Petrom's 9-month profits plunge 34 percent

OMV Petrom has reported declining sales in the first nine months of the year, with revenues dropping by to 16.2 billion lei, while the net profit has narrowed significantly: 2.4 billion lei compared to 3.66 billion in 2013, according to a company release.

Consolidated sales in the period between January 1 and September 30 fell by 11 percent to approximately 16.2 billion lei from 18.15 billion lei in the same period last year. As regards the third quarter in 2014, sales revenues came to some 5.5 billion lei, 17 percent below Q3 2013 value, due to lower sales volumes of petroleum products and electricity. Refinery & Marketing represented 83 percent of total consolidated sales, Gas & Power accounted for 14 percent and Exploration & Production for 3 percent, the related sales being largely intra-group sales rather than third-party sales.

The group’s EBIT amounted to 3.44 billion lei at nine months, 24 percent lower compared to the result recorded in the similar period in 2013. For the third quarter only, the drop was smaller: 15 percent y-o-y, EBIT totaling 1.35 billion euro as sales were affected by challenging market environment and by the increase in excise. The introduction of the new tax on construction in Romania had also a negative impact on the result and offset the positive effect from transfer of non-current assets and lower exploration expenses.

Net profit has also deteriorated, totaling 2.4 billion lei, 34 percent lower year-on-year, as in 2013 it came to 3.66 billion lei. Considering the results related to Q3 2014 solely, OMV Petrom’s net profit decreased by 20 percent y-o-y to about 1 billion lei.

Production indicators remained stable overall in the third quarter this year, with small variations on certain segments. Hence, the group’s hydrocarbon production was 16.39 million boe, down by 2 percent over Q2 in 2013, reflecting the lower production in Kazakhstan. Domestic crude oil production was about 7 million bbl, 3.3 percent below last year’s level due to planned workovers, while domestic gas production was slightly higher, 8.6 million boe, mostly supported by the new wells put on stream in the Totea and Mamu fields. In Kazakhstan, oil and gas production amounted to 0.76 million boe, which is 26 percent lower compared to the same period of 2013, reflecting pipeline integrity issues as well as natural decline of key fields, explains the company report.

The investment plan for 2015 to be reviewed

With projected investments in exploration of over 1.3 billion euro in 2014, the biggest since privatization, OMV Petrom announces that the investment plan for 2015 will be reviewed

“In light of the volatile and weaker market fundamentals we are reviewing our investment plans for 2015, which will be announced together with the Group’s fourth quarter and 2014 preliminary results on February 19, 2015”, states Mariana Gheorghe, CEO OMV Petrom, as per the mentioned release, adding that a stable and predictable investment-friendly fiscal and regulatory environment is a prerequisite for the group’s future expenditure strategy.

In this respect, OMV Petrom anticipates discussions with the Romanian authorities, discussions which will tackle hydrocarbon taxes and the new supplementary taxation.