It was a very successful 2021 for Austria's OMV, which ended with a doubling of sales and a striking increase in profits that led to a record result. The oil, gas and chemicals group ...
It was a very successful 2021 for Austria's OMV, which ended with a doubling of sales and a marked increase in profits leading to a record result. The oil, gas and chemicals group benefited from better business performance in all business areas, including higher exploration volumes, improved refining and chemical margins, and increased natural gas sales volumes.
In concrete terms, this translates into a 115 percent increase in sales to 35.6 billion euros. In the fourth quarter in particular, OMV benefited from significantly higher natural gas prices, as well as from higher gas sales volumes. But the revenues of the chemicals unit Borealis, which are fully reflected in the balance sheet for the first time, also had a positive effect.
The 'CCS operating result before special items' - this figure reflects how profitable the year was - increased more than significantly to just under 6 billion euros, compared with just under 1.7 billion euros in 2020. This is the highest annual result ever achieved by the Group.
The upstream and chemicals businesses in particular contributed to this substantial growth in the past twelve months. Operating profit before special items in Exploration & Production improved to 2.8 billion euros, up from 145 million euros a year earlier, thanks to a "favorable market environment" and higher production volumes. The sustained market recovery that occurred despite the ongoing pandemic ensured increased demand for oil and gas and higher price levels. OMV's average realized crude oil price in 2021 was $65.6 per barrel, a 73 percent increase, while average realized gas prices improved to €16.5 per MWh, or 84 percent.
In Chemicals & Materials, operating profit before special items also increased strongly to €2.2 billion (2020: €519 million). In the Downstream business (Refining and Marketing), by contrast, operating profit improved only slightly from €996 million to €1 billion.
Given the significantly higher overall energy price level last year, OMV was not affected by the 2 percent increase in production costs to $6.4/boe, especially as total hydrocarbon production rose by 5 percent compared to 2020 - mainly due to a higher contribution from Libya - to 486,000 boe/d. In parallel with the higher production, total oil and gas sales volumes also increased by 5 percent to 462,000 boe/d.
The petrochemicals business was also successful, with reference margins improving by 67 percent for polyethylene to 582 euros per metric ton and by 78 percent for polypropylene to 735 euros per metric ton due to stronger demand and tighter import volumes.
Shareholders are expected to benefit equally from the "historic year," and OMV plans to raise the payout from 1.85 euros to a "record dividend" of 2.30 euros.