Q1 2023 Report

S.N.G.N. Romgaz S.A.

12 May 2023

 

QUARTERLY REPORT

ON THE ECONOMIC-FINANCIAL ACTIVITY OF ROMGAZ GROUP

ON MARCH 31, 2023 (January 01, 2023 - March 31, 2023)

IDENTIFICATION DETAILS ON REPORT AND ISSUER

Report Basis	Law no. 24/2017 on issuers of financial instruments and market operations (Article 69) and ASF Regulation no.5/2018 on issuers of financial instruments and market operations (Annex no.13), for the three-month period ended on March 31, 2023
Report Date	May 12, 2023
Name of the Company	Societatea Nationala de Gaze Naturale "ROMGAZ" SA
Headquarters	Medias, 551130, 4 Constantin I. Motas Square, Sibiu County
Telephone/Fax number	004 0374401020 / 004 0374474325
Web/E-mail	www.romgaz.ro / [e-mail]
Trade Registry No.	J32/392/2001
Fiscal Code	RO14056826
Legal Entity Identifier (LEI)	2549009R7KJ38D9RW354
Regulated market where  company shares are traded	Bucharest Stock Exchange (shares) and London Stock Exchange (GDRs)
Subscribed and paid in share capital	RON 385,422,400
Shares main characteristics	385,422,400 shares each with a nominal value of RON 1 Nominative, ordinary, indivisible shares, issued dematerialised and free tradable since November 12, 2013 as SNG - for shares and SNGR - for GDRs

ROMGAZ GROUP[1] PERFORMANCES

In the first quarter (Q1) 2023, Romgaz Group recorded a revenue of RON 2,909.0 million, a decrease of 25.90%, namely by RON 1,016.8 million, as compared to the revenue achieved in Q1 2022, against a 5.69% drop in deliveries. As compared to Q4 2022, revenue increased by 14.21%, while deliveries increased by 6.25%.

Net consolidated profit of RON 970.0 million was lower by 0.98%, namely RON 9.6 million as compared to the similar period of last year. Compared to Q4 2022, net profit increased by 214.01%, considering that this quarter was influenced by the solidarity contribution introduced at the end of 2022 (the contribution, presented as profit tax, was for the full year 2022, not just for Q4). Gross profit increased by 20.28% as compared to Q4 2022.

Net consolidated profit per share (EPS) was RON 2.52.

The achieved margins of the consolidated net profit (33.34%), consolidated EBIT (59.90%) and consolidated EBITDA (64.71%) recorded a significant increase as compared to Q1 2022 (24.95%; 28.97% and 31.24% respectively). The increase is due to lower royalty expenses (RON 146.5 million in Q1 2023 as compared to RON 458.4 million in Q1 2022) and lower windfall tax expenses from gas sale activity (RON 476.9 million in Q1 2023 as compared to RON 1,843.2 million in Q1 2022), as a result of Government Emergency Ordinance No. 27/2022 as subsequently amended and supplemented. According to GEO 27/2022, the windfall tax does not apply for the gas sold at 150 RON/MWh, and royalty is paid based on this price, and not based on the reference price communicated by the National Agency for Mineral Resources. Monthly reference prices for the reviewed period are (RON/MWh):

Year	January	February	March
2023	550.34	318.28	271.58
2022	535.86	432.73	408.47

Natural gas consumption estimated^[2] at national level for Q1 2023 was about 38.72 TWh, approximately 12% lower than the consumption recorded in Q1 2022.

Natural gas production recorded in Q1 2023 was 1,236.7 million m³, 0.73% higher than planned. Compared to the natural gas production of Q1 2022, the production recorded in Q1 2023 dropped by 5.4%.

The amount of electricity produced was 323.04 GWh in Q1 2023, 6.46% lower than production in the similar period of last year (345.337 GWh).

Relevant Consolidated Financial Results

  *RON million*

Q1   2022	Q4   2022	Q1   2023	ΔQ1/Q4 (%)	Main indicators	Q1    2022	Q1    2023	Δ Q1 (%)
3,925.8	2,547.1	2,909.0	14.21	Revenue	3,925.8	2,909.0	-25.90
3,924.4	2,604.3	2,984.5	14.60	Income	3,924.4	2,984.5	-23.95
2,755.0	1,120.5	1,199.5	7.05	Expenses	2,755.0	1,199.5	-56.46
(0.1)	0.7	0.5	-27.94	Share of profit of associates	(0.1)	0.5	n/a
1,169.4	1,484.5	1,785.5	20.28	Gross profit	1,169.4	1,785.5	52.69
189.7	1,175.6	815.5	-30.63	Profit tax	189.7	815.5	329.77
979.6	308.9	970.0	214.01	Net profit	979.6	970.0	-0.98
1,137.5	1,457.2	1,742.4	19.57	EBIT	1,137.5	1,742.4	53.18
1,226.5	1,637.3	1,882.4	14.97	EBITDA	1,226.5	1,882.4	53.47
2.5	0.8	2.5	214.01	Earnings per share (EPS) (RON)	2.5	2.5	0.98
24.95	12.13	33.34	174.90	Net profit ratio (% from Revenue)	24.95	33.34	33.63
28.97	57.21	59.90	4.70	EBIT ratio (% from Revenue)	28.97	59.90	106.77
31.24	64.28	64.71	0.67	EBITDA ratio (% from Revenue)	31.24	64.71	107.14
5,843	5,971	5,943	-0.47	Number of employees at the end of the period	5,843	5,943	1.71

Operational Results

Q1   2022	Q4  2022	Q1  2023	ΔQ1/Q4 (%)	Main Indicators	Q1   2022	Q1   2023	Δ Q1  (%)
1,307.2	1,248.5	1,236.7	-0.95	Gross production (million m3)	1,307.2	1,236.7	-5.39
92.6	89.0	88.5	-0.56	Petroleum royalty (million m3)	92.6	88.5	-4.42
5,369	5,240	5,617	7.06	Condensate production (tonnes)	5,369	5,617	4.62
345.3	271.0	323.0	19.21	Electricity production (GWh)	345.3	323.0	-6.46
1,026.4	620.1	1,114.9	79.79	UGS withdrawal services (million m3) invoiced	1,026.4	1,114.9	8.62
78.8	483.3	45.4	-90.61	UGS injection services (million m3) invoiced	78.8	45.4	-42.39

Note: information is not consolidated, it also includes transactions between Romgaz and Depogaz.

Natural gas production recorded in Q1 2023 was influenced by:

·    well workover and recompletion programs in inactive or low productivity wells;

·    continuous rehabilitation projects of the main mature gas fields;

·    implementation of measures to optimize gas field production;

·    completion of investment works to extend the production infrastructure and connection of new wells to this infrastructure.

The conditions underlying these results were: 

-     gas imports for consumption were approximately 3.24 TWh, 75% lower than in the same period of the previous year;

-     lower gas withdrawals from Romgaz UGSs by 0.203 million MWh than in the similar period of 2022 (1.762 million MWh compared to 1.965 million MWh).

National gas consumption estimated for Q1 2023 was 38.72 TWh, approximately 12% lower than the consumption recorded in Q1 2022, out of which approximately 3.24 TWh was covered by import gas and the difference of 35.48 TWh by domestic gas. Romgaz contribution was 14.84 TWh, representing 38.33% from the national consumption and 41.81% from the consumption covered from domestic gas.

The full version of the Quarterly Report on the Economic-Financial Activity of Romgaz Group on March 31, 2023 (January - March 2023) and the Consolidated Condensed Interim Financial Statements for the Three-Month Period Ended March 31, 2023 (Unaudited), Prepared in Accordance with International Accounting Standard 34, are available on company's website www.romgaz.ro - Section Investors - Interim Reports and on RNS website, at:

http://www.rns-pdf.londonstockexchange.com/rns/2355Z_1-2023-5-12.pdf

---

[1]Romgaz Group consists of SNGN Romgaz SA ("The Company"/"Romgaz") as parent company and the subsidiaries fully owned by SNGN Romgaz SA - Filiala de Înmagazinare Gaze Naturale Depogaz Ploiești SRL ("Depogaz") and Romgaz Black Sea Limited.

[2] Consumption is estimated as ANRE has not published, until the date hereof, the reports on the gas market for 2023.

 

END