OMV Petrom Net Profit Hits Record RON4.82B In 2013

02.19.2014 By Florentina Dragu

Romanian leading oil company OMV Petrom (SNP.RO) Wednesday said its net profit rose 22% to a record 4.82 billion lei (EUR1.07 billion) in 2013, fueled by favorable crude oil prices and lower costs.

The result was above the market consensus of RON4.75 billion. In 2012, Petrom, the Romanian arm of Austria’s OMV (OMV.VI), reported a net profit of RON3.95 billion.

“In spite of the depressed demand in the gas and power sectors, lower refining margins and electricity prices, Petrom recorded another strong financial performance due to operational excellence, strict cost control initiatives as well as favorable crude price environment,” said Mariana Gheorghe, Chief Executive Officer of OMV Petrom.

In its preliminary financial report, Petrom said average international Urals crude prices declined 2% on the year to $108.3/barrel, but the average group realized prices rose 3% to $96.85/bbl.

Group production costs were roughly flat at $15.45/ barrel of oil equivalent. Production costs in Romania expressed in US dollars were also broadly unchanged on the year, but were down 4% when expressed in lei, mostly due to strict cost management and higher production available for sale.

In the fourth quarter alone, Petrom posted a net profit of RON1.15 billion, up 10% from the same quarter of 2012.

The company said earnings before interest and tax, or EBIT, rose 5% on the year to RON5.96 billion in 2013. Clean EBIT, adjusted for special one-time items, stood at RON6.01 billion, up from RON5.85 billion in the previous year.

Consolidated sales fell 8% on the year to RON24.2 billion in 2013, largely influenced by weak demand.

The group’s oil, gas and NGL production reached 66.964 million boe in 2013, little changed on the year. Total oil, gas and NGL production in Romania inched up 0.26% to 62.5 million boe, but output at the Kazakhstan fields fell 9% on the year to 4.1 million boe.

Crude oil production in Romania was stable at 28.6 million bbl, while domestic gas production rose 1% to 33.9 million boe.

Group sales volumes were similar to the 2012 level, Petrom said.

Overall investment rose to RON5.03 billion in 2013, from RON4.93 billion in the previous year.

For 2014, Petrom is considering total investment of over EUR1 billion, of which approximately 85% will be dedicated to the exploration and production segment.

At the end of 2013, the group’s total proved oil and gas reserves amounted to 728 million boe, while the proved and probable oil and gas reserves amounted to 1,02 million boe.

Petrom’s results are consolidated, unaudited and calculated according to IFRS.

On the Bucharest market Tuesday, Petrom closed up 0.43% at RON0.4639 a share. (EUR1=RON4.4873)