IC Market Espresso 15 Jan 2019

Romanian Banks Will Pay New Tax on Quarterly Basis

Prime Minister’s advisor said tax will be paid quarterly (instead of annually as some guessed previously), current ROBOR implies an annual rate of 1.2%.

Banks were once again in focus on the Bucharest Stock Exchange as the Romanian Prime Minister’s adviser Darius Valcov gave a media statement, shedding some light on the new tax. The tax rates were published before, but it was unclear whether the banks would apply them annually or quarterly. Unfortunately, the latter will be the case. The Government is using the method to squeeze what they consider “extra” cash in order to fill the budget hole.

As expected, the news was met negatively by investors, so the price of both Banca Transilvania (-10%) and BRD Bank (-6%) collapsed on the day. Comparing the price to 18 December 2018, a day before the tax was originally published, Banca Transilvania is down 27% and BRD 23%.

The quarterly tax will apply as follows:

wdt_ID Average of ROBOR 3M and 6M Quarterly Tax rate (% of banks assets)
1 up to 2% 0.0%
2 up to 0.5% above the reference level 0.1%
3 0.51%-1.0% above the reference level 0.2%
4 1.01%-1.5% above the reference level 0.3%
5 1.51%-2.0% above the reference level 0.4%
6 over 2.0% above the reference level 0.5%

Currently, the average of ROBOR 3M and ROBOR 6M stands at 3.075% ( ROBOR 3M: 2.92% – ROBOR 6M: 3.23%). That implies 1.075% above the 2% reference level and an annual assets tax of 1.2% (0.3% quarterly).

Deadline for Sale of Intereuropa Extended

The deadline for sale of Intereuropa has been extended to 7 February 2019. So far, three binding offers have been placed.

According to media, the deadline for submitting binding bids for Intereuropa has been extended to 7 February 2019. The reason for the new postponement of the deadline for submitting tenders is to conduct thorough inspections of interested parties. So far, three binding offers have been placed.

Currently, 72% of the group’s shares are owned by banks which include SID Banka, NLB, Nova KBM, Gorenjska Banka, SKB and Banka Intesa Sanpaolo. As a reminder, banks became the major shareholders as result of Intereuropa failing to service their debt.

This is not the first attempt of the sale; it was already tried in the beginning of 2016, but they failed to agree on the key terms of the sale with Czech-Maltese Tuffieh Funds.

OMV Petrom Key Performance Indicators

Average Brent price (USD/bbl) for Q4 2018 was 68.81 (+12% YoY), while average Ural price (USD/bbl) amounted to 68.33 (+12% YoY). Total hydrocarbon production and totally hydrocarbon sales volume decreased by 5% and 7%, respectively. Total refined product sales increased by 7%.

OMV Petrom has published a document stating some basic provisional information on their economic environment as well as their key performance indicators for Q4 2018, showing mixed results.

wdt_ID Economic environment Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 % change (18/17)
1 Average Brent price (USD/bbl) 61.26 66.82 74.39 75.16 68.81 12%
2 Average Urals price (USD/bbl) 60.77 65.17 72.74 74.16 68.33 12%
3 Average USD/RON FX- rate 3.923 3.786 3.904 3.995 4.083 4%
4 Average EUR/RON FX-rate 4.617 4.655 4.652 4.647 4.660 1%
wdt_ID Upstream Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 % change (18/17)
1 Total hydrocarbon production (kboe/d) (I+II) 165 162 160 160 156 -5%
2 I. Crude oil and NGL production (kboe/d) 73 73 74 74 72 -3%
3 II. Natural gas production (kboe/d) 92 89 86 87 84 -9%
4 Total hydrocarbon sales volume (mn boe) 14.3 13.5 13.7 13.7 13.3 -7%
5 Average realized crude price (USD/bbl) 52.61 57.36 64.65 66.35 59.71 13%
wdt_ID Downstream Oil Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 % change (18/17)
1 Indicator refining margin (USD/bbl) 6.16 6.56 6.72 6.62 5.27 -14%
2 Refinery utilization rate (%) 91 94 49 98 99 8 p.p.
3 Total refined product sales (mn t) 1.26 1.12 1.13 1.39 1.35 7%
wdt_ID Downstream Gas Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 % change (18/17)
1 Gas sales volumes to third parties (TWh) 11.13 12.13 9.51 7.54 9.74 -12%
2 Net electrical output (TWh) 1.05 0.89 0.42 1.04 1.48 41%

According to it, the average Brent price (USD/bbl) for Q4 2018 was 68.81 which is a 12% increase, compared to last year. Average Ural price (USD/bbl) amounted to 68.33 which is also a 12% increase YoY.

When observing Upstream, total hydrocarbon production decreased by 5% and total hydrocarbon sales went down by 7%, amounting to 13.3m barrels. Furthermore, average realized crude price (USD/bbl) amounted to 59.71 which is a 13% increase YoY.

When looking at downstream oil, indicator refining margin (USD/bbl) amounted to 5.27, which is a decrease of 14% YoY.  Next, Refinery utilization rate improved by 8 p.p, reaching 99%.  Note that in Q2 2018 OMV Petrom reported a 49% refinery utilization rate, as it was impacted by the Petrobrazi refinery turnaround.  Total refined product sales amounted to 1.35m tons, which is a 7% increase YoY.

Turning our attention to Downstream Gas, gas sales volumes to third parties decreased by 12%, amounting to 9.74 TWh, while net electrical output increased by 41% amounting to 1.48 TWh.

Note that OMV Petrom will publish their preliminary 2018 annual results on 6 February 2019.  

Belgrade Airport Observes 5.6m Passengers in 2018

In 2018, Belgrade Airport served 5.6m passengers (+5.4% YoY), while in December they served 1.2m passengers (+2% YoY).

French company VINCI reported that in 2018 Belgrade Airport served 5.6m passengers, which is an increase of 5.4% compared to last year. When looking at December alone, they served 1.2m passengers, which is a 2% increase YoY.

As a reminder, Vinci took over Belgrade Airport in December 2018. They were granted a 25-year concession during which the company will both manage and develop the Belgrade airport.  The total value of the concession amounts to EUR 1.2bn and consists out of a one-time payment of EUR 501m, yearly payments between EUR 4.3m and EUR 16m and an investment worth EUR 732m into the airport’s facilities.