OMV Petrom posts higher profits, cuts investments due to fiscal uncertainty

OMV Petrom posted a net profit of 4.08 billion RON (876 million Euro) in 2018, up by 64 per cent over 2017.

The group’s sales increased by 16 per cent year-on-year to 22.5 billion RON (4.84 billion Euro), according to the preliminary report sent to the Bucharest Stock Exchange on Wednesday, February 6.

The higher results were mainly supported by higher oil prices. The average price at which OMV Petrom sold its oil production in 2018 was 62 USD per barrel, up 36 per cent compared to 2017. This and lower operating expenses on the Upstream segment have compensated for the lower production of oil and gas.

Based on the preliminary results, OMV Petrom’s Executive Board proposed a dividend per share of 0.027 RON, up by 35 per cent compared to the one paid last year. The total dividends would thus amount to almost 1.5 billion RON (318 million Euro), implying a 38 per cent pay-out ratio (the share of dividends from the company’s net profit).

Despite the positive results, OMV Petrom also announced that it would revise its growth investment plans due to the unclear business climate in Romania. The estimated investments (CAPEX) for this year stand at 3.7 billion RON (790 million Euro), down from 4.3 billion RON (924 million Euro) in 2018.

OMV Petrom is the most valuable Romanian company listed on the Bucharest Stock Exchange. The group has a capitalization of over four billion Euro (as of February 6) after its shares gained almost 13 per cent since the beginning of this year.