In the 9M of 2019 Transgaz recorded a decrease in sales of 1% YoY, a decrease in operating profit of 27.6% and a decrease in net profit of 25.1%
As Transgaz published their 9M 2019 results, we are bringing you key takes from the report. According to it, operating revenue before the balancing and construction activity decreased by 1% YoY, amounting to RON 1.09bn. Of that, revenue from the domestic transmission activity accounts for 72.9%. The mentioned decrease mostly came on the back of commodity component revenue lower by RON 35.1m, as the commodity transmission tariff was lower by Lei 0,47 lei/MWh.
When observing operating expenses, they observed an increase of 11.4% or RON 85.9m. Such an increase could mostly be attributed to a rise in other operating expenses by 63% or RON 46.1m. Of the other operating expenses, the item loss on impairment of receivables amounted to RON 65.4m, representing an increase of RON 46m YoY.
Revenue from the balancing activity amounted to RON 250.9m, which represents a sharp increase of 111% YoY. Such an increase could be mostly attributed to higher quantity by 1,133,839 MWh. Revenue from the construction activity amounted to RON 521.4, showing a high increase of 376% YoY. However, note that higher registered revenue is in line with IFRIC 12, according to which revenue and costs related to the construction activity or the improvement of the transmission network, in exchange of which the intangible asset is registered, must be acknowledged in line with IAS 11, Construction Contracts.
Going further down the P&L, as a result of all above mentioned, operating profit witnessed a decrease of 27.6%, amounting to RON 244.5m. Meanwhile financial result amounted to RON 20.8m (+12%), which boosted the bottom line. The increase mostly came from the FX gains.
In 9M 2019, Transgaz recorded a net profit of RON 224.7m, representing a decrease of RON 25.1%.
Turning our attention to CAPEX, as of end of Q3 2019, capital expenditures amounted to RON 626.84m, of which RON 4.9m are NTS connection installations under the NTS access rules approved by ANRE Order 82/2017.
