Petrom profits collapse

SNP Petrom, Romania’s second-largest company, saw its profits collapse in the first quarter, down to 224bn ROL (5.6 million euros, calculated at an exchange rate of 40,000 ROL/euro). Revenues obtained by the oil company, which is 93% held by the Romanian State, dropped from 22,897 billion ROL to 19,077 billion ROL (477 million euros) at the end of March.

Petrom’s severe decline comes shortly after the company’s 2003 results were announced, which drew attention to the first ever drop in turnover in ROL.

Petrom reported a turnover of around 1.89 billion euros and net profits of 38 million euros last year, down 50% in euros from 2002.

At the time, Gheorghe Constantinescu, the company’s general manager, explained that Petrom’s results were real, verified and had been triggered by the company “purging” itself of the legacy of previous years.

The level of Petrom’s annual debts has reached 26,275 billion ROL (657 million euros).

The company’s capitalisation exceeds 2.3 billion euros on the Bucharest Stock Exchange, where 7% of the company’s stock is traded.

Petrom, which employs 57,000 people, is in the process of being privatised. The Romanian State wants to sell a 33.34% stake in Petrom to a strategic investor who will participate in a capital raise in order to bring its stake up to 51%. International analysts estimate the value of the transaction as standing at around $1 – 1.3 billion.

Three companies have placed final bids for Petrom: OMV (Austria), MOL (Hungary) and Occidental (USA).
adrian.mirsanu@zf.ro