Austrian energy company OMV reported a lower-than-expected net profit for the third quarter as stronger chemicals sales and margins could not fully offset weaker oil prices, refining margins, and trading.
OMV on Tuesday said that its net profit on a current cost of supply (CCS) basis, its closest metric to net income, fell by 20% to $374 million (346 million euros) for the third quarter, lower than a company-provided consensus of $495 million (457 million euros).
Operating profit adjusted for the current cost of supply fell by 21% year-over-year to $1.13 billion (1.05 billion euros).
Higher results in the chemicals division, with better margins for polyolefins and olefins, were unable to offset much lower refining earnings amid plunging margins.
Moreover, OMV’s oil and gas production fell by 9% to 332,000 barrels of oil equivalent per day (boepd), while production cost rose by 18% to $10.6 per barrel of oil equivalent. The company’s average realized oil and natural gas sales dropped as prices for crude oil and natural gas were lower in the third quarter compared to the same period of 2023.
OMV’s earnings in the Fuels & Feedstock division slumped between July and September, due to significantly reduced refining indicator margins, partly compensated by strong retail performance. The OMV refining indicator margin in Europe plunged by 64% to $5 per barrel.
“A stable utilization rate at the European refineries and an improved retail result had a partially offsetting effect,” OMV said.
The positive contribution of the retail business was driven by improved margins as well as higher volumes, partly due to the acquisition of additional filling stations in Austria and Slovakia.
Lower refining and trading margins also led to lower contributions from ADNOC Refining and ADNOC Global Trading, OMV’s joint venture business with Abu Dhabi’s national oil company ADNOC and Italian energy major Eni.
By Tsvetana Paraskova for Oilprice.com