February 21 (SeeNews) - Romania's top oil and gas group, OMV Petrom [BSE:SNP], said on Wednesday it posted a 2.489 billion lei ($659 million/534 million euro) net profit in 2017, sharply up from 1.038 billion lei profit in the previous year.
The group's consolidated sales increased by 17% year-on-year to 19.435 billion lei in 2017, largely due to higher sales in all business segments as a result of improved economic environment, OMV Petrom said in its unaudited financial statement submitted with the Bucharest Stock Exchange, BVB.
Downstream Oil contributed 74% of total consolidated sales, Downstream Gas accounted for 23% and Upstream had a share of approximately 2%.
In 2017, the group increased investments by 15% to 2.969 billion lei. OMV Petrom invested 2.435 billion lei in Upstream operations, 533 million lei Downstream and 446 million lei in Downstream Oil in 2017.
OMV Petrom expects capital expenditure for 2018 to be around 3.7 billion lei, mainly for ramping up our drilling activity, the Neptun project, the scheduled full-site refinery turnaround and the Polyfuel project.
Also, the company's executive board plans to propose a dividend payout of 0.020 lei per share for 2017, up 33% on the year.
OMV Petrom's operating profit rose to 3.27 billion lei last year from 1.476 billion lei in 2016, driven mainly by higher sales and cost optimization.
In the upstream segment, OMV Petrom's operating result rose to 1.66 billion lei from 401 million lei in 2016, impacted mainly by the reassessment of provisions.
Total hydrocarbon production shrank 4% to 61.18 million barrels of oil equivalent (boe) in 2017, while domestic production of crude oil and natural gas liquids dropped to 27.33 million barrels, 6% lower than the output in 2016.
Exploration expenditures fell 30% to 235 million lei in 2017, mainly due to reduced activity in the Neptun Block.
In the downstream segment, the operating profit rose 37% on the year to 1.768 billion lei in 2017. Total sales of refined products increased by 3% to 5.07 million tonnes. Gas sales volume grew by an annual 2% to 51.40 TWh, while net electricity output fell 7% on the year to 2.71 TWh in 2017.
OMV Petrom Group employed 13,790 people as at end-2017, a drop of 7% on 2016.
In the fourth quarter alone, OMV Petrom's net profit increased to 642 million lei from 162 million lei in the prior-year period, while sales rose 10% on the year to 5.142 billion lei.
In December, Independent electric power producer Transeastern Power B.V. has completed the acquisition of OMV Petrom Wind Power, a subsidiary of OMV Petrom.
In September, Romanian investment fund Fondul Proprietatea [BSE: FP] sold a 2.5% shareholding interest in OMV Petrom for 399.85 million lei.
Romania's government sold Petrom to OMV in late 2004. OMV owns a stake of 51.01% in OMV Petrom, the Romanian state, via the energy ministry holds 20.64%, Fondul Proprietatea owns 10%, and the remainder is in free float on the Bucharest Stock Exchange and the London Stock Exchange.
Shares of blue-chip OMV Petrom traded flat at 0.3080 lei as at 0937 CET on the Bucharest bourse on Wednesday.
(1 euro=4.6623 lei)