Petrom, the biggest Romanian company, controlled by Austrian petroleum group OMV, made 2.28 billion RON (647 million euros) net profit last year, 61% higher than in 2005. The company continued to benefit from the rise of petroleum prices on the international market.
On the other hand, the company is still losing money from its refining and distribution business.
Petrom's business went up to 3.72 billion euros, an increase of 22%.
"Our results are very good and are a step towards attaining our global goal: to become the leading petroleum and gas company in Europe. Last year's business reassured us that we are on the right track towards attaining the goals set for 2010," stated Mariana Gheorghe, Petrom's chief executive.
The results the company reported have pleased the investors, with Petrom's shares rising by 4.6% on the Bucharest Stock Exchange yesterday, witnessing a market rebound from the steep decline seen in the previous day. The company's market value amounted to 9.44 billion euros yesterday. Petrom's share quotes are below the level reached at the beginning of the year, around 0.62 RON/share.
Petrom's increase in profit was in part generated by a better fourth quarter than in 2005, with the company posting a net profit of 289 million RON (83.3 million euros) for the last three months of the year, compared with 11 million RON in the same period of 2005.
EBITDA amounted to nearly 3.6 billion RON (1.02 billion euros), an increase of 30% on the 2005 level. EBITDA of the fourth quarter stood at 551 million RON (158.8 million euros), up 73% from the fourth quarter of 2005.
Petrom's exploration and production profit, however, was again lowered by the big losses from its refining and distribution operations. The company posted losses of 1.14 billion RON (322.7 million euro) in this department, an increase of 24.3% compared with the losses in 2005.
"Petrom posted results beyond our expectations. First of all, the results were influenced by the favourable conditions in the petroleum sector (that is a high level of petroleum prices), and the exploration and production sector remained the only profitable segment. The 47% increase in EBIT was caused by a number of factors, including the adjustment of risk and expenditure provisions that cut the operating expenses by more than 550 million RON, which had a significant impact. The restructuring of the corporeal assets through the sale of real estate related to the core business resulted in 70 million RON lower amortisation expenses," stated Oleg Calbur, head of the research department of Raiffeisen Capital & Investment.
On the other hand, the results Petrom reported were slightly lower than expected by the analysts of Belgian financial group KBC, namely by 3% in terms of net profit and 11% in terms of EBIT.
Refining margins decreased to 11.83 euros/tonne last year, compared with 22.37 euros/tonne, with Petrom losing out as a result of the increase in the price of petroleum and from the relatively high energy consumption of Petrom's refineries, Arpechim and Petrobrazi.
