OMV profit leap beats forecasts as Libya recovers

VIENNA (Reuters) - Austrian energy group OMV posted a 82 percent increase in quarterly operating profit on Wednesday, easily beating market forecasts, as production returned to nearly normal in Libya and crude oil prices fell, helping its refining margin.

OMV said its clean CCS earnings before interest and tax (EBIT), which exclude special items and inventory holding effects, were 865 million euros in the June quarter, well above a Reuters poll average of 829 million euros.

The oil and gas company said production in Libya - which accounted for 10 percent of output before the civil war last year that toppled Muammar Gaddafi - was running at around 90 percent of pre-war levels.

Jaap Huijskes, who heads exploration and production at OMV, said Libya's oil fields were now capable of previous production levels but output was not yet reliable.

"There's work ongoing. It will take most of the rest of this year to get back to the sort of reliability levels we've seen previously," he told a news conference. "The fields are OK. It's the reliability, the up time, that we're still working on."

OMV, whose activities range from exploration to petrol stations, said production in Yemen had restarted at a low level in July following the repair of an export pipeline but the security situation remained uncertain.

Yemen's oil and gas pipelines have been repeatedly attacked by Islamic militants or disgruntled tribesmen since anti-government protests created a power vacuum in 2011.

The company said refining margins had spiked in the second quarter and were expected to deteriorate as crude oil prices recovered, while petrochemical and marketing margins would suffer from the subdued economic environment.

In the second quarter, OMV's clean CCS net income jumped 89 percent to 455 million euros, compared with the Reuters poll average of 404 million euros.

Chevreux called it "a good set of Q2-12 results" but the shares turned negative after initially rising 0.8 percent as the price of Brent crude oil slipped from 12-week highs.

By 1140 GMT, OMV shares were down 2.1 percent, while the European oil and gas index fell 0.7 percent.

OMV said it had begun to implement a performance improvement programme, designed to increase its return on average capital employed (ROACE) by 2 percentage points by 2014, and was also divesting assets as it shifted its focus to exploration.

"We are fit for the future," Chief Executive Gerhard Roiss told the news conference.

The company said it was at an advanced stage of the process to sell its Croatian and Bosnian filling stations, and hoped for a decision by the end of the year.

Source: http://news.yahoo.com/omv-profit-leap-beats-forecasts-libya-recovers-121321516--finance.html

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