OMV Petrom, Romania’s largest oil and gas company, recorded losses of some EUR 10 million in the third quarter of this year, as the drop in oil prices affected the company’s operating results and forced it to also take some accounting losses related to de depreciation of its upstream assets.

The company recorded one-off charges of EUR 185 million on its upstream segment, as it reviewed its oil price assumptions for the next years at lower levels, which determined impairments of its production assets and higher costs related to personnel restructuring.

Excluding these one-off expenses, OMV Petrom’s net profit went down by almost a third (31%) in the third quarter (compared to Q3 2014), to EUR 185 million. The group’s consolidated sales also went down by 12%, to EUR 1.09 billion, as fuel prices went down.

In the first nine months, OMV Petrom’s consolidated sales were down 16%, to EUR 3.07 billion. The net profit for the period was EUR 223 million, down by 60% compared to the first nine months of 2014, while the profit excluding special items was down by 44%, to EUR 390 million.

“In the first nine months of 2015, the group financial performance was severely affected by the approx. 50% drop in oil prices. In a persistently ongoing low crude price environment, we have decided to reduce our future oil price assumptions, which required impairments of Upstream assets. The negative impact in Upstream was only partly compensated by the good results in Downstream, capitalizing on our integrated business model and supported by improved refining margins and higher products demand,” said Mariana Gheorghe, CEO of OMV Petrom.

“In addition, we continued our efforts across the entire organization to contain capital spending and operational costs. I am particularly encouraged by the good response of the entire organization which shows the cultural change and business agility we have implemented at OMV Petrom over the last decade,” she added.

OMV Petrom reduced its capital spending by 41% in the third quarter, to EUR 209 million. In the first nine months of this year, the group spent EUR 676 million, a third less than in the same period of last year. The group also reduced its number of employees by about 2,000 (11%) in the past 12 months, to 16,200.

The company’s lower profits have been largely anticipated by the investors on the Bucharest Stock Exchange, as OMV Petrom’s shares (SNP) dropped by 25% in the past 12 months. The company is currently valued at some EUR 4.15 billion.

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Andrei Chirileasa, andrei@romania-insider.com