the "Company") was originally established in
1980 as Swedoil AB and is registered with the Swedish Patent and Registration
Office under the number 556206-9673. Swedoil AB was a subsidiary of Preem
Petroleum AB that had been dormant since 1983. On March 1, 2001, its name was
changed from Swedoil AB to Preem Holdings AB, through an amendment to its
Articles of Association and its subsequent registration with the Swedish Patent
and Registration Office. The purpose of this name change was to accurately
reflect its status as a holding company and its position within the overall
corporate structure with respect to Corral Petroleum Holdings AB, its parent
company, and Preem Petroleum AB, its operating subsidiary. Also on March 1,
2001, the Company's status was changed from a private company to a public
company, giving it the ability under Swedish law to raise capital through the
issuance of securities. Corral Petroleum Holdings AB, a Swedish company,
contributed all of the issued and outstanding shares of Preem Petroleum AB to
Preem Holdings AB on March 19, 2001. Preem Holdings AB is wholly owned by Corral
Petroleum Holdings AB, which is wholly owned by Moroncha Holdings Company
Limited, which is wholly owned by Mr. Mohammed Hussein Ali Al-Amoudi.
Preem Holdings AB applies the Swedish Annual Account act and complies
with recommendations of the Swedish Accounting Standards Board and the Swedish
Financial Accounting Standards Council.
The accompanying Consolidated Financial Statements present the
financial position, result of operations and cash flows of Preem Holdings AB and
its consolidated. In the accompanying Consolidated Financial Statements the
results of operations and cash flows of Preem Holdings AB for the three months
ended March 31, 2001 includes the results of operations and cash flows of Preem
Petroleum AB.
Preem Holdings AB's principal assets as of March 31, 2002 consist of
all of the issued and outstanding shares of Preem Petroleum AB and an
inter-company loan to Preem Petroleum AB. Preem Holdings AB's principal
liability as of March 31, 2002 consists of E305 million aggregate principal
amount of 10 5/8% senior secured notes, due 2011, of which Preem Holdings AB
issued E250 million on April 10, 2001 and E55 million on July 20, 2001.
The accompanying consolidated financial statements present the financial
position and results of operations and have been prepared in accordance with
Swedish GAAP. These accounting principles differ in certain significant respects
from U.S. GAAP (see note 25 in the Company's Form 20 F as of December 31, 2001).
The interim financial information included in the interim consolidated
financial statements is unaudited but reflects all adjustments (consisting only
of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the results for the interim periods
presented. Interim results for the three months ended March 31, 2002 are not
necessarily indicative of the results to be expected for the full year.
There has been no material change in the Company's contingent
liabilities (for further information see note 22 in the Company's Form 20 F as
of December 31, 2001).
NOTE 2. SALES REVENUE
<Table>
<Caption>
THREE MONTHS ENDED
-------------------------------
MARCH 31,
-------------------------------
2001 2002
-------------- ----------------
(IN MILLIONS)
Supply and Refining..................................................... 8,207 6,258
Swedish Market.......................................................... 2,668 2,395
International........................................................... 396 450
Group eliminations...................................................... (1,968) (1,641)
------- ------
TOTAL................................................................... 9,303 7,462
======= ======
</Table>
5
<Page>
NOTE 3. OPERATING INCOME
<Table>
<Caption>
THREE MONTHS ENDED
-------------------------------
MARCH 31,
-------------------------------
2001 2002
-------------- ----------------
(IN MILLION)
Supply and Refining..................................................... 197 188
Swedish Market.......................................................... 42 32
International........................................................... (15) 0
Other Non-allocated Income (expense), net............................... 93 (125)
---------- ---------
TOTAL................................................................... 317 95
========== =========
</Table>
NOTE 4. INVENTORIES
The valuation of the inventories has been carried out at the lower of
the acquisition value and the actual value, where the actual value for finished
goods represents the net sales value, and for crude oil represents the
replacements cost at year end. An individual valuation shows a surplus value in
finished products of SEK375 million and a loss in value for crude oil of SEK222
million as of March 31, 2002. The lending portion of inventory volume is
included in the inventory value in an amount of SEK10 million. Borrowed
inventory volumes corresponds to an inventory value of SEK72 million, which is
not included in the inventory value.
<Table>
<Caption>
AS OF AS OF
DECEMBER 31, MARCH 31,
-------------- --------------
2001 2002
-------------- --------------
(IN MILLION)
Raw materials and supplies............................................... 2,037 2,312
Finished products........................................................ 1,714 1,801
-------------- --------------
TOTAL.................................................................... 3,751 4,113
============== ==============
</Table>
NOTE 5. SHAREHOLDERS' EQUITY
The changes in shareholders' equity in Preem Holdings AB and
subsidiaries for the period December 31, 2001 to March 31, 2002 are as follows:
<Table>
<Caption>
TOTAL
SHARE RESTRICTED UNRESTRICTED SHAREHOLDER'S
CAPITAL RESERVES RESERVES EQUITY
--------- ---------- ------------ -------------
(SEK in million)
Balance at December 31,2001....................... 1 -- 3,111 3,112
Translation differences........................... -- -- 9 9
Net income........................................ -- -- 72 72
Balance at March 31, 2002......................... 1 -- 3,192 3,193
</Table>
6
<Page>
NOTE 6. LONG-TERM LIABILITIES TO CREDIT INSTITUTIONS
AMORTIZATION PLAN
<Table>
<Caption>
2002 2003 2004 2005 2006 2007+
--------- --------- --------- -------- -------- --------
(SEK, IN MILLION)
Bond loan................................. - - - - - 2,756
Loans..................................... 53 113 790 277 650 828
Capital lease obligation.................. 10 14 24 30 33 1,018
--------- --------- --------- -------- -------- --------
TOTAL..................................... 63 127 814 307 683 4,602
========= ========= ========= ======== ======== ========
</Table>
The Company has, as of March 31, 2002, debt of SEK45 million secured by
real estate mortgages and debt of SEK517 million that is guaranteed by a
financial institution.
NOTE 7. INTERIM SEGMENT INFORMATION
Financial information by segment is as follows:
<Table>
<Caption>
THREE MONTHS ENDING
--------------------------
MARCH 31,
--------------------------
2001 2002
------------- -----------
SALES REVENUE:
Supply and refining............................... 8,207 6,258
Swedish market.................................... 2,668 2,395
International..................................... 395 450
SEGMENT SALES REVENUE............................. 11,270 9,103
Intersegment sales revenue........................ (1,967) (1,641)
------------- -----------
Sales revenues.................................... 9,303 7,462
SEGMENT OPERATING PROFIT:
Supply and refining............................... 197 188
Swedish market.................................... 42 32
International..................................... (15) 0
Segment operating profit.......................... 224 220
Other non-allocated income net(1)................. 93 (165)
Income from operations............................ 317 55
Non-allocated items(2)............................ (186) 64
------------- -----------
Income before income taxes........................ 131 119
</Table>
(1) Other non-allocated income (expense) includes the corporate cost
center, non-recurring items and exchange rate differences.
(2) Non-allocated items consist of interest income and expenses, other
financial income and expense and minority interest.
7
<Page>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
HIGHLIGHTS OF THE FIRST THREE MONTHS OF 2002
SUPPLY AND REFINING DIVISION
Oil prices have continued to be volatile during the first quarter of
2002. The crude oil prices have varied from $18 per barrel in January to $26 per
barrel at the end of March 2002. The rise in crude oil prices during the first
quarter 2002 reflects primarily the tense political and economic situation in
the world. The prices of refined products have also increased, but not at the
same pace as the price of crude oil. As a result of this market situation, the
refining margins were low in the first quarter of 2002.
The Supply & Refining Division operates the majority-owned Scanraff
refinery and the wholly owned Preemraff refinery. Preem owns 78.5% of the
Scanraff refinery with the exception of the catalytic cracker, of which it owns
50%. The remainder of the catalytic cracker is owned by Preem's joint venture
partner, Hydro R&M Holding AS, an affiliate of Norsk Hydro AS. On April 17,
2002, Preem Petroleum AB and Norsk Hydro A/S signed a transaction structure
agreement in which the parties agreed to combine the operations, assets and
liabilities of Scanraff and Scancracker into a joint refining company with
unified ownership of shares and processing rights being held 75% by Preem and
25% by Norsk Hydro. These refineries refined for Preem approximately 24.0
million barrels of oil in the first quarter of 2002 compared to approximately
equally 24.0 million barrels of oil in the first quarter of 2001.
The following tables show the calculation of margins for the Scanraff
(Preem's share) and Preemraff refineries.
8
<Page>
<Table>
<Caption>
THREE MONTHS ENDED
------------------------------
MARCH 31,
------------------------------
2001 2002
------------- --------------
SCANRAFF
Gross refining margin.......................... $2.19 $1.06
Variable refining costs........................ (0.19) (0.22)
------------- --------------
Refining margin................................ 2.00 0.84
Fixed operating costs.......................... (0.55) (0.48)
------------- --------------
Net cash margin................................ 1.45 0.36
Depreciation................................... (0.32) (0.30)
------------- --------------
Net refining margin............................ $1.13 $0.06
------------- --------------
Total production (000 barrels)................. 13,820 14,216
PREEMRAFF
Gross refining margin.......................... $1.15 $0.25
Variable refining costs........................ (0.18) (0.06)
Natural gas, refining fuel..................... - (0.12)
------------- --------------
Refining margin................................ 0.97 0.07
Fixed operating costs.......................... (0.35) (0.37)
------------- --------------
Net cash margin................................ 0.62 (0.30)
Depreciation................................... (0.45) (0.50)
------------- --------------
Net refining margin............................ $0.17 $ (0.80)
------------- --------------
Total production (000 barrels)................. 10,541 9,572
</Table>
The decrease in refining margins, reflected in the above table, was
to a large extent offset by a increase in market prices for crude oil and
refined products, resulting in a substantial higher price gain on inventories
in the first quarter of 2002 compared to the first quarter of 2001.
The Supply & Refining Division generated EBITDA of SEK311 million in
the first quarter of 2002 compared to SEK316 million in the first quarter of
2001.
SWEDISH MARKET DIVISION
The Business to Business segment is continues to strengthen its
position in the Swedish. However, despite strong market positions, volumes are
down in March due to unseasonably warm weather and resulting in low sales of
heating oil.
For the Home Heating segment, the warmer than average temperature this
year has had a negative impact on sales volumes. We have conducted Telemarketing
and customer surveys for the purpose of reversing our low sales and supporting
our internal quality projects. Within Heating services a Bench learning project
has been concluded and a number of activities are ongoing in order to improve
the result of this business.
For the Station and Consumer segment in the growing diesel market our
Saifa concept is developing well, with activities focusing on pricing and
opening additional stations. In the gasoline market the restructuring of Preems
network is continuing according to plan with five openings and three closures
during the first quarter of 2002.
The Swedish Market Division generated an EBITDA of SEK70 million in the
first quarter of 2002 compared to SEK80 million in the first quarter of 2001.
9
<Page>
INTERNATIONAL MARKET DIVISION
The International Market Division has now been able to reduce the
losses in Poland. The main reasons are higher margins and sales volumes.
Costs are under control and are lower than the previous years. Nevertheless,
we have been unable to fully implement our plans to expand our operations in
Poland and have stopped investing in our Polish operations in 2002. We may
decide to exit the Polish market entirely.
The International Division generated a positive EBITDA of SEK7 million
in the first quarter of 2002 compared to a negative EBITDA of SEK9 million in
the first quarter of 2001.
CORPORATE COST CENTER
We book losses or gains in foreign exchange in operating activities
separately as "corporate costs" so that we can present a fair and accurate
result of the operating activities of each of our divisions. The "corporate cost
center" generated a negative EBITDA of SEK 131 million in the first quarter of
2002 compared to a positive EBITDA of SEK131 million in the first quarter 2001.
The decrease resulted primarily from an increase in foreign exchange losses made
on our inventory, which is priced in Dollars.
10
<Page>
RESULTS OF OPERATIONS
The following table shows the sales revenues and operating income
for the three divisions discussed above:
<Table>
<Caption>
THREE MONTHS ENDED
------------------------------
MARCH 31,
------------------------------
2001 2002
--------------- -------------
SALES REVENUE:
Supply & Refining.............................. 8,207 6,258
Swedish Market................................. 2,668 2,395
International Market........................... 395 450
TOTAL SALES REVENUE............................ 9,303 7,462
OPERATING INCOME (LOSS):
Supply & Refining.............................. 197 188
Swedish Market................................. 42 32
International Market........................... (15) 0
Other non-allocated income (expense)........... 93 (165)
TOTAL OPERATING INCOME......................... 317 55
</Table>
CONSOLIDATED STATEMENT OF OPERATIONS:
<Table>
<Caption>
THREE MONTHS ENDED
------------------------------
MARCH 31,
------------------------------
2001 2002
--------------- -------------
Revenues....................................... 11,598 10,330
Excise duties.................................. (2,295) (2,868)
--------------- -------------
SALES REVENUE.................................. 9,303 7,462
Costs of goods sold............................ (8,744) (7,141)
GROSS PROFIT................................... 559 321
Selling and administrative expenses............ (322) (339)
Other operating income......................... 80 73
--------------- -------------
OPERATING INCOME............................... 317 55
Other financial, net........................... (186) 64
--------------- -------------
Income before taxes............................ 131 119
INCOME TAXES................................... (43) (44)
Minority interests............................. (1) (3)
--------------- -------------
NET INCOME..................................... 87 72
=============== =============
</Table>
11
<Page>
THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001
REVENUES. Our revenues for the three months ended March 31, 2002 were
SEK10,330 million, a decrease of SEK1,268 million, or approximately 11%, from
SEK11,598 million for the three months ended March 31, 2001. This decrease is
attributable to the decrease in market prices for crude oil and products and to
lower sales volumes. The average crude oil prices dropped by approximately
$5/bbl or 19% and sales volumes were 354 000m3 or 9% lower, compared to the same
period last year. This decrease in revenues was, to some extent, offset by a
stronger Dollar, which increased by approximately 7% against the Krona during
this, and by an increase in excise duties resulting from increased taxation on
petroleum products compared to the same period last year.
SALES REVENUE. Sales revenue for the three months ended March 31, 2002
was SEK7,462 million, a decrease of SEK1,841 million, or approximately 20%, from
SEK9,303 million for the three months ended March 31, 2001, primarily as a
result of the factors discussed above.
COST OF GOODS SOLD. Cost of goods sold for the three months ended March
31, 2002 was SEK7,141 million, a decrease of SEK1,603 million, or approximately
18%, from SEK8,744 million for the three months ended March 31, 2001.
GROSS PROFIT. Gross profit for the three months ended March 31, 2002
was SEK321 million, a decrease of SEK238 million, or approximately 43%, from
SEK559 million for the three months ended March 31, 2001. The decrease in gross
profit during this period was, to a large extent, attributable to lower refining
margins. Average refining margin for the three months ended March 31 2002 was
$0.53/bbl, a decrease of $1,00/bbl from $1.53/bbl compared to the same period
last year. The decrease in gross profit was offset by a positive impact on
inventories due to higher increase in market prices compared to the same period
last year.
SELLING AND ADMINISTRATIVE EXPENSES. Selling expenses for the three
months ended March 31, 2002 were SEK233 million, an increase of SEK14 million,
or approximately 6%, from SEK219 million for the three months ended March 31,
2001. The increase in selling expenses is attributable to a reclassification of
IT-related costs, from administrative expenses to selling expenses.
Administrative expenses for the three months ended March 31, 2002 were SEK106
million, an increase of SEK3 million, or approximately 3%, from SEK103 million
for the three months ended March 31, 2001. The increase is attributable to
higher costs for technical and advisory services provided by Capital Trust SA,
and other costs for business development. The increase is to large extent offset
by the reclassification of IT-related costs discussed above.
OTHER OPERATING INCOME. Other operating income for the three months
ended March 31, 2002 was SEK73 million, a decrease of SEK7 million, or
approximately 9%, from SEK80 million for the three months ended March 31, 2001.
The decrease in other operating income for the three months ended March 31, 2002
is attributable to reduced sales of storage capacity in our Supply & Refining
Division.
OPERATING INCOME (LOSS). Operating loss for the three months ended
March 31, 2002 was SEK262 million, a decrease of SEK55 million, from SEK317
million for the three months ended March 31, 2001. The operating income of our
Supply and Refining Division was SEK188 million for the three months ended March
31, 2002, a decrease of SEK9 million from an operating income of SEK197 million
for the three months ended March 31, 2001. This decrease in operating income was
primarily attributable to lower refining margins as discussed under "Gross
profit" above. The decrease in operating income was caused by a positive impact
on inventories due to a increase in market prices compared to the same period
last year. Our Swedish Market Division generated an operating income of SEK32
million for the three months ended March 31, 2002, a decrease of SEK10 million,
from an operating income of SEK42 million for the three months ended March 31,
2001. The decrease in the Swedish Market Division's operating income is to a
large extent attributable to lower sales volumes due to the warm weather,
compared to the same period last year. The operating income of our International
Division was SEK0 million for the three months ended March 31, 2002, an increase
of SEK15 million, from an operating loss of SEK15 million for the three months
ended March 31, 2001. The increased operating income was primarily attributable
to our International Division's higher sales volumes and margins in the Polish
market.
FINANCIAL EXPENSE, NET. Financial income, net, for the three months
ended March 31, 2002 was SEK64 million, an increase of SEK122 million from a
financial expense, net, of SEK186 million for the three months ended March 31,
2001. The principal components of this increase were the net interest on the
Preem Holdings note issuance of SEK71 million and the foreign exchange gains on
notes of SEK106 million, a result of the weakening Euro against the Krona, and
other foreign exchange gains on Dollar-denominated loans that
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were restated in Kronor due to the development of the Dollar exchange rate
against the Krona during the first quarter 2002, compared to the third quarter
2001.
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW
Our primary sources of liquidity are internal cash generation,
long-term debt, short-term working capital financing and short-term use of
excise duties collected. We operate in an environment in which liquidity and
capital resources are impacted by changes in the prices for crude oil and
refined products, and a variety of additional risks, including currency and
regulatory risks. In particular, because we purchase crude oil on the spot
market and prices can be volatile, the availability of cash or short-term credit
is crucial to our business. Historically, our cash and short-term credit have
been sufficient to finance such purchases. For the three months ended March 31,
2002, EBITDA was SEK257 million, compared to SEK517 million for the three months
ended March 31, 2001. We believe the cash flow from operating activities, bank
borrowings and other available sources for funds, will be adequate to enable us
to make required payments on our debt and to fund anticipated expenditures and
working capital requirements for the foreseeable future.
For the year ended December 2001, we declared a group contribution of
SEK330 million. Of this amount, we settled a receivable of SEK212 million. The
remaining SEK118 million of this group contribution will be contributed to Preem
Holdings AB in the form of shareholder's contribution during the second quarter
in 2002. Generally, group contributions are paid in the year after declaration.
CASH FLOW
Cash flow from operating activities before changes in working capital
was SEK155 million for the three-month period ended March 31, 2002 a decrease of
SEK318 million for the three-month period ended March 31, 2001. The decrease is
primarily attributable to an increase in exchange gains. However, we believe
that a more informative description of our underlying cash generation capability
is to include changes in working capital, which are primarily driven by
differences between product prices and volumes at period end.
Cash flow from/used in operating activities was SEK(753) million for
the three-month period ended March 31, 2002, a decrease of SEK1,135 million from
SEK382 million for the three-month period ended March 31, 2001. The decrease is
primarily attributable to increased inventory volumes and to a decrease in
current liabilities.
We collect government excise duties imposed on petroleum products at
the time of retail sale and subsequently remit them to the respective country's
government, primarily Sweden and the UK. Excise duties were SEK2,868 million for
the three month period ended March 31, 2002 compared to SEK2,295 million for the
three month period ended March, 2001. The delay between the time we collect
these funds and the time we are required to remit them to the government enables
us to use the cash to finance a significant portion of our working capital
needs.
Cash flow used in investing activities was SEK207 million for the
three month period ended March 31, 2002 compared to SEK97 million recorded
for the three month period ended March 31, 2001. This increased use of cash
flow in investing activities is the result of ordinary, variable investments
related to maintenance of two refineries and day-to-day investments made
during the period.
Cash flow from/used in financing activities was SEK529 million for the
three month period ended March 31, 2002 compared to a negative cash flow
SEK(829) million for the three month ended March 31, 2001.
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CREDIT ARRANGEMENTS
As of March 31, 2002, we had total debt of SEK6,859 million and an
additional SEK2,646 million of available unused commitments. Our long-term debt
(excluding long-term bank overdraft facilities and shareholder loans) amounted
to SEK6,596 million as of March 31, 2002, the current portion of which was SEK63
million. We also had drawings under long-term bank overdraft facilities of SEK5
million and drawings under short-term debt of SEK258 million. These loans and
facilities are provided by various international banks. Our long-term debt as of
March 31, 2002 included SEK1,129 million incurred to finance the
desulphurization plant at Preemraff that became operational in 1997. This plant
was financed through a sale and leaseback financing that runs through the year
2023. As of March 31, 2002, our indebtedness bore interest at a weighted average
rate per year of 7.0%.
SUBSEQUENT EVENTS
On April 17, 2002, Preem Petroleum and Norsk Hydro AS signed
a transaction structure agreement in which the parties agreed to combine the
operations, assets and liabilities of Scanraff and Scancracker into a joint
refining company with unitised ownership shares and processing rights being held
75% by Preem and 25% by Norsk Hydro. Preem and Norsk Hydro have agreed to use
Scanraff as such joint refining company by assigning all shares of Scancracker
to Scanraff in return for the issuance of such number of shares in Scanraff as
is required in order to meet the ownership ratio of 75 % for Preem and 25 % for
Norsk Hydro.
As of May 7, 2002, Preem Petroleum AB has disposed of all its
shares in Greenergy Fuels Ltd,. The shares have been purchased by Preem's former
partner in Greenergy Fuels, Greenergy International Ltd., for a consideration of
GBP1 million at a loss of less than SEK1 million.
At its ordinary meeting on May 2002, Preem's board of directory
approved an investment of SEK2,500 million that will give Scanraff the
capacity to produce sulphur free petrol and diesel. The resolution pertains
to Preem's 75 percent ownership in the refinery. A corresponding procedure of
approval of the investment is in process with the other owner, Norsk Hydro.
The investment is in particular very important for Scanraff's competitive
position and capacity to increase the volume of vehicle fuel products, and to
meet future environmental requirements on these. Primarily the objective is
to reduce the sulphur content to below 10 parts per million, and to reduce
the content of aromatic hydrocarbons. The investment will also enable the
refinery to produce products in compliance with the European requirements
that come into force 2005. A precondition for the investment is that Scanraff
receives the necessary environmental permits. The issue is at present under
consideration by the government. The production of sulphur free petrol and
diesel implies a local increase of carbon dioxide emissions, but the global
impact will be lower as the amount of emissions from the consumers will be
lower.
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