OMV Q2 petchems operating profit falls on weaker ethylene margins

LONDON (ICIS)–OMV’s clean operating profit for the second quarter of the year fell to €40m compared to €47m in the same period the previous year on the back of weaker ethylene margins, the Austria based oil and gas producer said on Tuesday.

The fall in profit for the quarter was in spite of stable volumes, the company added.

Petrochemicals sales volumes were steady month on month and quarter on quarter at 550,000 tonnes, while the company’s second-quarter ethylene/propylene net margins was €355/tonne , compared to €382/tonne during the same period in 2013.

The company’s refining and marketing division clean operating profit – which includes petrochemicals – was buoyed by a strongly improved performance by Austria-based Borealis, which saw its operating profit more than double year on year during the quarter to €51m.

Stronger results for Borealis – of which OMV is a 36% stakeholder – were driven by stronger margins and an increased contribution following the initial cracker start-up of the company’s Borouge 3 project in Abu Dhabi.

Once fully onstream, Borouge 3 stands to increase olefins and polyolefins production capacity from 2m tonnes/year to 4.5m tonnes/year. Total refining and marketing division operating profit was stronger quarter on quarter at €60m, but below the second-quarter 2013 profit of €91m.

Petrochemicals clean operating profit for the first six months of the year was €82m, compared to €88m in the first half of 2013, as lower ethylene and benezene margins were only partially offset by higher propylene margins, the company said.

Group second-quarter clean operating profit was sharply down at €232m, compared to €668m in the second quarter of 2013, as a result of lower refining margins, a weaker US dollar and political instability in Libya and Yemen, the company said.