OMV Petrom’s profit, down by 11 pc in Q3

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OMV Petrom recorded a net profit of RON 473 million in Q3 of 2016 compared to a loss of RON 43 million in the same period of 2015, the largest oil and gas producer in South-Eastern Europe announced on Wednesday in a press release.

OMV Petrom recorded a profit of RON 878 million in the first nine months of 2016, down 11 percent compared to the first nine months of 2015 when the company had a net profit of RON 991 million.

“In the context of weak oil and gas prices and significantly reduced refining margins vs. previous year, OMV Petrom’s efforts focused on operational resilience and delivered good results. In Q3 of 2016, we continued with CAPEX prioritization and strict cost discipline, which translated into a RON 1.1 bn free cash flow. Our constant focus on the most profitable barrels led us to revisit the CAPEX guidance for 2016, from EUR 0.7 bn to EUR 0.6 bn (-30 percent yoy),” Mariana Gheorghe, CEO of OMV Petrom S.A. stated.

The net financial result was a loss at the amount of RON 16 million, compared to a loss of RON 86 million in Q2 of 2016,  following  the  special  income  from  the  clearance  of  a  legal  dispute  and  the  positive  effect  of exchange rates evolution in relation to bank loans denominated in EUR.

Consequently, the profit before tax for Q3 of 2016 of RON 557 million was significantly higher compared with the result of RON 132 million recorded in Q2 of 2016. Income tax level of RON 84 million led to an effective tax rate of 15 percent in Q3 of 2016.

Compared to Q3 of 2015, the sales decreased by 7 percent, as the decline in oil prices more than offset higher volumes of petroleum products, electricity and gas sold.

Upstream investments in the first nine month of 2016 were RON 1,484 million, compared to RON 2,790 million in the same period of last year. Downstream investments amounted to RON 328 million, compared to RON 203 million last year, thereof RON 320 million in Downstream Oil (9m/15: RON 199 mn) and RON 8 mn in Downstream Gas (9m/15: RON 4 mn). Corporate & Other CAPEX was RON 3 mn (9m/15: RON 4 mn).

“The Downstream contribution to Group result was very strong, driven by good operational performance of both Downstream Oil and Downstream Gas, despite a challenging market environment. As a result of all our efforts, OMV Petrom delivered a clean CCS EBIT of RON 602 million and a sound operating cash flow of RON 1.6 billion in Q3 of 2016,” Mariana Gheorghe noted.

Compared to December 31, 2015, total assets increased by RON 289 million, to RON 41,407 million, mainly driven by a stronger cash and cash equivalents position, which more than compensated the decrease in non-current assets.

As regards the brent oil price, OMV Petrom expects to reach USD 44/bbl in 2016.

“We estimate gas demand in Romania for 2016 to be below the 2015 level, with increased competition, including from import gas. Additional pressure on prices and margins is coming from recent amendments to the Energy Law, including the obligation for gas producers and suppliers to sell/buy via centralized platforms until 2021. In the power market, we anticipate demand for 2016 to be relatively stable vs. 2015, with improved spark spreads,” the OMV Petrom release reads.

 

 

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