Most of the oil majors saw hefty declines in profits as oil prices fell post-September 11. OMV was no exception, with a 25% decline in net income for Q4. Even so, 2001 profits reached record levels. The company will not be able to achieve similar growth in 2002, but it should be confident of another good year for marketing and chemicals and plastics.
Austrian oil group OMV had a good 2001 - in fact a record full year. Its EBIT rose by 24% to E610 million and net income was up by 18% to E382 million, with Refining and Marketing (R&M) and Chemicals and Plastics (C&P) the best performing segments.
The growth in marketing revenues was driven by a 17% rise in sales volumes at service stations in central and eastern Europe, together with a 7% rise in its home market of Austria, while the C&P business delivered a 37% increase in EBIT thanks mainly to higher product prices. The gas division, meanwhile, reported a stable performance due to higher demand and higher prices. In exploration and production, lower oil prices cut EBIT, despite steady volumes and low costs.
OMV can expect another mixed year, as falling oil prices hit exploration and production, while a corresponding fall in gas prices weakens the returns from the gas division. However, the company plans to form a marketing alliance with several Austrian gas companies to target industrial and commercial gas customers internationally. This should help boost sales abroad, compensating for losses on its domestic market as a result of competition.
Pressure on refining margins will also increase. To counterbalance this, the company is spending E2.7 billion over the next three years to increase oil and gas production, and grow the international marketing and melamine operations.
The service station business, meanwhile, should show major sales growth this year: more stations have been added to the network. In total the company has 1,1,60, of which 626 are outside Austria. This compares with 1,136 at the end of 2000, of which 588 were international. Cost reduction programs in this division should also help improve margins, while the C&P business should follow a successful 2001 with improved results in 2002.