According to the preliminary 2022 results, OMV Petrom achieved a sales revenue growth of 136% YoY in 2022, an EBITDA growth of 141%, and a net income of RON 10.3bn, an increase of 260% YoY.
OMV Petrom has published its preliminary results for 2022, giving us a glimpse into the Company’s business operations for Q4, as well as the entire year. On an FY basis, revenue amounted to RON 61.34bn, an increase of 136% YoY. This growth was driven by higher commodity prices and higher sales volumes of petroleum products and electricity, partly offset by lower gas sales volumes. Refining and Marketing segment represented 51% of the total consolidated sales, while the Gas and Power segment accounted for 49%. Revenue from the Exploration and Production segment accounted for only 0.1% after the divestment of Kazakhstan subsidiaries in Q4 2021, with the revenue in this segment being largely intra-group sales rather than third-party sales.
In Q4 2022, the Company recorded a revenue increase of 91% compared to Q4 2021, again supported by the same aforementioned factors. However, in Q4, we can already see the slowdown in the revenue growth, as compared to the triple-digit 136% YoY, the double-digit 91%, even though it is significant, is still slower overall.
Looking at the operating expenses, the total OPEX increased by 125% YoY and amounted to RON 50.65bn in 2022. The increase was driven primarily by the purchases of inventory (meaning oil&gas), which increased by 187% YoY and amounted to RON 30.38bn. Other categories also experienced growth, with production and op. expenses increasing by 69% YoY and amounting to RON 6.92bn, production, and similar taxes increasing by 173% YoY, amounting to RON 5.44bn. Depreciation also increased, growing by 173% YoY and amounting to RON 5.06bn.
The particularly interesting component here is the tax on OMV Petrom. They note in their report that in the context of the energy crisis in Europe, additional regulatory measures such as subsidy schemes, gas and power price caps, and over-taxation or the EU solidarity contribution are being implemented. In Romania, high taxes and measures such as royalties on energy companies have been present for quite some time now. In 2022, the Government decided to implement an additional tax on companies in the crude petroleum, natural gas, coal, and refining sectors. It is calculated based on the taxable profits of those companies, which are above a 20% increase of the average taxable profits generated in the period 2018-2021. OMV Petrom notes that they expect to be excluded from this Ordinance, as they have less than 75% of revenue in the defined areas, i.e. extraction of crude, extraction of natural gas, extraction of coal, and refining business. Furthermore, they note that in 2022, OMV Petrom already contributed royalties, supplementary taxes, and other industry-specific contributions around RON 7.3bn, in addition to the RON 2.2bn in corporate income tax. This would mean that in total, the industry-specific taxes increased by around 4 times compared to 2021.
Coming back to the results, the Company recorded an EBITDA of RON 17.1bn in 2022, an increase of 141% YoY. This was due to much higher contribution from all business segments, following the rise in prices in the Exploration and Production segment, increased margins on gas from third party transactions, and higher power margin in the Gas and Power segment, as well as higher refining margins in the Refining and Marketing segment. The result is of course also under the influence of increased purchases, both in terms of volumes and prices for all products, and higher industry-specific taxation. In these conditions, the EBITDA margin amounted to 27.9%, an increase of 0.55 p.p. YoY. In Q4 2022, they recorded an EBITDA of RON 3.8bn, an increase of 62% YoY. This would mean that again, even though the growth is present, there has been a slowdown in the last quarter, which is expected as the prices of oil, but especially gas, have somewhat stabilized. This would mean that the Q4 2022 EBITDA margin amounted to 22.2%, a decrease of 4 p.p. YoY.
The net financial result was a slight gain of RON 17m, compared to a loss of RON 311m in 2021, mainly due to higher interest income on bank deposits. As a result of the positive developments, the net profit amounted to RON 10.3bn, representing an increase of 260% YoY, and a net income margin of 16.8%, an increase of 5.78 p.p. YoY. In Q4 2022 however, we can see the full effect of the slowdown in profitability. Even though on a yearly basis we can see massive increases, in Q4 2022 the net profit amounted to RON 1.14bn, representing a decrease of 4% YoY. This would also mean that the net profit margin more than halved, from 13.3% to 6.7%, a decrease of 6.56 p.p. YoY.
OMV Petrom key financials (Preliminary 2022. vs 2021, RONm)
Source: OMV Petrom, InterCapital Research
Moving on to CAPEX, it amounted to RON 3.55bn in 2022, an increase of 26% YoY, mainly directed to Exploration and Production with investments of RON 2.56bn. Refining and Marketing investments amounted to RON 835m, an increase of 9% YoY, while Gas and Power investments amounted to RON 97m, an increase of over 7x YoY.
OMV Petrom also notes several key events for 2022. First of all, the declaration of the commercial discovery regarding the Neptun Deep project was submitted to the National Agency for Mineral Resources, which is an intermediate step towards the final investment decision, which is planned for mid-2023. They also took the final investment decision for a EUR 130m investment into a new unit of aromatic products at the Petrobrazi refinery. Finally, OMV Petrom successfully completed a 10% land share capital increase. Of the RON 567m total capital increase, RON 446m was cash subscription by shareholders.
