July 28 (SeeNews) - Romania's top oil and gas group OMV Petrom [BSE:SNP] booked a net profit of 980 million lei ($235 million/199 million euro) in the first six months of 2021, up 13% year-on-year, it said on Wednesday.
Sales rose 1% on the year to 10.12 billion lei in the January-June period, due to a better price environment for petroleum products and electricity, compensating for lower sales volumes of natural gas and electricity, OMV Petrom said in its second-quarter unaudited consolidated financial statement.
Downstream Oil represented 77% of total consolidated sales, while Downstream Gas accounted for 21% and Upstream for 1%.
"The global outbreak of the COVID-19 pandemic continues to have a major impact on global economic development. While oil prices continued to increase in the second quarter, they still remain significantly volatile. Increases in COVID-19 cases around the world and in particular in Europe could lead to delays in the assumed demand recovery, following the response of governments and citizens," OMV Petrom said.
Capital expenditures fell 23% on the year to 1.208 billion lei in the review period, consisting mainly of Upstream investments. For 2021, OMV Petrom plans 2.9 billion lei of capital expenditures, excluding acquisitions, compared to 3 billion lei in 2020.
In the Upstream segment, OMV Petrom posted a 784 million lei clean operating result in the first half, compared to 27 million lei in the same period of last year. The recovery was mainly driven by higher oil prices, lower Upstream taxation, as well as lower depreciation and exploration expenses, which were partly offset by lower sales volumes and unfavorable FX.
Group hydrocarbon production declined by 8.9% to 24.67 million boe due to lower volumes in both Romania and Kazakhstan. The daily average production in Romania, excluding portfolio optimization, declined by 7% on the year in the first half of 2021.
Exploration expenditures decreased by an annual 57% to 39 million lei, due to less seismic acquisition and less onshore drilling activities, partly counterbalanced by activities in Bulgaria. Exploration expenses fell 28% on the year to 46 million lei, due to fewer seismic acquisition activities, partly counterbalanced by additional costs in Bulgaria and increased geological and geophysical expenses, the company explained.
In the downstream segment, the group's operating result rose 18% on the year to 891 million lei, reflecting positive CCS effects due to the steep increase in crude quotations, partly offset by special charges mainly consisting of temporary losses from electricity forward contracts.
Total sales of refined products increased by an annual 2%, while group retail sales volumes were up by 17%, reflecting the relaxation of mobility restrictions. Non-retail sales decreased by an annual 12%, as a result of lower exports.
In the second quarter alone, OMV Petrom booked a net profit of 406 million lei, double compared to the profir reported for the same quarter of 2020.
OMV Petrom is the largest integrated energy company in Southeast Europe, with an annual group hydrocarbon production of 53 million boe in 2020. The group has a refining capacity of 4.5 million tons per year and is present on the oil products retail market in Romania and neighboring countries through 790 filling stations as at the end of March, under two brands – OMV and Petrom.
Shares in blue-chip OMV Petrom traded 0.12% lower at 0.4260 lei by 0956 CET on the BVB on Wednesday.
(1 euro=4.9194 lei)
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