OMV Petrom, the largest Romanian company listed on the Bucharest Stock Exchange, decided to cut dividends by 63% compared to last year, as the group’s net consolidated profit declined by 56% in 2014 compared to 2013.

OMV Petrom proposes a gross dividend of RON 0.0112 per share and a dividend yield of only 3% of the current share price, according to a company announcement. The group's shares lost 1.6% on the Bucharest Stock Exchange after the announcement.

These are the lowest dividends paid by OMV Petrom in the last five years since the company restarted dividend distributions.

The total dividends are some EUR 143 million or 30% of the company’s net profit in 2014.

OMV Petrom’s net profit dropped by 56%, to EUR 472 million, as the company’s sales went down by 11%, to EUR 4.84 billion. Petrom’s results were affected by the drop in international oil prices and lower demand on the local fuel market. The company also recorded significant one-off expenses related to the depreciation of its investment in the gas power plant in Brazi.

In the last five years (2010 to 2014), OMV Petrom recorded cumulated net profits of some EUR 3.8 billion and paid dividends worth a total EUR 1.5 billion to its shareholders, including the dividends to be paid this year for 2014.

Austrian group OMV is the largest shareholder, holding 51% of OMV Petrom’s shares. The Romanian state holds 20.64%, and investment fund Fondul Proprietatea has almost 19%. The remaining 9.36% represent the free-float.

OMV Petrom’s shares are trading on the Bucharest Stock Exchange with the ticker SNP. The shares lost 1.6% on Wednesday morning after the company announced the dividend proposal. The SNP shares traded under RON 0.36, and close to their lowest level since June 2012.

In the last seven months, OMV Petrom's shares dropped 25%. OMV Petrom currently has a market capitalization of EUR 4.6 billion.

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 Andrei Chirileasa, andrei@romania-insider.com