It said its consolidated sales amounted to RON3.559 billion and the decline was partly compensated by efficiency measures implemented across all business segments and business integration benefits.
Downstream Oil represented 64% of total consolidated sales, while Downstream Gas accounted for 33% and Upstream for 3% (sales in Upstream being largely intra-group sales rather than third-party sales), the company said in a statement.
Its EBIT for the first quarter amounted to RON343 million, lower than the result recorded in the first quarter of 2015, of RON494 million, due to lower sales revenues as a result of the challenging market environment, partially offset by the positive effect in other operating income of the final court decisions to reduce the fines imposed by the Competition Council in 2011.
The net result attributable to stockholders was RON291 million, compared with RON349 million in the first quarter of 2015, while earnings per share dropped to RON0.0051 in the first quarter of 2016 from RON0.0062 in the first quarter of 2015.
Compared with the fourth quarter of 2015, sales decreased by 21%, mainly due to seasonally lower sales volumes of petroleum products and the further declining oil price environment, as well as lower sales of electricity, which more than offset the positive effect of the increase in natural gas quantities sold, the company said.
The company’s net financial result was close to zero in the first quarter, compared with a RON135 million loss in the fourth quarter last year.
“In the first three months of 2016, the Group financial results were impacted by the steep drop in oil prices. In response, we have further implemented measures to reduce both operating costs and capital spending. Our investments were prioritized based on long-term value generation and CAPEX was reduced by approximately 28% yoy. This has naturally impacted the total hydrocarbon production in Upstream. However, on the back of our integrated business model, the negative Upstream result for Q1/16 was more than compensated by the positive contribution from both Downstream Oil and Gas,” said Mariana Gheorghe, CEO of OMV Petrom.
She added the company will continue to adjust its activity level, maintaining a strong balance sheet and protecting its free cash flow position, considering a prolonged depressed price environment.
OMV Petrom expects the Brent oil price to average USD40/bbl. It also expects gas demand in Romania to decline vs. 2015, with stronger competition and margin pressure, which is also due to the increasing competitiveness of import gas. In the power market, Petrom anticipates demand for 2016 to be relatively stable, but with weak spark spreads throughout the year.
The company estimates it will invest around EUR700 million in 2016, some 20% less than in 2015, of which around 85% will go into Upstream, while exploration investments will be cut by 50% compared with 2015.