The company said in its earnings report released Wednesday its consolidated sales declined 11% in the first half, to RON10 billion.
In the second quarter, the oil and gas company posted a net profit of RON214 million, down 74% on the year.
It said consolidated sales decreased by 32% compared with the second quarter of 2019, negatively impacted by lower commodity prices and lower sales volumes of petroleum products, only partially compensated by higher sales volumes of natural gas and electricity.
The global outbreak of the COVID-19 pandemic continues to have a major impact on global economic development. While oil prices slightly increased during the second quarter following supply reductions, they still remain significantly volatile. Recent increases in COVID-19 cases around the world could lead to delays in the assumed demand recovery, following the response of governments and citizens.
The consequences of the COVID-19 pandemic and the extent and duration of the economic impact cannot be reliably estimated from today’s perspective. However, OMV Petrom is closely monitoring the development and regularly evaluating the impact on the Group’s cash flow and liquidity position, the company said.
For the full year 2020, OMV Petrom expects the average Brent oil price to be at $40/bbl, compared with $64/bbl in 2019.
Following the COVID-19 outbreak, demand for oil products and power is expected to be below 2019, while demand for gas is expected to be broadly similar to 2019, supported by gas intensive industries.
OMV Petrom expects to invest around RON3 billion this year excluding acquisitions (compared with RON4.2 billion in 2019). It plans to cut operational costs and exploration and appraisal expenditures by RON320 million.
“We remain keen to see the Neptun Deep strategic project being developed. The final investment decision depends on a range of factors including stable and competitive fiscal framework and the right to freely market the gas,” the company said.