During 2023, Transgaz recorded an op. revenue growth of 13% YoY, an EBITDA increase of 2%, and a net income of RON 169m, down 52% YoY.
Starting off with the op. revenue, it amounted to RON 1.78bn, increasing by 13% YoY. This growth was influenced by several factors. Firstly, the higher revenue from capacity booking, at RON 80.5m. Romgaz provides further details inside this category, and as such this increase was influenced by: a higher capacity booking tariff by RON 0,344/MWh, with a positive influence of RON 123m, higher booked capacity by 2.49m MWh, with a positive influence of RON 6.2m, and higher capacity overrun revenue by RON 45.4m. The growth across these categories was offset by the lower revenue from the auction premium of RON 94.4m.
Secondly, higher commodity revenue by RON 19.5m was recorded, due to a RON 0.14/MWh higher commodity transmission tariff, with a positive influence of RON 19.9m. This was slightly offset by RON 448k of lower gas transmitted capacities YoY. Thirdly, higher international gas transmission revenue, at RON 42.4m, according to the Agreement for the termination of the legacy Contract between Transgaz and GPE.
In terms of operating expenses, in total they amounted to RON 1.67bn, growing by 17% YoY. Inside the OPEX, the largest increase was recorded in other op. costs increased by 51% YoY to RON 262.7m. This was due to the costs of the depreciation of trade receivables, as the Company wasn’t able to collect receivables from Gazprom in the amount of RON 121m, which was offset by the collection of receivables from Electrocentrale Constanta, at RON 20.5m, and Mehedinti Gaz at RON 3.2m. Furthermore, employee expenses grew by 16% YoY to RON 572m, as a result of the inflationary pressures. The cost of royalty also increased, by almost 8.7x YoY to RON 55.3m, as a result of the change in the royalty rate from 0.4% to 11.5% of the gross revenue from transmission and transit operations.
Furthermore, it should be noted that depreciation increased by 11% YoY to RON 482.7m, based on the completion and commissioning of investment projects. As depreciation is part of the EBITDA, and it recorded this growth, EBITDA actually increased by 2% YoY, to RON 595m, even though revenue outpaced overall OPEX growth. This would also imply an EBITDA margin of 33.3%, a decrease of 3.5 p.p. YoY.
Next up, the net financial result amounted to RON 99.4m, decreasing by 64% YoY. This came due to the 48% YoY decrease in financial income to RON 260.9m, mainly due to the recording of the update of regulated assets value with the inflation rate of 6.6% on 31 December 2023, as compared to 16.4% on 31 December 2022. According to this calculation, the value was RON 144.6m in 2023 as compared to RON 287.9m in 2022. At the same time, financial expenses also decreased, by 28% YoY to RON 161m.
As a result of these developments, net income decreased significantly, by 52% YoY to RON 169.3m. This would also imply a net income margin of 9.5%, representing a decline of 12.8 p.p. YoY.
Transgaz key financials (Preliminary 2023 vs. 2022, RONm)
Source: Transgaz, InterCapital Research
Taking a quick look at the balance sheet, total assets grew by 6% YoY, supported by a 2% increase in the non-current assets to RON 7.02bn, and a 26% increase in current assets to RON 1.7bn. Inside the non-current assets, trade receivables and other receivables grew by 13% to RON 2.4bn, right of use of the leased assets increased by 10x YoY to RON 170m, while intangible assets decreased by 7% to RON 3.6bn. Current assets meanwhile, increased primarily as a result of higher cash and cash equivalents (+70% YoY, to RON 712m), as well as higher trade receivables and other receivables (+25% YoY, to RON 433m).
On the other hand, total liabilities grew by 11% YoY to RON 4.56bn, mainly due to a 46% YoY increase in the current assets, to RON 1.4bn, which by itself was primarily driven by higher short-term loans, which increased by 234% YoY to RON 456m.
