Romanian gas producer Romgaz increases profit by 40%

Romanian gas producer Romgaz Medias (BVB ticker: SNG) increased its net profit by 40% in the first nine months of 2014 compared to the same period of last year, to EUR 251 million.

The company’s turnover increased by 27%, to EUR 742 million, according to its quarterly report. Romgaz’s sales and profits were mainly influenced by the gas price increase. The average price of the natural gas delivered by Romgaz was 29% higher in the first nine months of 2014 compared to the same period of 2013.

Romgaz delivered 3.84 billion cubic meters of natural gas from the internal production, 8% more than in the first nine months of 2013. Revenues from internal gas sales were up by 38.5%, to EUR 583 million.

The rest of the company’s revenues came from underground gas storage services, from the resale of import gas and from electricity sales. Revenues from gas storage services went up by 35%, to EUR 69 million, as Romania stored more gas for the winter to compensate for a possible cut of gas deliveries from Russian group Gazprom.

Sales of import gas went down by 71%, to EUR 23 million as gas imports went down by almost 70%, to 72 million cubic meters.

Romgaz recorded the highest increase on the electricity sales segment, of almost 150%, to EUR 55 million. The company operates a gas powered thermal power plant in Transylvania, close to Medias and Targu Mures. The power plant produced 2.2 times more energy in the first nine months of this year.

The increase in revenues compensated for the higher costs determined by the tax on special constructions (some EUR 15 million) and the higher windfall tax (EUR 53 million, compared to EUR 13 million in the first nine months of 2013).

Romgaz had EUR 650 million in cash and other liquid financial assets at the end of September 2014, the financial report shows.

Romgaz is listed on the Bucharest Stock Exchange (BVB) and on the London Stock Exchange, and has a market capitalization of EUR 2.96 billion. The company’s main shareholder is the Romanian state, which holds 70% of its shares. Romanian investment fund Fondul Proprietatea has a 10% stake, and the remaining 20% are held by institutional and individual investors.

Romgaz was listed following a EUR 391 million initial public offer (IPO), in November 2013. Investors gained 22% on the IPO price, in the last 12 months, including the dividends paid by the company from last year’s profit.

Andrei Chirileasa, [email protected]