Petrom posts record profit

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Company’s profit and sales rose to new highs last year, RON 3.9 bln and RON 26.2 bln respectively, mainly due to the positive evolution of oil products prices, after that in 2011 recorded a net profit of RON 3.759 bln and sales of RON 22.614 bln.

Petrom posted a record profit last year of RON 3.946 billion, up to 5 pc and 16 pc sales climbed to a new high of RON 26.258 billion, mainly due to the positive evolution of oil prices. In the previous financial year, Petrom recorded a net profit of RON 3.759 billion and sales of RON 22.614 billion. “After a recent period of volatile crude prices and macroeconomic uncertainty, 2012 was a year of relative stability, with strong operational and financial performance for Petrom. This was the result of the preceding years of high capital investments in our core business and a focus on operational excellence. On the operating side, we largely offset the natural decline of hydrocarbon production and pursued exploration opportunities, started commercial operations at Brazi power plant and achieved incremental improvements of our refinery yield structure”. Mariana Gheorghe, CEO of OMV Petrom said in the financial report, a press release informs.Petrom investments rose 3 pc last year, to RON 4.93 billion from RON 4.803 billion in 2011. “It will be a year of dialogue with the authorities. Fiscal regulatory framework must be a win-win situation. (…) We want the result to be optimal for both interests,” said Mariana Gheorghe in a press conference. She added that if the fees continue to be higher, the result will be less investment.Also, Mariana Gheorghe mentioned that the preliminary estimates of the first deepwater exploration well Petrom drilled early 2012 in joint venture with ExxonMobil indicate a gas discovery. “We also initiated the largest 3D seismic program in the Romanian sector of the Black Sea, in both deep and shallow waters. In 2013, our efforts will continue to focus on operational excellence, stabilize production volumes and capitalize growth opportunities via exploration works and exploration license acquisitions. To this end, one of our top priorities is the discussion with authorities to define a long-term, stable and reasonable fiscal and regulatory framework, prerequisite for the high, long-term investments required by the oil and gas industry,” Petrom official said. R&M (Refining and Marketing) represented 82 pc of total consolidated sales, G&P (Gas and Power) accounted for 14 pc and E&P (Exploration and Production) for approximately 4 pc, said the financial report. The Group’s EBIT amounted to RON 5,662 M, 15 pc higher than 2011, mainly due to the positive price environment and lower special charges (2011 was burdened by the fine received from the Competition Council) as well as lower exploration expenses. Clean CCS EBIT (current cost of supplies of earnings before interest and taxes) increased to RON 5,855 M in 2012. Clean CCS EBIT is stated after eliminating net special expenses of RON 362 M and inventory holding gains of RON 169 M. The significantly lower net financial result of RON 836 M was negatively influenced by the special charges of RON 209 M for alleged late payment interest following the receipt of the preliminary results of the fiscal review for the years 2009 and 2010, the discounting of receivables and lower FX gains in 2012 related to USD loans given by Petrom to its Kazakh subsidiaries as well as negative FX effects related to the EUR bank loans. Profits from ordinary activities increased to RON 4,826 in 2012 M and the related corporate tax charge of RON 880 M increased accordingly compared to 2011. Petrom contributed last year with EUR 1.27 billion on OMV EBIT, representing 41 pc of the earnings of  EUR 3.1 billion reported by Austrian oil and gas group, which recorded a advance of 24 pc than in 2011.In 2012, Petrom’s consolidated gas sales were slightly lower than in 2011, in line with estimated total gas consumption in Romania, which decreased by 4pc due to overall lower market demand. At the end of 2012, the total volume of natural gas in storage owned by Petrom amounted to 398 million cbm compared to 406 million cbm at the end of 2011. The estimated Romanian gross electricity production decreased by 5 pc in 2012 versus 2011, while the estimated consumption increased by 0.2 pc, thus turning Romania from a net exporter into a net importer of electricity. For 2013, Petrom expect the average Brent oil price to be above USD 100/bbl and the Brent-Urals spread to stay relatively tight. In the local gas market, the oil company anticipates a stable demand, albeit not without challenges. OMV Petrom management considers an investment plan for 2013 of over EUR 1 billion and intends to propose allocation of dividends for 2012 financial year.OMV Petrom employees will receive this year a wage increase which will reflect the company optimization, Mariana Gheorghe said, but she did not specify more. She also said that Brazi power plant  activity will be stopped for a month, from April to May, for mounting a gas treatment facility. Regarding Arpechim Pitesti rafinery, it will be demolished if a buyer will not be found.