Last checked at 13 Aug 2021 07:00
BOARD OF DIRECTORS' REPORT
1ST 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 / 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 GROUP1 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 1ST 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 - Section Investors - Interim Reports and on RNS website at:
http://www.rns-pdf.londonstockexchange.com/rns/5733I_1-2021-8-13.pdf