You have 10 free articles left this month. Get your freeBasic subscription now and gain instant access to more.

Romania's Romgaz 9-mo net profit drops on higher expenses

Romania's Romgaz 9-mo net profit drops on higher expenses Romgaz HQ

BUCHAREST (Romania), November 15 (SeeNews) - Romanian natural gas producer Romgaz [BSE:SNG] said on Thursday that its January-September net profit fell by 14% year-on-year to 1.02 billion lei ($248 million/220 million euro), as expenses increased.

Exploration expenses rose by 32% on the year to 195 million lei in the first nine months of 2018, reflecting a change in the accounting policy by which the exploration expenses related to seismic prospects, geological and geophysical studies and similar activities are recorded as expenses at the time these works are performed, and these costs are not capitalized anymore, the company said in its third-quarter financial report submitted to the Bucharest Stock Exchange, BVB.

The consolidated revenue from gas sales in the first nine months rose 18% on the year to 2.9 billion lei. The increase compensated for a 34.4% drop in revenue from gas storage services and a 45.5% fall in revenue from electricity sales.

According to data provided by Romanian power transmission system operator Transelectrica, the market share of Romgaz has decreased to 1.89% in the first nine months of 2018, from 3.14% a year earlier.

Romgaz produced 3.92 million cubic meters of natural gas in the first nine months of 2018, up 4.6% on the year.

During the review period, natural gas consumption in Romania decreased by 1.84% on the year to 87.4 TWh, while Romgaz deliveries dropped by 0.28% as compared to the previous period, to 42.79 TWh.

The company's total revenues rose 6.3% on the year in the nine months through September, reaching 3.44 billion lei.

Earlier this month, Romgaz said its board has approved a request from the energy ministry to distribute an additional dividend of 501 million lei for 2017. Romgaz will pay 1.3 lei per share as additional dividend for last year, according to the board decision. This adds to 1.9 billion lei or 4.99 lei per share in dividend for 2017 that Romgaz has already decided to distribute to its shareholders .

The company's majority shareholder is the Romanian state with a 70% stake, with the balance of 30% in free float on the BVB.

Shares in Romgaz traded 0.43% lower at 34.9 lei lei by 1117 CET on Thursday on the BVB.

(1 euro=4.6590 Romanian lei)