In Q1 2024, Romgaz recorded a revenue decrease of 22% YoY, an EBITDA decline of 16%, and a net income of RON 1.24bn, a 28% increase YoY.
Starting at the top, Romgaz recorded a revenue of RON 2.27bn, representing a decrease of 22% YoY. This was influenced by a 6.7% drop in gas deliveries, an 18.3% decline in electricity production, and a 9.1% decrease in revenue from storage activities. Revenues from the gas sales represent app. 85% of Q1 2024 revenue, while revenue from electricity sales represents 4.8%, and revenue from storage services represents 6%. Meanwhile, on a QoQ basis, revenue grew by 3.7%, while gas deliveries increased by 5.7%.
Moving on to expenses, in total they amounted to RON 890.3m, decreasing by 30% YoY. The decrease in OPEX came mainly due to lower taxes and duties, which declined by 57% YoY to RON 270m, mainly as a result of lower windfall tax expense, which declined by 84% to RON 77m. Other expenses category also decreased, by 14% YoY to RON 157m, mainly due to lower expenses with CO2 certificates, as fewer certificates were necessary considering the decreased electricity production as well as lower purchase prices.
On the other hand, employee expenses increased by 9% YoY to RON 216m, mainly due to higher wages. Exploration expense also grew by almost 60x YoY to RON 29.6m, due to higher exploration activities. As the OPEX decrease was faster than the revenue decline, EBITDA declined by 16% YoY and amounted to RON 1.58bn. This would also mean that the EBITDA margin “improved” by 4.84 p.p. to 70%. Meanwhile, earnings before taxes amounted to RON 1.49bn, decreasing by 17% YoY to RON 1.49bn. One other significant item to report was the income tax expense, which decreased drastically from RON 815.5m to RON 241.6m. This was because Romgaz had to calculate the solidarity contribution at the end of 2022, which was no longer present as of 2024, including in Q1.
As such, the net income actually managed to improve by 28% YoY to RON 1.24bn, implying a net income margin of 54.8%, an improvement of 21.4 p.p. YoY.
Romgaz key financials (Q1 2024 vs. Q1 2023, RONm)
Source: Romgaz, InterCapital Research
In terms of investments, Romgaz Group invested RON 460m in Q1, representing 64% of the Q1 2024 plan, and 10% of the 2024 annual plan. Romgaz itself made investments of RON 386.8m, an increase of 141% YoY. Investments in Q1 2024 included: drilling works for 2 wells that were finalized, one exploration and one production well, with a total of 5.6k meters drilled; prepared documents for procurement of drilling execution works for 9 wells, among others. If you would like to read more about the investments, the detailed breakdown is available on pages 10-13 of the Q1 report, which can be accessed here.
