OMV Profits Slip on Prices in Q4
Austria’s OMV has reported a fall in core fourth-quarter profits, as production gains were offset by weaker prices
The oil and gas company’s clean current cost of supplies (CCS) earnings before interest and tax sunk 26% yr/yr to €781mn ($859mn), it said February 6. Clean CCS net income came in at €420mn in the three-month period, down 35%.
Production climbed 13% yr/yr to 505,000 boe/d – the first time it has exceeded an average of 500,000 boe/d in a quarter, thanks to asset purchases in New Zealand, Malaysia and the UAE. Growth was driven by a 18% rise in gas extraction to 156.2bn ft3, while oil output increased 8% to 19.7mn barrels.
Still, OMV’s upstream clean operating income dropped 21% to €459mn, owing to large hedging gains a year earlier, asset depreciation and more bearish prices, particularly for gas.
Downstream, clean CCS operating earnings declined 13% to €385mn, on weaker petrochemicals performance. But this weakness was partly offset by a 29% growth in downstream gas profit to €82mn, on the back of higher gas sales and storage revenues.
Operating cash flow was down only 12% at €981mn, but organic free cash flow before dividends slumped 34% to €378mn. OMV plans to increase its dividend to €2/share for 2019, up from €1.75 issued for the previous year.