Profit of Romanian Transgaz surges 2.5 times y/y in H1

The net profit of Romanian natural gas grid operator Transgaz (BVB: TGN) surged 2.5 times y/y to RON 176 million (EUR 36 mln) in H1, amid higher tariffs and more revenues generated by the company’s subsidiary in Moldova, Vestmoldtransgaz – where Transgaz holds 75% and the European Bank for Reconstruction and Development 25%.

The market capitalisation of Transgaz reached RON 4.65 bln (EUR 930 mln) after the price of its shares rose by 39% y/y (+4.44% on August 16, before the H1 financial release). The dividend paid out of its 2023 profit resulted in a yield of only 1.42%.

The company is carrying out large-size investment projects. It recently borrowed RON 1.93 bln through a syndicated loan from Banca Transilvania, BCR, Raiffeisen, UniCredit, and CEC Bank to ensure the financing of investment projects, including the one aimed to transfer the gas produced in the Black Sea.

In the first half of this year, Vestmoldtransgaz reported revenues from gas delivery services in the amount of RON 77.2 mln, compared to only RON 3.5 mln in the same period of 2023.

Transgaz’s consolidated revenues increased by 32% y/y to RON 1.14 bln.

Operating income before balancing and construction activity increased in the first semester of 2024 by 45% y/y (+RON 259 mln) to RON 1.1 bln, mainly as a result of the increase in transport tariffs between October 1, 2023, and September 30, 2024.

Operating expenses, in turn, increased by 27% y/y (+RON 131 mln) due to the increase in royalty expenses by RON 105 mln following the change in the royalty rate from 0.4% to 11.5% of the value of gross revenues from transport and transit operations through the national transport systems starting from September 30, 2023.

(Photo source: Inquam Photos/George Calin)