OMV profits fall on lower sales, crude price, dollar
VIENNA (Reuters) - Austrian oil and gas group OMV (OMVV.VI) reported a steeper-than-expected drop in second-quarter underlying profits on Tuesday on lower sales volumes and crude prices, a weak dollar and write-offs.
OMV, which like its peers has been hit by declining demand in Europe, said underlying operating profit (clean CCS EBIT) fell 15 percent to 733 million euros ($974 million) and underlying net income fell 29 percent to 321 million euros.
Average forecasts in a Reuters poll were 743 million euros and 336 million euros respectively.
OMV said lower sales volumes in Libya, Britain and New Zealand had hurt its profits, as had exploration expenses that rose 72 percent to 98 million euros mainly due to write-offs in Tunisia and Britain and increased seismic activities in Norway.
The company said it expected refining margins to remain at lower levels this year due to subdued demand and persisting overcapacity, and retail volumes would remain under pressure due to the weak economic environment in its core markets.
OMV reported last month its second-quarter refining margin fell 18 percent to $2.48 per barrel on weaker spreads, and production slipped due to issues in Austria, Kazakhstan and Libya.
On Tuesday, OMV said production levels had largely returned to normal in Libya after interruptions during the first half of the year. The north African country accounted for about 10 percent of OMV's total production before the 2011 civil war.
OMV is switching focus from refining and selling oil and gas to exploration and production, as Europe's refining industry battles declining domestic demand - which has forced a painful consolidation - and growing competition from Russia.
($1 = 0.7523 euros)
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