OMV reported its IFRS consolidated results for 2Q12 this morning, beating the consensus on both the CCS EBIT and net income lines thanks to a superb performance in E&P and petchem divisions. Beat on net income is especially charming given the very high effective tax rate (39.6% versus exp. 32.0%). Admittedly, however, this is partly due to the lower minorities on less robust performance from Petrom. On somewhat weaker operating cash-flows gearing returned to around 30%, in-line with the company’s target. In terms of segments, E&P was extremely strong on impressive cost containment and better average realized prices. By contrast, R&M fell somewhat short of our expectation due to the weak performance at Petrom in 2Q12. As a massive positive surprise, petchem delivered € 66m in 2Q12, the highest quarterly reading since at least 4Q06 (!). With clean CCS EBIT up 85% y/y, OMV maintained its sector leading earnings momentums in the second quarter. The company remains our preferred play in the current macro environment: the valuation seems undemanding considering the firm’s high exposure to fat upstream margins.