In 2022, Transgaz recorded an operating revenue growth of 15.7% YoY, an EBITDA increase of 21.7%, and a net profit of RON 348.9m, an increase of 55.5% YoY.
Starting off with the operating revenue, in total it amounted to RON 1.58bn, an increase of 15.7% YoY, or RON 210.7m. The revenue growth was influenced by several factors. Firstly, the increase of revenue from capacity booking of RON 238.9m, driven by higher revenue from the auction premium of RON 165.2m, following the capacity booking auctions performed according to the CAM-NC by interconnection points. Capacity surplus revenue also increased, by RON 6.2m. Finally, the average capacity booking tariff, determined by the structure of the booked products, increased by RON 0.365/MWh, leading to an increase in revenue of RON 130.2m. On the other hand, the booked capacities were lower by 27.584.341 MWh, which led to a decrease in revenue of RON 62.7m. Furthermore, commodity revenue was down by RON 51.3m, due to lower gas transmitted capacities (-7% YoY), as well as the lower commodity transmission tariff of RON 0.25/MWh.
Overall, the revenue from the balancing activity was higher by RON 563.3m, based on the higher trading price of RON 319.64/MWh, (impact of RON +604.5m), while at the same time, the quantity sold was lower by 194.163 MWh, with a negative influence of RON 41.2m. Revenue from the construction activity was down by RON 407.2m, which is in line with IFRIC 12, according to which revenue and cost related to the construction activity or the improvement of the transmission network, in exchange for which the intangible asset is registered, must be acknowledged in line with IAS 11, Construction Contracts. Finally, the financial revenue increased by RON 331.3m, mainly due to the updating of the debt for the regulated value of the remaining unamortized regulated asset base at the end of the Concession Agreement with the inflation rate in 2021. In 2021, inflation of 5.05% (RON 87.9m) was recorded, while in 2022, inflation amounted to 13.8% (RON 286.9m).
Moving on to operating expenses, in total they increased by 18.8% YoY and amounted to RON 1.05bn. The largest absolute driver of this growth came from higher depreciation costs, which increased by 21% YoY, or RON 75.5m, due to the completion and commissioning of major investment projects. Following it, we have the higher costs of NTS gas consumption, materials and consumables used, which increased by RON 67.5m, or 59.8%, as well as higher employee costs, which increased by RON 27.4m, or 5.9% YoY, mainly driven by the higher inflation rate. They also note that the transmission system gas consumption was RON 76.4m higher, due to the higher average purchase price (RON +100.17/MWh as compared to 2021), with a negative influence of RON 75.5m. On the other hand, the quantity of natural gas for the NTS gas consumption was up by 9.2 MWh YoY, leading to a reduction in the cost of RON 936k.
All taken together, this led to an EBITDA of RON 584.6m, representing an increase of 21.7% YoY, or RON 104.1m. This was due to the faster revenue than OPEX growth described above, and it also led to an EBITDA margin of 37%, representing an increase of 1.82 p.p. YoY.
The net financial result amounted to RON 273.2m, an increase of 149% YoY, mainly driven by the higher financial revenue described above, but the Company also notes that the financial expense is higher by RON 158.3m (+4.2x YoY), mainly due to the cost of financial fixed assets (RON 108.7m), the higher interest expense (RON 38.4m), and finally, an FX loss of RON 8.9m.
Based on all of this, the net profit to majority of Transgaz amounted to RON 348.9m, an increase of 55.5% YoY. This would imply a net profit margin of 22.09%, an increase of 5.65 p.p. YoY.
Transgaz key financials (Preliminary 2022 vs. 2021, RONm)
Source: Transgaz, InterCapital Research