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Global oil and petchem companies announce financial results for Q1

by Merve Madakbaşı -
  • 03/05/2022 (08:49)
Oil and petrochemical producers have announced their financial outcomes for the first quarter of 2022. The companies in oil refining, petroleum and chemicals sectors appear to have enjoyed strong results, while petchem producers largely faced weaker results as war-driven oil price hikes coupled with higher utility and gas prices deteriorated earnings.

In the meantime, the prevailing supply chain problems resulting from disruptions, container shortages and rising freight rates led to surging costs.

Winning streak

ExxonMobil’s first-quarter profits more than doubled to $5.5 billion in Q1 as higher oil prices offset costs connected to exiting its Sakhalin-1 project in Russia, according to a statement from the company.

During the first quarter, ExxonMobil’s revenues rose 52.4% to $87.7 billion. “Besides higher exploration and production earnings, ExxonMobil also saw improvement in its refining division, where tight supplies of gasoline and other petroleum products more than compensated for increased crude prices,” the statement said.

Chevron’s profit more than quadrupled during the first quarter of 2022, as higher oil and gas prices bolstered the company’s results. The company reported earnings of $6.3 billion, up from $1.37 billion during the same quarter in 2021. Chevron’s revenue rose to $54.37 billion, up from $32.03 billion year-on-year.

Dow’s Q1 sales totaled $15.26 billion, up 28.5% from the $11.88 billion the company reported a year earlier.

Net profits in Q1 came in at $1.57 billion as compared to $991 million in the same quarter of 2021. Operating cash flow went from a negative $228 million to a positive $1.61 billion, while EBITDA expanded from $2.27 billion to $3.17 billion.

PKN Orlen reported an increase of 85% in earnings on a yearly basis in Q1 2022 due to higher quotations of refining and petrochemical products resulting from rising crude oil prices and 15% higher sales volumes. The company’s petrochemical operating profit slumped 59.9% to 277 million zloty ($60.9 billion), meanwhile.

Italian energy group Eni’s Q1 profits beat expectations on the heels of soaring oil and gas prices triggered by the conflict between Russia and Ukraine. Accordingly, adjusted net profit came in at 3.27 billion euros ($3.4 billion) from 0.27 billion euros a year ago.

"A quarter of clear progress in executing our strategy of delivering security and sustainability of the energy system," Chief Executive Claudio Descalzi said

Repsol posted a net income of €1.392 billion thanks to the improved economic context compared to €648 million in Q1 2021, when the pandemic was still effective. Adjusted net income was €1.056 billion, 69% of which came from the Exploration and Production business that carries out all its activities outside Spain, according to a statement on the company’s website.

Josu Jon Imaz, CEO of Repsol stated, "These results demonstrate the strength of our integrated business model and the correct choice of path in our Strategic Plan.”

BASF achieved strong EBIT before special items despite significantly higher energy and raw materials prices. “The first quarter of 2022 was characterized by significantly higher energy and raw materials prices as well as supply chain disruptions. Nevertheless, we had a very good start to the year 2022,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE.

Sales rose by €3.7 billion compared year-on-year to €23.1 billion. Sales growth was mainly driven by higher prices, especially in the Chemicals and Materials segments. Income from operations (EBIT) before special items increased by €497 million to €2.8 billion. Net income receded to €1.2 billion, compared with €1.7 billion in Q1 2022.

Sinopec (China Petroleum & Chemical Corp.) reported a 25% surge in net income for the first quarter of 2022, a level last seen in the third quarter of 2020. Stronger results were attributed to elevated crude oil prices. The company achieved 22.61 billion yuan ($3.45 billion) net profit when compared to 17.93 billion yuan a year earlier, according to a filing to the Shanghai Stock Exchange.

Losing streak

South Korea’s LG Chem Ltd. said in a regulatory filing that its Q1 net profit plunged 43.9% from a year earlier. This was because rising global crude oil prices deteriorated the profitability in the company’s main petrochemical business. Net income slumped to 769.2 billion won ($608 million) compared with 1.3 trillion won the previous year. Operating profit fell 27.3% on the year while the revenue increased 20.4%.

The lower results came due to higher raw material costs, stemming from the rise in global oil prices, dented profitability in its main petrochemical business, the company said

Thailand’s SCG (Siam Cement Group) announced a 41% erosion in Q1 net profit year-on-year while the weaker results emanated from squeezed chemical margins due to rising feedstock costs from Chemicals Business. However, the company’s revenue from sales climbed 25% owing to higher sales revenue across all businesses.

Roongrote Rangsiyopash, President and CEO of SCG said, “SCG has remained strong both in Thailand and overseas despite rising costs owing to the Russia-Ukraine situation.”

Saudi Arabia’s Advanced Petrochemical Co.’s’s net profit dropped by 4% in the first quarter of 2022 from a year ago to reach SR164 million ($43 million). The company attributed the decrease in net profit to an increase in propane and outsourced propylene prices by 40% and 27%, respectively. On the other hand, the company’s sales volume increased by 35% from the same period of 2021.

Italian petrochemical producer Versalis, the operator of ENI’s chemical business, reported a loss of €115 million in the first quarter of 2022, as higher feedstock costs and rising utilities impacted cracker margins, ENI said.

Austrian OMV’s polyolefins sales volumes were down by 4% on the year in Q1 2022 while margins tightened following rising upstream costs, the company said. "The stronger market environment was more than offset by larger customer discounts in light of the higher price levels, higher costs of the feedstock mix, which also includes other intermediates besides naphtha, and climbing power and natural gas prices," OMV said.

Fully consolidated polyolefin producing subsidiary, Borealis, saw a 7% drop in PE sales volumes to 440,000 tons while PP sales volumes were down 6% to 520,000 tons. OMV recorded a 173% rise in its Q1 group operating result on the year at €3.17 billion. Borealis saw its contribution increase 73% to €469 million, while OMV’s Chemicals and Material division -which includes Borealis - recorded an operating result of €561 million.
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