OMV earnings surge as oil and gas major beats estimates

the Austrian energy company, which has interests in offshore projects in Abu Dhabi, has increased its savings target and slashed its investment budget.

An Austrian energy group OMV refinery in Schwechat, Austria. The firm has beaten expectations. Heinz-Peter Bader / Reuters

The Austrian oil and gas group OMV reported fourth-quarter clean current cost of supplies (CCS) earnings before interest and tax of €315 million (Dh1.23 billion) on Thursday, up 68.4 per cent from a year earlier topping estimates of €305m in a Reuters survey of analysts.

This measure strips out special items and inventory holding gains or losses.

OMV, in which Abu Dhabi’s Ipic has a major stake, raised its dividend by 20 per cent to €1.2 for 2016, it said on Thursday, as free cash flow turned positive last year, climbing to €1.08bn on cost savings and divestments.

Austria’s biggest listed company increased its savings target this year to €250 million an earlier goal of €150m and slashed its investment budget for the year by 10 per cent to €2bn, it said.

The OMV chief executive Rainer Seele is reversing the policy of his predecessor, who targeted output growth by buying assets in the North Sea, where production is expensive.

Under Mr Seele, the firm swapped a stake in its Norway holding for Siberian assets of Russia’s Gazprom.

Mr Seele aims to generate cash by selling off assets including a stake in Gas Connect Austria and Turkey’s Petrol Ofisi, a divestment OMV expects to conclude this year.

In March, Abu Dhabi’s Adnoc, OMV and Occidental Petroleum from the US signed a contract over several undeveloped oil and gasfields in north-west offshore Abu Dhabi including the Ghasha and Hail areas, according to the OMV website. The agreement covers a four-year seismic, drilling and engineering work programme for exploration, appraisal and potential field developments.

* Agencies

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