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Refining & Marketing

OMV’s Refining & Marketing business refines and markets fuels and natural gas. It operates three inland refineries in Europe and holds a strong market position in the areas where its refineries are located, serving a strong branded retail network and commercial customers. In the Middle East, it owns 15% of ADNOC Refining and ADNOC Global Trading.

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At a glance

 

 

 

 

 

 

 

2022

2021

∆

Clean CCS Operating Result1

in EUR mn

2,415

945

155%

thereof ADNOC Refining & Trading

in EUR mn

350

(11)

n.m.

thereof Gas & Power Eastern Europe

in EUR mn

605

188

n.m.

Special items

in EUR mn

774

(924)

n.m.

CCS effects: inventory holding gains/(losses)1

in EUR mn

202

430

(53)%

Operating Result

in EUR mn

3,392

451

n.m.

Capital expenditure2

in EUR mn

821

633

30%

 

 

 

 

 

OMV refining indicator margin Europe based on Brent3,4

in USD/bbl

14.71

3.66

n.m.

Utilization rate refineries Europe

 

73%

88%

(15)

Fuels and other sales volumes Europe

in mn t

15.51

16.34

(5)%

thereof retail sales volumes

in mn t

6.16

6.40

(4)%

Note: As of 2022, the gas business was split into Gas Marketing Western Europe reported under Exploration & Production, and Gas & Power Eastern Europe reported under Refining & Marketing. Previously, the gas business was fully reflected in Refining & Marketing. For comparison only, 2021 figures are presented in the new structure.

1

Adjusted for special items and CCS effects; further information can be found in Note 4 – Segment Reporting – of the Consolidated Financial Statements

2

Capital expenditure including acquisitions

3

As of Q2/22, the refining indicator margin reflects the change in the crude oil reference price from Urals to Brent at OMV Petrom. For comparison only, 2021 figures are presented based on the new calculation logic.

4

Actual refining margins realized by OMV may vary from the OMV refining indicator margin due to factors including different crude oil slate, product yield, and operating conditions.

Financial performance

The increased significantly to EUR 2,415 mn (2021: EUR 945 mn). Exceptional refining indicator margins, a significantly better result in Gas & Power Eastern Europe, and a remarkable ADNOC Refining & ADNOC Global Trading result more than compensated for the negative production effects following the turnaround and incident at the Schwechat refinery, higher costs driven by turnaround activities, and a lower retail result.

The OMV refining indicator margin Europe went up sharply to USD 14.7/ (2021: USD 3.7/bbl). Higher cracks for diesel, gasoline, and jet fuel were only partially offset by rising fuel and losses due to the further Brent price increase, and lower heavy fuel oil cracks. In 2022, the utilization rate of the European refineries decreased by 15 percentage points to 73% (2021: 88%), mainly caused by the turnaround and the incident at the Schwechat refinery, as well as the turnaround at the Burghausen refinery in the second and third quarters of 2022. At 15.5 mn , fuels and other sales volumes in Europe decreased slightly by 5%, mainly as a consequence of lower supply availability in Schwechat and the divestment of the German retail business, partly offset by higher jet fuel sales volumes. The result of the commercial business declined slightly, mainly due to the price cap regulations in several countries, especially in Hungary and Slovenia. This was partially offset by increased demand for jet fuel driven by the easing of travel restrictions. The contribution from the retail business to the result decreased significantly, mainly driven by the divestment of the German retail network in May 2022, higher utilities costs, lower fuel unit margins following the price caps in several countries, and higher fixed costs driven by inflation. This was partially offset by better performance in the non-fuel business and cost-cutting efficiency measures.

In 2022, the contribution of ADNOC Refining & ADNOC Global Trading to the clean Operating Result grew substantially to EUR 350 mn (2021: EUR (11) mn), mainly as a result of higher refining margins, and robust operational performance at ADNOC Refining. In addition, ADNOC Global Trading provided strong support to the result compared to the same period of the previous year.

The contribution of the Gas & Power Eastern Europe business to the result more than tripled to EUR 605 mn (2021: EUR 188 mn), mainly due to the positive impact of increasing gas selling prices, high gas margins on gas transactions outside Romania, and better power results due to higher margins following higher power selling prices. This was partially offset by Petrom Gas & Power being significantly regulated through extended scope of capped prices and of overtaxation, for both gas and power.

Net amounted to EUR 774 mn (2021: EUR (924) mn) and were primarily related to the sale of the German filling stations in May 2022 and commodity derivatives. In 2021, special items were mainly related to an impairment in ADNOC Refining in the amount of EUR (669) mn. CCS effects of EUR 202 mn were recorded in 2022 as a consequence of increasing crude oil prices. The Operating Result of Refining & Marketing rose substantially to EUR 3,392 mn (2021: EUR 451 mn).

Capital expenditure in Refining & Marketing amounted to EUR 821 mn (2021: EUR 633 mn). Organic capital expenditure in 2022 was predominantly related to the European refineries and the retail network. The increase in capital expenditure in 2022 was mainly due to turnaround activities, repair works at the Schwechat refinery, and investments in the co-processing unit at Schwechat.

Clean CCS Operating Result
Operating Result adjusted for special items and CCS effects
The Group clean CCS Operating Result is calculated by adding the clean CCS Operating Result of Refining & Marketing, the clean Operating Result of other segments and the reported consolidation effect adjusted for changes in valuation allowances, in case the net realizable value of the inventory is lower than its cost.
bbl
Barrel (1 barrel equals approximately 159 liters)
t
Metric ton
CCS/CCS effects/inventory holding gains/(losses)
Current Cost of Supply
Inventory holding gains and losses represent the difference between the cost of sales calculated using the current cost of supply and the cost of sales calculated using the weighted average method after adjusting for any changes in valuation allowances in case the net realizable value of the inventory is lower than its cost. In volatile energy markets, measurement of the costs of petroleum products sold based on historical values (e.g., weighted average cost) can have distorting effects on reported results (Operating Result, net income, etc.). The amount disclosed as CCS effect represents the difference between the charge to the income statement for inventory on a weighted average basis (adjusted for the change in valuation allowances related to net realizable value) and the charge based on the current cost of supply. The current cost of supply is calculated monthly using data from supply and production systems at the Refining & Marketing level.
Special items
Special items are expenses and income reflected in the financial statements that are disclosed separately, as they are not part of underlying ordinary business operations. They are being disclosed separately in order to enable investors to better understand and evaluate the OMV Group’s reported financial performance.

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