Financial crisis drives down Lukoil profit in Romania by 7%

However, its operating profit will drop 6-7 percent, to €55-56 million, because of the international financial crisis, the company’s General Manager, Constantin Tampiza, told Business Standard.

Last year, LukOil Romania posted $1.77 billion (€1.3 bln) worth of business, and earnings before interest, taxes, depreciation and amortization (EBITDA) worth €58.8 million.

For the first nine months of 2008, estimates show a 25 percent drop in net earnings.

Tampiza said LukOil’s Romanian investment plan has been met. “In 2001, we carried out a feasibility study on the LukOil Romania project, according to which we decided to have 300-350 gas stations and nine storage facilities, and modernize Petrotel [refinery]. The project was practically finalized. We secured a 25 percent market share,” he said. “While annual investments used to amount to €100 million, current investments are €10 million for the environment and IT systems,” Tampiza added.

LukOil is Romania’s second-largest fuel retailer, in terms of sales, after Petrom oil group, according to company estimates. For the coming years, the local subsidiary plans to build some 4-5 gas stations annually, along future pan-European highways to be constructed in Romania.