Last checked at 13 Nov 2015 07:08
THIRD QUARTER REPORT
on the Economic - Financial Activity of S.N.G.N. ROMGAZ S.A.
as of September 30, 2015
(January 1, 2015 - September 30, 2015)
IDENTIFICATION DETAILS ON REPORT AND ISSUER
Report based on: | Article 227 of Law no. 297/2004 on capital market and Annex no.30 of CNVM Regulation no.1/2006 for the nine-month period ended as of September 30, 2015 |
Report Date: | November 13, 2015 |
Name of the Company: | Societatea Nationala de Gaze Naturale "ROMGAZ" S.A. |
Headquarter: | Medias, 4 Piata Constantin I. Motas, code 551130, County Sibiu |
Telephone/fax number: | 0040 269 201020 / 0040 269 846901 |
Web/E-mail: | www.romgaz.ro / secretariat@romgaz.ro |
Fiscal Code: | 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 markets where the issued securities are traded: | Bucharest Stock Exchange BVB (shares), London Stock Exchange (GDRs) |
COMPANY PERFORMANCES
The operating income is in accordance with the figures budgeted in the approved income and expenditures budget.
Natural gas production has been in Q3 2015 almost equal to the one recorded in Q3 2014 (1,357.8 vs. 1,362.3 million cm ) and natural gas production for the first 9 months of 2015 was only 2.21% lower than the production during the similar period of 2014 (4,134.5 vs 4,227.9 million cm).
Gas quantities that haven't been sold were stored in UGSs.
The achievement of a net profit margin of 33.3%, EBIT margin of 39.5% and EBITDA margin of 57.6% confirms the high profitability of the company.
Operating expenses are higher as compared to the planned ones due to the allowance for doubtful customers of RON 187.9 million and to the partial impairment of non-current assets for exploration works in the Black Sea of RON 133 million that led to a net profit of RON 975.3 million.
As compared to the same period of the previous year, the company's performances were mainly influenced by the decrease of natural gas demand on the Romanian market by 2.66%.
Romgaz sold lower natural gas quantities as compared to the same period of last year because of:
o Consumption of customers that use gas for electric power production was limited for those consumers with reduced payment capacities;
o Delayed issue of the regulations on the minimum gas stock for the 2015 - 2016 winter and the lack of will of the main natural gas sector players to comply with regulations due to the uncertainties on carrying out the price liberalization process on the regulated market.
Relevant Financial Result
* RON million *
Q3 2014 | Q2 2015 | Q3 2015 | Δ Q3 (%) | Main Indicators | 9 months 2014 | 9 months 2015 | Δ 9 months (%) |
760.4 | 869.6 | 698.0 | -8.2% | Revenue | 3,286.8 | 2,933.1 | -10.8% |
913.2 | 941.6 | 902.3 | -1.2% | Income | 3,473.5 | 3,143.5 | -9.5% |
595.5 | 668.6 | 659.6 | 10.8% | Expenses | 2,066.2 | 1,948.7 | -5.7% |
317.7 | 273.0 | 242.6 | -23.6% | Gross Profit | 1,407.2 | 1,194.8 | -15.1% |
74.7 | 69.5 | 33.9 | -54.6% | Profit Tax | 293.2 | 219.4 | -25.2% |
243.0 | 203.5 | 208.7 | -14.1% | Net Profit | 1,114.0 | 975.3 | -12.4% |
353.0 | 577.8 | 246.7 | -30.1% | Cash flow from operational activities | 1,998.2 | 1,473.7 | -26.2% |
301.2 | 261.4 | 233.2 | -22.6% | EBIT | 1,349.2 | 1,160.0 | -14.0% |
503.3 | 381.8 | 465.2 | -7.6% | EBITDA | 1,917.7 | 1,688.9 | -11.9% |
0.63 | 0.53 | 0.54 | -14.1% | EPS (RON) | 2.89 | 2.53 | -12.4% |
32.0% | 23.4% | 29.9% | -6.4% | Net Profit Rate (% from Revenue) | 33.9% | 33.3% | -1.9% |
39.6% | 30.1% | 33.4% | -15.7% | EBIT Ratio (% from Revenue) | 41.0% | 39.5% | -3.7% |
66.2% | 43.9% | 66.6% | 0.7% | EBITDA Ratio (% from Revenue) | 58.3% | 57.6% | -1.3% |
6,361 | 6,332 | 6,351 | -0.2% | Number of employees at the end of the period | 6,361 | 6,351 | -0.2% |
The figures above are rounded and therefore there may be slight differences after reconciliation
Note: income and expenses do not include in-house works capitalized as non-current assets.
As compared to the same period of 2014 the lower revenue is related mainly to the reduced national gas demand and specifically due to the limited consumption imposed on customers having reduced payment capacities that use gas for electric power production, the delayed issue of regulations on minimum gas stock in storages.
Due to the above mentioned causes, the net profit, EBIT and EBITDA are lower as compared to the same period of 2014 when the Company recorded the best results ever. Despite all, the ratios of these financial indicators against the revenue do not record significant deviations and are highly favorable: 33.3%, 39.5% and 57.6% (as compared to 33.9%, 41.0% and, respectively, 58.3% at 9 months 2014), confirming the high profitability of the company.
Net profit per share of RON 2.53 recorded in the first nine months of 2015 shall be positively influenced by the allocation from the reserves made in previous years in compliance with GD no.168/1998.
The reserves allocation, with a positive impact on the net profit to be allocated, has been in 2013 in amount of RON 157.5 million, in 2014 RON 241.90 million. Until the date of the financial statements as of September 30, 2015 the amount to be allocated from the reserves is of RON 127 million.
Operational Results
Q3 2014 | Q2 2015 | Q3 2015 | Δ Q3 (%) | Main Indicators | 9 months 2014 | 9 months 2015 | Δ 9 months (%) |
1,362.3 | 1,340.6 | 1,357.8 | -0.33 | Gas Produced (million cm) | 4,227.9 | 4,134.5 | -2.21 |
947.4 | 1,183.7 | 842.6 | -11.06 | Gas delivered from domestic production (million cm) *) | 4,152.9 | 3,719.7 | -10.43 |
3.0 | 0.0 | 0.0 |
| Delivered import gas (million cm) | 72.9 | 2.2 | -96.98 |
950.4 | 1,183.7 | 842,6 | -11.34 | Total gas delivered (million cm) | 4,225.8 | 3,721.9 | -11.92 |
98.2 | 97.3 | 98.8 | 0.61 | Petroleum Royalty (million cm) | 310.0 | 300.5 | -3.06 |
1,005.0 | 3,600.0 | 2,679.0 | 166.57 | Condensate Production (tonnes) | 3,164.0 | 8,191.0 | 158.88 |
395.1 | 264.5 | 691.9 | 75.12 | Electricity delivered (GWh) | 1,215.6 | 1,102.1 | -9.34 |
0.0 | 38.9 | 0.0 |
| UGS gas withdrawn services (million cm) | 1,169.4 | 1,190.1 | 1.77 |
1,005.6 | 438.9 | 819.0 | -18.56 | UGS gas injection services (million cm) | 1,615.2 | 1,550.1 | -4.03 |
*) - includes gas from current production, own gas withdrawn from UGS and acquired domestic gas and also includes gas delivered to Iernut and Cojocna.
Gas production was in the parameters expected when preparing the program for 2015, the achieved level representing 99.5% of the planned one (4,153.9 million cm planned vs. 4,134.5 million cm achieved).
The evolution of gas production in this quarter reflects the seasonality of the demand, increased by the warm weather conditions during May - June and by the heat recorded in July - August. As a consequence, during the first nine months of 2015 Romgaz recorded a production of 93.4 million cm (2.2%) lower than the production of the same period of last year.
The major demand decrease in the chemical fertilizer sector, the limited consumption imposed on consumers with reduced payment capacity using gas for electric power production, the delayed issue of regulations on minimum gas stock for the 2015 - 2016 winter, the lack of will of the main natural gas sector players to comply with regulations due to the uncertainties on carrying out the price liberalization process on the regulated market are the causes that have led to lower sales.
By entering into production of Frasin - Gura Humorului and Caragele discoveries, the production of condensate recorded a major growth (159%) during the reviewed period, with a quantity of approximately 8,191 tonnes.
Electricity delivered by CET Iernut in the first nine months of 2015 has been by 22% higher (y/y) considering the decreased hydro potential. From the total electricity issued, 42% was delivered to the balancing market that lead to the consolidation of Romgaz position as electricity producer on the balancing market. The sale prices of electricity have exceeded the average prices on all markets.
The full version of Q3 2015 Report (January - September 2015) and the Individual Interim Financial Statements (not-audited) for the period ended September 30, 2015 are available on company's website, link: http://www.romgaz.ro/en/investor-relations/interim-reports and on RNS website at:
http://www.rns-pdf.londonstockexchange.com/rns/6192F_-2015-11-13.pdf