Wintershall Dea Profits Slide on Price Decline

German gas group Wintershall Dea saw its core earnings (Ebitdax) slide 21% in 2019 to €2.83 ($3.06)bn, it said on March 18, as a result of weaker prices.

Adjusted net income fell 17% to €879mn, while fresh cash flow shrank to €190mn, from €1.18bn in the year before. A 9% growth in production to 642,000 barrels of oil equivalent/day helped mitigate the impact of lower prices. It also slashed production costs by 20% to $4.3/boe.

Wintershall Dea particularly struggled in the fourth quarter, with core earnings slumping 41% yr/yr to €603mn and net profit tumbling to €72mn, from €328mn in the same period of 2018.

Despite the weaker numbers, Wintershall Dea CEO Mario Mehren said the group's results were "solid" in the face of "a challenging energy price environment."

"The merger of Wintershall and Dea continues to yield the benefits of increased scale, growth and lower costs," he continued. "In response to the challenging external environment we are implementing a series of mitigation actions, including a significant reduction in our planned in-year capital investment programme, and suspending our common dividend until further notice."

Wintershall expects capital spending on production and development to total €1.2-1.5bn in 2020, compared with €1.5bn in 2019. The company aims to curtail exploration spending to €150-250mn, from €341mn in 2019. It expects output, excluding contributions from its assets in war-torn Libya, to average between 600,000-630,000 boe/day, suggesting little change from 617,000 boe/day in 2019.