OMV Signals Q2 Earnings Beat on Strong Refining, But E&P Weakness Weighs on Shares

Shares of Austrian energy company OMV AG fell 1% on Thursday after it released a second-quarter trading update that signaled stronger-than-expected earnings, though performance was mixed across its divisions.

The company's preliminary results suggest that consensus estimates for its second-quarter earnings before interest and taxes (EBIT) and net income could be upgraded by approximately 5% to 6%, according to figures from Visible Alpha Consensus. The current consensus stands at €1,505 million for EBIT and €708 million for net income.

Refining and Chemicals Drive Performance

OMV's refining and marketing division delivered a strong performance, benefiting from high refining indicator margins, a favorable product mix, and high utilization rates. The company noted that these positive factors helped offset the negative impact of crude differentials and temporary regulatory measures in Austria and Romania. OMV also reported a record-high refining margin of approximately $30 per barrel for July so far.

The chemicals segment also contributed positively, with second-quarter EBIT expected to be higher than the previous quarter. This was primarily driven by increased prices for olefins and polyolefins, which outweighed higher discounts and lower cracker utilization.

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Exploration and Production Faces Headwinds

In contrast, the exploration and production (E&P) division encountered several challenges during the quarter. The company cited a number of negative factors that partially offset gains from higher quarter-over-quarter oil and gas prices, including:

• Lower sales volumes due to a lack of liftings in the United Arab Emirates.
• The impact of overtaxation measures in Romania.
• Reduced production in Norway resulting from seasonal maintenance.
• High discounts on realized gas prices compared to European benchmarks in Romania.

OMV is scheduled to publish its full second-quarter results on July 31.