REG - S.N.G.N. Romgaz S.A. - H1 2023 Report

Societatea Nationala de Gaze Naturale Romgaz SAAnnouncement

11/08/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230811:nRSK0621Ja&default-theme=true

RNS Number : 0621J  S.N.G.N. Romgaz S.A.  11 August 2023

BOARD OF DIRECTORS' REPORT

1(ST) HALF YEAR 2023

 

 

IDENTIFICATION DETAILS ON REPORT AND ISSUER

 Report based on                                         Law No. 24/2017 on issuers of financial instruments and market operations
                                                         (Article 67) and ASF Regulation (Financial Supervisory Authority) no.5/2018 on
                                                         issuers of financial instruments and market operations (Annex No.14) for the
                                                         six-month period ended on June 30, 2023 (H1 of financial year 2023)

                                                         GEO No.109 of November 30, 2011 on corporate governance of public enterprises,
                                                         as subsequently amended and supplemented - art.55 para (1)
 Report Date                                             August 11, 2023
 Company Name                                            Societatea Naţională de Gaze Naturale "ROMGAZ" SA
 Headquarters                                            Mediaş, Piaţa Constantin I. Motaş, nr.4, 551130, Sibiu
 Telephone/fax number                                    0040 374 401020 / 0040 269 846901
 Web/E-mail                                              www.romgaz.ro (http://www.romgaz.ro) / secretariat@romgaz.ro
                                                         (mailto:secretariat@romgaz.ro)
 Registration No. with the Trade Register Office         J32/392/2001
 Fiscal Code                                             RO14056826
 Legal Entity Identifier (LEI)                           2549009R7KJ38D9RW354
 Regulated market where the company's shares are traded  Bucharest Stock Exchange (shares) and London Stock Exchange (GDRs)
 Subscribed and paid in share capital                    RON 385,422,400
 Shares main characteristics                             385,422,400 shares, each with a nominal value of RON 1;

                                                         nominative, ordinary, indivisible shares, issued dematerialised and free
                                                         tradable since November 12, 2013 as SNG - for shares and SNGR - for GDRs

 

Romgaz(( 1  (#_ftn1) )) Group Performances

Romgaz Group keeps high operational and financial performances in the first
six months of 2023 (H1 2023).

National gas consumption recorded a decrease of roughly 12.4% for the first 6
months of 2023 as compared to the similar period of last year, while Romgaz
deliveries decreased by 5.7%. Therefore, Romgaz market share 2  (#_ftn2) is
47.8%, by 3.4% higher than the share held in the similar period of last year.

Natural gas production for the first half of 2023, was 2,383.3 million m(3),
indicating a 5.2% production decline related to production recorded in H1
2022.

Romgaz electricity production reached 497.579 GWh, lower by 47.08 GWh than the
production recorded in the similar period of 2022 (-8.64%). This production
placed Romgaz at a market share of 1.69%(( 3  (#_ftn3) )).

Consolidated net profit per share (EPS) was RON 4.4.

Margins of the main profitability indicators for H1 2023: net consolidated
profit (34.42%), consolidated EBIT (59.19%) and consolidated EBITDA (64.52%)
increased significantly as compared to the first half of 2022 (23.02%; 26.19%
and 29.12% respectively).

The increase is due to lower royalty expenses (RON 290.1 million in H1 2023
compared to RON 917.1 million in H1 2022) and due to lower expenses with the
windfall tax from gas sales activities (RON 645.1 million in H1 2023, compared
to RON 3,607.3 million in H1 2022) following GEO No.27/2022 4  (#_ftn4) .
According to this Ordinance, natural gas quantities sold for 150 RON/MWh are
exempted from payment of the windfall tax, and royalty is calculated and paid
at this price and not at the reference price communicated monthly by the
National Agency for Mineral Resources.

 

Relevant financial results (consolidated)

 
*RON million*

 Q2 2022   Q1 2023  Q2 2023  Δ Q2 (%)   Main Indicators                               HI 2022  HI 2023  Δ HI

                                                                                                        (%)
 3,570.3   2,909.0  1,988.3  -44.31     Revenue                                       7,496.0  4,897.3  -34.67
 3,680.1   2,984.5  2,141.2  -41.82     Income                                        7,604.5  5,125.6  -32.60
 2,792.5   1,199.5   921.9   -66.99     Expenses                                      5,547.5  2,121.5  -61.76
 0.3        0.5      1.1     266.67     Share of the associates' result               0.2       1.6     700.00
  887.9    1,785.5  1,220.3  37.44      Gross Profit                                  2,057.3  3,005.7  46.10
 141.6      815.5    504.6   256.36     Profit Tax                                    331.3    1,320.1  298.46
 746.3      970.0    715.6   -4.11      Net Profit                                    1,725.9  1,685.6  -2.34
 825.7     1,742.4  1,156.1  40.01      EBIT                                          1,963.2  2,898.6  47.65
 956.2     1,882.4  1,277.2  33.57      EBITDA                                        2,182.7  3,159.6  44.76
 1.9        2.5      1.9     -4.11      Earnings per share (*)) (RON)                 4.5       4.4     -2.34
   20.90    33.34    35.99   72.18      Net Profit Rate (% from Revenue)               23.02    34.42   49.49
  23.13     59.90    58.15   151.42     EBIT ratio (% from Revenue)                    26.19    59.19   125.99
  26.78     64.71    64.24   139.85     EBITDA ratio (% from Revenue)                  29.12    64.52   121.57
 5,884     5,943    5,944    1.02       Number of employees at the end of the period  5,884    5,944    1.02

The figures above are rounded. Therefore, small differences may result upon
reconciliation.

Note: income and expenses do not include in-house works capitalized as
non-current assets.

 

Summary of the Group's main indicators for H1 2023:

-       Total income decreased by RON 2,478.9 million in H1 2023,
recording a drop of 32.6% due to the following factors:

·      Decrease of revenue from natural gas sales (RON 4,283.68 million
in H1 2023 as compared to RON 6,694.78 million in H1 2022); deliveries
decreased by 5.5% than in H1 2022, an important effect in reducing the revenue
from gas sales was triggered by the obligation imposed by GEO No.27/2022,
under which Romgaz had to sell most of production at a regulated price of 150
RON/MWh (86.16% of H1 2023 deliveries (21.22 TWh) were made at regulated
price, compared to H1 2022, when only 4.23% of deliveries (1.10 TWh) were made
at regulated price);

·      Revenue from electricity sales also recorded a decrease (RON
200.40 million in H1 2023 as compared to RON 498.58 million in H1 2022). As of
2023, Romgaz had to sell almost all electricity produced at 450 RON/MWh,
according to GEO No. 27/2022;

·      Revenue from storage services increased by 59.84% (RON 287.29
million in H1 2023 as compared to RON 179.74 million in H1 2022), mainly due
to increased capacities booked by clients for natural gas storage;

-       Total expenses decreased in H1 2023 by 61.76% (-3,426.00
million), mainly due to the reduced windfall tax for natural gas (-2,962.16
million) and royalty expenses (-627.05 million);

-       Increase of the gross consolidated profit by 46.10% as compared
to H1 2022 was offset by the profit tax. The profit tax includes the
solidarity contribution introduced at the end of 2022, the expense recorded
with this contribution in H1 2023 was RON 970.92 million;

-       Net consolidated profit of RON 1,685.64 million, by 2.34% lower,
namely by RON 40.30 million, as compared to the similar period of last year;

-       Labour productivity decreased as compared to the previous
period, from RON 1,273.97 thousand revenue/employee in H1 2022 to RON 823.91
thousand revenue/employee in H1 2023 (-35.33%);

-       EPS of RON 4.4 is by 2.34% lower than recorded in H1 2022.

 

Operational results

 Q2 2022  Q1 2023  Q2 2023  Δ Q2 (%)   Main Indicators                                HI 2022  HI 2023  Δ HI (%)
 1,207.9  1,236.7  1,146.6  -5.1       Gas production (million m3)                    2,515.1  2,383.3  -5.2
 83.8     88.5     78.6     -6.2       Petroleum royalty (million m3)                 176.5    167.1    -5.3
 5,239    5,617    5,322    1.6        Condensate production (tons)                   10,607   10,939   -3.1
 199.3    323.0    174.5    -12.4      Electricity production (GWh)                   544.7    497.6    -8.64
 63.7     1,114.9  42.4     -33.4      Invoiced UGS withdrawal services (million m3)  1,090.1  1,157.3  6.2
 702.2    45.4     814.3    16.0       Invoiced UGS injection services (million m3)   781.0    859.7    10.1

Note: the information is not consolidated, namely it contains transactions
between Romgaz and Depogaz.

 

H1 2023 gas production was influenced by:

-       production decline specific for production of hydrocarbon
reservoirs;

-       well workover operations at wells with low productivity or
inactive wells;

-       ongoing rehabilitation projects of main mature gas fields;

-       optimisation of gas field exploitation;

-       investments to expand production infrastructure and to connect
new wells to it.

National gas consumption estimated for H1 2023 was 55.6 TWh, approximately
12.4% lower than the consumption recorded in H1 2022, out of which about 8 TWh
was import gas and the difference of 47.6 TWh is gas from domestic production,
Romgaz deliveries being 26.6 TWh, representing 47.8% of the national
consumption and 55.8% of the consumption covered with gas from domestic
production.

Electricity production is shown in the table below and its trend was closely
related to the energy demand, price trends on competitive markets and
equipment maintenance and repair activities.

 
 *MWh*

      2022     2023     Variation
 1    2        3        4=(3-2)/2x100
 Q1   345,337  323,037  -6.46%
 Q2   199,323  174,542  -12.43%
 H I  544,660  497,579  -8.64%

 

 

The full version of the Board of Directors' Report for 1(ST) Half Year 2023,
the Consolidated Condensed Interim Financial Statements (not audited) for the
six-month and three-month periods ended June 30, 2023 and the Separate
Condensed Interim Financial Statements (not audited) for the six-month period
ended June 30, 2023, prepared in accordance with International Accounting
Standard 34, are available on company's website www.romgaz.ro
(http://www.romgaz.ro) - Section Investors - Interim Reports and on Bucharest
Stock Exchange website, at the link bellow.

 

http://www.rns-pdf.londonstockexchange.com/rns/0621J_1-2023-8-11.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/0621J_1-2023-8-11.pdf)

 1  (#_ftnref1) Romgaz Group consists of S.N.G.N. Romgaz S.A. ("the
Company"/"Romgaz") as parent company and its wholly owned subsidiaries,
Filiala de Înmagazinare Gaze Naturale Depogaz Ploiești SRL ("Depogaz") and
Romgaz Black Sea Limited.

 2  (#_ftnref2) Market share is calculated as a weight of Romgaz deliveries in
the total national gas consumption.

 3  (#_ftnref3) Source: CNTEE Transelectrica SA

 4  (#_ftnref4) Emergency Ordinance No.27 of March 18, 2022 on measures
applicable to end users from the electricity and gas market during April 1,
2022 - March 31, 2023, as well as for amending and supplementing some pieces
of legislation in the energy sector, as subsequently amended and supplemented.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IR FIFVETLILLIV