Romgaz posts net profit of 2.8 billion RON, up 10.4 percent in 2023

Romgaz announces a net profit of 2.8 billion RON for 2023, a 10.4 percent growth compared to 2022, according to its preliminary performances for the last year.

Natural gas production estimated for 2023 is 4,788.5 million m3 , by 147.4 million m3 lower than the production of the previous year (-2.99 percent).

Total revenue is lower by RON 4,295.4 million, recording a drop of 31.45 percent due to the following factors:

– decrease of revenues from natural gas sales (RON 7,766.97 million in 2023 as compared to RON 11,306.97 million in the previous year); the obligation enforced by GEO No. 27/2022 had a significant impact that led to the drop of 31.31 percent of revenues from gas sales, therefore Romgaz sold most of production at the regulated price of RON 150/MWh (86.43 percent of deliveries);

– electricity revenues also dropped (RON 406.98 million in 2023 as compared to RON 1,330.61 million in the previous year). According to GEO No.27/2022, as of 2023, Romgaz sold almost all electricity production at RON 450/MWh;

– revenue from underground storage activities increased by 17.66 percent (RON 552.19 million in 2023, as compared to RON 469.33 million in 2022), mainly due to the increase of capacities booked by clients for underground gas storage;

Total expenses decreased by 54.77 percent as compared to last year, mainly due to the decrease of windfall tax on revenues from natural gas (RON -4,014.05 million) and royalty expenses (RON -1,039.56 million). The Group recorded in January-December 2022 expenses of RON 403.80 million with the windfall tax on electricity sales, which became subsequently a contribution to the energy transition fund; taking into account that 90 percent electricity was sold at 450 RON/MWh, this contribution is insignificant for the reviewed period;

Increase of the consolidated gross profit by 21.98 percent as compared to the similar period of the previous year was offset by the profit tax. Profit tax includes the solidarity contribution introduced at the end of 2022, for years 2022-2023. In 2023, the expense recorded with this contribution is RON 1,687.37 million, an increase by RON 684.58 million as compared to the previous year;

Achieved net consolidated profit margins (31.24 percent), consolidated EBIT (54.41 percent) and EBITDA (59.70 percent) strengthened as compared to 2022 (19.06 percent; 29.81 percent and 33.93 percent respectively). The increase is due to lower royalty expenses (RON 600.52 million in 2023 as compared to RON 1,640.08 million in 2022) and to lower expense with the windfall tax from gas sales (RON 889.80 million in 2023 as compared to RON 4,903.85 million in 2022), as a result of enforcing provisions of GEO No. 27/2022. According to this ordinance, natural gas quantities sold at RON 150/MWh are exempted from payment of windfall tax, and royalty is calculated and paid at this price, and not at the reference price communicated monthly by the National Agency for Mineral Resources.