On Wednesday, Romania’s oil and gas company OMV Petrom said in its first-quarter unaudited consolidated financial statement that the company posted a deep year-on-year fall in its first-quarter net profit, negatively affected by the coronavirus pandemic.
In the first three months of 2020, the company posted RON653 million (USD147 million) of net profit, down by 43% year-on-year even when sales climbed by 12% in the same period to RON6.08 billion (USD1.38 billion).
Higher natural gas volume was sold in the first quarter, partially compensating the lower commodity prices and volumes of electricity sold. From the total consolidated sales, downstream oil made up for 63% while the downstream gas made up for 35% and upstream for 1%.
The company quotes the restriction efforts globally to limit the spread of coronavirus possess a negative impact on prices and demand for oil products, gas, power, and crude oil. OMV Petrom also expected demand would be significantly lower in 2020 compared to last year.
The lower oil and gas prices, combined with higher depreciation, have dented the company’s upstream segment. The segment posted an 80% yearly fall of clean operating results at RON157 million (USD35.6 million). Meanwhile, the total hydrocarbon production slid by 0.8% to 13.2 million boe.
In the downstream segment, the operating results soared by 75% year-on-year to RON661 million (USD150 million) as the downstream oil result showed a significant increase while the downstream gas result only showed a marginal increase.
The total refined product sales slowed by 1% year-on-year as the impact of the coronavirus outbreak had just started to be visible at the end of March. Gas sales volumes rose by 52% yearly to 18.61 TWh.
OMV Petrom posted a 16% year-on-year jump of capital expenditures (CAPEX), to RON958 million (USD217.6 million). The company has cut the planned CAPEX for 2020 from RON4.2 billion (USD954 million) to RON3 billion (USD681.4 million), mainly by curbing the prioritization of drilling activity and delaying petrochemical and retail projects.
Exploration expenditures slumped by 22% annually in the period to RON72 million (USD16.3 million) as the company slowed exploration drilling and testing activity.
Reacting to the report, shares blue-chip OMV Petrom traded flat at RON0.3190 in Bucharest at 07.41 GMT.
