In Q1 2023, Romgaz recorded a revenue decrease of 25.9%, an EBITDA increase of 53.5%, and a net income of RON 970m, a decrease of 1% YoY.
Starting off with the revenue, Romgaz recorded revenue of RON 2.91bn, representing a decrease of 25.9% (or RON 1.02bn) YoY. Breaking this down further, there was a 5.7% decrease in deliveries in Q1 2023 (as compared to a 6.25% increase during the same quarter last year) Furthermore, natural gas production amounted to 1.24bn m3 in Q1 2023, an increase of 0.73% compared to the plan, but a decrease of 5.4% compared to Q1 2023. Also, the amount of electricity produced was 323.04 GWh, which was 6.46% lower than the production in Q1 2022. Finally, national gas consumption is estimated at 38.72 TWh, a decrease of 12% YoY. Of this, Romgaz contributed 14.84 TWh, representing 38.3% of national consumption and 41.8% of consumption covered by domestic gas. As a result of these developments, revenue from gas sales decreased by 25.5% (or RON 877.3m), while revenue from electricity sales decreased by 62.2% (or RON 199.6m).
In terms of the expenses, they amounted to RON 1.2bn, a decrease of 56.5% YoY, mainly due to lower royalty expenses (RON 146.5m vs. RON 458.4m in Q1 2022), and lower windfall tax expenses from the gas sale activity (RON 476.9m vs. RON 1.84bn in Q1 2022), due to government regulation. In turn, this would mean that even though the revenue dropped by more than a quarter, the EBITDA improved significantly. As such, during Q1 2023 it amounted to RON 1.88bn, representing an increase of 53.5% YoY. This would imply an EBITDA margin of 64.7%, representing an increase of 33.47 p.p. YoY.
Moving on down the P&L, one interesting thing to note is the relative decrease (albeit minor, 1%) in net income. This came as a result of higher net income tax, which in total amounted to RON 815.5m, an increase of 329.7% YoY. Breaking this tax expense apart, we have the current income tax of RON 271.2m, deferred income tax of RON 6.8m, and the contribution to the solidarity fund in the amount of RON 537.5m, which was introduced at the end of 2022. As such, this significantly impacted the net income, which amounted to RON 970m, declining by 1%. Despite this, the net income margin did improve, amounting to 33.3%, representing an increase of 8.4% YoY, but this came mostly as a result of lower revenue, and as mentioned, not higher net income.
Romgaz key financials (Q1 2023 vs. Q1 2022, RONm)
Source: Romgaz, InterCapital Research
In terms of investments, in Q1 2023 Romgaz Group scheduled investments of RON 325.2m but managed to achieve RON 222.6m of total investments, meaning a reduction of 31.6% compared to the plan. Compared to the Annual Investment Plan (in the amount of RON 1.97bn), Romgaz carried out investments in the amount of RON 160.5m, or 8.1% of the total. Compared to the same period last year, investments increased by 77.8%. Of these investments, Romgaz noted several chapters, such as revamping and retrofitting of existing installations and pieces of equipment, geological exploration works, exploitation drilling works, environmental protection works, independent equipment and installation, and expenses with studies and projects.
