OMV Petrom starts 2014 with lower financial figures than 2013


Petrom, the largest Romanian oil and gas company, with activities in the exploration, production, refining and petrochemicals, marketing, natural gas and energy sectors, seems that it will not repeat it’s last year’s performance, when the company had a record year in terms of profit. However, the company manages to get high revenues, over RON 1 billion in the first quarter.
OMV Petrom’s net profit decreased by 19 percent in Q1 2014, to RON 1.075 billion, from the same period of last year, according to the company’s financial report released on Tuesday. In Q1 2013, the company saw a net gain of RON 1.332 billion. At the same time, OMV Petrom’s sales decreased by 9 percent to RON 5.296 billion, from RON 5.789 billion, the value of the indicator in the same period of last year. “In Q1/14, our financial performance reflected the higher fiscal burden and weaker market environment. Depressed demand in the gas, power and fuels markets combined with lower refining margins were only partially compensated by the operational excellence and cost management initiatives across all divisions”, Mariana Gheorghe, CEO of OMV Petrom S.A. said in the company’s quarterly report.
The estimated natural gas consumption of Romania decreased by 9 percent in the first quarter of 2014, and the electricity one by 3 percent, mainly due to the lower demand from the industrial sector, reads OMV Petrom’s quarterly report published on Tuesday.
‘Romania’s estimated natural gas consumption decreased by 9 percent from Q1 2013, due to the contraction of the industry sector’s demand and as effect of the mild winter. Petrom’s gas sales volume went down by 18 percent, reflecting also the lower extraction from underground storage facilities, as the company sold additional quantities of natural gas in the injection period in Q2-Q3 2013, instead of storing them for winter,’ according to the report.
At end-Q1, the total volume of natural gas in underground storage facilities, owned by Petrom, was 74 million cubic meters, compared to 28 million cubic meters in late Q1 2013. At the same time, the estimated gross electricity production in Romania increased by almost 4 percent from Q1 2013, whilst the estimated consumption went down by around 3 percent, and thereby the country’s export of electricity exceeded the relevant import, the report also reads.
‘The lower domestic consumption and the steep increase in the production from renewable sources have led to lower electricity prices on the market in Romania. According to the preliminary data released by the OPCOM, the price on the Next Day Market stood at the average value of RON 145 / MWh for the electricity supplied in band and at RON 193 / MWh for the electricity delivered during peak hours, slightly lower compared with the same quarter of last year,’ Petrom officials say.
Regarding the market, regulatory and fiscal environment, Petrom expects the average Brent oil price to remain above USD 100/bbl and the Brent-Urals spread to stay relatively tight. “In Romania, gas and power market demand is anticipated to remain under pressure. Gas price increases for domestic production scheduled for January and April have been duly implemented. (…)  In the power market, prices are expected to be under pressure due to supply dynamics, with additional capacity on stream from renewables, as well as low electricity demand, which reflects, in part, prospective energy efficiency measures”, according to the report. Also, gas demand in Romania is expected to further decrease which will lead to increased competition and margin pressure.
For this year, Petrom plans to invest over EUR 1.3 bn, of which approximately 85 percent will be dedicated to Exploration and Production – E&P (drilling development wells, field redevelopment projects, workover activities / subsurface operations and the Neptun Deep project).
Dacia deposes Petrom of the leader position in terms of turnover
Automobile Dacia Company reported last year a RON 18.4 billion turnover (EUR 4.16 billion), 45 percent higher than last year, the best result in history for Mioveni car plant, which reached a record production of 324,000 cars in 2013. With this result, Dacia overcame Petrom Company for the first time, which reported in 2013 a turnover of RON 18.09 billion (EUR 4.09 billion), according to a report filled in by the oil company and sent to ZF. By 2013, no other company managed to overcome Petrom, ever since the company was created, at the top of the major players in economy. Dacia’s net profit went up last year to RON 337.4 million (EUR 76.3 million), compared to the 2012 profit of RON 277.2 million (EUR 62.3 million).

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