Austrian OMV Sees Dip in Earnings

Austrian energy firm OMV reported a dip of 6% in its current cost of supplies (CCS) third quarter net income, at €593 ($659)mn October 30. Its operating result, on the same basis, was down 10% at €949mn, of which about half, €449mn, came from upstream, which was down from €554mn in Q3/18.

The gains from new acreage in the United Arab Emirates, Malaysia, New Zealand and the start-up of Norway's Ansta Hansteen field was more than offset by the negative market environment and higher depreciation as well as lower production in Romania. It produced 18% more hydrocarbons in total, at 480,000 barrels of oil equivalent/day. And it produced 18% more gas, but sold it more cheaply: the average sales price was down 20% if measured in $/mn Btu or down 17% if measured in €/MWh.

The downstream gas clean CCS operating result declined slightly from €26mn in Q3/18 to €25mn. The contribution from Gas Connect Austria increased from €19mn to €23mn mainly following higher contributions from participations and lower energy costs.

Natural gas sales volumes improved significantly from 23.3 TWh to 27.2 TWh, primarily following increased volumes in Romania as well as a successful market offensive in Germany and the Netherlands, partly offset by lower sales volumes in Turkey. Net electricity output went down to 1.0 TWh in Q3/19 (Q3/18: 1.4 TWh) following the divestment of the Samsun.

Natural gas sales volumes in 2019 are projected to be above the 114 TWh recorded last year but the margins are forecasted to be lower. OMV also said it continues to finance Nord Stream 2.