During 9M 2022, Romgaz recorded a revenue increase of 209% YoY, an EBITDA increase of 60%, and a net profit of RON 2.24bn, +94% YoY.

The revenue of the Company during 9M 2022 amounted to RON 10.8bn, an increase of 209% YoY. Consolidated revenue from gas sales amounted to RON 9.28bn, an increase of 211% YoY. This increase can mainly be attributed to the significant rise in gas sale prices. At the same time, the quantity of gas deliveries decreased by 6.2% compared to the same period last year. Consolidated revenue from storage services increased by 65.6% YoY. In this category, capacity book services revenue grew by 45.9% (or RON 65.3m), while injection services grew by 211.5% (or RON 64m). Meanwhile, consolidated revenue from electricity sales increased by over 5.9x, with an increase in production of 97% YoY to 839.5 GWh.

Moving on to op. expenses, they increased by 252% YoY to RON 8.39bn. In this category, the cost of commodities sold decreased by RON 92.1m, as the cost of gas purchased for resale decreased by 93.4% (or RON 208.4m), given an insignificant quantity of gas purchased for resale. At the same time, the cost of imbalances from the power segment increased by over 4.8x (or RON 115.8m), following the unscheduled shutdown of CET Iernut in August 2022. However, the biggest driver of growth in this category is by far the other expenses, which grew by 565% YoY to RON 7bn. The biggest driver here came from the increase in taxes and duties, which increased by over 8x YoY to RON 6.54bn. Consolidated royalty expenses grew by RON 1.15bn (+330% YoY), while the windfall tax on revenue from gas sales increased by over RON 4.56bn (+12.5x) YoY. This includes the newly introduced (in 2022) contribution to Energy Transition Fund, which amounted to RON 293.9m.

Even with the significant increase in expenses, however, the Company recorded such a strong increase in revenue that profitability also recorded a noteworthy increase. EBITDA during 9M 2022 amounted to RON 2.89bn, an increase of 60% YoY. Despite this, however, the EBITDA margin recorded a significant drop, due to the higher proportion of OPEX in total revenue, and the significantly faster revenue that EBITDA growth. As such, the EBITDA margin stood at 26.8% in 9M 2022, a decrease of 24.9 p.p. YoY.

Moving further down the P&L, EBT amounted to RON 2.67bn, an increase of 97.8%, or RON 1.32bn YoY, due to the positive developments described above. The income tax for the period amounted to RON 431.9m, an increase of 124% YoY. This would imply an effective tax rate of 16.2%, an increase of 1.9 p.p. YoY. Finally, Romgaz’s net profit amounted to RON 2.24bn, an increase of 93.5% (or RON 1.08bn) YoY. This would imply a net profit margin of 20.7%, a decrease of 12.4 p.p. YoY.

Romgaz key financials (9M 2022 vs. 9M 2021, RONm)

Source: Romgaz, InterCapital Research

Romgaz also commented on its investments for 2022. For the year, they allocated a total investment budget of RON 5.72bn, assigned mostly to increasing the gas reserves and resources portfolio, to compensate for the natural decline of gas and electricity production. As of 30 September 2022, they used RON 5.46bn, which is slightly over 100% of the planned investment for 9M 2022, 95.4% of the total investment plan for 2022, and over 16.8x higher investment YoY.

If you would like to read the full Romgaz 9M 2022 report, click here.