Main Risk Factors and Mitigating Measures

The Group is exposed to a variety of macroeconomic factors, including foreign exchange rates, crude oil prices, and refining margins. Additionally, it faces financial risks related to its capital structure, liquidity, cash flow, and credit. Furthermore, the Group is subject to regulatory and market risks, particularly in relation to the EU Emissions Trading System. To address these risks, the Group has implemented comprehensive risk management policies that align with international best practices and take into account local market conditions and regulatory requirements. The primary objective of these policies is to minimize the Group’s exposure to market volatility and mitigate any adverse impacts on its financial position to the greatest extent possible. The ongoing geopolitical tensions in Eastern Europe and the Middle East, along with inflationary pressures and monetary tightening by central banks, emphasize the critical importance of the Group’s risk management framework. The following section outlines the key risks faced by the Group and the corresponding measures implemented to mitigate them.

Main risks

Indicative mitigating measures

Macroeconomic environment
Crude oil and products market: Variation of crude oil / oil product prices Variation of Refining Margins	Highly-complex and competitive refineries, with operational performance above European refineries' average and over-performance vs benchmark margins Matching of purchases with sales on a periodic basis in order to mitigate price exposure Framework for managing commercial risks involving executive members of the Group Hedging transactions subject to market conditions Management of cash balances
Global Economy: Economic recession conditions Significant decrease of demand Geopolitical crises	Crisis management program Capital expenditures management Maximization of available liquidity Strong balance sheet Operational and working capital management
Energy transition: Decrease of oil products demand Increased cost of climate compliance	Reduction of environmental footprint (target to reduce CO₂ emissions by 30% by 2030 and achieve net zero by 2050) Strategic portfolio diversification in RES, natural gas, electricity, as well as other new forms of energy (such as biofuels and hydrogen) Investments to significantly reduce CO₂ emissions in core activities
Foreign exchange risk: Gross margin conversion Financial position translation	All transactions involving crude oil and petroleum products, both domestically and internationally, are conducted in dollars, with conversion into local currency on the date of the transaction Balance sheet management to match monetary exposure (assets – liabilities) Hedging transactions subject to market conditions
Greek economy: Reduced demand Exposure to Greek banking system Credit risk Economic environment evolution	Export-focused business model, with volumetric exports accounting for over 50% of total Issuance of Eurobonds to diversify the funding mix and reduce costs A significant portion of gross refining margin is dependent on international prices of both crude oil and petroleum products Continuous monitoring of the domestic economic environment and corresponding adjustment of the Group's strategy

Financial risks
Capital structure	Diversification of the funding mix and adjustment based on business activities Adoption of flexible funding instruments for business activities (such as project finance/non-recourse debt) Improvement of the debt maturity profile based on market conditions Reduction of borrowing costs Management of indebtedness (deleverage) Funding mix optimization (fixed over variable interest cost) Protection from interest rate volatility through hedging instruments
Liquidity	Maximization of cash from operating cash flow and available credit lines (headroom) Issuance of Letters of Guarantee (LG) or Credit (LC) for trade liabilities Maximization of available open credit from crude suppliers

Financial risks

Capital structure

Diversification of the funding mix and adjustment based on business activities
Adoption of flexible funding instruments for business activities (such as project finance/non-recourse debt)
Improvement of the debt maturity profile based on market conditions
Reduction of borrowing costs
Management of indebtedness (deleverage)
Funding mix optimization (fixed over variable interest cost)
Protection from interest rate volatility through hedging instruments

Liquidity

Maximization of cash from operating cash flow and available credit lines (headroom)
Issuance of Letters of Guarantee (LG) or Credit (LC) for trade liabilities
Maximization of available open credit from crude suppliers

Credit

Differentiation of the customer mix
Faster collection of receivables (DSO reduction)
Review of customers’ credit rating status and limits

Operational risks
Safety & Environment	Investments to enhance safety and environmental protection levels Implementation of safety audit processes and regular inspection of all production facilities, storage and distribution terminals Continuous measurement of emissions from the Group's manufacturing facilities Participation in international organizations to share best-practices in accordance with the highest standards of the refining industry
Ensure refineries’ supply with raw materials	Proactive scheduling of refineries’ supply Adjusting supply chain to address potential shortages of specific crude grades Leveraging the refineries' location and configuration to access and process a wider range of crude oil grades Supply diversification
Reduced operation or unplanned shut-down of a refinery	Rigorous enforcement of preventive maintenance programs Regular maintenance turnarounds in accordance with equipment specifications
Compliance in terms of operation and product quality	Implementation of necessary measures to fully comply with existing specifications, both in the production process and the supply chain Investments in adjusting equipment configuration, in line with national and European institutional guidelines
Property and liability risk	Insurance coverage for various risks, including physical asset damage, personal and third-party injuries, business interruption, product-related or other liability

Overview of Internal Control System and Risk Management

In the same context, the Internal Control System and Risk Management of the Group incorporate safeguards and monitoring mechanisms at various levels within the organization, as outlined below:

Main Risk Factors and Mitigating Measures

Overview of Internal Control System and Risk Management

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2023
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2023 Annual Report

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