OMV’s $1.3 Billion Quarter Hides a Storm of Setbacks

OMV's Q1 earnings nearly triple to €1.32 per share, but €250M in one-off charges, Borouge IPO delay to 2027, and RBC downgrade weigh on the stock.

When OMV releases its first-quarter results on Thursday, investors will see a headline profit that has nearly tripled year-on-year. But behind the numbers lies a company grappling with production outages, hedging losses, and a delayed IPO that will cost shareholders dearly.

The Austrian energy and chemicals group is expected to report earnings per share of €1.32 for the three months through March, up from €0.44 a year earlier, on revenue of roughly €8 billion. That headline growth, however, masks a series of one-off charges that have already hit the bottom line.

Supply chain disruptions in the Middle East triggered hedging losses of around €100 million, while lower retail margins and planned refinery maintenance added another €150 million in costs. The Strait of Hormuz blockade was severe enough that OMV tapped Austria’s strategic petroleum reserve, with the economy ministry releasing 56,000 tonnes of crude oil to keep the Schwechat refinery running.

A Chemical Reaction in Abu Dhabi

The biggest headache for management is Borouge International, the petrochemical joint venture with Abu Dhabi’s ADNOC. An Iranian attack in early April damaged production facilities at the Ruwais industrial complex, forcing a halt after falling debris hit the site. While the company has found alternative shipping routes to keep exports moving, the damage has delayed the planned initial public offering.

OMV and ADNOC have pushed the listing back to 2027, a move that will halve Borouge’s expected dividend contribution to OMV next year. The shortfall works out to as much as €0.70 per OMV share — a meaningful hit for a stock yielding over 7 percent.

The joint venture is still expected to contribute around €140 million to group earnings from the second quarter onward, but the production outage raises questions about how long that ramp-up will take.

Dividend Day Approaches

For the 2025 financial year, OMV’s board is proposing a total dividend of €4.40 per share, comprising a regular payout of €3.15 and a special dividend of €1.25. At Friday’s closing price of €58.10, that yields between 7.5 and 8.1 percent — one of the richer payouts in the European energy sector.

Shareholders will vote on the proposal at the annual general meeting on May 27. The ex-dividend date is set for June 8, with payment due three days later.

Technicals and Analyst Caution

The stock has rallied roughly 20 percent since the start of the year, hitting a 52-week high of €63.20 in early April before retreating. It now sits exactly on its 50-day moving average, with the 200-day line at €50.13 well below — a sign the long-term trend remains intact.

A move above the 20-day average near €60.50 after the earnings release could signal a resumption of the uptrend, with the round number of €60 as the next target.

Not everyone is convinced. RBC Capital Markets recently downgraded OMV to “underperform” with a price target of €46, citing overcapacity across the chemicals industry. The bank’s caution reflects a broader concern: that the special charges hitting OMV this quarter may not be as exceptional as management hopes.

The market will be watching Thursday’s call closely for clarity on how long the Ruwais production halt will last and whether the board can credibly frame the €250 million in combined one-off costs as truly temporary. If they can, the stock’s rally may have further to run. If not, the dividend yield could end up being the only thing holding the share price up.