Petrom reports first-quarter profit down 48%

Romania’s largest company by market value, Petrom, reported Q1 net profit of 506 million lei, in first quarter of 2009, 48% below prior-year period, reflecting the lower oil price environment that chopped its revenues by a third.
In first three months of last year, Petrom posted a net profit of 977.03 million lei. The company’s turnover stood at 3.04 bln lei in Q1 2009, 18.3% lower than 3.72 billion lei a year earlier.

"The unfavorable oil price environment and deteriorating economic situation that continued through the first quarter of 2009 burdened our results”, said Mariana Gheorghe, CEO of Petrom.

However, the reduction of Q1 net profit was cushioned by the company’s hedging strategy. The operating profit was largely dented by the low oil price environment, driving it 83% below Q1 2008.

In January-March 2009 interval, Petrom’s revenues stood at 3.469 bln lei (813 million euros), down 32% from 5.146 bln lei in first quarter 2008. The total costs of the company contracted by 26.6%, down to 2.929 bln lei (686.55 bln euros), versus 3.99 bln lei in prior-year quarter.

Analysts polled by Reuters projected Petrom’s profit at 416 million lei (97.5 million euros) for first quarter, down 48% from a year earlier.

The Austrian-based OMV is the majority shareholder of Petrom, holding an equity position of 51.01% while Ministry of Economy folds 20.64% and Fondul Proprietatea 20.11%.

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