Austria's OMV quarterly profit jumps 65% on price hikes
OMV's Financial Performance and Market Context
By Danny Callaghan and Tristan Veyet
Quarterly Profit Surge and Market Volatility
July 31 (Reuters) - Austrian oil, gas and chemicals firm OMV posted a quarterly profit surge on Friday, beating estimates, as price hikes across the board more than offset the impact of the Middle East conflict on sales.
Oil companies have benefited from heightened energy-market volatility as the U.S.-Israeli conflict with Iran triggered sharp swings in crude oil and natural gas prices.
Operating Profit and Analyst Expectations
OMV's operating profit jumped 65% year-on-year to €1.71 billion ($1.97 billion), above analysts' expectations of €1.66 billion, according to a consensus compiled by Vara.
Brent Price Forecast and Recent Trends
The company confirmed its forecast for the full-year Brent price of between $85 and $95 a barrel, subject to shipping through the Strait of Hormuz resuming. Brent futures stood at $87.43 a barrel on Friday.
In early July, the company reported an average crude oil price of $97.80 a barrel for the April-to-June period, up more than 50% on the final quarter of last year.
Chemicals Division Performance
The Vienna-based firm's chemicals division beat expectations, reporting an adjusted operating profit of €429 million, more than double from a year ago and 22% higher than analyst estimates provided by Vara Research.
Drivers of Chemicals Profit Growth
The company attributed the rise to higher prices of olefins and polyolefins as well as a higher contribution from its stake in Borouge.
Role of the Chemicals Business in OMV's Strategy
The chemicals business, viewed as a growth engine as OMV transitions away from polluting fossil fuels, produces chemicals used in gas and water pipes, car parts and medical syringes.
Strategic Outlook and Subsidiary Performance
Analysts at Morgan Stanley see OMV entering a new "cyclical phase," after the creation of Borouge International earlier this year and incoming CEO Emma Delaney taking the reins from September, in which management can refocus strategy on areas such as adding to the company's upstream portfolio.
Petrom Subsidiary Results
On Friday, OMV's listed Romanian subsidiary Petrom reported a slightly better-than-expected quarterly adjusted operating result, beating consensus by around 2%, boosted by higher oil and gas prices.
($1 = 0.8692 euros)
(Reporting by Danny Callaghan and Tristan Veyet; Editing by Mrigank Dhaniwala)
