09 May 2012 08:31 [Source: ICIS news]
LONDON (ICIS)--Austria’s OMV on Wednesday posted an 81% decline in its petrochemical business’ operating profit to €7m ($9.09m) in the first quarter of this year because of lower olefin margins.
Petrochemical sales volumes, at 560,000 tonnes, were an improvement from the 540,000 tonnes and 500,000 tonnes recorded for the first quarter of 2012 and fourth quarter of last year, respectively, OMV added.
“The petrochemicals business was burdened by substantially lower margins, especially at the beginning of the year, due to the subdued economic environment,” the group said, noting that its ethylene/propylene margin – calculated on West European Contract Prices (WECP) – fell by 30% year on year to €248/tonne.
OMV cautioned that its refining and marketing division, of which the petrochemicals business is a part, is set to grapple with low margins throughout the rest of this year. However, it said that in the remainder of 2012 the “petrochemical business is anticipated to improve slightly”.
Income from Austria-based plastics producer Borealis, in which the OMV group has a 36% stake, fell by 20% to €50.2m “as a result of the difficult market conditions, especially for the European polyolefin business segment”.
“Both [the] Borouge [joint venture between Borealis and the Abu Dhabi National Oil Co] and the fertilizer business, however, continued their strong performance,” OMV added.
“The Borouge 3 expansion project is progressing as planned and will increase the annual capacity of the integrated olefins/polyolefins site in Abu Dhabi from 2m tonnes/year to 4.5m tonnes/year by 2014,” it said.
Overall, OMV achieved a first-quarter net profit of €626m, a 31% improvement on the figure posted a year ago.
Sales revenue increased by 28% to €10.4bn, OMV said.
Looking at the performance of OMV in exploration and production (E&P) and gas and power (G&P), OMV CEO Gerhard Roiss said: “The year 2012 started very favourably for OMV. On 22 February, we were able to announce a potentially significant deep-water gas discovery in the Black Sea offshore Romania. This is a good example of how we are delivering on our strategy by focusing on bigger, high-impact exploration targets.”
“In Libya, production has quickly returned to approximately 85% of pre-crisis levels and these volumes contributed positively to the operating result in the first quarter of 2012. Stronger oil prices and the very cold central European winter supported the results of our E&P and G&P business segments, respectively,” Roiss added.
($1 = €0.77)
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