IC Market Espresso 7 Feb 2020

OMV Petrom Preliminary FY 2019 Results & Dividend Proposal

In 2019, the company recorded an increase in sales of 13% YoY, decrease in EBIT of 19% and a decrease in net profit of 11%. OMV Petrom also proposed a dividend of RON 0.031 per share (DY 7.3%).

OMV Petrom published their FY 2019 preliminary report. According to it, sales for 2019 amounted to RON 25.5bn representing an increase of 13%. Such a high increase could be attributed to the higher sales volumes and prices for natural gas, higher sales volumes for petroleum products and higher prices for electricity, partially compensated by lower selling prices for petroleum products. Of the consolidated sales, Downstream Oil accounts for 72% of, Downstream Gas for 26% and Upstream for approximately 2%.

Clean CCS Operating result decreased by 5% to RON 4.57bn, reflecting the unfavorable oil price environment and the decrease in refining margin.

Special items comprise net charges of RON -370m, mainly related to future estimated soil remediation costs in relation to Arpechim refinery booked in Q3 2019 and an impairment of assets held for sale in Upstream booked in Q4 2019, partly offset by temporary positive effects from forward contracts in Downstream Gas. Inventory holding gains amounted to RON 42m in 2019.

Operating profit for the year 2019 decreased by 19% to RON 4.24bn. Such a high drop came mainly on the back of unfavorable market environment as well as net special charges in 2019.

Going further down the P&L, net financial result improved from a loss of RON -299m in 2018 to RON 32m. The result can be attributed mainly to the positive impact from the discounting of receivables, higher interest income on bank deposits and interest income in relation to clarification of a tax-related topic recognized in Q1 2019. As a result, the profit before tax for 2019 of RON 4.28bn decreased compared to 2018 EBT of RON 4.91bn.

In 2019, the OMV Petrom recorded a net profit of 3.63bn representing a decrease of 11% YoY.


Yesterday, OMV Petrom also published an announcement on the Bucharest Stock Exchange proposing a dividend of RON 0.031 per share, which would represent a dividend increase for the 3rd consecutive year. The dividend translates to a yield of 7.3%, at the current share price. Note that the ex-date was not stated.

The Executive Board’s final proposal for the distribution of dividends for the financial year 2019 will be submitted for approval to the April 2020 Ordinary General Meeting of Shareholders after the approval by the Supervisory Board.

In the graphs below, we are bringing you an overview of OMV Petrom’s historic dividend payout and dividend yield.

BRD Bank Preliminary FY 2019 Results

In 2019, BRD recorded an increase in net interest income of 8.12% YoY, increase in net banking income of 5% and a net profit decrease of 4%.

As BRD Bank published their preliminary FY 2019 results, we are bringing you key takes from it. In 2019, the Group has recorded a net interest of RON 2.15bn, showing a strong increase of 8.12% YoY. Such a high increase came on the back of the expanding volumes across all customer segments. To be specific, BRD witnessed further retail loan growth (+3.5% YoY), increasing lease financing and loans to large corporates (net loans including leasing up by +4.6%* YoY).

Besides that, net fee and commission income went up by 1.1%, amounting to RON 805.6m. As a result, net banking income amounted to RON 3.27bn, showing a strong increase of 5% YoY.

Going further down the P&L, operating expenses witnessed an increase of 15%, amounting to RON 1.68 which came on the back of higher staff costs and regulatory expenses (cumulated contributions to Deposits Guarantee and Resolution Funds and tax on financial assets), while other costs categories were contained at +2.5% YoY.

The P&L was further boosted by cost of risk write-backs in the amount RON 203.7m driven by strong recovery performance from previously written off exposures, exceptional insurance indemnities payout (recognized in Q3 2019) and good control of risk at loan origination.

In 2019, BRD recorded a lower net profit by 4% YoY (RON 1.5bn), as a result of the above-mentioned increase in operating expenses.

Balance Sheet

The Group’s assets grew by solid 3.7% YoY to RON 57.77bn. Such an increase came mostly on the back of the growth of loans and advances to customers (+2.3% YoY). On the liabilities side, deposits from customers increased by 1.5%, amounting to RON 45.9bn. As a result of the higher loan than deposit growth, L/D ratio increased by 0.5 p.p.to still relatively low 66%, showing room for further loan growth.

In 2019, the Group’s NPL ratio stood at 3.1%, which is still below the system level of 4.3%.