OMV Reports Higher Profits, Mixed Outlook for Gas

Austrian energy company OMV expects to sell more gas than last year's 114 TWh; but the margins on those sales are forecast to be lower in 2019 compared to 2018, it said as it announced its second-quarter results July 31.

Its clean current cost of supplies (CCS) operating result rose 44% in the quarter to €1.047 ($1.16)bn, owing to higher production and growth in sales volumes in upstream and improved performance in downstream oil. Its net income was up 139% at $658mn, and its upstream operating result was up 77% at £644mn. Downstream earnings were up 49% at €474mn. 

The better operational performance was mainly caused by the sales contribution from Libya due to the lifting schedule and OMV’s acquisitions in Abu Dhabi ( Q2 2018), New Zealand (Q4 2018), and Malaysia (Q1 2019). These effects were partly offset by lower production in Romania and Austria, as well as in Pakistan as a result of the divestment of OMV’s Upstream companies in Q2 2018. 

At $6.9/barrel of oil equivalent, the production cost excluding royalties declined by 9% as a result of higher quantities and the positive foreign exchange development. Total hydrocarbon production rose by 17% to 490,000 boe/d, primarily owing to the acquisitions in New Zealand, Abu Dhabi, and Malaysia, as well as the production contribution from Aasta Hansteen in Norway. Total hydrocarbon sales volumes increased to 44.1mn boe from 35.7mn boe in Q2 2018 following the acquisitions.

The downstream gas clean CCS 0perating result fell from €20mn to €0mn owing to a lower gas storage and power business result. The contribution from pipeline operator Gas Connect Austria rose from €20mn to €27mn mainly following higher transportation revenues.

Natural gas sales volumes increased from 24.8 TWh to 26.8 TWh, primarily following a successful market offensive in Germany and the Netherlands, partly offset by lower sales volumes in Turkey and Romania. Net electrical output went down to 0.0 TWh in Q2 2019, down from 700 MWh in Q2 2018, following an unfavourable market environment in Romania and the sale of its Samsun power plant in Samsun, Turkey.