Drilling for profits: State-owned Romgaz aims to become the most profitable company in Romania

State-owned gas producer Romgaz Medias plans to increase its net profit by 7% this year, to EUR 340 million, according to the company’s budget, which was recently approved by the Government. This would turn Romgaz into the most profitable company in Romania, as oil and gas producer OMV Petrom, which has held this position in the past years, forecasted a 40% drop of its individual net result, to EUR 247 million. Romgaz posted a net profit of EUR 317 million, in 2014, up by more than 41% compared to 2013, as the gas price increase in Romania, boosted its sales by 15%, to over EUR 1 billion. In the first quarter of 2015, the company's profit declined by 7.4%, to EUR 127 million. On the other hand, OMV Petrom’s net profit went down by 62%, to EUR 413 million, as the steep drop in international oil prices cancelled the positive effect the company recorded from higher local gas prices. In the first quarter or 2015, the group’s profit dropped by 68%, to EUR 77.5 million. The Romanian Government owns 70% of Romgaz and a 20.6% minority stake in OMV Petrom. Austrian group OMV owns 51% of OMV Petrom. State-owned electricity producer Hidroelectrica may also surpass OMV Petrom in the profits ranking, as its administrator estimates a gross profit of EUR 300 million this year, which would translate into a net profit of over EUR 250 million. Both Romgaz and OMV Petrom are listed companies, trading on the Bucharest Stock Exchange and London Stock Exchange (only Romgaz). The Government also plans to float Hidroelectrica, as soon as the company exits insolvency. Andrei Chirileasa, andrei@romania-insider.com