By Sylvia Westall and Eva Komarek
VIENNA (Reuters) - OMV's (OMVV.VI: Quote, Profile, Research, Stock Buzz) 2008 earnings will rise substantially compared to 2007, the oil and gas group's Chief Executive Officer said at the Reuters Central European Investment Summit on Tuesday.
Despite the financial crisis, OMV is bullish on its full-year outlook and its dividend will not be lower than in 2007, CEO Wolfgang Ruttenstorfer said in an interview.
"It will be definitely a very good result, definitely a substantially better result than last year," CEO Wolfgang Ruttenstorfer said, referring to earnings in 2008.
"Our cash flow this year will be a record cash flow, an all-time high. That's quite certain," he said, adding however that 2009 might be less attractive from a cash-flow perspective, because the oil price is expected to come down.
Financing is not easy in the current economic environment, Ruttenstorfer said, but OMV has untouched credit lines of 1.875 billion euros ($2.5 billion) which it can draw on if needed.
"They are completely open to finance our programme. But we haven't touched them and we don't intend to touch them for the foreseeable future," he said at the event, being held at the Reuters office in Vienna.
Capital expenditure in 2009 might be lower than in 2008, Ruttenstorfer said. He said OMV wants to invest around 3 billion euros over the next couple of years on average.
Shares in OMV were up 7.4 percent by 1130 GMT, outperforming a 5.3 percent rise in the DJ Stoxx European Oil & Gas index . The stock has halved in value since the start of the year, while the sector index has shed a third.
OIL AND GROWTH OUTLOOK
Ruttenstorfer expects the average oil price in 2009 to be similar to that in 2007, give or take $10 each way.
"The more than $100 (oil price) we see for 2008 will definitely not be our budget for 2009. But it will be rather similar to the 2007 price," he said.
If there is weaker GDP growth in the next two or three years as analysts predict, this would be reflected in the oil price unless there is a political move, Ruttenstorfer said.
"Broadly speaking what we expect from the fundamental side is a weaker oil price for the time of lower worldwide economic growth in the next 2-3 years. After that it will probably regain," he said.
He said that OMV's 160 million euro net book value impairment to its Romanian Arpechim refinery was a one-off event.
"It's not related to the financial crisis. It's related to the overcapacity of refineries in Romania and on a broader basis in South Eastern Europe, which does not allow to earn a reasonable profitability for some of those refineries," he said. Continued...
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