In Q1 2024, OMV Petrom recorded a revenue decrease of 10% YoY, a decline in op. result of 1%, and a net income of RON 1.4bn, a 6% decrease YoY.
Recently, OMV Petrom, one of the largest energy producers in Romania has published its Q1 2024 results, and in this overview, we’re bringing you the highlights. Starting off with the revenue, it amounted to RON 8.5bn, a decrease of 10% YoY. This came mainly as a result of lower prices for natural gas and electricity, as well as lower sales volumes of natural gas, which was partially offset by higher sales volumes of electricity and refined products.
Breaking this down by segments, the Refining and Marketing segment’s revenue amounted to RON 679m representing 72% of total sales and decreasing by 13% YoY. Meanwhile, the Gas and Power segment accounted for 28% of total sales at RON 463m, decreasing by 38% YoY, while the Exploration and Production segment, recorded RON 1.4bn of revenue, but this accounts for only 0.2% of the Group sales as this segment mostly relates to intra-group sales only.
Moving on, Clean CCS (current cost of supply) op. result, which is adjusted for special items, amounted to RON 1.77bn, decreasing by 16% YoY, due to the lower contribution from all business segments, mainly due to lower margins from natural gas in the Gas and Power segment, decline of natural gas prices and lower sales volumes in the Exploration and Production segment, and lower refining margin and utilization rate in the Refining and Marketing segment. Meanwhile, the reported Group op. result amounted to RON 1.6bn, decreasing by 1% YoY.
Next up, the net financial result amounted to RON 78m, decreasing by 49% YoY, mainly as a result of the negative effect in relation to the discounting of receivables. Finally, the net income to majority amounted to RON 1.4bn, decreasing by 6% YoY.
OMV Petrom key financials (Q1 2024 vs. Q1 2023, RONm)
Source: OMV Petrom, InterCapital Research
In terms of CAPEX, it amounted to RON 972m in Q1 2024, increasing by 1% YoY. The majority of investments, i.e. RON 772m (Q1 2023: RON 550m) was directed to the Exploration and Production segment, which was mostly directed towards the Neptun Deep project, which is currently in the execution phase. Next up, RON 154m (Q1 2023: RON 380m) of investments was directed towards the Refining and Marketing segment, with the majority of these investments being made in the refining business, for major projects such as the new aromatic complex, sulfur acid gas treatment plant and the new SAF/HVO unit. Following them, we have the Gas and Power investments at RON 22m (Q1 2023: RON 17m), mainly related to the Brazi power plant, while Corporate and Other investments amounted to RON 23m (Q1 2023: RON 12m).
OMV Petrom also provided an outlook for 2024. For the full year, the Company expects the average Brent oil price of USD 85/bbl (previously: RON 80/bbl). They expect the refining margin to be around USD 10/bbl (2023: USD 14/bbl). In Romania, demand for retail fuels, gas, and power is expected to be slightly above the 2023 level. Meanwhile, legislative measures for the gas and power markets are expected to remain in place, some of them until the end of March 2025. They also noted that a new government emergency ordinance, starting 1 April 2024 is making first steps towards market deregulation. Companies that produce and refine crude oil pay a contribution of RON 350 per tonne of crude oil processed for 2023 and 2023; the contribution for 2023 is due for payment at the end of June 2024 and amounts to RON 1.24bn.
Furthermore, an additional tax on revenues was introduced on 1st January 2024, at 0.5% for OMV Petrom S.A. and OMV Petrom Marketing S.R.L. (so this does not affect the entire Group), with an estimated total annual impact of <RON 250m in 2024. The new tax is applicable in 2024-2025. For financial highlights, organic CAPEX is estimated at RON 6.5bn (2023: RON 4.7bn), with increased investments dedicated mainly to the Neptun Deep as well as low and zero carbon projects, mostly SAF/HVO, renewables, and EVs. In terms of the dividend, a base dividend of RON 0.413 DPS, an increase of 10% YoY was approved, at the high end of the 5-10% p.a. range stated in the dividend guidance. Additionally, a special dividend is planned to be announced in 2024. If you want to read OMV Petrom’s full Q1 2024 results, click here.
