Less than a year has passed since the privatisation of the largest company in Romania, and Petrom could already post more than half a billion euros in net profit, a record high for any company in this country.
Mittal Steel Galati (the former Sidex), posted net income of 345 million euros against a 1.693bn-euro turnover last year. No profit estimates for this year were provided, however.
When asked by ZIARUL FINANCIAR about the estimates of Petrom''s management regarding turnover and profit for this year, Gheorghe Constantinescu, the general manager of the company, said he anticipated 2.7-2.9bn-euro turnover.
The petroleum company''s turnover stood at 2.1bn euros last year, a level it has already exceeded nine months into the year.
If its business reaches 2.9bn euros in 2005, Petrom could make some 520 million euros or nearly one cent per share, as long as it maintains its net profitability margin for the first three quarters, 18%. Petrom officials said the 389 million-euro net profit in the first nine months would be improved by yearend, without offering any further details as to how much this final figure might be worth.
Petrom''s'' results were given a boost by the increase in the price of oil and petroleum products on the international market and, to a lesser extent, by the reduction of its own costs due the first streamlining measures imposed by the new majority shareholder.
Petrom''s nine-month profit contributed to the tripling of the OMV Group''s income.
The Austrian Group OMV took over 51% in Petrom last year as part of a transaction worth 1.5bn euros. The Austrians took control of the Romanian company exactly one year ago and replaced almost the entire management, retaining only Gheorghe Constantinescu as chief executive officer.
OMV deregulated the company''s pricing policy, tying it to international petroleum product prices, which allowed it to make record profits compared with the previous years, when a state-run Petrom had made either meagre profits or even losses.
The Austrians brought along some 100 expat experts, whom they placed in key positions within the company to analyse the efficiency of the operations and change operational methods. More than 1,000 Petrom middle management officials were reviewed by OMV with the help of human resources companies.
They proceeded to reassess the operations in Petrom''s portfolio and decided to focus on the core business of the company, namely petroleum and natural gas. As of next year it will outsource every other asset that is unrelated to these two activities.
These assets, Constantinescu explained, were included in a separate operations bundle that is to be put up for sale.
This package comprises the Carpatina mineral water business, a hotel and motel network throughout the country as well as industrial gas production operations. Constantinescu added that the accommodation facilities pertaining to filling stations would probably remain part of Petrom, with the rest of the hotels and motels set to be sold. adrian.mirsanu@zf.ro
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