Romania's Romgaz expects 25% plunge in turnover, profits after new turnover tax

One of Romania's two major natural gas producers, Romgaz (SNG), said on January 30 that it estimates both its turnover and profitability to decrease in 2019 by 20-25% as a result of the Government ordinance 114/2008. The ordinance introduces a turnover tax for energy companies and caps the price of gas producers sell to the household segment to RON 68 (EUR 14.6) per MWh after April 1, 2019. The price of the company’s shares has already plunged to RON 28 after the Government passed the ordinance, from RON 36 before, indicating that the investors also expect lower results. For comparison, in the first nine months of 2018, the average price Romgaz got for its gas was RON 79.9 (EUR 17.2) per MWh, 17.5% more than the regulated price enforced as of April 1. "The ordinance will cost us RON 420 million (EUR 90 million) in terms of profits," said Adrian Volintiru, Romgaz CEO, at a conference in Sibiu after the company made some donations to a hospital, local Ziarul Financiar reported. However, he kept a neutral note. "As long as we can help, we will. Romgaz also sponsors other hospitals for the purchase of medical equipment and can also do it through partial contributions," Volintiru said. Romania’s Romgaz, Hidroelectrica defer investment plans amid 2% turnover tax editor@romania-insider.com (photo source: Facebook / Romgaz)