OMV Petrom profit fell to RON 991m in nine months, losses in Q3

OMV Petrom (SNP) registered in nine months a net profit of RON 991 million (EUR 223.1 million), down 59% against the same period last year, and reports losses in Q3, while sales fell during January-September by 16% to RON 13.62 billion (EUR 3.06 bln), following the international oil price decrease by half as compared to 2014, according to an OMV Petrom release.
During July-September the company registered losses of RON 46 million, against a profit of RON 691 million in the previous three months and a profit of RON 1.02 billion in the same period of 2014. In Q3, the company had sales of RON 4.81 billion, down by 12%.
“In the first nine months of 2015, the Group financial performance was severely affected by the approx. 50% drop in oil prices. In a persistently ongoing low crude price environment, we have decided to reduce our future oil price assumptions, which required impairments of Upstream assets. The negative impact in Upstream was only partly compensated by the good results in Downstream, capitalizing on our integrated business model and supported by improved refining margins and higher products demand.
In addition, we continued our efforts across the entire organization to contain capital spending and operational costs. I am particularly encouraged by the good response of the entire organization which shows the cultural change and business agility we have implemented at OMV Petrom over the last decade.
The Group hydrocarbon production came in flat yoy, as the past investments and discoveries compensated for the natural decline and the currently reduced level of CAPEX. In partnership with ExxonMobil, we have further pursued our exploration activities in the Neptun Deep block, with four wells finalized this year and the fifth started drilling.
Going forward, we will continue to adjust our level of activity while maintaining a strong balance sheet. Moreover, as previously stated, future investments remain dependent on long term, stable and investment-friendly taxation and regulatory framework as well as supportive market fundamentals,” Mariana Gheorghe, CEO of OMV Petrom S.A., is quoted as saying by the release.
In Q3/15, the average Urals crude price decreased to USD 49.75/bbl, 19% lower compared to Q2/15. The average realized crude price, which reflected also the positive impact of the oil price hedges, decreased by 16% to USD 44.70/bbl.
Clean EBIT decreased compared to the Q2/15 level, mostly due to lower realized oil prices and decreased sales volumes, which offset the positive effect from lower exploration costs. Reported EBIT decreased to RON (407) mn mainly due to impairments of production assets, as well as personnel restructuring.
Group production costs in USD/boe were broadly stable compared to Q2/15. Production costs in Romania went slightly up by 2% when expressed in USD/boe, and by 1% in RON/boe terms (RON 51.23/boe), reflecting lower costs offset by the effect of the decreased production volumes.
Group daily production decreased by 4% to 173.6 kboe/d, mostly influenced by planned workovers at gas fields in Romania, while total production amounted to 15.97 mn boe (Q2/15: 16.48 mn boe). Group sales volumes decreased by 5% compared to the Q2/15 level, largely due to lower sales in Romania, the press release reads.