In Q1 2022, Romgaz recorded an increase in sales of c. 2x, an increase in EBITDA of 76.3% and a doubling of net profit (+111.2% YoY).
As Romgaz published their Q1 2022 results, we are bringing you key takes from it. In Q1 2022, the gas production amounted to 1,307.2 m3, representing a decrease of 0.3% YoY. Natural gas production was influenced by completion programs in inactive or low productivity wells, completion of investment works to extend the production infrastructure and connection of new wells to this infrastructure. Meanwhile, technological consumption increased by 4.2%, amounting to 19.8 m3, resulting in net internal gas production of 1,287.4 m3, representing a decrease of 0.4% YoY. Electricity production amounted to 345.34 GWh, higher than in the same period of 2021 (202.1 GWh). With this production, Romgaz contributed to 35.7% of the national consumption and 45.5% of the consumption covered by domestic gas.
When observing the company’s P&L, Romgaz recorded a 195.8% increase in revenues amounting to RON 3.93bn. Such an increase came on the back of a rise of gas sales, both from internal production and from gas purchased for resale (+201.1%) and from higher revenues from electricity sales (+284.6%). The cost of commodities sold decreased by 68% YoY, amounting to RON 8.9m, mainly due to lower gas quantities purchased for resale. Other expenses recorded an increase of 6x, by RON 2.11bn. Such an increase could be attributed to mainly to the rise of expenses for the windfall tax by RON 1.73bn. Royalty expenses increased by RON 374.3m.
In the first quarter of 2022, EBITDA amounted to RON 1.2bn, representing an increase of 76.3%. Such an increase could be attributed to the solid top-line performance. Overall, the Group observed a decrease of the EBITDA margin to 31.3% (-23.9 p.p. YoY). The lower EBITDA margin is the result of much lower sales in Q1 2021, even with the above-mentioned nominal growth in EBITDA. In the same period, just like EBITDA, EBT showed a strong increase of 107.4%%, amounting to RON 1.14bn, while net profit amounted to RON 979.6m (+111.2%).
Turning our attention to CAPEX, Romgaz’s investments were lower than scheduled due to rescheduling the advance payment (amounting to RON 470m) for Neptun Deep investments namely acquisition by Romgaz of all shares of ExxonMobil Exploration and Production Romania, holding 50% rights and obligations in the Deepwater Zone of XIX Neptun offshore Block, Black Sea. However, the company did achieve few investments during Q1 2022. Drilling works for three wells were finished while drilling on one well was seized. Works for surface facilities were finished to stream in the production four wells, while work on six wells for surface facilities are still in progress.
