- Petrom SA balance sheet consolidated in the OMV 2004 financial statement
- Annual results 2004 for Petrom to be approved by the General Assembly on May 24th
The majority shareholder of Petrom SA, OMV has today announced its financial results for the year 2004. These include for the first time a consolidated balance sheet for Petrom reflecting OMV`s investment which was executed effective December 14th 2004. This balance sheet has been prepared in compliance with International Financial Reporting Standards (IFRS) including the application of certain values ascribed to Petrom`s assets to reflect purchase price accounting. This is a requirement of IFRS when one company acquires a controlling stake in another and as such the IFRS balance sheet as consolidated by OMV, will differ from IFRS statements previously issued by Petrom which did not need to reflect purchase price accounting.
The financial results of Petrom for 2004, produced in compliance with local Romanian accounting requirements (RAS) will be announced in accordance with the attached financial calendar. These results will reflect a number of provisions for expenses which had not previously been recognised in Petrom`s local Financial Statements and will also reflect the Geological (Development) Quota tax deductible provision allowed by the government to encourage investment in the domestic oil and gas industry. This will support Petrom in financing its ambitious investment program.
Though these financial statements have not yet been finalised or approved by the Petrom Board, these factors combined are likely to lead to an absence of earnings available for distribution for 2004, as well as to no taxes on profits for the year. Petrom will, of course, continue to be the largest single provider of tax revenue to the Romanian Government through other taxes paid and collected by the company.
Petrom is also in the process of finalising its investment plans for the medium term and these will clearly be ambitious reflecting the new strategic partner's commitment to transform Petrom`s prospects as well as to honour the commitments made as part of the Privatisaton Agreement in 2004. The company anticipates that in 2005 RAS financial statements and the IFRS statements for Petrom consolidated and reported by OMV will, in all material respects, be similar. This will lead to a far simplified reporting structure and greatly help transparency as Petrom, in partnership with its new strategic partner OMV, begins the process of strengthening its leading position in Romania and the neighbouring markets.
Along with the alignment of the reporting structure and the alignment of the financial calendar for 2005, Petrom has also set up a basis for an overall strategy and goals for 2008. Key performance indicators will be: strong earnings delivery via an Return of Average Capital Employed (ROACE) of 13% by 2008; strong E&P performance with a stable production volume of 200,000 to 220,000 boe/d and with further international activities in the Caspian region.
In R&M Petrom will lead the Romanian downstream operations in market share and significantly improve network efficiency of its filling stations. Petrom will use its strong national position for export activities and will supply neighbouring markets. On the Gas side Petrom will fully use market liberalization thus supplying gas to all relevant customer channels. Along with this comes a clear commitment for focusing on cost improvement and increased productivity. By setting industry benchmarks Petrom will be best positioned to pursue strong and international growth.
- Presentation of the full year results as of 31.12.2004 (RAS) which are to be submitted for the approval of the General Meeting of Shareholders-May 18, 2005;
- General Meeting of Shareholders-May 24, 2005
- Presentation of the full year results as of 30.12 2004 (RAS) - May 24, 2005;
- Presentation of tha half year results as of 30.06.2005 (RAS) - August 24, 2005;
In relation to the presentation of the quarterly results for 2005 (RAS), Petrom is now in the process of identifying the way to mitigate both the requirements of the Romanian specific regulations of harmonizing the reporting deadlines with OMV Group.
Petrom is the largest Romanian oil and gas group, with activities in the business segments of Exploration and Production, Refining and Petrochemicals, as well as Sales and Marketing. Petrom has estimated oil and gas reserves of 1 billion boe, refining capacity of 8 million metric tons and 600 filling stations. In 2003 the sales revenue of the group was EUR 2,031 million, EBITDA was EUR 342 million. Since December 2004 OMV, the leading oil and gas group in Central Europe holds a 51% share in Petrom. OMV is active in Refining and Marketing, Exploration and Production, Gas as well as Chemicals in 27 countries on five continents. The Romanian state holds 40.74% of Petrom shares, the European Bank for Reconstruction and Development, 2.03% and 6.23% are owned by minority shareholders.