OMV Loses in Poor Q1 Market
Austrian energy firm OMV made a net loss of €77 ($82)mn on Q1 trading, it said April 29, driven by the overall lower global commodity price environment and resulting asset value write-downs in New Zealand, Tunisia, and Austria.
This is down from a loss of €28mn in Q1 2019. Its operating result fell by 89% to €81mn from €766mn. Its debt gearing ratio went up from 14% to 19% following major purchases last year; and its return on average capital employed fell from 12% to 8%.
The clean current cost of supplies operating result declined by 8% from €759mn to €699mn, of which upstream contributed €137mn, down from €393mn; and downstream €501mn, up from €374mn on bigger margins.
Commenting on the effects of the Covid-19 crisis, it said the containment measures "have a major impact on global economic development and have led to a sharp decline in demand for products and services. At the same time, oil supply was increased due to a conflict between major oil producers enforcing the effect of reduced demand for oil and oil products.... OMV is implementing targeted measures to safeguard the company’s financial strength, namely reduction of investments, cost cutting and postponing acquisition projects."
It expects the average Brent oil price to be $40/barrel this year and the average realised gas price €10/MWh as "significant global LNG oversupply triggered by massive capacity ramp-ups further depressed gas prices," but it expects to sell more gas this year than last, when it sold 137 TWh. It expects its own production to be between 440,000 boe/d and 470,000 boe/d, down from last year's actual 487,000 boe/d, depending on the security situation in Libya and imposed production cuts by governments. Of last year's output, over half – 279,000 boe/d or 593.1bn ft³ – was gas.
Its gas business grew by 18% to €92mn from €78mn last year, mainly as a consequence of a better performance of the storage business. Natural gas sales volumes stepped up significantly in the quarter from 38.1 TWh to 48.0 TWh, driven by higher sales volumes in Romania, the Netherlands and Belgium. The increase in natural gas sales volumes in Romania was partially a consequence of allocations to the regulated gas market, it said.