REG - S.N.G.N. Romgaz S.A. - Q3 2023 Report

Societatea Nationala de Gaze Naturale Romgaz SAAnnouncement

15/11/2023 07:00

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RNS Number : 5255T  S.N.G.N. Romgaz S.A.  15 November 2023

QUARTERLY REPORT

ON THE ECONOMIC-FINANCIAL ACTIVITY OF ROMGAZ GROUP

ON SEPTEMBER 30, 2023 (January 01, 2023 - September 30, 2023)

 

 

   IDENTIFICATION DETAILS ON REPORT AND ISSUER

 Report based on                                            Law No. 24/2017 on issuers of financial instruments and market operations,
                                                            republished (Art.69) and ASF Regulation (Financial Supervisory Authority) No.
                                                            5/2018 on issuers of financial instruments and market operations (Annex
                                                            No.13), for the nine-month period ended September 30, 2023
 Report Date                                                November 15, 2023
 Company Name                                               Societatea Naţională de Gaze Naturale "ROMGAZ" SA
 Headquarters                                               Mediaş, 4 Constantin I. Motaş Sq., 551130, Sibiu County
 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 Number with the Office of the Trade Registry  J32/392/2001
 Fiscal Code                                                RO14056826
 Legal Entity Identifier (LEI)                              2549009R7KJ38D9RW354
 Regulated market where  company 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 dematerialized and free
                                                            tradable since November 12, 2013 as SNG - for shares and SNGR - for GDRs

 

ROMGAZ GROUP (( 1 )) PERFORMANCES

In the first nine months of 2023, Romgaz Group recorded a revenue of RON
6,810.27 million, a drop of 37.02% as compared to RON 10,812.55 million
recorded in the first nine months of 2022.

Net profit of RON 2,168.69 million was lower by 3.09%, namely RON 69.12
million, as compared with the similar period of the previous year.

Consolidated net profit per share (EPS) was RON 5.6, by 3.09% lower than the
one recorded in the first nine months of 2022.

For the reporting period, Romania's estimated natural gas consumption(( 2 ))
was 69.25 TWh, approximately 11.7% lower than the consumption recorded in the
similar period of 2022.

Romgaz market share estimated for the first 9 months of 2023 is 55%, by 3.6%
higher than the market share recorded in the same period of the previous year.

Natural gas production for the first 9 months of 2023 was 3,515 million m(3),
by 4.67% lower than production recorded in the similar period of last year,
namely 172 million m(3).

Electricity produced in the reporting period was 641.466 GWh, 23.59% lower
(-197.999 GWh) as compared to the same period of the previous year. This
production places Romgaz at a 1.52% market share.

In Q3/2023 Romgaz produced 143.887 GWh, decreasing by 150.919 GWh, namely
51.19% less than in Q3/2022.

 

Relevant Consolidated Financial Results

*RON million*

 Q3 2022  Q2 2023  Q3 2023  Δ Q3         (%)           Main indicators                               9M 2022   9M 2023  Δ 9M (%)
 3,316.5  1,988.3  1,913.0  -42.32                     Revenue                                       10,812.5  6,810.3  -37.01
 3,449.3  2,141.2  2,065.7  -40.11                     Income                                        11,053.8  7,191.3  -34.94
 2,838.2  921.9    1,025.3  -63.87                     Expenses                                      8,385.7   3,146.8  -62.47
 1.40     1.1      1.7      21.43                      Share of the associates' result               1.6       3.3      106.25
 612.5    1,220.3  1,042.1  70.14                      Gross profit                                  2,669.8   4,047.8  51.62
 100.6    504.6    559.0    455.67                     Profit tax                                    432.0     1,879.1  334.98
 511.9    715.6    483.1    -5.63                      Net profit                                    2,237.8   2,168.7  -3.09
 561.9    1,156.1  1,007.7  79.34                      EBIT                                          2,525.1   3,906.3  54.70
 712.4    1,277.2  1,114.9  56.50                      EBITDA                                        2,895.1   4,274.5  47.65
 1.33     1.9      1.3      -5.63                      Earnings per share (EPS(*))) (RON)            5.81      5.6      -3.09
 15.43    35.99    25.25    63.61                      Net profit rate (% from Revenue)              20.70     31.84    53.86
 16.94    58.15    52.68    210.91                     EBIT ratio (% from Revenue)                   23.35     57.36    145.61
 21.48    64.24    58.28    171.32                     EBITDA ratio (% from Revenue)                 26.78     62.77    134.41
 5,971    5,944    5,951    -0.33                      Number of employees at the end of the period  5,971     5,951    -0.33

 

A brief overview of the Group's main indicators during the 9M period ended
September 30, 2023:

ü Total revenue for the reporting period is lower by  RON 4,002.28 million,
recording a drop of 37.02% due to the following factors:

·        decrease of revenues from natural gas sales (RON 5,912.94
million in the nine month period ended on September 30, 2023 as compared to
RON 9,282.16 million in the similar period of 2022). The provisions of GEO No.
27/2022 had a significant impact on the decrease by 36.30%  of revenues from
natural gas sales, as these set the obligation for Romgaz to sell most part of
the natural gas production at the regulated price of 150 RON/MWh;

·        electricity revenues dropped (RON 288.48 million for the 9M
ended September 30, 2023 as compared to RON 1,008.73 million for the similar
period of 2022). According to GEO No.27/2022, as of 2023, 90% of Romgaz
electricity production is sold at 450 RON/MWh;

·        revenue from underground storage activities increased by
31.00% (RON 424.29 million for the 9M ended September 30, 2023, as compared to
RON 323.88 million  for the similar period of 2022), mainly due to the
increase of capacities booked by clients for underground gas storage;

ü Total expenses decreased in the 9M period ended September 30, 2023 by
62.47%, mainly due to the decrease of windfall tax on revenues from natural
gas (RON -3,980.46 million) and royalty expenses (RON -1,066.91 million). The
Group recorded in January-September 2022  expenses of RON 293.87 million with
the windfall tax on electricity sales, which became subsequently a
contribution to the energy transition fund. Taking into account that 90%
electricity was sold at 450 RON/MWh, this contribution is insignificant for
the reviewed period;

ü Following electricity sales at 450 RON/MWh, GEO No.27/2022 enforced a
mechanism by which, if the monthly value of CO(2) certificates for the
electricity sold at such price, is higher than the contribution to the energy
transition fund, electricity producers receive the difference between the two
items. The Group recorded an income of RON 119.17 million from electricity
sales at 450 RON/MWh. But until this date, the law does neither provide the
reimbursement procedure nor the authority responsible for payment of such
amounts;

ü Increase of the consolidated gross profit by 51.62% as compared to the
similar period of the previous year was offset by the profit tax. Profit tax
includes the solidarity contribution introduced at the end of 2022, for the 9M
period ended September 2023, the expense recorded with this contribution is
RON 1,388.39 million;

ü Net profit is RON 2,168.69 million, lower by RON 69.12 million (-3.09%)
than the one recorded in the previous period due to the above mentioned
reasons;

ü Labour productivity decreased by 36.80%, as compared to the previous
period, from RON 1,810.84 thousand revenue/employee in the first 9M/2022 to
RON 1,144.39 thousand revenue/employee in the similar period of 2023 due to
the above mentioned reasons;

ü EPS is RON 5.63, 3.09% lower than in the first 9M/2022.

 

Operational Results

 Q3 2022  Q2 2023  Q3 2023  Δ Q3 (%)   Main Indicators                                  9 months 2022  9 months 2023  Δ 9 months (%)
 1,172.4  1,146.6  1,131.7  -3.5       Gas production (million m(3))                    3,687          3,515          -4.7
 82.4     78.6     79.2     -3.8       Petroleum royalty (million m(3))                 259            259            -0.8
 5,030    5,322    5,544    10.2       Condensate production (tons)                     15,638         16,483         5.40
 294.8    174.5    143.9    -51.2      Electricity production (GWh)                     839.5          641.5          -23.6
 12.3     42.4     3.2      -74.0      Invoiced UGS withdrawal services (million m(3))  1,102.4        1,160.5        5.3
 1,185.8  814.3    841.5    -29.0      Invoiced UGS injection services (million m(3))   1,966.9        1,701.2        13.5

Note: the information is not consolidated, transactions between Romgaz and
Depogaz are included.

 

During the first 9 months of 2023, Romgaz produced 3,515 million m(3) natural
gas, 172 million m(3) (- 4.67%) less than in the similar period of 2022.

Gas production for the first 9M of 2023 was influenced by:

ü production decline specific for exploitation of hydrocarbon reservoirs;

ü gas consumption dynamics in some subsystems of the National Gas
Transmission Systems;

ü execution of well workover operations in low productivity or inactive
wells;

ü continuous rehabilitation projects of the main mature gas reservoirs;

ü production optimization of natural gas reservoirs;

ü completion of investments for the development of production infrastructure
and connection of new wells to this infrastructure.

The volume of gas sold by Romgaz in the reporting period, representing
deliveries to customers, without CTE Iernut consumption, decreased by 4.0% as
compared with 9M/2022.

The volume of electricity produced as shown in the table below is in close
connection with the energy demand, the evolution of prices on competitive
markets and the quantity of natural gas allocated to the production of
electricity and the efficiency of said activity.

*MWh*

           2021     2022     2023     Indices
 1         2        3        4        5=4/3x100
 Q 1       202,073  345,337  323,037  93.54%
 Q 2       1,010    199,323  174,542  87.57%
 Q 3       222,989  294,806  143,887  48.81%
 9 months  426,072  839,465  641,466  76.41%

 

 

The full version of the Quarterly Report on the Economic-Financial Activity of
Romgaz Group on September 30, 2023 (January - September 2023) and the
Consolidated Condensed Interim Financial Statements for the Nine-Month and
Three-Month Periods Ended September 30, 2023 (Unaudited), Prepared in
Accordance with International Accounting Standard 34, are available on
company's website www.romgaz.ro (https://www.romgaz.ro/en) - Investors -
Interim Reports and on Bucharest Stock Exchange website, at the link below.

http://www.rns-pdf.londonstockexchange.com/rns/5255T_1-2023-11-15.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5255T_1-2023-11-15.pdf)

 1  Romgaz Group consists of S.N.G.N. Romgaz S.A. (the "Company"/"Romgaz") as
parent company and the subsidiaries owned 100% by Romgaz: Filiala de
Înmagazinare Gaze Naturale Depogaz Ploiești SRL ("Depogaz") and Romgaz Black
Sea Limited.

 2  Consumption is estimated as, at the date hereof, ANRE did not publish the
report on the natural gas market for August‑September 2023.

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