OMV 1Q Profit Fell After Russia Business Hit; Cuts 2022 Production Outlook -- Update

By Giulia Petroni

OMV AG said Friday that profit fell in the first quarter as the company took a hit from its businesses in Russia, and cut its production outlook for the full year.

The Austrian oil-and-gas company posted a quarterly net profit of 546 million euros ($573.3 million) compared with EUR654 million a year earlier. On an adjusted basis, net profit came in at EUR1.07 billion.

Results were negatively affected by the previously announced EUR1 billion impairment related to the Nord Stream 2 project the company financed, OMV said. The company also had a hit from changes to the consolidation method of two Russian entities through which it holds a 24.99% interest in the Yuzhno Russkoye gas field.

Quarterly sales rose to EUR15.83 billion from EUR6.43 billion last year driven by significantly higher natural gas prices.

OMV said total upstream production for the quarter was 457,000 barrels of oil equivalent a day, down from 495,000 boe/d a year earlier. The company expects total production to be 390,000 boe/d in the current year, below a previous forecast of around 470,000 boe/d as Russian volumes will no longer be included.

The average Brent crude oil price is now expected to be around $95 a barrel from around $75 a barrel previously, while the average realized gas price is forecast to be around EUR45 a megawatt-hour from previous expectations of over EUR25/MWh.

Organic capital expenditure is projected at around EUR3.5 billion in the full year, OMV said.

In relation to potential short-term gas supply disruptions from Russia, OMV said it could use gas in storage and access alternative liquid-gas market hubs in Europe to supply its customers. In the first quarter of the year, the company imported on average 7.6 terawatt-hours of natural gas a month under long-term supply agreements with Gazprom PJSC to hubs in Germany and Austria, mainly through Ukraine, it said.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

April 29, 2022 02:05 ET (06:05 GMT)

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