REG - S.N.G.N. Romgaz S.A. - H1 2021 Report

Societatea Nationala de Gaze Naturale Romgaz SAAnnouncement

13/08/2021 07:00

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RNS Number : 5733I  S.N.G.N. Romgaz S.A.  13 August 2021

BOARD OF DIRECTORS' REPORT

1(ST) HALF YEAR 2021

 

IDENTIFICATION DETAILS ON REPORT AND ISSUER

 Report based on                                         Law no. 24/2017 on issuers of financial instruments and market operations
                                                         (Article 65) and ASF (Financial Supervisory Authority) Regulation no.5/2018 on
                                                         issuers of financial instruments and market operations (Annex 14) for the
                                                         six-month period ended on June 30, 2021 (HI of financial year 2021)
 Report Date                                             August 13, 2021
 Name of the Company                                     Societatea Naţională de Gaze Naturale "ROMGAZ" SA
 Headquarters                                            Mediaş, 4 Constantin I. Motas Square, code 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)
 Fiscal Code                                             RO 14056826
 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 GROUP(1) PERFORMANCES

Romgaz Group keeps high operational and financial performances in the first
six months of 2021.

National gas consumption recorded an approximately 8% increase for the first 6
months of 2021 as compared to the similar period of last year, while Romgaz
deliveries increased by 23.7%. Therefore, Romgaz has a 53% market share in
terms of deliveries from internal production, by 8.6% higher than the share
held in the similar period of 2020.

Natural gas production for first half of 2021, was 2,519.2 million cm, by
12.2% (273.5 million cm) higher than the production achieved in the similar
period of last year.

Romgaz electricity production reached 203.08 GW, lower by 92.15 GWh than the
production in the similar period of 2020 (-31.21%). This production placed
Romgaz at a market share of 0.67%(2).

Consolidated net profit per share (EPS) was RON 2.0.

Margins of high profitability indicators for H1 2021: net consolidated profit
(33.8%), consolidated EBIT (38.9%) and consolidated EBITDA (52.7%) are
slightly decreasing as compared to the first half of 2020 (36.5% , 42.0% and
55.3% respectively) but maintain a high rate.

Relevant Financial Results (consolidated)

*million RON*

 Q2 2020  Q1 2021  Q2 2021  Δ Q2         (%)           Main indicators                               HI  2020   HI  2021   Δ HI (%)
 763.1    1,327.2  922.8    20.9                       Revenue                                       2,193.4    2,250.0    2.58
 819.8    1,256.1  1,002.1  22.2                       Income                                        2,233.4    2,258.2    1.11
 556.7    693.5    662.0    18.9                       Expenses                                      1,290.3    1,355.5    5.05
 (0.4)    (0.2)    (0.6)    50.0                       Share of the associates' result               (0.1)      (0.8)      700.00
 262.8    562.4    339.6    29.2                       Gross Profit                                  943.1      901.9      -4.37
 33.9     98.6     41.7     23.0                       Profit Tax                                    142.2      140.3      -1.34
 228.9    463.8    297.8    30.1                       Net Profit                                    800.8      761.6      -4.90
 251.1    548.6    326.8    30.1                       EBIT                                          920.4      875.4      -4.89
 398.0    695.7    489.9    23.1                       EBITDA                                        1,213.3    1,185.7    -2.27
 0.6      1.2      0.8      33.3                       Earnings per share (RON)                      2.1        2.0        -5.90
 30.00    34.94    32.27    7.6                        Net Profit Rate (% from Revenue)              36.51      33.85      -7.29
 32.91    41.33    35.41    7.6                        EBIT ratio (% from Revenue)                   41.96      38.91      -7.28
 52.16    52.42    53.09    1.8                        EBITDA ratio (% from Revenue)                 55.32      52.70      -4.74
 6,208    6,126    6,066    -2.29                      Number of employees at the end of the period  6,208      6,066      -2.29

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 HI 2021:

ü Total income is by RON 24.8 million higher, recording a 1.11% rise while
total expenses increased by 5.05%;

ü Net consolidated profit of RON 761.6 million, by 4.90% lower, RON 39.2
million respectively, as compared to the similar period of the previous year.
The following significant factors influenced the result of H1 2021:

o Romgaz won in court a litigation against ANAF (National Agency for Fiscal
Administration) requesting annulment of a fiscal inspection report related to
an investigation performed during December 2016 - April 2017, which led to an
income of RON 28.02 million from offsetting the impairment set up for such
receivable;

o Increase of greenhouse gas emission certificates price had a net negative
impact on H1 2021 result of RON 70.8 million;

o Following deregulation of prices in the gas sector windfall tax decreased by
RON 61.09 million as compared to H1 2020;

o Increase of petroleum royalty expenses by RON 78.2 million in H1 2021 as
compared to the previous period;

o Decrease of revenues from storage activities by RON 27.1 million due to
booking lower storage capacities in 2021-2022 storage cycle than in the
previous storage cycle. In H1 2021 Depogaz clients withdrew from storages
1,420.7 million cm (H1 2020: 923.9 million cm), but injected only 559 million
cm (H1 2020: 571 million cm), resulting in a decrease of 861,7 million cm gas
in storages (H1 2020: 352.9 million cm);

ü Labour productivity increased as compared to the previous period, from RON
353.31 thousand revenue/employee in H1 2020 to 370.92 thousand
revenue/employee in H1 2021 (+5%);

ü EPS of RON 2.0 is by 5.9% lower than recorded in H1 2020.

Operational Results

 Q2 2020  Q1 2021  Q2 2021  Δ Q2 (%)   Main indicators                                HI        2020         HI 2021  Δ HI (%)
 883.4    1,311.5  1,207.7  36.7       Gas production (million cm)                    2,245.7                2,519.2  12.2
 59.4     93       84.1     41.6       Petroleum royalty (million cm)                 157.4                  176.9    12.4
 4,748    6,351    6,515    37.2       Condensate production (tons)                   11,245                 12,865   14.4
 36.31    202.1    1.0      -97.2      Electricity production (GWh)                   295.2                  203.1    -31.2
 28.5     1,289.9  130.8    359.0      Invoiced UGS withdrawal services (million cm)  923.9                  1,420.7  53.8
 530.3    2.4      556.6    2.1        Invoiced UGS injection services (million cm)   571.0                  559.0    -2.1

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

2,519.2 million cm is Romgaz production in H1 2021, by 273.4 million cm
(12.2%) more than in the similar period of last year.

HI 2021production was supported by:

ü optimisation of gas field exploitation;

ü ongoing rehabilitation projects of main mature gas fields;

ü well workover operations that resulted in reactivation of several wells
with significant flow rates;

ü investments to stream in production new wells resulted from exploration
drilling.

Electricity production is shown in the table below and its trend was closely
connected to the energy demand, price trends on competitive markets and the
quantity of fuel allocated thereto.

 

 
 
*MWh*

      2020     2021     Ratio
 1    2        3        4=3/2x100
 Q 1  258,923  202,073  -21.96%
 Q 2  36,310   1,010    -97.22%
 H I  295,233  203,083  -31.21%

 

 

Notes:

(1 )Romgaz Group consists of S.N.G.N. Romgaz S.A. ("the Company"/"Romgaz") as
parent company, Filiala de Inmagazinare Gaze Naturale Depogaz Ploiesti SRL
("Depogaz"), which is the subsidiary owned 100% by Romgaz, and its associates
S.C. Depomures S.A. (40% of the share capital) and S.C. Agri LNG Project
Company SRL (25% of the share capital)

(2) Source: CNTEE Transelectrica SA

 

The full version of the Board of Directors' Report for 1(ST) Half Year 2021
and the Consolidated Condensed Interim Financial Statements for the Six-Month
and Three-Month Periods Ended June 30, 2021 (Unaudited), 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 RNS website at:

 

http://www.rns-pdf.londonstockexchange.com/rns/5733I_1-2021-8-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5733I_1-2021-8-13.pdf)

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