Romania's OMV Petrom Jan-Sept net profit plummets 70%

The negative performance was mainly caused by lower oil and gas prices, blue-chip OMV Petrom said in its third-quarter unaudited consolidated financial statement filed with the Bucharest Stock Exchange, BVB.

"Following the COVID-19 outbreak, demand for oil products and power is expected to be below 2019, while demand for gas is expected to be broadly similar to 2019, supported by gas intensive industries," the oil and gas group said.

Sales fell 17% year-on-year to 15.1 billion lei in the nine months through September, negatively impacted by lower commodity prices and sales volumes.

OMV expects 2020 capital expenditures (CAPEX), including capitalized exploration and appraisal, to be around 3 billion lei, while operational costs, exploration and appraisal expenditures are planned to be cut by around 300 million lei. Around 67% of 2020 CAPEX will be directed to Upstream, according to the statement.

CAPEX fell 10% to 2.79 billion lei in the first nine months of 2020.

In the upstream segment, OMV Petrom posted a 1.085 billion lei operating loss, compared to a 2.093 billon lei positive operating result in the same period of 2019.

Total daily hydrocarbon production shrank 3% on the year to 146,300 boe during January-September, while daily hydrocarbon sales were 3% lower on the year to 138,000 boe, due to lower output in Romania.

Exploration expenditures fell by an annual 64% to 116 million lei in the first nine months of 2020.

In the downstream segment, the group's operating result rose 38% on the year to 1.81 billion lei in the January-September period of 2020. The Petrobrazi refinery utilization rate was at utilization rate at 86%, reflecting the planned shutdown in July, OMV said.

Total sales of refined petroleum products fell 8% year-on-year to 3.72 million tonnes in the nine months through September. Gas sales volumes rose by an annual 25% to 44 TWh while net electricity output jumped by an annual 40% to 2.99 TWh.

In the third quarter alone, OMV Petrom's booked a net loss of 46 million lei, compared to a 785 million lei net profit in the same period of 2019. Sales in the third quarter of 2020 fell 26% on the year to 5.05 billion lei.

OMV Aktiengesellschaft, one of the largest listed industrial companies in Austria, holds a 51.011% stake in OMV Petrom. The Romanian state, through the energy ministry, owns 20.63%, and the rest is in free float on the Bucharest Stock Exchange and the London Stock Exchange.

Shares of OMV Petrom traded 0.62% lower at 0.32 lei as at 0935 CET on Thursday on the Bucharest Stock Exchange.

(1 euro=4.8746 lei)