Romania Petrom 3Q Net Pft At RON615M, Dn 2% On Yr

Romania's largest oil company Petrom (SNP.RO) Tuesday reported a net profit of 615 million lei (EUR1=RON4.2968) in the third quarter, slightly down from RON626 million in the same period a year ago, on a 25% lower turnover.

In July to September, Petrom's earnings before interest and taxes, or EBIT, rose 10% on the year to RON705 million. However, earnings before interest, taxes, depreciation and amortization, or EBITDA, fell 31% to RON1.14 billion.

Petrom, which is owned by Austria's OMV, posted a net turnover of RON3.53 billion in the third quarter, from RON4.73 billion in the same period a year before.

The results reflect lower oil prices and sales of commercial fuels and gas compared with the similar period of 2008, Petrom said in a statement.

"EBIT was higher compared to the third quarter of 2008, which was burdened by the Arpechim impairment, while net profit was supported by the positive hedging result," the statement read.

It said the retail fuels' sales volume rose 14% compared with the third quarter of 2008, but total marketing sales fell 5% on the year, due to lower export and lower domestic commercial sales.

Operating expenses dropped 31% on the year in the analyzed period, due to a decrease in raw materials costs, resulting from lower prices and quantities of imported crude oil. Also, expenditure is lower, as Petrom booked in September 2008 an impairment of RON559 million, which represents the total book value of Arpechim refinery.

Oil and gas production was down 4% compared to the third quarter of 2008, but the oil production reversed its downwrd trend from the second quarter of 2009, as a result of production start-ups, Petrom said. It started production at two recently drilled offshore wells, with a combined flow rate of around 3,100 barrels of oil equivalent per day.

Third quarter results showed an improvement from the previous quarter on higher sales and prices.

Compared to the second quarter, the company's net turnover was 22% higher, driven by the increase both in quantities and price for gasoline and diesel, according to Petrom's financial report. EBIT was almost triple compared with RON275 million in the second quarter, mainly due to the favorable price environment.

The improved operating result lead to a higher net profit in the third quarter, from RON417 million in the second quarter.

In the first nine months, Petrom's net profit was at RON1.54 billion, down 33% on the year, on significant decreases of operating profits.

Petrom reported EBIT of RON1.16 billion in January to September, down 54% on the year, while nine-month EBITDA fell 44% to RON2.37 billion.

Petrom's net turnover reached RON9.5 billion in the first nine months, down 27% from RON13 billion in the similar period a year earlier.

"Our cumulative results for the first nine months were affected by lower crude price, difficult economic conditions and deteriorating margins, marked by the downturn in the commercial and industrial sectors," the company's chief executive Mariana Gheorghe said.

In January to September, Petrom's investments amounted to RON2.7 billion, 42% lower on the year.

At the end of September, the company had 28,215 employees, down 16% compared to 33,656 in September 2008.

On the Bucharest Stock Exchange, Petrom closed Monday at RON0.25 a share, up 1.63% on the day.

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