OMV Petrom registers lower profit

OMV Petrom net profit has decreased by 19 percent during Q1 of 2014, down to RON 1.075 billion, as compared to the similar period last year, reads the financial report of the company. In Q1 2013 the company had registered a net profit of RON 1.332 billion. Furthermore, OMV Petrom sales shrank by 9 percent to 5.296 billion, against RON 5.789 billion during the similar period last year. “Our financial performance in Q1/2014 is mirroring the higher fiscal burden and a deteriorated market environment. The lower demand on the gas, electric power and fuel markets, along with the lower refining margins were only partially compensated by operational excellence and cost management in all divisions of activity,” stated Mariana Gheorghe, CEO OMV Petrom. During the analyzed interval the number of OMV Petrom employees has decreased by 6 percent, from 20,790 to 19,509. During Q1 the company has produced 16.36 million tons oil equivalent (toe), 1 percent less that during the first three months in 2013 of 16.46 million toe. Hydrocarbons daily output reached 182,000 toe, one percent less than the 183,000 toe level during January-March 2013. Crude and condensed oil output was of 7.83 million toe, downward by 2 percent as compared to 7.99 million toe. Natural gas output went up by one percent, from 1.3 billion cubic metres to 1.31 billion cubic metres. Hydrocarbons production costs have increased during Q1 by 14 percent, from 14.92 USD/toe to 17 USD/toe. The company says the costs went up mainly due to higher costs in Romania, due to unfavourable effects of the exchange rate and due to smaller sales volume.

Quarterly OMV Petrom investments have increased by approx. 25 percent during Q1 2014, reaching RON 1,240 million, i.e. RON 248 million above the level registered during the similar interval last year. During the current year OMV Petrom will carry out investments of over RON 6 billion “on condition of favourable environment for investments and sound market fundaments,” said Mariana Gheorghe, pointing to the so-called tax on special constructions. “The 1.5 percent tax applied on the gross value of constructions, established in January 2014, has a negative impact on operational costs in all parts of company’s activities (especially for exploration and production) and is affecting the efficiency of some of our investment projects,” the official said. The investments for exploitation and production (RON 1,084 million) represented 87 percent of the total value of investments during the first three months of 2014, being 24 percent over the level of the similar interval last year. These investments were directed to the drilling of development wells, to the integrated projects for redeveloping the deposits, capital repairs and deep well operations, surface equipment, as well as to the Totea Deep project. The investments towards refining and marketing (RON 155 million) represented 12 percent of total investments in Q1 2014 and were directed, mainly, towards the modernization program of Petrobrazi refinery. In addition the investments were allocated to energy efficiency improvement projects, as well as to projects of conformity with legal and environment requirements, the company’s report reads. In 2013 the OMV Petrom investments peaked to EUR 1.181 billion, while the net profit registered was of EUR 1.085 billion.

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