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37
Annual report 2012 www.recope.com
CONCLUSIONS
On the 31st of December, 2012, RECOPE attended
entrepreneurship with the financial resources collected from
cashier sales and short-term credit line financing.
The instability that characterized the first few months had
a significant impact on the cash flow. This situation is also
caused by methodological lags in the price adjustment formula.
Average Platt prices used belong to the 15 days preceding the
last date of calculation, meaning that the application takes about
45 days (price changes are applied one month later). These
circumstances cause the company to show an accumulated
profit
of US $12.466 thousand on the income statement up to
December, 2012 after covering operating expenses.
Short-term financing through authorized bank credit lines was
sought to even out this situation and face the oil bill. These were
fully cancelled at the end of the year (Central Bank policies).
The gross profit margin once deducted decreases when
operating expenses are subtracted. These expenses register
fixed costs regarding the refinery that has not been operating
during this period, as is established by the International
Accounting Standards.
Port charges, municipal taxes and depreciation also grew
significantly. Depreciation was due to the capitalization of works
that had been lagging behind registry.
The company presented Budgetary Authorities with information
regarding budget guidelines in a timely manner during this
period.
RECOPE must present to ARESEP another application for
ordinary price readjustment, in order to expose the financial
position it has been facing and obtain a price increase that
may bring balance to the unstable scenario. This holds true for
both; the international market price and the Company´s K factor
(operating expenses), so as to provide the Company with the
resources to meet these expenses without needing to solicit
credit.
The price adjustment formula, by itself has a lag in the
calculation methodology, because Platt’s average prices
are used in the 15 days prior to the last date of calculation.