Romanian gas producer Romgaz expects 28% lower profit this year

Romgaz, the largest producer and main natural gas supplier in Romania, expects RON 5 billion (EUR 1.05 billion) in revenues in 2019, down 4.2% compared to last year. The net profit may shrink by 28% year-on-year to RON 1.1 billion (EUR 230 million), according to the company’s budget planning.

The company will invest RON 1.2 billion (EUR 256 million), financed entirely from its own sources and oriented towards projects to compensate for the natural decline of natural gas production.

On the medium term, the company expects its revenues to increase rather slowly to RON 5.02 billion in 2020 and RON 5.08 billion in 2021. It also expects the profit to further decline, at a low rate, to RON 1.02 billion in 2020 and RON 964 million in 2021.

Of the total operating revenues, 81% come from the exploitation of natural gas and 5% from electricity production.

“When preparing the forecast for 2020-2021, we considered the assumptions underlying the 2019 budget fundamentals, demand, market conditions and current legislation on gas delivery prices,” Romgaz said.

The regulations under revised government ordinance (OUG) 114/2018 specify that the company has to pay a 2% turnover tax and must deliver natural gas to households (and heating units having households as customers) at a capped price. The price of gas on the non-residential market is no longer capped, under revised OUG 114.

(Photo source: Facebook / Romgaz)