* Hedging instruments caused a loss of 189 million lei
The largest Romanian company "OMV Petrom" (SNP), posted a net profit of 1.74 billion lei, after the first six months of the year, up 14% over the first semester of 2010, as it gained from the increase in the price of oil on the international markets, amid political unrest in Northern Africa and the Middle East.
The price of Ural crude, which is used as the reference price for Romania, reached 108.29 USD/barrel in the first semester, rising 42% YOY. However, the average crude price achieved by the Petrom Group in the first semester was 92.92 USD/bbl, up 36% YOY, but still below the international price.
The officials of "Petrom" have explained this situation through the negative effects of the hedging instruments used in oil: "In order to protect the company"s cashflow and to support the company"s investment program for this year, Petrom entered oil price swaps, which, for 25,000 bbl/day, locked in a price of around USD 97/bbl for a production volume of 25,000 bbl/day, until the end of the year."
The result of the hedging instruments had a negative impact, of -189 million lei, on the EBIT of the 1st semester, compared to the positive effect of 75 million lei it had in January-June 2010.
The group"s EBIT (earnings before interest and taxes), (2.41 billion lei) has increased 44% over the first half of 2010.
"Petrom has a conservative financial policy, and that is why we have resorted to hedging instruments", Daniel Turnheim, the CFO of the company said yesterday.
The officials of "Petrom" did not disclose their hedging counterparties, mentioning only that they were "major investment banks".
The company has sales of 10.27 billion lei, in the first part of the year, up 23% over H1 2010. Sales from the second quarter amounted to 5.29 billion lei, up 20% over the sim
