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S.N.G.N. ROMGAZ S.A. - SNG

Q3 2019 Report

Release Date: 11/14/2019 8:25:10 AM

IRIS Code: 5FCA7

QUARTERLY REPORT

REGARDING THE ECONOMIC-FINANCIAL ACTIVITY

OF ROMGAZ GROUP

ON SEPTEMBER 30, 2019 (January 01, 2019 – September 30, 2019)

ALE “ROMGA

IDENTIFICATION DETAILS ON REPORT AND ISSUER

Report basis

Law No. 24/2017 regarding issuers of financial instruments and market operations (art. 65) and ASF Regulation No. 5/2018 regarding issuers and market operations (Annex No. 13) for the 9-month period ended on September 30, 2019

Report date

November 14, 2019

Name of Company

Societatea Nationala de Gaze Naturale “ROMGAZ” SA

Headquarters

Medias, No. 4 Piata Constantin I. Motas, zip code 551130, Sibiu County

Phone/fax

0040 374 401020 / 0040 269 846901

Web/E-mail

www.romgaz.ro / secretariat@romgaz.ro

Trade Register Unique Registration Code

RO14056826

Legal Entity Identifier

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

Main characteristics of shares

385,422,400 shares each with a nominal value of     RON 1

Shares are nominative, ordinary, indivisible, issued in dematerialised form and freely tradable since November 12, 2013 under the symbol SNG – for shares and SNGR – for GDRs

 

ROMGAZ GROUP[1]  PERFORMANCES

Romgaz operational and financial performance during the 9-month period ended on September 30, 2019 remains high, confirming the path the Company chose to follow.

During the first nine months of 2019, estimations show that national gas consumption decreased by approx. 5.7%, while Romgaz deliveries, consisting of deliveries to customers, CET Iernut consumption and technological consumption, decreased by 5.4% as compared to the similar period of the previous year. Romgaz market share, representing the participation of deliveries from the Company’s internal production to the domestic natural gas national consumption, increased by approximately 7% as compared to the similar period of the previous year, reaching approximately 59%.

Natural gas production was 3,950 million m3, by 28 million m3 higher than the production of the same period in the previous year (+0.7%) and by 0.3% lower than scheduled.

Electricity production was 292.11 GWh, lower than in the similar period of 2018 (750.65 GWh). With this production, Romgaz has a 0.66%[2] market share.

Margins of main profitability indicators: net profit (31.3%), EBIT (36.0%) and EBITDA (51.7%) confirm the high profitability of Romgaz Group.

 

Relevant Financial Results

                                                                                                                *RON million*

T3 2018

T2 2019

T3 2019

Δ T3

(%)

Main indicators

9 M  2018

9 M  2019

Δ 9 M (%)

970.1

1,161.7

916.1

-5.6

Revenue

3,444.6

3,790.9

10.1

1,070.7

1,229.4

1,014.6

-5.2

Income

3,517.6

3,927.1

11.6

806.3

 719.6

770.1

-4.5

Expenses

2,324.0

2,532.4

9.0

(0.9)

 (0.2)

0.2

n/a

Share of profit of associates

0.05

1.4

2,662.9

263.4

 509.6

244.7

-7.1

Gross profit

1,193.6

1,396.0

17.0

49.7

 75.5

35.5

-28.7

Profit tax

197.1

210.9

7.0

213.7

 434.1

209.2

-2.1

Net profit

996.6

1,185.1

18.9

249.6

 496.7

238.5

-4.5

EBIT

1,153.6

1,365.9

18.4

397.8

 598.9

467.5

17.5

EBITDA

1,563.8

1,960.4

25.4

0.6

 1.1

0.5

-2.1

Earnings per share (EPS) (RON)

2.6

3.1

18.9

22.0

 37.4

22.8

3.7

Net profit rate (% from Revenue)

28.9

31.3

8.1

25.7

 42.8

26.0

1.2

EBIT ratio (% from Revenue)

33.5

36.0

7.6

41.0

 51.6

51.0

24.5

EBITDA ratio (% from Revenue)

45.4

51.7

13.9

6,137

6,171

6,214

1.3

Number of employees at the end of the period

6,137

6,214

1.3

 

The figures in the table above are rounded, therefore small differences might result upon reconciliation.

Note 1: Revenues and Expenses do not include in-house works capitalised as non-current assets.

Note 2: periods relating to 2018 have been restated. For additional information, please refer to Note 14 of the consolidated condensed interim financial statements attached to this report.

 

Also for January-September 2019, the Group recorded an increase of the main indicators as compared to the similar period of 2018, namely: revenue +10.1%, EBIT+18.4%, EBITDA +25.4%, confirming the previous trend. The relating profitability rates have also significant value.

A brief overview of the Group’s main indicators during the reporting period is:

Ø  Total income is higher by RON 409.5 million, recording an increase of 11.6% while total expenses increased by 9.0%.

Ø  Gross result is higher by 17.0% as compared to the previous year due to the following influential factors:

 

·         10.1% higher revenue as compared to the similar period of 2018 following an increase of gas sales, both from internal production and from gas purchased for resale (+12.92%);

·         the positive effect triggered by the increased revenue reflected on the profit was affected by the increased windfall tax (+50.4% representing an increase of RON 186.4 million) and by the 2% contribution of electricity and gas licence titleholders from the revenue recorded from activities that relate to the licences granted by ANRE (National Regulatory Authority in the field of Energy) (RON 62.8 million).

 

Ø  Net profit is by RON 188.5 million higher than in the previous period due to increase of income and influenced by increase of expenses as previously shown (+18.9%);

 

Ø  Labour productivity increased by 8.69% as compared to the previous period from RON 561.29 thousand revenue/employee to RON 610.05 thousand revenue/employee;

 

Ø  Net Profit, EBIT and EBITDA rates are higher in comparison with the similar period of 2018 due to the increase of revenue;

 

Ø  EPS is RON 3.1, by 18.9% higher.

 

 

Operational Results

T3 2018

T2 2019

T3 2019

Δ T3 (%)

Main Indicators

9 M 2018

9 M 2019

Δ 9 M (%)

1,282

1,269.8

1,249.8

-2.51

Gas Produced (million m3)

3,922

3,950

0.71

92

81

90

-1.10

Petroleum Royalty (million m3)

284

283

-0.35

1,792

4,321

3,679

105.30

Condensate Production (tonnes)

5,277

12,952

145.44

284.4

0.8

120.4

-57.65

Electricity produced (GWh)

750.65

292.11

-61.09

12.3

39.8

0.0

-

Invoiced UGS gas withdrawal services (million m3)

1,130.9

924.7

-18.23

860.0

1,009.8

1,226.8

42.7

Invoiced UGS gas injection services (million m3)

1,611.6

2,274.4

41.13

 

Gas production was in line with the expected parameters when preparing the 2019 production schedule, the achieved level representing 99.70% of the schedule.

Romgaz natural gas production during the first 9 months of 2019 was 3,950 million m3, by 28 million m3   (0.71%) more than the volume produced during the same period of the previous year. 

The high production was supported by:

u  Continued rehabilitation projects on the most important mature gas reservoirs which arrested the production decline of these reservoirs;

u  Well workover operations which resulted in reactivating several wells with significant flow rates;

u  Relocation of compressors to optimise production at some gas reservoirs;

u  Implementation of production and valorisation phase in case of positive geological exploration results by streaming into production new commercial gas discoveries.

The decrease of produced electricity as indicated in the table below is in close connection with the investment performed at CTE Iernut, works restricting the operation of power units belonging to the old power plant. Therefore, during Q2 and Q3 of 2019, electricity was not produced because of works performed at:

·         the external power station;

·         the primary cooling water circuits, works which are common with the existing power plant;

·         the existing primary cooling circuits of the plant (hydro-technical dam, cooling water pumps, cooling towers, mixing chamber etc.), to be used also at the new investment, works which could only be performed when the plant was not in operation.

                                                                        *MWh*

Period

2018

2019

Variation

1

2

3

4=(3-2)/2x100

Q 1

287,287

170,894

-40.51%

Q 2

178,933

773

-99.57%

Q 3

284,429

120,443

-57.65%

9 months

750,649

292,110

-61.09%

 

 

The full version of the Quarterly Report on the Economic-Financial Activity of Romgaz Group on September 30, 2019 (January - September 2019) and the Consolidated Condensed  Interim Financial Statements (not audited) for the nine-month and three-month periods ended September 30, 2019 are available on company’s website www.romgaz.ro – Section Investor RelationsInterim Reports and on Bucharest Stock Exchange website, at the link bellow.



[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”) the subsidiary 100% owned  by Romgaz and its associates SC Depomures SA (40% of the share capital) and SC Agri LNG Project Company SRL (25% of the share capital).

[2] Source: CNTEE Transelectrica SA.

 



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