OMV Petrom (SNP) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered robust operational performance with Clean CCS Operating Result at RON 1.4 bn, down 15% year-on-year, mainly due to lower gas and power prices, but supported by higher downstream utilization and strong retail/commercial fuel demand.

• Strategic progress included advancing the Neptun Deep gas project, final investment decisions for SAF/HVO and green hydrogen, and expanding renewable energy and e-mobility, including Renovatio EV network acquisition.

• Special dividend of RON 0.03/share approved, with payment starting September 2024; record base dividends of RON 2.6 bn paid in June.

• GHG intensity reduced by 11% compared to 2019.

Financial highlights

• Q2 2024 sales increased 4% year-on-year to RON 8.7 bn, driven by higher petroleum and electricity sales, offset by lower gas prices and volumes.

• Clean CCS net income attributable to stockholders was RON 1.2 bn, down 19% year-on-year.

• Operating cash flow reached RON 1.1 bn, up 156% year-on-year, mainly due to lower tax and solidarity payments.

• Free cash flow before dividends was RON 0.4 bn; after dividends, negative RON 2.2 bn due to high dividend outflows.

• Capital expenditure in Q2 2024 was RON 1.4 bn, up 1% year-on-year, with most investments in Exploration and Production.

Outlook and guidance

• 2024 Brent oil price expected around USD 85/bbl; refining margin forecast at USD 10/bbl; refinery utilization above 95%.

• Production expected above 106 kboe/d in 2024; production cost at ~$16/boe.

• Organic CAPEX guidance up to RON 6.5 bn, total CAPEX including M&A up to RON 8 bn; 2025–2026 CAPEX above RON 8.5 bn.

• Positive free cash flow before dividends expected, but lower year-on-year due to higher investments.

• Retail fuel and power demand in Romania expected above 2023, gas demand stable; gas sales volumes to decrease.