In 9M 2022, OMV Petrom recorded sales revenue growth of 60% YoY, EBITDA growth of 180% YoY, and a net income of RON 9.16bn, an increase of 446% YoY.

Sales revenue increased by 60% YoY, and amounted to RON 44.3bn, mainly supported by higher commodity prices and higher sale volumes of petroleum products and electricity. The Refining and Marketing segment represented 49% of the total consolidated sales, while the Gas and Power segment accounted for 51%. Sales from the Exploration and Production segment accounted for only 0.1%, being largely intra-group sales rather than third-party sales in Q3 2021.

Following the growth in sales, operating expenses also increased, growing by 123% YoY and amounted to RON 33.3bn. The largest contributions to this increase came from higher commodity prices in terms of oil and gas, whose purchase costs increased to RON 21.24bn, an increase of c. 3x YoY. Meanwhile, production and operating expenses increased to 3.9bn, an increase of 37.7% YoY, while Production and similar taxes increased to RON 4.49bn, an increase of more than 5x YoY, mainly as a result of higher volumes.

EBITDA increased significantly, growing by 180% YoY and amounting to RON 13.3bn. This was due to a higher contribution of all business segments, following an increase in prices in Exploration and Production segment, significantly higher refining margins in the Refining and Marketing segment, as well as solid margins on gas from storage and third-party transactions in the Gas and Power segment. The aforementioned increased purchases (in terms of both volumes and prices for all products) and higher Exploration and Production taxation also had an influence on the EBITDA result.

Interest income amounted to RON 500.8m, an increase of 350.8% YoY, while interest expenses increased by 73.1% YoY, amounting to RON 566.9m. Combined, this resulted in a net financial result of RON -73.1m, showing an improvement compared to the same period in 2021 when the net financial result amounted to RON -223.6m. The improvement mainly came due to higher interest income on bank deposits.

The income tax amounted to RON 1.7bn, representing an increase of more than 4x YoY, representing an effective tax rate of 16%, roughly the same on a YoY basis. All of this combined resulted in the net income to the majority of RON 9.16bn, an increase of more than 4x YoY.

OMV Petrom key financials (9M 2022 vs. 9M 2021, RONm)

Source: InterCapital research

Moving on to the balance sheet, as compared to the end of 2021, non-current assets decreased by 2.1% YoY, and amounted to RON 31.97bn, mainly as a result of a decrease in property, plant and equipment, as depreciation and the reduction in decommissioning assets following reassessment exceeded the additions during the period. Meanwhile, current assets increased by 45.8% YoY, and amounted to RON 25.2bn, mainly as a result of higher cash and cash equivalents, higher inventories following the increase in volumes and in unit costs, as well as higher trade receivables following higher sales, and higher fin. assets, mainly in relation to derivatives. In total, this would mean that assets amounted to RON 57.21bn, an increase of 14.5% YoY.

Equity increased by 13.9% YoY, and amounted to RON 39bn, mainly as a result of the net profit generated in the current period, which was partially offset by the dividend distribution for the financial year 2021. Total liabilities increased to RON 18.2bn, growing by 15.7% YoY, mainly due to higher current liabilities.

Finally, CAPEX amounted to RON 2.29bn in 9M 2022, an increase of 25.3% YoY. Investments in Exploration and Production amounted to RON 676m in Q3. Refining and Marketing investments amounted to RON 215m, while Gas and Power investments amounted to only RON 1m, with the majority of investments being directed to the planned outage at the Brazi power plant.