Petrom posted a net loss of 307 million lei (EUR69.1 million), versus a profit of RON1.16 billion in the fourth quarter of 2013, according to the financial report released Thursday.
This is the first negative result in a quarter since July-September 2010, when Petrom reported a loss of RON116 million due to a one-off charge for its Kazakhstan operations.
For the full year, Petrom reported a net profit of RON2.1 billion, down 56% from the record RON4.82 billion in 2013.
The company, a unit of Austria’s OMV, announced it will cut its investment program for 2015 by 20%-35% as a result of the weaker market conditions.
The 2015 investment budget is now expected to be between EUR800 million and EUR1.1 billion, of which around 85% will be dedicated to exploration and production operations, Petrom said in its report.
Last year, the company’s capital expenditure rose to RON6.24 billion, from RON5.3 billion in 2013.
“In light of the volatile and potentially prolonged weaker market fundamentals, we are scaling back our investment plans for 2015 and have intensified cost optimization programs whilst maintaining our potential growth projects in the Black Sea,” said Mariana Gheorghe, Petrom’s chief executive officer.
The company reported sales revenue of RON21.54 billion for 2014, down 11% from RON24.18 billion in the previous year, largely due to lower crude and petroleum products sales, that more than offset higher sales of natural gas.
Petrom’s earnings before interest and tax (EBIT) amounted to RON3.34 billion, 44% lower on the year, mainly due to the impact of lower selling prices for petroleum products following the decrease of international quotations and due to the impairments in the G&P segment and in the E&P segment.
The group booked a charge for its Kazakhstan operations triggered by unsuccessful field redevelopment results in the TOC fields earlier in the year, to which a RON755 million impairment of its Brazi gas-fired power plant was added in the fourth quarter. The power business in Romania had a negative contribution to Petrom’s final result triggered by higher natural gas prices and lower electricity prices, the report reads.
Last year, Petrom resumed drilling in the Neptun block of the Black Sea, which it operates in a joint-venture with ExxonMobil. Two new wells were spudded in 2014, and further exploration and appraisal drilling is expected this year.
After the announcement of the financial results, Petrom shares were trading down 1.8% in Bucharest Thursday morning.