OMV AG — Earnings Release 1998

Nov 17, 1998

News Details

Ad-hoc | 17 November 1998 09:59

Ad hoc-Service: OMV AG englisch

—————————————————————— Ad hoc-Service: OMV AG englisch Ad-hoc Mitteilung übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist allein der Emittent verantwortlich. —————————————————————————— OMV Interim Results for the Nine Months Ended 30 September 1998 – Group net income up by 25% to ATS 2.17 bn, despite difficult market conditions. – Consolidated sales down by 20% to ATS 49.35 bn due to lower oil prices and trading volumes and to the de-consolidation of PCD Group. – Earnings before interest and tax (EBIT) also affected by the sale of PCD and the low crude prices; down by 30% despite improved results from Chemicals and Refining & Marketing (R & M). On a like-for-like basis, EBIT (excluding PCD in 1997) showed a decrease of 18% only. – Cash flow from operating activities down at ATS 5.21 bn. – Segment headlines: E & P: oil price fall hits EBIT despite decreased costs. Gas: EBIT affected by lower storage revenues. R & M: further improvement in Refining and Marketing Chemicals: strong contribution due to melamine and the inclusion of the Polyfelt Group. OMV Interim Results for the Nine Months Ended 30 September 1998 in ATS billion 1-9/98 1-9/97 +/- FY 1997 EBIT* 3.02 4.32 (30%) 5.76 Income from ordinary activities 3.04 4.06 (25%) 5.35 Net income 2.17 1.74 +25% 2.27 Sales** 49.35 61.59 (20%) 83.03 Cash flow from operating activities 5.21 7.03 (26%) 8.00 Employees 6,637 8,180 (19%) 7,934 * Earnings before interest and tax ** Sales excluding petroleum excise tax OMV, the Central European oil and gas group, today announces its interim results for the nine months ended 30 September 1998. Market conditions have deteriorated even further since the half year results. However, the effect of the continuing weakness in crude oil prices has been partly offset by the impact of OMV’s restructuring efforts. Consolidated sales fell by 20%, from ATS 61.59 billion (bn) to ATS 49.35 bn, mainly resulting from the declining crude oil and product prices and lower trading volumes in Refining & Marketing (R & M), as well as Exploration & Production (E & P) which was hit by the sharp decrease in crude prices. In addition, the Plastics business was de-consolidated in this quarter for the first time for the period from 1 January 1998 onwards. Earnings before interest and tax (EBIT) fell by 30%, from ATS 4.32 bn to ATS 3.02 bn, mainly due to the de-consolidation of the PCD Group and the markedly lower result in E & P. Excluding the de-consolidated parts of the PCD Group from the same period in 1997, a like-for-like EBIT would have shown a decrease of only 18%. Both Chemicals and R & M experienced an improvement in their contributions, whereas EBIT in the Gas segment declined. Restructuring charges included in EBIT were down in the first nine months at ATS 0.54 bn (1-9/97: ATS 0.68 bn) and included, as previously indicated, the ongoing personnel restructuring program as well as the reduction in the discount rate for jubilee and severance provisions. Financial items were positive at ATS 0.02 bn (1-9/97: financial loss of ATS 0.26 bn). For the first time, the 25% stake in Borealis is shown at-equity in financial items, and therefore the improvement was largely due to the income from this investment amounting to ATS 0.26 bn. Income from ordinary activities was ATS 3.04 bn (1-9/97: ATS 4.06 bn). Extraordinary charges were significantly reduced to ATS 0.08 bn (1-9/97: charges of ATS 1.15 bn) and mainly resulted from the closing of the PCD-Borealis transaction. Taxes on income showed a significant decrease in absolute terms. The majority of this was attributable to the de- consolidation of the PCD Group, as the equity income from the investment has already been taxed. Net income for the period increased by 25% to ATS 2.17 bn (1-9/97; ATS 1.74 bn). During the first nine months, cash flow from operating activities declined by 26% from ATS 7.03 bn to ATS 5.21 bn, mainly due to the de-consolidation of the PCD Group and the decline in the operating result. Furthermore, in 1997 there were substantial additions for long-term provisions for the personnel reduction plans and pension provision programs were also included. Consequently, sources of funds declined to ATS 4.45 bn (1-9/97: ATS 5.68 bn). Working capital showed a decrease of about 0.59 bn due to increases in inventories and short-term provisions and a decrease in accounts receivable. Total group assets remained almost stable at ATS 68.25 bn (31.12.1997: ATS 68.72 bn). The equity ratio increased to 31% (31.12 1997:29%). Additions to fixed assets since the beginning of the year totaled ATS 8.38 bn (1-9/97: ATS 5.76 bn). Beside current projects, these also include the acquisition of the 25% stake in Borealis A/S. Financial assets increased in total by ATS 3.19 bn, while tangible assets decreased by ATS 2.45 bn. As of 30 September, net debt continued to decrease and amounted to ATS 1.89 bn (31.12.1997: ATS 3.03 bn), equivalent to a gearing ratio of about 9% (31.12.1997:15%). As of the end of September, the OMV Group employed 6.637 people. 1,543 less than last year (1-9/97: 8,180). This decrease includes a reduction of about 970 persons resulting from the sale of the PCD companies to Borealis. For the full version of the News Release, please refer to: http://www.omv.com Ende der Mitteilung