Last checked at 15 May 2019 07:00
QUARTERLY REPORT
REGARDING THE ECONOMIC-FINANCIAL ACTIVITY OF ROMGAZ GROUP
ON MARCH 31, 2019 (January 01, 2019 - March 31, 2019)
IDENTIFICATION DETAILS ON REPORT AND ISSUER
Report Basis | Law no. 24/2017 on issuers of financial instruments and market operations (Article 67) and ASF Regulation no.5/2018 on issuers of financial instruments and market operations (Annex 13) for the three-month period ended on March 31, 2019 |
Report Date | May 15, 2019 |
Name of the Company | Societatea Naţională de Gaze Naturale "ROMGAZ" SA |
Headquarters | Mediaş 551130, 4 Constantin I. Motaş Square, Sibiu County |
Telephone/Fax number | 0040 374 401020 / 0040 269 846901 |
Web/E-mail | www.romgaz.ro / secretariat@romgaz.ro |
Fiscal Code | RO 14056826 |
Trade Registry No. | J32/392/2001 |
Legal Entity Identifier (LEI) | 2549009R7KJ38D9RW354 |
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 GDR's |
Regulated market where the company's shares are traded | Bucharest Stock Exchange (shares) and London Stock Exchange (GDRs) |
ROMGAZ GROUP1) PERFORMANCES
Romgaz Group recorded in Q1 2019 a revenue of RON 1,713.1 million increasing by 15.57% namely RON 230.8 million, compared to Q1 2018.
Net profit reached RON 541.9 million higher by 16.26% namely RON 75.8 million compared to the similar period of 2018.
Net earnings per share (EPS) was RON 1.4.
The achievement of the consolidated net profit margin (31.6%), consolidated EBIT margin (36.8%) and consolidated EBITDA margin (52.2%), confirms that the high profitability of the Group's activity is maintained.
The natural gas consumption estimated2) nationally for Q1 2019 was 48.5 TWh, by 3% lower than the consumption recorded in Q1 2018.
Natural gas production increased by 4.8%, 65.9 million m3 respectively, from 1,364.1 million m3 in Q1 2018 to 1,430.0 million m3 in Q1 2019.
Due to the fact that the power units are unavailable during the works performed at the new power plant, the electricity delivered decreased by 42.11% as compared to the similar period of last year (170.8 GWh vs 287.3 GWh).
1) Romgaz Group consist of S.N.G.N. Romgaz S.A. ("The Company"/"Romgaz") as parent company, Filiala de Înmagazinare Gaze Naturale Depogaz Ploiești SRL ("Depogaz") the 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) The consumption is estimated as ANRE did not publish until the date hereof the reports on the gas market for February and March 2019.
Relevant Consolidated Financial Results
*RON million*
Q1 2018 restated*) | Q4 2018 | Q1 2019 | Δ Q1 (%) | Main indicators | 2017 restated*) | 2018 | Δ '18/'17 (%) |
1,482.3 | 1,559.6 | 1,713.1 | 15.57 | Revenue | 4,585.2 | 5,004.2 | 9.14 |
1,407.1 | 1,531.2 | 1,684.4 | 19.71 | Income | 4,786.0 | 5,048.8 | 5.49 |
845.9 | 1,164.7 | 1,089.8 | 28.71 | Expenses | 2,667.7 | 3,464.3 | 29.86 |
0.8 | 0.6 | 1.4 | 75.00 | Share of profit of associates | 1.4 | 0.6 | -57.14 |
561.2 | 367.5 | 641.8 | 14.36 | Gross profit | 2,119.8 | 1,585.2 | -25.22 |
95.1 | 27.8 | 99.9 | 5.05 | Profit tax | 316.1 | 219.0 | -30.72 |
466.1 | 339.7 | 541.9 | 16.26 | Net profit | 1,803.6 | 1,366.2 | -24.25 |
550.0 | 354.2 | 630.8 | 14.70 | EBIT | 1,853.0 | 1,531.9 | -17.33 |
706.2 | 673.9 | 894.0 | 26.59 | EBITDA | 2,405.5 | 2,240.0 | -6.88 |
1.2 | 0.86 | 1.4 | 16.67 | Earnings per share (EPS) (RON) | 4.79 | 3.54 | -26.10 |
31.4 | 21.78 | 31.6 | 0.64 | Net profit ratio (% from Revenue) | 34.0 | 27.3 | -19.71 |
37.1 | 22.71 | 36.8 | -0.81 | EBIT Ratio (% from Revenue) | 40.4 | 30.6 | -24.26 |
47.6 | 43.2 | 52.2 | 9.67 | EBITDA Ratio (% from Revenue) | 52.46 | 44.8 | -14.60 |
6,157 | 6,214 | 6,162 | 0.08 | Number of employees at the end of the period | 6,198 | 6,214 | 0.26 |
*) In 2018 the Group voluntarily modified the accounting policy regarding recognition of costs with seismic, geological, geophysical works and other similar operations. According to the new policy, such costs are recognised as expense when they are incurred. Previously, such costs were recognised as exploration intangible assets. Information on previous periods were restated to ensure comparability with the current period. At the same time the Group modified in 2018 the calculation method of the well decommissioning provision, replacing average cost of equity with the related interest rate of the 10 year liability government bonds as liability discount rate, in compliance with industry practices. Moreover, in 2018 the Group reanalysed the depreciation of the gas cushion recorded as non-current asset and concluded that it should not have been depreciated; the correction affected the previous periods, therefore they have been restated in order to make them comparable to the current period. The information related to the quarters were not restated to reflect the gas cushion correction; the estimated value of the depreciation per quarter is RON 2.3 million, the quarterly result shown above is smaller by that amount. More information on these restatements are shown in the consolidated and individual financial statements annexed to this report.
Operational Results
Q1 2018 | Q4 2018 | Q1 2019 | Δ Q1/Q4 (%) | Main indicators | Q1 2018 | Q1 2019 | Δ Q1 (%) |
1,364.1 | 1,411.0 | 1,430.0 | 1.3 | Gross production (million m3) | 1,364.1 | 1,430.0 | 4.8 |
101 | 104 | 103 | -1.2 | Petroleum royalty (million m3) | 101 | 103 | 2.2 |
1,635 | 2,589 | 4,934 | 90.5 | Condensate production (tonnes) | 1,635 | 4,934 | 201.8 |
287.3 | 414.5 | 170.9 | -58.8 | Electricity production (GWh) | 287.3 | 170.9 | -40.5 |
1,098.2 | 819.0 | 884.9 | 8.0 | UGS withdrawal services invoiced (million m3) | 1,098.2 | 884.9 | -19.4 |
298.5 | 119.6 | 222.5 | 86.0 | UGS injection services invoiced (million m3) | 298.5 | 222.5 | -25.5 |
The gas production recorded for Q1 2019 was 1,430 million m3, by 4.8% higher than the production recorded in the similar period of the previous year.
The high production achieved in Q1 2019 was supported by:
ü the high development of Caragele gas field by finalising investment works to extend the production infrastructure and connecting the pipelines to this infrastructure;
ü continue the production rehabilitation programs for the main mature gas fields that led to annulling the production decline on these fields;
ü performing recompletion operations that reactivated a series of wells with significant flow rates;
ü relocating compression units to optimise the production process of natural gas fields.
These results were achieved under the following conditions:
@ natural gas imports were approximately at the same level as in Q1 2018, Romania imported an estimated quantity of 9.3 TWh;
@ the withdrawn quantity from Romgaz gas stocks stored in underground storages was by 1.2 TWh less than in the same period of 2018.
The natural gas consumption estimated3) at national level for Q1 2019 was 48.5 TWh, by 3% lower than the consumption recorded in Q1 2018 out of which approximately 9.33 TWh was covered by import gas and the remaining 39.2 TWh by domestic production to which Romgaz participated with 17.63 TWh, representing 36.36% of the national consumption and 43.48% of the consumption covered by domestic gas. The company's market share decreased by 2.7% as compared to Q1 2018.
3) The consumption is estimated as ANRE did not publish until the date hereof the reports on the gas market for February and March 2019
The full version of the Quarterly Report on the Economic-Financial Activity of Romgaz Group on March 31, 2019 (January - March 2019) and the Consolidated Condensed Interim Financial Statements (not audited) for the three-month period ended March 31, 2019 are available on company's website www.romgaz.ro - Section Investor Relations - Interim Reports and on RNS website at:
http://www.rns-pdf.londonstockexchange.com/rns/0801Z_1-2019-5-15.pdf