In the first Q1 of 2022, DIGI recorded an increase in revenue of 21.1%, an increase in EBITDA of 9.5% and an increase in total net profit by EUR 400.7m, amounting to EUR 414.8m due to the sale of its subsidiary DIGI Hungary.

In the first three months of 2022 DIGI Communications recorded EUR 360.6m in revenues, showing a solid increase of 21.1% YoY.

In the Romanian market, the company observed an increase in revenue of 13.3%, amounting to EUR 243.4m. Revenue growth in Romania was mainly the result of the increase of mobile telecommunication services, cable TV and fixed internet and data RGUs in the period, due to organic growth.

In the Spain market, DIGI recorded revenues of EUR 110.8m, noting an increase of 42.2%. The increase in our Spain revenue was due to the increase in mobile telecommunication services RGUs from approximately 2,496 thousand in Q1 2021 to approximately 3,210 thousand in Q1 2022, an increase of 28.6%.

In the Other market, Digi witnessed a slight increase in revenues by EUR 1m, amounting to EUR 6.6m.  A slight increase came due to new customer acquisitions as a result of more attractive mobile and data offerings.

Turning our attention to the operating expenses, in Q1 2022, they amounted to EUR 317.2m (+23.3% YoY). The highest increase in operating expenses could be observed in the Romanian market, where OPEX amounted to EUR 137.4m (EUR 24.1m YoY increase). This variation is mainly due to increases in utilities and network maintenance expenses during the period – but OPEX growth is in line with revenue growth. In Spain, OPEX increase happened mainly due to interconnection and salaries expenses as a result of the business development.

As a result of all of the above-mentioned, DIGI reported an EBITDA of EUR 124.2m, which represents an increase 9.5%. As a result of sales increasing faster than the EBITDA, EBITDA margin observed a decrease of 3.6 p.p. and currently stands at 34.4%. Meanwhile, operating profit amounted to EUR 43.4m, representing an increase of 7.7%.

Going further down the P&L, the company recorded a further improvement in the net financial loss by EUR 5m and currently stands at EUR -20.1m. As a result of all-above stated, the company’s net profit from operations increased from EUR 23.3m to EUR 27m, an increase of c. 16%.

In Q1 2022, the total net profit amounted to EUR 414.7m, representing a strong increase of EUR 400.7m. This increase of EUR 400.7m comes on the back of Net profit from discontinued operations, which reported an increase of EUR 387.8m, due to the sale of DIGI Hungary to the leading Hungarian IT and ICT company.

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.