OMV Petrom’s profit before tax reached 1.4 billion RON, down by 189 percent in 2020

OMV Petrom Group announces the preliminary consolidated unaudited results for January – December 2020. The profit before tax for 2020 was 1.4 billion RON, lower compared to 4.2 billion RON in 2019.

Consolidated sales of RON 19,717 mn for 2020 decreased by 23% compared to 2019, following negative evolution of the commodity prices and lower sales volumes for petroleum products and electricity. Downstream Oil represented 69% of total consolidated sales, Downstream Gas accounted for 29%, and Upstream for 2% (sales in Upstream being largely intra-group sales rather than third-party sales).

Clean CCS Operating Result amounted to RON 2,287 mn, 50% below RON 4,573 mn in 2019, mainly due to lower commodity prices. The negative evolution in Upstream, triggered by lower crude oil and gas prices, was partly compensated by higher positive contribution from Downstream, mainly deriving from the power business and gains from middle distillate margin hedges. The Clean CCS Group effective tax rate was 16% (2019:16%). Clean CCS net income attributable to stockholders was RON 1,931 mn (2019: RON 3,863 mn).

Special items comprise net charges of RON (425) mn, mainly related to net impairments booked in Q3/20 in Upstream amounting to RON 918 mn before tax, triggered by the updated price assumptions, mainly for oil, and full reversal of impairments for Brazi gas-fired power plant amounting to RON 519 mn before tax, following revision of the long-term power and CO2 price assumptions. Inventory holding losses amounted to RON (396) mn in 2020, mainly as a result of a steep decline in crude oil prices. In 2019 special items comprised net charges of RON (370) mn, mainly related to future estimated soil remediation costs in relation to Arpechim refinery booked in Q3/19 and an impairment of assets held for sale in Upstream booked in Q4/19, partly offset by temporary positive effects from forward contracts in Downstream Gas. Inventory holding gains amounted to RON 42 mn in 2019.

Reported Operating Result for 2020 decreased to RON 1,467 mn, compared to RON 4,245 mn in 2019 driven mainly by the unfavorable market environment, as the lower prices and the COVID-19 crisis had a negative impact on Group’s performance, and by the net impairments triggered by the revision of price assumptions.

Net financial result slightly decreased to RON 12 mn in 2020 (2019: RON 32 mn).

Income tax amounted to RON (188) mn, while the effective tax rate was 13% in 2020 mainly due to fiscal credits (2019: 15%).

Net income attributable to stockholders of the parent was RON 1,291 mn (2019: RON 3,635 mn).

Cash flow from operating activities amounted to RON 5,556 mn, lower than RON 6,803 mn in 2019, mainly as a result of lower commodities prices in the current market environment. Free cash flow after dividends resulted in a cash inflow of RON 652 mn (2019: RON 1,730 mn)

Capital expenditure amounted to RON 3,206 mn in 2020, 24% lower than in 2019 (RON 4,225 mn), mainly directed to Upstream investments of RON 2,382 mn (2019: RON 3,269 mn). Downstream investments amounted to RON 802 mn (2019: RON 903 mn), thereof RON 793 mn in Downstream Oil (2019: RON 818 mn). Corporate and Other investments were RON 23 mn (2019: RON 53 mn).

OMV Petrom Group reported a net cash position including leases of RON 6,486 mn as at December 31, 2020, higher than RON 5,982 mn as at December 31, 2019.