Petrom's 2009 profit zooms 33% amid recession

The oil and gas company OMV Petrom said in its preliminary report filed to Bucharest Stock Exchange its net profit jumped 33% from 1.02 billion lei in 2008 to 1.36 billion lei (€321 million) in 2009.

In 2008, the company recorded net profit of 1.02 billion lei and turnover of 16.7 billion lei.

OMV Petrom’s turnover fell 23% to 12.8 billion lei (€3.03 billion), while revenues shrank 26% to 14.3 billion lei (€3.3 billion) from a year earlier.

Expenses narrowed 29% year-on-year to 12.6 billion lei (€2.9 billion).

Erste Group said in a research it expected the company to show a net profit of 1.44 billion lei.

In the fourth quarter 2009, the net turnover suffered 10% decline from a year earlier driven by lower export sales.

“Net profit improved by 87% in the fourth quarter of last year compared with the same period of 2008, mainly due to higher EBIT that offset the lower financial result”, the company said in a press release.

At the end of December the company had total assets of 26.7 billion lei, 7% above end-2008 levels, following the revised investment plan.

Shareholders' equity amounted to 14.05 billion lei as of December 31, 2009 and increased by 4% from the end of 2008, “as a result of the net profit generated in the current year and reduced by a decrease in the not realized portion of the oil price hedging”.

Investments for Petrom SA in 2009 amounted to RON 4,145 mn, a 35% decrease compared to 2008. Investments in exploration and production accounted for 68% of the total figure of 2009, mainly due to the continued focus on field development and production drilling.

"Despite the worsening economic environment, 2009 marked the achievement of several milestones. In E&P, several key projects were put on stream. We commissioned the new gas processing plant in Midia, successfully started production at the Komsomolskoe field in Kazakhstan and at two offshore wells in Romania and we maintained the domestic reserve replacement rate at 70%. Moreover, we significantly improved our cost base and we are on track to deliver on our Petromservice acquisition target to achieve an additional reduction of production cost of 1.5 USD/ boe thanks to the successful integration of E&P Services”, said Mariana Gheorghe (photo), chief executive of Petrom.

The deterioration of gas and fuels market conditions over the course of the year, she continued, have led to the “as-needed”-based operation of Arpechim and Doljchim.

The company has a share capital of 5.66 billion lei, divided into 56.6 billion shares at a face value of 0.1 lei. The majority shareholder is OMV Austria, with 51.01% interest, followed by Ministry of Economy with 20.6% and Fondul Proprietatea with 20.11%.

OMV has a market cap of 15.97 billion lei (€3.8 billion), according to yesterday’s closing quote of 0.282 lei/share.

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