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OMV Petrom 2020 net profit plummets 64%

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Romania's top oil and gas group OMV Petrom [BSE:SNP] said on Thursday its net profit plummeted 64% year-on-year to 1.291 billion lei ($318.5 million/265 million euro) in 2020.

 

The weak performance was mainly caused by the unfavorable market environment, as lower prices and the COVID-19 crisis had a negative impact on the group’s performance, blue-chip OMV Petrom said in an unaudited consolidated financial statement filed with the Bucharest Stock Exchange, BVB.

"The global outbreak of the COVID-19 pandemic continues to have a major impact on global economic development. While oil prices increased during the fourth quarter following supply reductions in 2020 as well as expectations of increased demand and further positive effects from the start of the vaccinations, they still remain significantly volatile," the oil and gas group said.

 

For 2021, the group expects demand for oil products and power to be above 2020, while demand for gas is expected to be broadly similar to 2020.

 

Sales fell 23% year-on-year to 19.7 billion lei in 2020, following a negative evolution in commodity prices and lower sales volumes for petroleum products and electricity. Downstream oil represented 69% of total consolidated sales, downstream gas accounted for 29%, and upstream for 2%.  

 

Capital expenditure amounted to 3.206 billion lei in 2020, 24% lower on the year, mainly directed to upstream investments of 2.382 billion lei. The group said it estimates capital expenditures around 2.9 billion lei in 2021.

 

In the upstream segment, OMV Petrom posted a 985 million lei operating loss, compared to a 2.589 billon lei positive operating result in the same period of 2019.

Total hydrocarbon production shrank by an annual 4% to 52.98 million barrels of oil equivalent (boe) in 2020 due to lower output in Romania.

 

Exploration expenditures fell by an annual 54% to 195 million lei in 2020, due to less onshore drilling activities and less seismic acquisition. 

 

In the downstream segment, the group's operating result rose 21% on the year to 2.317 billion lei in 2020. The Petrobrazi refinery utilization rate decreased to 92% in 2020 from 97% in the previous year, reflecting the two-week planned shutdown in July and lower demand following mobility restrictions, but supported by placing more equity products on all markets while reducing third-party supply.

 

Total sales of refined petroleum products fell 9% year-on-year to 4.99 million tonnes in 2020. Group retail sales volumes were down by 8% following reduced traffic during the coronavirus pandemic. Non-retail sales decreased by 9%, as a result of weaker demand in the context of the pandemic and a steep drop in the aviation business.

 

Gas sales volumes rose by an annual 4% to 57 TWh while net electricity output jumped by an annual 23% to 4.7 TWh.

 

In the fourth quarter alone, OMV Petrom's net profit fell by an annual 47% to 465 million lei. Sales in the fourth quarter of 2020 fell 37% on the year to 4.595 billion lei.

The company has also said that it is proposing a gross dividend of 0.031 lei per share for 2020, same as in the previous year.  

 

Austria's OMV Aktiengesellschaft holds a 51.011% stake in OMV Petrom. The Romanian economy ministry owns 20.639% and 28.35% is the free float on the BVB and the London Stock Exchange.

Shares of OMV Petrom traded 1.5% higher at 0.4060 lei as at 0913 CET on the BVB.


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