"Petrom" posts a profit of 2.19 billion lei

• The share capital increase may be postponed a year

• The management of "Petrom" will propose the payment of dividends out of last year"s profit

"OMV Petrom", the largest domestic company, last year made a net profit of 2.19 billion lei, up 163% over 2009, as the management of the company announced it would propose to shareholders the payment of dividends from last year"s profits, after a two year break. Last year, "Petrom" paid 600 million lei in royalties to the Romanian state, about 50 million more than in 2009.

The profit that "Petrom" obtained this year may cause the company to postpone its plans to increase its share capital, especially since the state recently began the procedures to sell a stake of 9.8% of the shares of "Petrom".

In the second half of 2010, information appeared that the state was planning to sell part of its stake in "Petrom" to raise money for participating in the share capital increase, but it was only last week that the authorities published the announcement that they were looking for an intermediary that would handle the sale of the shares of the state on the Stock Exchange. Aside from that, the mandate of the Board of Directors of "Petrom" to decide on the share capital increase will expire at the end of April, this year, and it is hard to believe that the state would be successful in selling off its stake of 9.8% in SNP.

Mariana Gheorghe, the managing director of "Petrom" yesterday said that a decision concerning the opportunity of the share capital increase will be made in the near future: "In month, the approval that we have received from shareholders to perform the share capital increase will expire. We will review whether increasing the share capital is opportune, by taking into account the financial results for 2010, the possibility of distributing dividends and the opinion of shareholders. According to legislation, if the shareholders were to decide to extend the mandate of the Board of Directors of Petrom to increase the share capital, the extension would be possible for another year".

The management of the company yesterday announced that the rise of the profit of "Petrom", last year occurred on the back of the rise of the price of oil, and the significant improvement of the operational efficiency of the Refining and Marketing sector.

In the last quarter of last year, "Petrom" made a net profit of 779 million lei, after posting a loss of 131 million lei in the similar period of 2009.

"The results of the fourth quarter were supported by the positive evolution of the price of oil, and by increased sales", the representatives of the company said yesterday, and they added: "The price of Ural crude was 15% greater in the last quarter of last year, compared to the similar period of 2009. As a result, the EBIT of the group (earnings before interest and taxes), which amounted to 974 million lei, far exceeded the figure of the similar period of 2009, mostly due to higher sales compounded by the benefits of consolidation. The financial losses, of 72 million lei, decreased compared to the last quarter of 2009, when "Petrom" reported losses of 239 million lei, as it was forced to set up a provision following an investigation by ANAF.

"Petrom" has a market capitalization of 21.46 billion lei, according to the price of 0.379 lei/share recorded during yesterday"s trading session, when the shares rose of SNP rose 3.84%. Austrian company OMV controls 51% of the company, and the Ministry of the Economy has a stake of about 20%. The Proprietatea Fund has a stake of 20.11% in "Petrom".