Petrom shares drop due to poor financial results

“The results for the first six months, although negative, match our forecasts,” Petrom’s CEO, Mariana Gheorghe, announced at a press conference yesterday. She said another reason for the drop in net profits is the lower oil price on international markets.

Petrom’s owner, Austrian oil and gas group OMV, also posted lower operational profits - an 8 percent drop year-on-year, to €1.07 billion. On the Vienna Stock Exchange, OMV shares plunged 4.64 percent during yesterday’s trading session.

The company’s operational profit (EBIT) dropped 47 percent, to €291.7 million, from €546.5 million year-on-year, because of lower oil production. Petrom’s turnover was also 14 percent lower year-on-year, at €1.63 billion, due to decreasing prices and sales.

Meanwhile, the company’s investments rose 74 percent, to €408.9 million. Operational expenses were reduced by 7 percent, both because of a drop in utility costs, and lower salaries and taxes. Petrom laid off 22 percent of its staff based on the restructuring plan it is applying following its takeover by OMV. The company currently has 29,667 employees.

Negative results have affected the company’s shares. On the Bucharest Stock Exchange (BVB), Petrom stocks tumbled to RON 0.495 (€0.153) per share, a minimum low for more than a year. The 3.88 percent drop took the company’s market capitalization down to €8.62 billion yesterday, €490 million lower compared to Wednesday’s session.

Brokers say Petrom shares were both negatively affected by poor financial results and the general downward trend of the stock exchange. “The outlook was clearly lower, everybody was expecting a drop in financial results,” according to Rares Nila, Manager of BT Securities, the brokerage division of Banca Transilvania.

“The results for the first six months, although negative, match our forecasts Mariana Gheorghe CEO, Petrom