OMV Aktiengesellschaft (OMV) Earnings Call Transcript & Summary

Welcome to the OMV Results January to June and Q2 2026 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. At this time, I would like to refer you to the disclaimer, which includes our position on forward-looking statements. These forward-looking statements are based on beliefs, estimates and assumptions currently held by and information currently available to OMV. By their nature, forward-looking statements are subject to risks and uncertainties that will or may occur in the future and are outside the control of OMV. Therefore, recipients are cautioned not to place undue reliance on these forward-looking statements. OMV disclaims any obligation and does not intend to update these forward-looking statements to reflect actual results, revised assumptions and expectations and future developments and events. This presentation does not contain any recommendation or invitation to buy or sell securities in OMV. I would now like to hand the conference over to Mr. Florian Greger, Senior Vice President, Investor Relations and Sustainability. Please go ahead, Mr. Greger.

Thank you. Good morning, ladies and gentlemen. Welcome to OMV's earnings call for the second quarter 2026. With me on the call are OMV's CEO, Alfred Stern; and our CFO, Reinhard Florey. Alfred and Reinhard will walk you through the highlights of the quarter and will discuss OMV's financial performance. Following the presentations, the 2 gentlemen are available to answer your questions. And with that, I'll hand it over to Alfred.

Thank you, Florian. Ladies and gentlemen, good morning, and thank you for joining us today. I'm pleased to welcome you to OMV's Second Quarter 2026 Results Conference Call. The second quarter was characterized by continued geopolitical uncertainty and heightened volatility in global energy markets, which led to substantially higher prices and margins across all our businesses. While the ongoing conflict in the Middle East affected our upstream operations and refining assets in the region, our diversified portfolio and strong performance in other areas allowed us to deliver an overall very good result despite these regional challenges. Our clean CCS operating result rose sharply to EUR 1.7 billion and cash flow from operating activities grew significantly to EUR 1.3 billion. When looking at the market situation, the conflict in the Middle East continued to impact global oil and LNG trade flows through the Strait of Hormuz. While these developments resulted in periods of significant volatility, market conditions gradually stabilized toward the end of the quarter as prospects for easing tensions improved. Against this backdrop, the average Brent oil price increased to $104 per barrel compared to $68 per barrel in the second quarter of last year. Our average realized crude oil price rose to $98 per barrel from $66 per barrel in the period -- in the prior year period. Concerns regarding LNG availability continued to support European gas prices through most of the quarter. The average THE gas price increased to EUR 46 per megawatt hour compared to EUR 36 per megawatt hour in the prior year quarter, while our realized gas price increased to EUR 38 per megawatt hour from EUR 29 per megawatt hour. Market conditions also improved substantially in our downstream businesses. European refining indicator margins more than doubled to $20.3 per barrel compared to $8.1 per barrel in the second quarter of 2025. This was driven by tighter supply availability and drawing inventories following restrictions on shipping through the Strait of Hormuz as well as damages in the Russian energy infrastructure impacting Russian refined product exports. In Chemicals, European ethylene indicator margins grew by almost 40% to EUR 813 per ton, while propylene indicator margins increased by more than 50% to EUR 704 per ton. With that, let me now turn to the financial highlights of the quarter. Supported by a much stronger market environment and reliable operations across Energy, Fuels and Chemicals, OMV delivered a substantially better performance compared to the prior year period. This quarter also marked the first reporting period of the new global polyolefins leader, Borouge International, which we co-own with ADNOC's international investment arm, XRG, each party holding 50% and consolidated at-equity. The contribution from Borouge International to OMV's result was very meaningful as it was able to capture the favorable market conditions across the key regions. In Energy, hydrocarbon production came in lower than the prior year quarter, mostly because the Middle East conflict impacted output. In Fuels, the utilization rate of the refineries improved by 7 percentage points and sales volumes were almost at the strong prior year level. In Chemicals, the steam cracker utilization rate rose by 11 percentage points year-on-year, reflecting significantly higher utilization at Burghausen and underlining our ability to capitalize on the improved olefin margin environment. Our clean CCS operating result increased sharply by 65% to EUR 1.7 billion. This is especially noteworthy because in chemicals, a large part of the result stemmed from the at-equity consolidated Borouge International and is, therefore, already an after-tax figure. Consequently, OMV's net income surged to around EUR 930 million, an increase of more than EUR 500 million year-on-year. The clean tax rate decreased from 45% to 34% because of a different earnings mix, a higher share from fuels, which is typically lower taxed and substantially -- and the substantial at-equity result from Borouge International. Because of this, clean CCS earnings per share went up sharply to EUR 2.90 compared to EUR 1.20 last year. Cash flow from operating activities rose by around EUR 250 million to EUR 1.3 billion, reflecting both the stronger earnings and a net working capital inflow of around EUR 150 million. The clean operating result of energy rose strongly year-on-year by 50% to EUR 885 million, driven by an improved E&P result, higher hydrocarbon prices led to positive market effects of more than EUR 400 million. Reduced sales volumes mainly due to the conflict in the Middle East were somewhat offsetting. The realized crude oil price increased by 48% to an average of $98 per barrel, while Brent increased by 53% to $104 per barrel. Different pricing mechanisms, which in some countries have a delay of 2 months, explain the slight difference. OMV's average realized natural gas price improved by 30% to EUR 38 per megawatt hour. The stronger increase compared to the European benchmark price THE, which grew by 26% was mainly due to portfolio composition. Hydrocarbon production remained broadly resilient at 291,000 barrels of oil equivalent per day, declining by only 4% despite temporary lower production driven by the Middle East conflict. Strong operational performance in Libya, where production increased by 10,000 to 45,000 barrels of oil equivalent per day, supported by new wells helped to offset natural decline in countries such as Norway and New Zealand. Absolute production costs decreased because of various cost reduction measures. However, unit production costs rose slightly to $11.2 per barrel. This increase resulted mainly from lower production volumes and unfavorable exchange rate effects. Sales volumes declined more than production by 34,000 to 242,000 barrels of oil equivalent per day as we had no liftings in the Middle East because of the conflict. Partly compensating were higher sales in Libya and Norway due to increased production and the lifting schedule. The Gas Marketing and Power result improved by EUR 11 million to EUR 6 million, driven by a higher contribution from Gas West, which was mainly attributable to the release of a transport provision related to booked pipeline capacities. Gas East came in broadly in line with the prior year quarter. The power business was impacted by the planned yearly maintenance turnaround of the Brazi power plant, which usually takes place in the second quarter. I'm now pleased to give you an update on the significant progress of the Neptun Deep project, one of the most important energy developments in Romania and the Black Sea region. With the installation of the Neptun Alpha offshore production platform in the Black Sea, OMV Petrom has now reached another important milestone. The platform located in waters approximately 120 meters deep is weighing more than 16,500 tons and standing over 225 meters high, which makes it one of the most impressive offshore structures in the region. Neptun Alpha will serve as the operational core of the field, processing natural gas offshore before transferring it to the onshore network. It has been designed as a fully automated facility capable of remote operation, reflecting the latest advances in offshore technology. The installation was successfully completed using the Saipem 7000, the world's third-largest semisubmersible crane vessel. In parallel, the installation of the offshore main gas pipeline, which will connect the field's production facilities to the onshore transport infrastructure has been completed. Furthermore, strong progress in the drilling activities has been made with 6 of the 10 planned development wells already completed. The next phase of the project is now well underway as progress is being made toward completion of the remaining production wells and the installation and integration of the subsea infrastructure at the Domino and Pelican South fields. In parallel, preparations are progressing well to connect all offshore facilities to the transport pipeline system. This will be followed by a comprehensive testing and commissioning program to ensure safe and reliable operations. The progress achieved to date is a testament to OMV Petrom's commitment to delivering this strategic project safely, efficiently and on schedule. The Neptun Deep project remains on schedule for first gas production in 2027, thanks to the dedication of everyone involved. Once operational, it will play a vital role in strengthening Romania's energy security, supporting regional supply resilience and reducing Europe's dependence on imported natural gas. The clean CCS operating result of fuels rose sharply to EUR 446 million, mainly due to substantially stronger refining indicator margins. In addition, the refining business benefited from a more favorable production mix and higher utilization. The trading business also delivered a strong performance, taking advantage of the high market volatility during the quarter. Partially offsetting were the impacts of elevated crude differentials and temporary regulatory measures, especially in Romania and Austria. The European refining indicator margin increased by more than $12 per barrel to $20 (sic) [ $20.3 ] per barrel, with refining utilization reaching 90% compared to 83% in the prior year quarter, which was affected by planned shutdowns at Burghausen and Petrobrazi, we were well positioned to capture these favorable market conditions. The contribution from the marketing business declined as the retail performance was affected by lower fuel unit margins caused by price regulations in several countries. This was partly offset by a stronger nonfuel business contribution and sales to EV customers, which tripled compared to the same period last year. The commercial business result remained at a similar level to the prior year quarter. The result of ADNOC Refining and ADNOC Global Trading came in slightly negative due to supply chain disruptions as a result of the conflict in the Middle East. The clean operating result of Chemicals more than doubled to EUR 429 million, driven by substantial increases in olefin and polyolefin prices. Borouge International in its first quarter of existence delivered a strong performance and represented the lion's share of the Chemical result. This is quite remarkable as we only show OMV's share of clean net income, thus an after-tax number as the new company is consolidated at-equity. The result of OMV-based chemicals also increased strongly, mainly because of substantially higher olefin indicator margins, which resulted in a positive market effect of EUR 100 million. Elevated price levels led to higher absolute discounts, which partially offset the overall increase. The utilization rate of the OMV steam crackers improved by 11 percentage points following substantially better utilization at Burghausen. Utilization in the prior year quarter was impacted by the shutdown of the crude distillation unit at the Burghausen refinery as well as turnarounds at customers. At EUR 349 million, the contribution from Borouge International was strong. OMV's attributable sales volumes from Borouge International, which corresponds to 50% of the new company, totaled 1.17 million tons. As this was the first full quarter of operations of Borouge International, I would like to provide you with some further details. Formed by OMV and XRG at the end of March 2026, through the combination of Borealis and Borouge and the acquisition of NOVA Chemicals, this new global leader in polyolefins has got off to an extremely strong start. Borouge International delivered strong results within the first 3 months of acting as one group. Adjusted EBITDA reached $1.8 billion in the second quarter of 2026, thus more than double the pro forma adjusted EBITDA generated in the first quarter of this year. At 33%, the EBITDA margin in the second quarter was very strong. The new company has proven the benefit of its diversified global footprint and premium product portfolio in this extremely challenging market environment. While the conflict in the Middle East severely constrained global polyolefin availability and drove prices up by more than 50% in North America and Europe and over 30% in Asia, it also highlighted the flexibility and resilience of the Borouge International global asset base. Borouge International's assets in North America and Europe continue to operate at high utilization rates with unrestricted access to feedstock and logistics services. In the Middle East, production volumes as reported by Borouge PLC were impacted by asset damage resulting from the incident on the 5th of April, reducing utilization in the second quarter to 60%. Borouge PLC acted swiftly to complete the necessary repairs and restore full asset availability by the end of June. With asset availability now fully restored, Borouge PLC is well positioned to return to high utilization rates, subject to logistics and feedstock availability. Despite the operational challenges in the Middle East, Borouge International has also made significant progress in integrating its business under a new governance and management structure. A series of value creation initiatives was launched with a focus on maximizing cost advantages and leveraging the group's differentiated high-performance product portfolio. These actions lay the foundation for the estimated EBITDA synergies of over $500 million with approximately 75% to be realized within the first 3 years. Thank you very much for your attention. I will now hand over to Reinhard.

Thank you very much. As Alfred explained, Borouge International delivered strong financial results. As part of our ongoing efforts to enhance transparency and facilitate a deeper understanding of our financial performance also with regards to Borouge International, I would like to provide an illustrative reconciliation bridge from EBITDA to net income. We currently anticipate an indicative depreciation of around $2 billion per year, reflecting the size and capital intensity of the Borouge International asset base. The indicative combined corporate tax rate of the new company is expected to be between 25% and 30% per year. As previously emphasized by Alfred, Borouge International achieved a strong performance in the second quarter, recording adjusted EBITDA of $1.8 billion. Adjusted EBITDA is stated before nonrecurring expenses, which amounted to around $150 million as a onetime effect in the second quarter of 2026. When reconciling to adjusted net income, approximately $500 million reflect depreciation, while the remainder of the difference is being nearly equally split between interest and tax expenses. To bridge the adjusted net income of around $900 million to the contribution to OMV's clean operating result in Chemicals, we must first deduct the 10% minority share of Borouge PLC, then consider OMV's 50% stake in Borouge International account for the FX impact from dollar to euro conversion and include PPA adjustments. We trust that this information provides greater transparency on how Borouge International translates into OMV's share of results. With that, let us move back to OMV and from earnings to cash flow. Our cash flow continues to reflect the strong operational performance and cash generation of the OMV businesses. Our second quarter operating cash flow before net working capital effects rose substantially by 39% to almost EUR 1.2 billion, mainly due to higher commodity prices and stronger refining margins. This was achieved despite the missing cash flow contribution from the Borealis Group following the deconsolidation as a result of the closing of the Borouge International transaction in March 2026 as well as lower dividends received in the second quarter of 2026. The prior year quarter still included around EUR 200 million dividend payments from Borouge Plc, which is now part of Borouge International. Net working capital effects in the quarter were positive and amounted to around EUR 150 million. As a result, cash flow from operating activities came in at around EUR 1.3 billion, an increase of roughly 20% compared with the same quarter in 2025. As part of investing cash flow, we recorded a cash outflow of around EUR 750 million in the second quarter. The prior year quarter was slightly positive as it included around EUR 450 million from the divestment of our 5% stake in Ghasha Concession in the UAE and around EUR 650 million from a loan repayment from Baystar in the U.S. Organic free cash flow before dividends increased to more than EUR 600 million from EUR 160 million in the prior year quarter. As usual, the second quarter reflects the payment of our annual dividends, along with the dividends to minority shareholders in OMV Petrom, resulting in negative free cash flow for the quarter. Looking at the half year picture, cash flow from operating activities before net working capital effects rose by 27% to EUR 2.8 billion. This increase was mainly due to a higher reported result in the Fuels segment, supported by strong refining margins. The missing Borealis Group cash flow contribution and lower dividends received from equity accounted investments were partly offsetting. In the first half of 2026, we recorded a build of net working capital of almost EUR 700 million because of higher inventory levels in Fuels and the higher price environment. In the respective prior year period, we recorded a net working capital release of around EUR 250 million, mainly due to a decrease in inventories in the gas business. Organic cash flow from investing activities in the first half of the year was around EUR 1.6 billion related to ordinary ongoing business investments and major growth projects such as the Neptun Deep mega project in the Black Sea, the SAF/HVO plant in Romania and green hydrogen in Austria. Inorganic cash flow from investing activities in the first half of the year contained outflows of around EUR 2 billion in relation to the formation of Borouge International stemming mostly from a capital injection from OMV in Borouge International and cash disposed due to the loss of control of the Borealis Group. Organic free cash flow before dividends in the first half of 2026 came in at around EUR 500 million. As you can see, our balance sheet remains strong. In the first quarter, we reflected the deconsolidation of Borealis, the related changes in equity and net debt and the EUR 1.5 billion capital injection into Borouge International. In June, we shared the success of our business by distributing a total EUR 1.7 billion, comprising annual dividends from 2 OMV shareholders as well as dividends to minority holders in OMV Petrom, thereby continuing our track record of attractive shareholder returns. Even after this sizable distribution, our leverage ratio increased to 19% only, remaining comfortably below our mid- and long-term threshold of 30%. This underlines our disciplined approach to maintaining a robust capital structure while delivering attractive returns. At the end of June, OMV had a cash position of EUR 3 billion and EUR 3.1 billion in undrawn committed credit facilities. Let me now conclude with an updated outlook for this year. Geopolitical developments in the Middle East remained dynamic throughout the second quarter. While we saw alternative phases of diplomatic engagement and heightened regional tensions, recent escalations again caused increased volatility in global energy markets. We continue to monitor the situation, but how this conflict will develop and its implication on global markets remain highly uncertain. We continue to forecast an average dated Brent price between $85 and $95 per barrel for 2026, reflecting the ongoing high volatility and limited visibility. The average THE gas price is now estimated to be around EUR 50 per megawatt hour, mirroring the current fragile state of the gas market. Consequently, we expect our average realized gas price to be around EUR 40 per megawatt hour. In Energy, we continue to expect average oil and gas production for 2026 to be between 280,000 and 290,000 barrels of oil equivalent per day. While we saw strong production in the first half of this year, the timing and extent of the lifting of restrictions on shipping through the Strait of Hormuz continues to be a decisive factor. In Fuel, we revised our refining indicator margin, which is now projected to be average $20 per barrel for 2026, reflecting an extraordinary situation in global refining markets. Refining balances have substantially tightened with around 10% of global capacity currently offline. We forecast utilization rate of our European refineries to be above 90% with no major maintenance turnaround scheduled in the second half of the year, which will allow us to strongly benefit from the current market environment. Total fuel sales volumes are expected to be higher than last year, while retail and commercial margins are projected to be below the levels seen in 2025. In Chemicals, the combination of the exceptionally strong second quarter and the continued high price environment moving into the second half of 2026 lead to a substantial improved view on olefin margins for 2026. We now expect the ethylene indicator margin to be above EUR 600 per ton and the propylene indicator margins above EUR 500 per ton. The utilization rate of the OMV olefin crackers is now predicted to be between 85% and 90% in 2026, following a weaker-than-anticipated second quarter. In the second half of 2026, we expect a significantly improved and stronger cracker utilization compared to the first half year. The clean tax rate for the full year is currently expected to be in the low 40s. Before we go to your questions, I would like to take a moment on behalf of the Executive Board and the OMV team. Alfred, this is your last quarterly results call as CEO of OMV. And I would like to thank you for your leadership, your clear strategic direction and your strong commitment to OMV's transformation. Over the past years, you have guided OMV through a period of major change and important strategic decisions. You have helped position the company for the future with a stronger portfolio, a clear transformation agenda and a continued focus on value creation for our shareholders. It has been a pleasure to work with you, and I'm sure many on this call will join me in thanking you for the open and constructive dialogue you have had with the capital markets. With that, Alfred, I would like to hand over to you for a few final words.

Thank you, Reinhard. That is very nice of you, and thank you for your kind words, much appreciated. And also thank you to everyone on the call. I have to say I've very much appreciated the discussions with analysts and investors over the past years in our quarterly calls, in meetings and during roadshows. Your questions were always detailed, sometimes challenging and very valuable. Personally, I have to say I tremendously enjoyed all the calls, all the discussions because each time I learned a lot through your questions and challenges. It has been a privilege to represent OMV during such an important phase of its development, and I'm proud of what the team here at OMV has achieved and confident about the company's future. OMV has strong foundations, a clear strategy and many opportunities ahead. And of course, I wish Emma Delaney, Reinhard, the Executive Board and the entire OMV team every success for the next chapter. And I would like to thank all of you for your continued interest in OMV and for the professional exchange over the last years. I want to wish everybody the best, but we still get to the questions, and we do that by me handing over to Florian.

Thank you, both. Let's now come to your questions. [Operator Instructions] The first question today comes from Alejandro Vigil, Santander.

Wishing Alfred all the best in the new challenges and best of luck to Emma in her new role in the company. My first question is about the dividend from BGI. When are you expecting to collect this dividend? And if considering the market performance, the company results are probably above expectations. Is there any option of BGI to pay dividends in line with the initial idea of $1 billion per year? And the second question is about the net debt and your expectations for the end of the year. I saw that you issue a hybrid bond in the second quarter, also the working capital. If you can elaborate a bit on the second half of the year to bridge the net debt for the end of the year.

Yes. Thank you, Alejandro, for your questions. Let me start with your questions on dividend. First of all, regarding the delivery of the dividend that was announced, we are actually expecting that this dividend will come in, in the third quarter. And then also for the first time, contribute with a very strong cash flow from Borouge International in our accounts. Regarding the second part of that question, whether we see any kind of upside to that, I think it's a little bit too early to comment on that because you're right, second quarter was a very strong quarter. We still have lots of uncertainties around there. We have lots of net working capital challenges still with high prices, high inventories. And we have been also exposed to some additional CapEx. It's too early to comment on that. And therefore, I leave that for a later consideration. But at the moment, we are looking forward for still a very strong dividend contribution for Q3. Your second question on the net debt level. First of all, let me comment on the hybrid bond. The hybrid bond that was successfully placed in Q2 with EUR 750 million is actually a replacement for a hybrid bond that we pay back and that we have announced so to do in the third quarter. So we are not actually increasing the outstanding financing in that respect. So therefore, if I look at the current expenses that we had, very strong negative impact on cash flow from the EUR 1.5 billion equalization payment for Borouge International in the first quarter and EUR 1.7 billion of dividends for OMV and minorities of Petrom in the second quarter. All that will not happen in Q3 and Q4. So therefore, I would expect some positive development in that respect, and that will also influence our net debt going forward.

Just to clarify a follow-on on the question on the hybrids. So the total hybrids you're expecting to end the year, it's the current level you have in the first half. You're not going to have maturity...

The level is about EUR 2 billion in total. And now we have a little bit of an elevated situation in Q2. That will correct in Q3, and we'll end the year with that exposure of around EUR 2 billion.

EUR 2 billion. Okay. Understood.

Impressive Chairman. Alejandro, thanks for your question. We now move to Ram Kamath, Barclays.

Alfred, I want to congratulate you on your tenure at OMV and wish you all the very best for the next chapter. A couple of questions from me. Firstly, could you provide some color on Chemicals price momentum into second half, particularly given recent pullback in monomer prices. I see that you have guided -- I mean, the indicator margin suggests EUR 150 per ton on an average. But if we imply based -- after considering the first half prices, 2Q has been significantly higher, right? So is it suggesting that second half would be lower than the annual guide that you have? And given the higher prices of these olefins, would you see reflection of that in higher feedstock cost on polyolefin production in the second half? And just on the refining thing as a second question, I know, I mean, refining margin has been robust so far this year. Do you see any downside risk to this refining outlook? And just on a -- to get a sense -- sorry, I think I lost.

We can still hear you.

Okay. Could you provide some color on basically the relative contribution from refining and the marketing just for the modeling purpose and possibly the impact of regulatory measures introduced in Romania and Austria in the second quarter?

Okay. Well, first of all, thank you very much for your kind words. Much appreciated. And let me try and answer your 2 questions. First on the Chemicals margins, olefins margins and color on that for the second year -- for the second half of the year. What we have actually seen here in July is that, yes, compared to the second quarter, the prices or the margins have come down a little bit, but we are still on a very strong level, well above the guidance that we have provided. So ethylene margins are above the 600, propylene margins are above the 500 that we are guiding for the full year. Quite honestly, I think it will depend a little bit how we see things evolving as Reinhard explained a lot of volatility in the situation and how to supply the markets. We expect that we can run our assets in the second half of the year full and that we can benefit of a market environment and use this global position in Borouge International, but also the European position of our OMV-based chemical crackers. On the refining margins, to be honest, Ram, I will be very careful. In the last couple of years, this was the one indicator where we were the most of all the time. It is a very special environment. And I would say some major contributing factors, of course, the Middle East crisis, not just with the Strait of Hormuz, but now also with the activities, blockage of the Houthis in the Red Sea is creating supply chain disruptions. But on top of that, a lot of the Russian infrastructure is damaged also showing limited availability and with this supply chain streams changing. I think -- and at the same time, what we see is, as you could see in our retail area, a good demand and also on the commercial business-to-business side, only more or less flat with a very slight reduction versus last year. So we see good demand. And on the other side, globally, major supply chain disruptions with significant capacity not accessible. This is why we take the refining indicator margin for the full year average up to $20 per barrel. And we believe as we have no turnarounds and everything, we will, of course, maximize our production from our assets. In the -- maybe the one thing that I should mention, what we can see, of course, also globally is inventory levels reducing and partly compensating now for lack of supply. This will -- the longer this takes, the more difficult this will, of course, become. Regulatory measures are hard to predict because the fuel prices now across many countries in Europe, in particular, again, significantly elevated. And here, this is providing for some inflationary push. And one should expect that there could be some further regulatory measures. In Romania, they have announced something that they haven't published yet. So we are not completely clear, but I think it's similar to what we had in the second quarter. And also the -- in Austria here, they are extending the measures, however, without any margin restriction. So basically, we see that this should provide -- continue to provide a good environment to operate in.

Thank you, Ram, for your questions. We now move to Eva Xenios from BNP Paribas.

So just 2 from me, please. The first is on windfall taxes. So given that Portugal has just approved a windfall tax on oil firms, should we expect Austria to do the same? And secondly, on NOVA Chemicals, could you update us on the AST2 growth project and the efficiency program, given that these are both -- I think you've said supposed to be key drivers for Borouge International's EBITDA growth this year?

Yes, Eva, thank you. I'll take your first question on windfall taxes. It is true that there are considerations in some countries around reintroduction of windfall taxes. We have not seen that this is a really widespread attempt. We are seeing that some of the regulatory topics regarding fuel margins have been considered. We have seen part of that in Austria. But as Alfred mentioned, not as a direct impact to reduce margins. However, we are expecting that in Romania, maybe in other Central and Eastern European countries, we see similar measures. But this is not directly a windfall tax in that sense, what we have experienced in the past. And therefore, I would be -- I would say, positive towards a continued positive environment for our business without major restrictions through windfall tax impact.

Okay. And I will try on the NOVA Chemicals AST2. Maybe let me just position it this way. As you point out, AST2 is one of the growth projects that we have there in this environment now with limited supplies globally. This is one of the areas where Borouge International can benefit us. To my understanding, they are on track with the project. However, for the detailed things, I will refer to Borouge International. But all I know is they are on track with the project.

Thank you, Eva. Now we'll come to Josh Stone from UBS.

Best of luck, Alfred. Congratulations for managing OMV through a number of landmark moments for the company. So it was much appreciated. A couple of questions. One on refining, I just wanted to follow up in terms of your confidence and ability to capture these very strong margins. So what are you seeing today? And just to confirm, there aren't any hedges or anything like that, that could disturb things on the refining side? And then related to that, there have been a number of reports in recent weeks around very low water levels on certain choke points on the Rhine and also the Danube. So I'm just curious how is that impacting your business? And are you already starting to see some premiums to refining or even on chemicals as a result of these very low water levels? I'm curious on that.

Yes, Josh, maybe first, let me thank you for your kind words. Thank you very much. Then I start with the refining margins a bit and maybe Reinhard wants to add something on hedging or other things. Indeed, as you said, if you look at the July margins, right, we are well above the $20 per barrel that we are now giving as an outlook for the full year. I think all that is a mix effect of all these supply chain issues. All the -- I mentioned some of them before, you added some others on logistics, transportation, low water levels are an issue and they are driving the possibility to transport the things on top of low water levels. There's also some rail issues in Germany. So all this is limiting the supply chains. And I think this is what is causing the fuel prices and in particular, the middle distillate prices to be where they are. And as I said, I think we are well -- that we have predicted for the full year. Maybe one other comment on the kerosene because we -- I think we are in a special situation here with OMV. As you know, we have both pipeline into Schwechat Airport here in Vienna and to the Munich Airport in Germany. Also close to the airport in Bucharest. And we manage, in particular, here in Austria and in Germany to supply fully the kerosene demand and ensure that we can supply that and also use the demand price environment that we see.

And maybe, Josh, on the topic of hedges, we are not expecting any major negative or other effects from hedging going forward. Remember that the negative hedging impact that we showed in Q2 was actually triggered by a cargo from our oil trading that was designed to come from Middle East. And suddenly, this cargo couldn't leave the port. And therefore, we had one leg open and prices were rising, and therefore, we encountered a loss. That is currently not the case. We do not have any cargoes that we have inside the Strait of Hormuz. We don't have any open hedges on that. So therefore, I'm not expecting any of the negative effects to continue.

Thank you for the questions. And we now move to Gui Levy from Morgan Stanley.

Alfred, also echoing my colleagues here, I wanted to wish you all the best on your next steps. Perhaps the first question to you, I would like to ask you what you think are going to be the biggest challenges to the next CEO? What the next CEO is going to face over the coming years? Any particular issue that you would like to have addressed if you had stayed in the company for longer as CEO? And then second one, going to the working capital topic. Could you help me quantify how much of the working capital build in the first half has been driven by price versus volumes? And how should I think about that reversing over the coming quarters?

Yes, Gui, thank you very much. Let me -- thank you very much for your kind words. And then let me address your first question. For the net working capital, I will ask Reinhard to help here. The biggest challenge is, right? I think what we have started off here at OMV, we wanted to develop the company to become an integrated energy, fuels and chemicals company. And because we believe in that integrated business model, it has served us well. And over the quarters that I was here, I could see that we were able to deliver very good cash flows through this model, which allowed us to pay attractive dividends and at the same time, make investments into the progress of the company. We have made some major steps in that direction. Borouge International, of course, is a big one. And it's great that the second quarter was an extremely good start for Borouge International in a special environment, right? And also, we reported on Neptun Deep. And as we reported earlier, Neptun Deep, when it goes on stream, it will deliver about EUR 500 million additional operating result. And in that, it's a key project to keep moving forward. So Reinhard reported on our leverage ratio of 19%, which makes a very solid balance sheet that allows to continue to invest into the growth and into the transformation of the company. And I think those -- around those things, we will see most of the challenges and not to neglect, in my opinion, the high volatility that we see all around us. This requires agility. We have put a lot of work into OMV to be able to respond to this, but this will continue to be a challenge, just the speed and volatility of changes that we see is incredible. And last but not least, I want to mention our efficiency program where we said at a minimum, we want to deliver EUR 500 million additional cash flow by 2027. As you know, we have strengthened that program with a fixed cost program that should also deliver EUR 400 million lower fixed costs by 2027. We are well on the way. We have projectized all this and continuing to deliver on this will be key to make OMV a stronger and better company.