Petrom reports better-than-expected third-quarter earnings

Petrom, Romania’s biggest company reported better-than-expected decline in net profit for the third quarter, of only 2% to 615 million lei year-on-year, on 10% increase in earnings before interest and taxes. In third quarter 2008, the company recorded a net profit of 626 million lei.
„Despite challenging economic conditions, we recorded good overall performance in the first nine months and the third quarter 2009, as results were supported by the effects of our timely response to the deteriorating environment: crude oil hedges for 2009, adjustment of our cost base and operations and the financing secured for our key projects”, said the CEO of Petrom, Mariana Gheorghe (photo).

However, third-quarter results were affected by lower crude price and deteriorating margins, but the increased EBIT has managed to compensate the decline.

The oil company recorded third-quarter EBIT of 705 million lei, 10% more than 643 million lei a year earlier, largely due to the decrease in operating expenses, partially offset by the crude price. As for the financial result, it fell to 36 million lei in third quarter this year, from 139 million lei in Q3, weighed down by currency depreciation and devaluation of financial assets, which was partially offset by crude oil hedges.

Petrom’s turnover increased 22% in third quarter to 3.53 billion lei, from 2.89 billion lei in second quarter. Third-quarter turnover stood 25% below year-ago period.

Crude oil hedges have maintained Petrom’s 9-month net profit to 1.54 billion lei (364 million lei), one third lower that the same period of last year, as the oil company’s business shrank 27% to 9.46 billion lei (€2.24 million) year-over-year.

For January-September period, Petrom reported net result of 2.29 billion lei, and turnover of 13 billion lei.

“However, our cumulative results for the first nine months were affected by lower crude price, difficult economic conditions and deteriorating margins, marked by the downturn in the commercial and industrial sectors. In the near-term, we expect the oil and energy sector and the Romanian macroeconomic environment to be marked by volatility. In response to the current challenging environment, we will stay focused on our strategic directions and continuous investments, although at lower level, while further reviewing our restructuring options and assessing our business opportunities,” said Mariana Gheorghe.

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