REG - S.N.G.N. Romgaz S.A. - Q3 2021 Results

Societatea Nationala de Gaze Naturale Romgaz SAAnnouncement

12/11/2021 07:05

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RNS Number : 2107S  S.N.G.N. Romgaz S.A.  12 November 2021

QUARTERLY REPORT

ON THE ECONOMIC-FINANCIAL ACTIVITY OF ROMGAZ GROUP

ON SEPTEMBER 30, 2021 (January 01, 2021 - September 30, 2021)

 

 

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 on September 30, 2021
 Report Date                                                November 12, 2021
 Company Name                                               Societatea Naţională de Gaze Naturale "ROMGAZ" SA
 Headquarters                                               Mediaş, Piaţa Constantin I. Motaş, nr.4, cod 551130, judeţul 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 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   PERFORMANCE

In the first nine months of 2021, Romgaz Group recorded a revenue of RON
3,496.5 million, an increase by 19.8%, namely RON 578.1 million, as compared
with the revenue achieved in the first 9 months of 2020. In the 3(rd) quarter
(Q3) of 2021, the consolidated revenue increased by 71.9% compared with Q3
2020.

Net profit of RON 1,156.4 million was higher by 22.7%, namely RON 214.4
million, as compared with the similar period of the previous year.

Consolidated net profit per share (EPS) was RON 3.0, 22.7% higher than the one
recorded in the first nine months of 2020.

Achieved margins of consolidated net profit (33.07%), consolidated EBIT
(37.50%) and consolidated EBITDA (51.69%) are relatively similar with those
recorded in the nine month period ended on September 30, 2020 (32.28%; 36.71%
and 52.74% respectively) and maintain Group's profitability.

For the reporting period, Romania's estimated natural gas consumption 2  was
90.32 TWh, approximately 3.2% higher than the consumption recorded in the
similar period of 2020.

Thus, Romgaz market share estimated for the first nine months of 2021, is
45.8%, 8% higher than the market share recorded in the same period of the
previous year.

Natural gas production in the first 9 months of 2021 was 3,706.4 million m(3),
higher by 15.9%, namely 508.7 million m(3), than in the similar period of
2020.

Electricity produced in the first 9 months of 2021 was 426.071 GWh, 31.04%
lower (-191.795 GWh) than in the same period of the previous year.

In Q3, Romgaz produced 222.989 GWh, 99.644 GWh lower, namely 30.88%, than in
the first 9 months of 2020. With this production, Romgaz has a 1.7% market
share.

 

Relevant Financial Results (consolidated)

*RON million*

 Q3 2020    Q2 2021  Q3 2021    Δ Q3 (%)   Main indicators                               9 months 2020  9 months 2021  Δ 9 months (%)
  725.0     922.8    1,246.5    71.93      Revenue                                       2,918.4        3,496.5        19.81
  771.3     1,002.1  1,469.7    90.55      Income                                        3,004.7        3,727.9        24.07
  607.7     662.0    1,023.0    68.34      Expenses                                      1,898.0        2,378.5        25.31
  0.3       (0.6)    0.8        149.70     Share of the associates' result               0.2            0.01           -95.07
  163.8     339.6    447.5      173.21     Gross profit                                  1,106.9        1,349.4        21.92
  22.7      41.7     52.7       132.33     Profit tax                                    164.9          193.1          17.07
  141.1     297.8    394.8      179.78     Net profit                                    941.9          1,156.4        22.77
  150.8     326.8    435.7      188.92     EBIT                                          1,071.2        1,311.1        22.39
  326.0     489.9    621.7      90.69      EBITDA                                        1,539.3        1,807.3        17.41
  0.37      0.8      1.02       179.78     Earnings per share (EPS(*))) (RON)            2.4            3.0            22.77
 19.46      32.27    31.67      62.73      Net profit rate (% from Revenue)              32.28          33.07          2.47
 20.80      35.41    34.95      68.05      EBIT ratio (% from Revenue)                   36.71          37.50          2.15
 44.97      53.09    49.87      10.91      EBITDA ratio (% from Revenue)                 52.74          51.69          -2.00
 6,201      6,066    5,918      -4.56      Number of employees at the end of the period  6,201          5,918          -4.56

Figures in the above table are rounded, therefore small differences may result
upon reconciliation.

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

 

A brief overview of the Group's main indicators during the nine-month period
ended on September 30, 2021:

Ä Consolidated gross result for the reporting period is higher by 21.92% as
compared with the similar period of the previous year (RON +242.6 million) due
to the following influential factors:

·    Consolidated revenue recorded an increase of 19.81% (RON 578.1
million) compared with the similar period of 2020;

·    Revenues from natural gas sales increased by 25.64% (RON +609.2
million), with a sold quantity higher by 26.4%. Revenues from sales of gas
purchased for resale increased by 2,379.4%, namely RON 291.8 million,
considering that the cost of gas purchased for resale increased by RON 158.8
million;

·    Revenues from electricity increased by 27.5%;

·    consolidated revenue from underground storage activity recorded a
decrease by 30.07%; the unconsolidated revenue from underground storage
activity decreased  by approximately 7% as compared with the previous period;

·    in Q3 2021 the performance bond related to the works contract for
development of CTE Iernut by building a new 430 MW power plant with, combined
cycle gas turbine concluded between S.N.G.N. Romgaz S.A. and the Duro Felguera
S.A. and Romelectro S.A. consortium was executed, generating an income of RON
114.6 million;

·    Romgaz received a final settlement in a litigation against ANAF
(National Agency for Fiscal Administration) for cancelling a fiscal inspection
report related to an inspection carried out between December 2016 - April
2017, which led to the recognition of an income of RON 28.02 million from
offsetting the impairment set up for such receivables;

·    Royalty expenses increased by RON 214.2 million (+161.35%), mainly as
a result of the increase of the reference price used in the calculation of
this tax but also as a result of the increase of production,  while expenses
with the windfall tax are higher by RON 29.0 million (+8.64%);

·    The increase of the price of greenhouse gas emission certificates had
a  net negative impact of RON 105.8 million on the results of the period;

Ä Net profit is RON 1,156.4 million, higher by RON 214.5 million than the one
recorded in the previous period due to the above mentioned reasons (+22.7%);

Ä Labour productivity increased by 25.54%, as compared to the previous
period, from RON 470.64 thousand revenue/employee in the first 9 months of
2020 to RON 590.83 thousand revenue/employee in the similar period of 2021;

Ä EPS is RON 3.0, 22.70% higher than in the first 9 months of 2020;

Ä In Q3 2021 an amount of RON 94.1 million was received representing
financing from the National Investment Plan for the construction of the new
power plant in Iernut.

 

Operational Results

 Q3 2020  Q2 2021  Q3 2021  Δ T3 (%)   Main Indicators                                  9 months 2020  9 months 2021  Δ 9 months (%)
 952.0    1,207.7  1,187.3  24.7       Gas production (million m(3))                    3,198          3,706          15.9
 64       84.1     84.0     31.3       Petroleum royalty (million m(3))                 220            261            18.6
 5,349    6,515    6,528    22.0       Condensate production (tons)                     16,594         19,393         16.9
 322.63   1.0      222.99   -30.9      Electricity production (GWh)                     617.87         426.07         -31.0
 0.3      130.8    25.3     8,326.7    Invoiced UGS withdrawal services (million m(3))  924.2          1,446.0        56.5
 444.5    556.6    1,070.9  33.2       Invoiced UGS injection services (million m(3))   1,015.5        1,629.9        60.5

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

 

During the first 9 months of 2021, Romgaz produced 3,706 million m(3) of
natural gas, 508 million m(3) (+15.9%) more than in the same period of the
previous year.

The level of gas production recorded in the first 9 months of 2021 was
influenced by:

ü Implementation of actions to optimize exploitation of natural gas
reservoirs;

ü Continuation and extension of rehabilitation projects of the main mature
gas reservoirs;

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

ü Completion of investments in the development of production infrastructure
and connection of new wells to this infrastructure.

The volume of gas sold by Romgaz in the first 9 months of 2021, representing
deliveries to customers, without CET Iernut consumption, recorded an estimated
increase of 26.4% as compared with the similar period of the previous year.

The volume of produced electricity as indicated 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*

            2020     2021     Ratio
 1          2        3        4=3/2x100
 Quarter 1  258,923  202,073  78.04%
 Quarter 2  36,310   1,010    2.78%
 Quarter 3  322,633  222,989  69.11%
 9 months   617,866  426,072  68.96%

 

 

 

The full version of the Quarterly Report on the Economic-Financial Activity of
Romgaz Group on September 30, 2021 (January - September 2021) and the
Consolidated Condensed Interim Financial Statements for the Nine-Month and
Three-Month Periods Ended September 30, 2020 (Unaudited), Prepared in
Accordance with International Accounting Standard 34, are available on
company's website www.romgaz.ro (https://www.romgaz.ro/en) - Section Investors
- Interim Reports and on RNS website, at:

 

http://www.rns-pdf.londonstockexchange.com/rns/2107S_1-2021-11-12.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2107S_1-2021-11-12.pdf)

 

 1  Romgaz Group consists of SNGN Romgaz SA (the "Company"/"Romgaz") as parent
company, Filiala de Înmagazinare Gaze Naturale Depogaz Ploiești SRL
("Depogaz"), subsidiary 100% owned by Romgaz and its associates SC Depomureş
SA (40% of the share capital) and SC Agri LNG Project Company SRL (25% of the
share capital).

 2  Consumption is estimated as, at the date hereof, ANRE did not publish the
report on the natural gas market for August and September 2021.

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