Romania's largest vertically integrated oil company, Petrom SA (SNP.RO), said Tuesday its net profit fell around 22% in 2007 due to international crude oil price increases and lower oil output, news agency Mediafax reported.
The company, which is majority owned by Austria's OMV AG (OMV.VI), posted a full-year net profit of 1.77 billion lei ($716 million) from RON2.28 billion in 2006.
The Bucharest-listed company said its turnover fell 6% to RON12.2 billion last year from RON13 billion a year before due to lower refining and marketing export sales volumes and prices.
"The results are in line with our expectations, despite the mixed impact of the volatile macroeconomic environment, increasing international oil prices and supply costs," Petrom Chief Executive Mariana Gheorghe said.
"We managed to stop the production decline in the course of the year and continued to improve operational efficiency, based on the restructuring programs and investments in all business segments," she added.
Petrom's oil output fell 4% in 2007 to 70.27 million barrels from 73 million barrels in 2006.
In 2007, the company continued its modernization program, with RON3.82 billion investments, up 30% from RON2.93 billion invested in 2006.
The company plans to invest RON6 billion in 2008, amid a major investment program, which will continue until 2011.
Gheorghe said the high volatility of the economic environment is expected to continue throughout 2008, but she does not "foresee a major impact on our business, as demand for oil products in Romania continues to grow and the company successfully continues its modernization efforts."
Petrom's fourth-quarter net profit fell 20% to RON230 million from RON289 million in the year-earlier period due to higher international crude oil prices and the appreciation of the Romanian leu against the U.S. dollar.
Petrom's results are preliminary, unconsolidated, unaudited and computed according to Romanian accounting standards.
Petrom is the largest corporation in Romania and the largest gas and oil producer in southeastern Europe. In December 2004 OMV bought a 51% stake in Petrom for EUR1.6 billion.