OMV more than doubles Q2 core earnings on soaring gas prices

BERLIN (Reuters) -Austrian energy and chemicals group OMV more than doubled second-quarter core operating profit on the back of soaring gas prices fuelled by the war in Ukraine.

It reported clean current cost of supplies (CCS) earnings before interest and tax (EBIT), which exclude special items and inventory gains or losses, of 2.94 billion euros ($3 billion) on Thursday, beating analyst expectations for 2.79 billion euros.

The group, which in past years benefitted from profits on Russian assets, said it purchased on average 6.67 terrawatt hours (TWh) per month of natural gas under long-term supply agreements with Gazprom in Germany and Austria in the second quarter.

The West is anxiously monitoring gas flows from Russia, especially through the major Nord Stream 1 pipeline. Gazprom delivered a mere fifth of its total capacity on Wednesday, which is seen as retaliation against Western sanctions over Russia's war with Ukraine.

OMV receives part of its Russian gas through the pipeline.

It said it did not expect natural gas exports from Russia to stop entirely. "In the event of further or even full gas supply disruptions from Russia, OMV can use gas in storage to supply customers and has access to other liquid gas market hubs in Europe until the regulator implements energy steering measures," the group said in its quarterly report.

To become less dependent on Russia, OMV has booked 40 TWh of additional transport capacity from Norway and Italy to Austria for the gas year October 2022 to September 2023.

The volume corresponds to nearly half of Austria's annual demand and covers OMV's delivery obligations in Austria, according to the company. The group's gas storage facilities were almost 89% full, CEO Alfred Stern said earlier this month.

Costs for filling its gas storage facilities, and increased production costs in its refining business due to the high gas prices, weighed on the group's cash flow in the second quarter. Cash flow from operating activities dropped to 461 million euros, missing analyst expectations of 1.843 billion.

($1 = 0.9800 euros)

(Reporting by Kirsti KnolleEditing by Paul Carrel and Mark Potter)