Petrom's turnover fell by 8% in Q1, to 815 million euros. "In the first three months we were faced with unfavourable conditions including lower oil prices and the strong appreciation of the domestic currency, both having a negative impact on our results. The natural decline of production, which we estimate will stabilise towards the end of the year, has also influenced the results," stated Mariana Gheorghe, Petrom CEO.
The company's turnover fell primarily due to a 48% decline in the level of exported oil products, and was affected by a drop in oil prices. The decision to focus on the domestic market was made because of an increase in market demand.
The price of domestic oil fell by 9% to 48.49 dollars/barrel, compared with the same time last year.
"I believe that the company will witness a rebound in the second quarter, considering the average oil price in the first quarter stood at 50 dollars/barrel, and the current oil price stands at around 60 dollars/barrel," says Adrian Danciu, an analyst with Broker Cluj.
Production sold by the company reached 356.3 million euros, down 47% from the same quarter in 2006. At the same time, revenues from the sale of commodities doubled to 458 million euros, despite the fact that the price of oil products on the domestic market fell by 4-9%.
Although the company's level of production fell by 6%, the price of oil decreased as well, and retail sales were 18% lower, the operating costs increased by 13% to 750 million euros. The number of employees was cut by approximately 10,000 compared with the first three months of 2006, and the salary expenses were slightly lower than last year's.
The total production of the company in Romania witnessed a 6% decline compared with the production volume in the first three months of 2006. Factors like the natural decline or the warm winter took Petrom's total domestic production to 17.77 million barrels of equivalent oil in the first three months of 2007.
As far as refining and marketing are concerned, Petrom's refineries processed 1.67 million tonnes of oil, down 3.6% from the same time last year.
Along with the financial results, Petrom also announced major changes in its management structure.
Werner Schinhan, who was Petrom's deputy chief executive, will step down at the end of the year. Schinhan is currently in charge of relations with investors, treasury, corporate affairs, legal, gas operations and Doljchim. Gerald Kappes, the current head of OMV's procurement department will take charge of the natural gas operations and Doljchim. The corporate duties will be transferred to Mariana Gheorghe and Reinhard Pichler, the current chief financial officer of Petrom.
Werner Ladwein, the current manager of the exploration and production unit, will take charge of Petrom's international portfolio.
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