Last checked at 12 Aug 2016 07:00
HALF-YEAR REPORT REGARDING THE ECONOMIC-FINANCIAL ACTIVITY OF SNGN "ROMGAZ" SA AS OF JUNE 30, 2016
(January 01, 2016 - June 30, 2016)
IDENTIFICATION DETAILS ON REPORT AND ISSUER
Report Basis | Article 227 of Law no. 297/2004 on the capital market and Annex no. 31 to CNVM Regulation no. 1/2006 for the six-month period ended on June 30, 2016 (H1 of the Financial Year 2016) |
Report Date | August 12, 2016 |
Name of the Company | Societatea Nationala de Gaze Naturale "ROMGAZ" SA |
Headquarter | Medias, 4 Piata Constantin I. Motas, code 551130, Sibiu County |
Telephone/Fax number | 0040 269 201020 / 0040 269 846901 |
Web/E-mail | www.romgaz.ro / secretariat@romgaz.ro |
Fiscal Code | RO 14056826 |
Trade Registry No. | J32/392/2001 |
Subscribed and paid in share capital | RON 385,422,400 |
Number of shares | 385,422,400 each having a nominal value of RON 1 |
Regulated market where the company's shares are traded | Bucharest Stock Exchange (shares) and London Stock Exchange (GDRs) |
HALF-YEAR 2016 OVERVIEW
Company's Performances
Compared to the similar period of the last year, the Company's operational and financial performances for H1 2016 have been influenced mainly by the decrease of natural gas demand on the Romanian market by approximately 6%.
Net profit, in amount of RON 615.3 million, is in line with the budget forecast (+0.65%) although lower than in the similar period of 2015 (-19.74%).
The intensive exploration activities carried out deep onshore lead to the largest hydrocarbon discovery of the latest 30 years of about 25-27 billion cm.
The financial indicators have been maintained at a very good margin EBIT (40.1%) and EBITDA (54.8%).
Gas sales were significantly influenced by weather conditions, by the decreased gas demand in the key sectors, by the uncertain regulatory framework related to minimum gas stocks.
Revenue from electricity production has increased by 56.9%, namely RON 45 million.
Other operating income, inclusive late payment penalties increased by RON 42 million.
The objective to have "0" new overdue accounts receivables is fulfilled - as a result of the company's trading policy, there were no overdue accounts receivables during H1 of 2016 related to deliveries, that influenced costs and implicitly the company's profit.
The external audit of Romgaz natural gas reserves and contingent resources has been performed in the 1st half of 2016 by the American company DeGolyer&MacNaughton, resulting in a final Report sent to Romgaz on June 30, 2016. The results included in the Report confirm the evaluation of natural gas resources and reserves made by Romgaz as of December 31, 2015 and concurrently confirm the annual reserves replacement ratio during 2013-2015 of an average 83%, higher than the target of 70%.
Relevant Financial Result
*million RON*
Q2 2015 | Q1 2016 | Q2 2016 | ΔQ2 (%) | Main Indicators | H1 2015 | H1 2016 | Δ H1 (%) |
869.6 | 1,363.5 | 486.4 | -44.07 | Revenue | 2,235.1 | 1,849.9 | -17.23 |
941.6 | 1,316.3 | 594.1 | -36.91 | Income | 2,241.2 | 1,910.4 | -14.76 |
668.6 | 706.3 | 449.1 | -32.83 | Expenses | 1,289.1 | 1,155.4 | -10.37 |
273.1 | 610.0 | 145.0 | -46.91 | Gross Profit | 952.1 | 755.0 | -20.70 |
69.5 | 120.7 | 19.0 | -72.62 | Profit Tax | 185.5 | 139.7 | -24.69 |
203.6 | 489.3 | 125.9 | -38.14 | Net Profit | 766.6 | 615.3 | -19.74 |
261.4 | 602.6 | 138.8 | -46.91 | EBIT | 926.8 | 741.4 | -20.01 |
381.8 | 722.8 | 291.5 | -23.64 | EBITDA | 1,223.7 | 1,014.3 | -17.11 |
0.5 | 1.3 | 0.3 | -38.34 | Earnings per share (RON) | 1.99 | 1.60 | -19.78 |
23.4 | 35.9 | 25.9 | 10.61 | Net Profit Rate (% from Revenue) | 34.3 | 33.26 | -3.03 |
30.0 | 44.2 | 28.5 | -5.04 | EBIT Ratio (% from Revenue) | 41.5 | 40.1 | -3.36 |
43.9 | 53.0 | 59.9 | 36.50 | EBITDA Ratio (% from Revenue) | 54.8 | 54.8 | 0.15 |
6332 | 6313 | 6282 | -0.79 | Number of employees at the end of the period | 6332 | 6282 | -0.79 |
Note: income and expenses do not include in-house works capitalized as non-current assets.
Revenue, profit and the other indicators calculated on their basis were set based on the estimated equivalent value of the natural gas quantities delivered in May and June, because the gas balance hasn't been finalised due to the lack of clear regulations on gas deliveries to household and assimilated consumers.
Summary of main indicators:
- Total Income, lower by RON 330.8 million, recorded a decrease by 14.8%, while total expenses were reduced by 10.4%. The evolution shows the warm weather, the decrease of natural gas demand in key sectors especially in the chemical fertiliser sector, the decrease of the gas demand for the minimum gas stocks for winter 2016-2017 as a result of a uncertain and uncoherent regulatory framework and the increased competition of import gas caused by the significant gas price drop in Europe;
- Although the net profit, EBIT and EBITDA are lower as compared to H1 2015, the financial indicator ratios as compared to revenue do not record significant deviations and are highly favourable: 33.3%, 40.1% and 54.8% (as compared to 34.3%, 41.5% and 54.80%, respectively during H1 of 2015), confirming the high profitability of the company;
- EPS (earnings per share) is RON 1.60/share.
Operational Results
Q2 2015 | Q1 2016 | Q2 2016 | Δ Q2 (%) | Main Indicators | H1 2015 | H1 2016 | Δ H1 (%) |
1,341 | 1,374 | 823 | -38.6 | Gas Produced (million cm) | 2.777 | 2,197 | -20.9 |
97 | 100 | 54 | -44.9 | Petroleum Royalty (million cm) | 202 | 153 | -23.9 |
3,600 | 2,051 | 1,590 | -55.8 | Condensate Production (tonnes) | 5,512 | 3,641 | -33.9 |
222.6 | 318.7 | 191.8 | -13.9 | Electricity Production (GWh) | 389.6 | 510.5 | +31.0 |
38.9 | 931.0 | 0.0 | - | UGS gas withdrawn services (million cm) | 1,190.1 | 931.0 | -21.8 |
438.9 | 308.9 | 373.6 | -14.9 | UGS gas injection services (million cm) | 731.1 | 682.5 | -6.6 |
Gas production was in the parameters expected when preparing the program for 2016, the achieved level representing 90.32% of the planned one.
Romgaz produced 2,197 million cm of natural gas during the first half of 2016, 580 million cm (20.9%) less than the gas produced in the same period of the previous year.
- the gentle winter leading to a lower natural gas consumption during the first quarter;
- the decrease of demand in the key sectors, caused by the international price drop (especially in the chemical fertiliser sector where the gas consumption has dropped by 49% as compared to last year) and the strong competition in the electricity generation sector;
- the decrease of gas demand for the minimum gas stocks for winter 2016-2017 as a result of the uncertain and uncoherent regulatory framework. Therefore, third parties injected in Romgaz storages in H1 2016 489 million cm; by 103 million cm lower than in H1 2015, namely approx. 17% less;
- a relatively large gas stock belonging to Romgaz at the end of winter 2015-2016. The storage stock was of 795.8 million cm out of which Romgaz stock was 723 million cm representing 92%;
- the high competition of the import gas caused by the significant gas price drop in Europe. Therefore, as compared to H1 2015, the gas import increased in H1 2016 by 230%, namely by 179 million cm.
The increase of electricity quantities is strictly related to the high temperatures recorded during the cold season, therefore the 200 MW energy unit operated during Q1 2016. The electricity produced in H1 2016 is as follows:
*GWh*
1 | 2015 2 | 2016 3 | Indici 4=3/2x100 |
Q1 2016 | 167,007.91 | 318,720.48 | 190.84% |
Q2 2016 | 222,680.04 | 191,846.53 | 86.15% |
H1 2016 | 389,687.95 | 510,567.01 | 131.02% |
The full version of H1 2016 Report (January - June 2016) and the Individual Interim Financial Statements (reviewed) for the six-month and three-month periods ended June 30, 2016 are available on company's website www.romgaz.ro - Section Investor Relations - Interim Reports and on RNS website: http://www.rns-pdf.londonstockexchange.com/rns/0243H_-2016-8-12.pdf