Petrom, the largest company in Romania, controlled by the Austrian OMV group, made 564 million-euro net profit in the first nine months, an increase of 45% on the corresponding period of last year.
The company posted operating losses worth 513 million RON (146.6 million euros) from its refining and marketing portfolio, caused by the trend of crude oil on the international markets and the decline in the profitability of its petrol stations. As a result, the fourth quarter outlook is bleak, in part because of the deficits expected from the refining sector, but also due to the Petrobrazi refinery going through a period of maintenance.
Turnover went up 25% to 2.73 billion euros, a value close to the figures posted for the whole of last year.
The results announced by the petroleum company did not meet the expectations of investors on the Stock Exchange, where the company's shares dropped 3.3%. The deficits posted by its refining and marketing portfolio, induced by the prices of international crude oil per barrel and by the decline in the filling stations' profitability, "ate" 296 million euros into Petrom's market value, which reached 9.56 billion euros as a result.
Operating losses of Petrom from its refining & marketing unit increased five times in the first three quarters compared to the corresponding period of last year, to a total of 513 million RON (146.6 million euros).
"Petrom posted good results for the first nine months, given that the business environment was unfavourable and volatile in terms of extraction and processing," says Mariana Gheorghe, CEO of the company. " is the key word for this period, because the cumulated value of investments rose by more than 120% compared to the first nine months of 2005," Mariana Gheorghe adds.
The volume of investments doubled in the January-September period to 441 million euros, more than half of which were used to upgrade the refineries and expand the fuel distribution network.
"The net profit derived in the third quarter is 8% lower than estimated by CA IB, and EBIT is 4% below expectations. Compared against our estimates, the results are not poor, but do show a significant decline from the third quarter of last year, given that we felt our estimates were conservative, " Adriana Marin, head of the research department of CA IB Securities brokerage firm explained. CA IB analysts had estimated Petrom would post a nine-month net profit of 618.64 million euros.
The company made 160 million-euro net profit in the third quarter, down 29% from the third quarter of 2005. The volume of gas sold went down over the period analysed, while its price was substantially increased.
Petrom's results made a direct impact on the results of the OMV group that reported a 1.3 billion-euro net profit, up only 8%, while sales reached 13.8 billion euros. OMV's shares on the Vienna Stock Exchange dropped 5% due to the announcement of the financial results.
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