Romania's largest company, Petrom, which was acquired by Austrian OMV Group last year, presented the first details of its 2004 financial statements on Tuesday.
Simultaneously, Petrom shares fell 4% on the Bucharest Stock Exchange.
Petrom's financial statements for 2004 are yet to be completed, however the company announced yesterday it had incurred significant expenses in terms of provisions made in the final quarter of 2004, which were not evident in the third quarter.
A large part of these expenses were for the investments scheduled for the next few years.
"Although the financial statements have not been finished or approved by the board, I can say that the combined effect of all these factors (the provisions) will most likely lead to a lack of disbursable profits and profit tax for 2004," Petrom officials said yesterday. The company is due to publish its financial results on May 18.
"It is impossible to tell whether Petrom concluded the year with losses or whether its profits were not high enough for it to pay dividends," a broker said on Tuesday.
When approached by Ziarul Financiar, Petrom representatives issued no additional comment on the financial statements for last year.
Petrom finished trading on Wednesday at 4,250, down 5.56% since Tuesday. Its shares also fell 4.3% on Tuesday to 4,500 ROL, being among the most liquid shares on the market.
The company had reached an all time high of 5,300 ROL at the end of February. Since then, however, its market capitalisation has shed more than 1.5bn euros, falling to less than 7bn euros.
At the end of last year Petrom made a number of provisions, deductible against profit tax, in respect of the investment programme it is planning for this year. It also made certain other provisions that did not show in the company's statements at the end of the third quarter.
OMV officials say the investments Petrom has scheduled for 2005 amount to approximately 400 million euros.
Petrom officials recently announced that the company would allocate 200 million euros to investments for upgrading technologies used in petroleum exploration and drilling equipment management.
Petrom currently has around one billion euros in cash following the capital inflow from OMV.
The Austrian company now owns 51% in Petrom.
The Romanian state is the important minority shareholder with 40.7%, while the European Bank for Reconstruction and Development owns 2%.
The remaining 6.23% are held by stock market investors. vlad.nicolaescu@zf.ro
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