In the fourth quarter, “the result from hedging had a negative impact on (earnings before interest and taxes, or EBIT) of RON95 million, but still below the negative result of RON120 million recorded in the fourth quarter of 2010,” Petrom noted in its financial report.
For the full year, Petrom’s EBIT went up by 53% to RON5.43 billion, “on the back of the increased oil price and lower production costs, which more than offset the negative effects from hedging and unfavorable FX effect due to the weaker USD against RON,” it said.
Petrom posted net profit of RON3.76 billion in 2011, the largest profit ever recorded by a company in Romania.
“To protect the company’s cash flow in 2012 and support this year’s investment program, Petrom entered into new oil price swaps in 2011, locking in a Brent price of approx. $101.0/bbl for a production volume of 30,000 bbl/day for 2012,”the report noted.