Here you can find the dates for the upcoming events of the regional companies.

Due to the nature of these events, they are subject to change (might be postponed or canceled).

With the FY 2022 results of Romanian companies now out, we decided to take a look at how profitable were the Romanian energy companies during the year, by taking a look at the EBITDA and net profit margins.

2022 turned out to be quite eventful year for the energy sector in general. Companies in the oil&gas business, including extraction, transportation, and refinement greatly benefitted. Given the scope of the situation in 2022 however, there was enough room for other companies not directly involved in the fossil fuel business, such as Electrica with its electricity transportation infrastructure, and Nuclearelectrica with its nuclear reactors to also benefit.

Romania is quite specific in this case, as compared to other countries in the region, most notably Croatia & Slovenia, they have 6 energy sector companies in their main index, BET, meaning that almost a third of the index is composed of them. As such, 2022 could be described as the year of the energy sector. This is also due to the fact that in the preceding years, there was a reduction in investment into new infrastructure and drilling sites, especially when it comes to fossil fuel extraction and processing. This was somewhat mitigated by higher investments in renewable energy sources, but this was still not enough to compensate for the reduction. Lastly, the COVID-19 pandemic meant that in general companies invested less.

So having all of this in mind, how profitable were the Romanian energy companies in 2022?

EBITDA margins of Romanian energy companies (2022 vs. 2021, %)

Source: Companies’ data, InterCapital Research

Looking at the graph above, we can see that Nuclearelectrica was the most profitable company, at least when it comes to the EBITDA margin. In 2022, they managed to achieve an EBITDA margin of 55.72%, which is a reduction of 0.18 p.p. YoY. This is to be expected, for several reasons. First of all, Nuclearelectrica is a majority state-owned company, which uses fuel whose price did not experience the strong price fluctuations that oil&gas did. As such, their operating expenses did not experience such a significant increase, outside extraordinary items. In this case, this would refer to all the taxes/royalties/solidarity contributions, as Romania has a law that says all energy companies are to be taxed at higher levels after a certain price point, meaning that their profitability is effectively capped. This is the main reason why Nuclearelectrica experienced a decrease in profitability, as their revenue grew but was taxed at higher levels, leading to slightly lower profitability. Next up we have Transgaz, which recorded an EBITDA margin of 43.09%, an increase of 1.85 p.p. YoY, and Transelectrica, which recorded an almost doubling of its EBITDA margin, from 19.77% to 37.61%, an increase of 17.84 p.p. YoY. Following them, we have OMV Petrom with an EBITDA margin of 27.88%, an increase of 0.55 p.p. YoY, Romgaz, with an EBITDA margin of 26.34%, a decrease of 21.23 p.p. YoY, and finally, Electrica, with an EBITDA margin of 13.62% (2021: -1.78%).

Romgaz’s story in particular is interesting here, as we can see the direct effect of the higher gas prices, but also the higher taxes on those prices. As such, even though Romgaz recorded more than a doubling in revenue growth (+129% to be exact), its EBITDA only increased by 26.6% YoY, leading to the aforementioned drop in profitability.

Net profit margins of the Romanian energy companies (2022 vs. 2021, %)

Source: Companies’ data, InterCapital Research

Like with the EBITDA margin, Nuclearelectrica also recorded the highest net profit margin, at 42.9%. This represents an increase of 9.62 p.p., meaning that despite the overall “flat” EBITDA margin, Nuclearelectrica’s bottom line increased significantly, indicating that the higher expenses were already felt on the EBITDA line and had a reduced effect on the net profit (the solidarity contribution which taxes revenue above the certain point at 100% is booked as part of the operating expenses and not as a direct tax, something that would affect the net profit and not EBITDA). Next up, we have Transgaz, which recorded a net profit margin of 25.8%, representing an increase of 10.6 p.p. YoY, and Transelectrica, with a net profit margin of 22.84%, an increase of 22.81 p.p. YoY. On the other hand, the only company to experience a drop in profitability was Romgaz, whose net profit margin decreased by 13.7 p.p. to 19.02%.

In February, passenger car registration in the EU increased by 11.5% YoY, totaling 802,763 units. Meanwhile, looking at the first two months of 2023, EU registration of new cars increased by 11.4% YoY overall. In Croatia in the mentioned period, passenger car registration reported a more pronounced increase of 20.3% YoY.

In February 2022, passenger car registration in the EU increased by 11.5% YoY, totaling 802,763 units. The most significant increase reported in the EU in February by far was in Italy, where the reported increase amounted to 19.4k units, representing a 17.4% YoY increase. Italy is followed by Spain, where an 11.9k unit increase can be noted (+19.2% YoY). Spain is closely followed by France, which is also considered a major and significant region, noting an increase of 10.9k units (+9.4% YoY). Finally, the last major region within the EU, Germany, noted a slight and stable growth of 6k units, amounting to 206k units (+2.8% YoY).

When observing the first two months of 2023, the situation is pretty similar – EU registration of new cars increased by 11.4% YoY, reaching 1.6m units registered in total. EU new car registration remained with positive development, but we emphasize this growth occurred due to the low base effect. The previous year was influenced by the semiconductor shortage, which started at the beginning of 2022. Consequently, most EU markets showed strong growth compared to 2022. When observing the whole period, each of the major markets within the EU noted a positive development. Germany reported just a slight growth, while Spain, Italy and France all noted strong growth of 32.1%, 18.2% and 9.1%, respectively. Further, a number of smaller regions also noted a strong double-digit growth.

Looking at the region, when observing the whole period since the beginning of the year, Croatia reported an increase of 20.3% YoY, amounting to 7k units registered. Slovenia reported a somewhat worse situation – when observing February, the development was more or less flat.

Fuel type cars market share [February 2023]

Source: ACEA, InterCapital Research

Fuel types of new cars

During February 2023, there was a rise in the number of battery electric and hybrid cars registered in the EU, now representing 12.1% and 25.5% of the market respectively. Still, petrol remained the top choice for newly-registered cars in the EU, with a market share of 36.9%, which is on par with the share recorded in 2022.