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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

 

 

 

 

 

 

 

2021

2020

∆

Clean CCS Operating Result1

in EUR mn

1,001

996

1%

thereof ADNOC Refining & Trading

in EUR mn

(11)

(107)

90%

thereof gas

in EUR mn

252

337

(25)%

Special items

in EUR mn

(509)

22

n.m.

CCS effects: inventory holding gains/(losses)1

in EUR mn

430

(425)

n.m.

Operating Result

in EUR mn

922

592

56%

Capital expenditure2

in EUR mn

654

570

15%

 

 

 

 

 

OMV refining indicator margin Europe3

in USD/bbl

3.67

2.44

50%

Utilization rate refineries Europe

 

88%

86%

2

Fuels and other sales volumes Europe

in mn t

16.34

15.45

6%

thereof retail sales volumes

in mn t

6.40

5.88

9%

Natural gas sales volumes

in TWh

196.39

164.01

20%

Note: As of Q1/21, the Downstream business segment was split into Refining & Marketing and Chemicals & Materials. For comparison only, 2020 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

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 was stable at EUR 1,001 mn (2020: EUR 996 mn). Stronger refining margins, improved performance by ADNOC Refining & Trading, and higher demand were offset almost entirely by a lower contribution from margin hedges and a weaker result from the gas business and oil trading. The OMV refining indicator margin Europe increased by 50% to USD 3.7/ (2020: USD 2.4/bbl), mainly as a consequence of a stronger macro environment. Substantially higher gasoline, naphtha, and jet cracks were only partly offset by weaker diesel cracks, which only rebounded toward the end of the year. In 2021, the utilization rate of the European refineries reached a resilient level of 88% (2020: 86%). At 16.3 mn , fuels and other sales volumes in Europe increased by 6%, mainly on account of robust demand recovery. In the commercial business, demand for jet fuel and diesel grew thanks to the easing of travel restrictions, while margins remained fairly constant, pushing up sales volumes. The result from the retail business improved despite lower margins, following an increase of 9% in retail sales quantities, as well as due to a higher contribution from the non-fuel business.

In 2021, the contribution of ADNOC Refining & Trading came in at EUR (11) (2020: EUR (107) mn), mainly due to better operational performance and a higher refining margin environment. The result was further improved by ADNOC Global Trading following its successful launch at the end of 2020.

The result of the gas business declined by 25% to EUR 252 mn (2020: EUR 337 mn), mainly following the divestment of Gas Connect Austria to VERBUND at the end of May 2021. In addition, higher storage, CO2, gas, and energy expenses, as well as a negative impact from power forward contracts lowered the result. The ability to benefit from high market volatility through supply and sales contracts, higher revenues from the electricity balancing market, and the one-off revenues following the reversal of certain provisions partly compensated for this development. Natural gas sales volumes rose significantly from 164.0  to 196.4 TWh, thanks to primarily higher sales quantities in Germany and the Netherlands. This was partially offset by lower sales in Romania.

Net amounted to EUR (509) mn (2020: EUR 22 mn) and were primarily related to an impairment in ADNOC Refining amounting to EUR (669) mn, which was due to lower assumed refining margins and production volumes. This was partially offset by the effect of commodity derivatives. of EUR 430 mn were recorded in 2021 as a consequence of a substantially higher crude oil price level, while CCS effects in 2020 amounted to EUR (425) mn following the sharp drop in crude oil prices. The Operating Result of Refining & Marketing increased significantly to EUR 922 mn (2020: EUR 592 mn).

Capital expenditure in Refining & Marketing amounted to EUR 654 mn (2020: EUR 570 mn). Organic capital expenditure in 2021 was predominantly related to investments in the European refineries and retail stations.

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
mn
Million
TWh
Terawatt hour
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 OMV Group’s reported financial performance.
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.

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