OMV’s Hormuz Headache: A €886 Million Book Gain Masks a 12% Profit Slide

OMV's Q1 net profit jumps to €1.645B on Borouge gain, but adjusted profit falls 12% amid Strait of Hormuz closure, production drop, and dividend outlook dims.

The numbers coming out of OMV’s first-quarter report tell two very different stories—and investors are betting the cleaner one holds more weight.

On the surface, the Austrian energy major posted a net profit of €1.645 billion, a staggering leap from €288 million a year earlier. But peel back the layers, and the picture turns far more sobering. That headline figure was inflated by a one-off €886 million book gain tied to the creation of Borouge International, a new 50:50 joint venture with partner XRG that consolidates Borealis, NOVA Chemicals, and Borouge. Strip that out, and the underlying numbers reveal a business under real pressure.

Adjusted operating profit slid 12% to €1.025 billion in the first three months of 2026, while earnings per share dropped 21% to €1.0—missing market expectations for the full-year consensus of €9.53. The adjusted net income fell even further, down 22% to €323 million. The culprit? A geopolitical shock that hit OMV where it hurts most.

The closure of the Strait of Hormuz in late February dealt a direct blow to the company’s Energy segment. Hydrocarbon production fell 7% to 288,000 barrels of oil equivalent per day, and the Fuels division absorbed roughly €100 million in one-off hedging losses. The result: operating cash flow plunged 43% to €776 million.

OMV has responded by overhauling its full-year assumptions. The Brent crude price forecast for 2026 has been raised sharply to $85–$95 per barrel, up from the previous estimate of around $65, reflecting expectations that the Strait will reopen by the end of June. The gas price projection for the Trading Hub Europe has also been lifted to roughly €45 per megawatt-hour. Yet despite the more bullish pricing outlook, the company has trimmed its production guidance to 280,000–290,000 barrels per day, down from an earlier indication of just under 300,000.

The Borouge International deal, completed on March 31, required OMV to invest €1.5 billion in cash. That pushed net debt to €4.5 billion, up from €3.6 billion at the end of 2025, though the leverage ratio remains a manageable 17%. The joint venture is expected to generate long-term synergies of more than €500 million by 2030, with combined EBITDA targeted to rise from a historical $4.5 billion to over $7 billion.

For income-focused investors, the most immediate concern is the delayed initial public offering of Borouge International, now pushed back to 2027. That postponement halves OMV’s dividend income from the venture to $250 million. Analysts estimate this could reduce the total dividend per share by €0.60 to €0.70. For the 2025 financial year, management has proposed a payout of €4.40 per share—comprising €3.15 in regular dividends and €1.25 in special dividends—to be formally approved at the annual general meeting on May 27 at the Vienna Congress Center.

The company’s dividend policy remains intact: 20% to 30% of operating cash flow plus 50% of the Borouge dividend will continue to be distributed. That commitment has not gone unnoticed by the market.

BlackRock, the world’s largest asset manager, has increased its voting rights stake in OMV to 4.39%, reinforcing its position as a key institutional investor. The stock closed recently at €60.70, up roughly 25% since the start of the year and nearly 34% over the past twelve months.

Analysts are taking notice. Erste Group upgraded OMV from “Hold” to “Accumulate” and raised its price target sharply from €46.10 to €66.00, implying upside of about 9% from current levels. The question now is whether the share price can sustain its rally once the second quarter arrives—and the Borouge book gain is no longer there to dress up the numbers.