Ethiopia’s Preem Hits $12.6 Billion Revenue in 2023

Preem, a leading Swedish petroleum and biofuel corporation majority-owned by Ethiopia’s richest man Mohammed Al-Amoudi, suffered a big financial setback in the fiscal year 2023, citing a considerable drop in both revenue and profit.

Preem’s 2023 annual report shows a 14% decrease in revenue, from SEK160.55 billion ($14.75 billion) in 2022 to SEK137.71 billion ($12.65 billion) in 2023. This fall was attributable to a large decline in petroleum product sales throughout the course of the year.

Preem’s overall production in 2023 was 18.6 million cubic meters, slightly lower than the previous year’s output of 18.9 million cubic meters. The proportion of products sold outside Sweden climbed to 65 percent from 60 percent in 2022, with a value of SEK89.61 billion ($8.23 billion) versus SEK96.83 billion ($8.9 billion).

The fall in sales, along with price losses on inventory and a write-down of inventory value of SEK1.52 billion ($139.7 million), resulted in a significant decrease in operating profit. Operating profit declined to SEK7.91 billion ($727 million) from SEK14.82 billion ($1.36 billion) the previous year, impacted by a cost of SEK833 million ($76.55 million) for the disposal of a VDU plant at the Lysekil refinery to make way for a new renewable unit, ICR.

Preem’s earnings also fell significantly, by 34.28 percent, from SEK9.09 billion ($834.52 million) the previous year to SEK5.97 billion ($548.48 million) by the end of its fiscal year in 2023. This reduction was ascribed to continuous geopolitical upheaval, macroeconomic uncertainty, and worse refining profits at the Gothenburg refinery.

Despite the financial failures, Preem’s CEO, Magnus Heimburg, announced a strategic investment decision to modernize the ICR Unit at the Lysekil refinery.

With an expenditure of around SEK5.5 billion ($505.37 million), the diesel production unit will be turned into Scandinavia’s largest manufacturing plant for Sustainable Aviation Fuels and HVO (Hydrogenated Vegetable Oil).

This plan seeks to boost renewable refining capacity by 1.2 million cubic meters per year by 2027, for a total of 2.5 million cubic meters across both refineries.

Mohammed Al-Amoudi, who has a net worth of $9.17 billion, draws a large percentage of his income from his interest in Preem, which increased from $3.74 billion on January 1 to $3.88 billion recently.

Al-Amoudi, Ethiopia’s richest man, is ranked 270th on the Bloomberg Billionaires Index and has significant influence in the Middle East and Africa. His diverse assets in the mining, oil, and construction industries contribute greatly to his success.

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