Romgaz blames gas release program for lower earnings, deferred investments
The profit, income, and investments of Romanian natural gas producer Romgaz will be revised downwards by about a quarter, under a proposal made by the management to the shareholders, Profit.ro reported.
The revision is mainly due to weaker demand, production, and prices, amid the COVID-19 pandemic, and the new legal obligations to offer gas on stock exchanges through auctions under the so-called gas release program, the management explained.
Thus, Romgaz estimates a decrease of 25.3% (over RON 1.3 billion or EUR 250 million) in its operating income compared to the initial budget for 2020, from RON 5.36 bln to RON 4.01 bln, despite the liberalization of the household market segment from July 1.
Romgaz forecasts that it will obtain a net profit of RON 1.065 bln (EUR 200 mln) this year, 26% lower than the initial budget (RON 1.439 bln).
"For 2020, Romgaz aims to achieve total investments of RON 853 mln, 25% below the program approved by the initial budget of RON 1.14 bln," reads the company's report for shareholders.
As a result, the company's management has postponed the commissioning of the new power plant at Iernut for June 2021. The plant was initially supposed to open at the end of this year.
The Romanian state controls Romgaz through the Economy Ministry, which holds a 70% stake.
(Photo: Oleg Gerasymenko/ Dreamstime)