Petrom Bucuresti (SNP), the largest Romanian company, expects to derive net unconsolidated income worth 670m euros (2.4bn RON against last Thursday's exchange rate of 3.61 RON/EUR) this year, up 26% in euros from the figure reported in 2007, according to with the spending and revenue budget for 2008.
The budget is to be approved during the April 22 General Meeting of Shareholders. In RON, the profit increase budgeted by Petrom amounts to 36%.
Last year, Petrom's income dropped by 22% in RON against 2006 and reached 1.78bn RON (532m euros), in line with unconsolidated financial results, calculated in line with RAS.
Petrom officials expect to generate these figures amid the high price of oil, which has recently reached a level of 115 dollars per barrel, but warn about the continued volatility of the Romanian macroeconomic environment.
According to the document, Petrom is set to reach net turnover worth 11.97bn RON (3.3bn euros) this year, down almost 10% on the 2007 figure, while the company's representatives expect production volumes to rise as an intensive drilling programme is launched and tighter expense control is applied.
However, some analysts say that the budgeted parameters may be exceeded given that Petrom's income/expenses budgets are more conservative.
Thus, the 2007 budget was surpassed by 15% in terms of turnover and 5% in terms of net income. ING Bank forecast Petrom will reach net income worth 3.57bn RON, almost double the level hit last year, particularly considering the strong rise in oil prices, especially benefiting companies with strong exploration and production segments.
This year, Petrom will invest 1.7bn euros (6.1bn RON), 54% more than last year, with the largest part of the sum, namely 1bn euros (3.34bn RON), to be exclusively destined to the exploration and production segment, which generates most of Petrom's revenues.
On the refining segment, the company will invest 360m euros (1.3bn RON), while marketing investments will amount to 125m euros (451m RON). For the gas and electricity segment, Petrom will earmark 200.5m euros (722m RON). Petrom projects a slight output increase this year from 2007, to the equivalent of 71.1 million barrels of oil, especially as the company managed to stabilise production in mid-2007.
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