Fourth best result

OMV: Strong profit despite low oil prices

OMV has given itself a new logo, here on the Group headquarters in Vienna

(Bild: APA/HARALD SCHNEIDER)

Despite lower oil and gas prices, 2024 was a profitable year for OMV, even if profits were not quite as high as in the previous year. Overall, the Group achieved an annual turnover of 34 billion euros.  

"After the exceptional years of 2022 and 2023, we achieved the fourth-best result in OMV's history in 2024," said CEO Alfred Stern at the annual press conference in Vienna on Tuesday. "In a difficult environment, we operated very profitably, even if we did not quite match the result of the strong previous year 2023."

Lower raw material and energy prices
Falling commodity and energy prices alongside a weak economy had a significant impact on OMV's business last year, Stern reported. At the same time, the chemicals division had recovered somewhat compared to the very weak year 2023. The average Brent crude oil price of 85 dollars (82.73 euros) per barrel was 2 percent below the previous year.

OMV Chairman of the Executive Board Alfred Stern

(Bild: APA/HARALD SCHNEIDER)

Wholesale prices for gas fell by 16 percent to an average of 35 euros per megawatt hour. In the refinery business, OMV's refinery reference margin in Europe reached 7.1 dollars per barrel compared to 11.7 dollars in 2023. In contrast, the polyolefin business recovered with significantly improved margins, Stern reported.

34 billion euros turnover
Overall, OMV generated a cash flow from operating activities of EUR 5.31 billion (plus 14 percent) in 2024 on Group sales of just under EUR 34 billion (minus 14 percent). The CCS operating result before special items (adjusted primarily for inventory valuation effects) fell by 15 percent to EUR 5.14 bn. The CCS net profit for the period attributable to shareholders before special items fell by 19% to EUR 2.09 billion, while earnings per share (EPS) fell from EUR 4.53 to EUR 4.25. The net profit attributable to shareholders fell by 6 percent to EUR 1.389 billion - although this figure was significantly better in the final quarter at EUR 301 million (plus 28 percent).

Dividend falls to 4.75 euros per share
The Management Board is proposing a dividend of EUR 4.75 per share, consisting of a regular dividend of EUR 3.05 and a special dividend of EUR 1.70. A total dividend of EUR 5.05 per share was distributed for 2023.

OMV is planning investments of EUR 3.6 billion this year. Total oil and gas production is expected to amount to around 300,000 barrels per day, assuming there are no disruptions to production in Libya. Production costs at Group level are expected to rise from 10 to 11 dollars per barrel. The average Brent crude oil price for this year is estimated at 75 dollars (73 euros) per barrel, the average realized natural gas price at around 35 euros per megawatt hour. The capacity utilization rate of refineries is expected to be 85 to 90 percent.

Falling oil price expected
OMV expects the price of Brent oil to fall further this year to an average of 75 dollars. The average German wholesale gas price (THE) is expected to rise to EUR 40 to 45 per MWh. "The average wholesale price in 2024 was still a third to a quarter of what it was in 2022, but still higher than before the Russian attack on Ukraine." With the withdrawal from the long-term gas supply contract with Gazprom, "we are opening a new chapter in the company's history," said Stern.

It is important to get more gas to Europe in order to lower prices, Stern said. The pricing mechanism in Europe had changed. "Previously, pipeline gas from Russia had nowhere else to go, but the LNG ships can go wherever the best price is paid."

Driving forward own gas production
That's why we need to drive forward our own production in Europe. "We also want to fully exploit the potential of the field in Wittau, where we have made Austria's largest gas discovery in 40 years." It is assumed that this could increase gas production in Austria by 50 percent.

The first wells for the Neptun Deep project in the Black Sea in Romania are due to start drilling later this year. The recoverable reserves there are estimated at 100 billion cubic meters. Production there will be at a level of 7 to 9 billion cubic meters per year for around ten years. That is roughly equivalent to Austria's annual demand.

As far as OMV's talks with its core shareholder ADNOC (Abu Dhabi National Oil Company) about a joint venture between OMV's chemicals subsidiary Borealis and Borouge in Abu Dhabi, which have been ongoing since mid-2023, are concerned, OMV is still only reporting the bare essentials. A few days ago it was announced that the two companies are now also jointly considering the purchase of Nova Chemicals, which, like ADNOC, belongs to the Emirate of Abu Dhabi.