SNGN ROMGAZ SA Q4/FY 2023*
Earnings Presentation
*subject to the SGM approval on April 25
SNG10 years since listing on
Romgaz Group Overview
https://www.romgaz.ro/en/summary-results-and-presentations-investors
April 2024 | 115 years of Energy! |
Disclaimer
Romgaz Group (Romgaz or Romgaz Group or The Company) consists of SNGN Romgaz SA as parent company, Filiala de Înmagazinare Gaze Naturale Depogaz Ploieşti SRL (subsidiary owned 100% by Romgaz SA), Depomureş SA (40% owned by Romgaz SA) and Romgaz Black Sea Limited (100% owned by Romgaz).
This document was prepared by SNGN Romgaz SA for the presentation of the Q4/FY 2023 Results (Q4 stands for the 4th Quarter, FY for Full Year).
This document is for your information only and all statements contained herein are related to intentions, assumptions and forecasts made by SNGN Romgaz S.A. or by its management. None of the information included herein shall be assumed as an invitation, an offer, a recommendation or an opinion expressed by SNGN Romgaz S.A. to subscribe, purchase or sell any securities. Also, this document and all information included herein shall not form the basis of any contract, investment decision or commitment whatsoever. This document and all information included herein shall not be treated as a consultancy or advice whatsoever.
This presentation is not an offer for sale of securities in the United States or any other jurisdiction. The Company's shares have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the US.
To the extent available, the industry, market and competitive position data contained in this presentation has come from official or third party sources. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, the Company has not independently verified the data contained therein. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation.
This presentation may include certain forward-looking statements, beliefs or opinions. No representation is made that any of these statements, beliefs or opinions will be achieved. There are a number of risks, uncertainties and factors that could cause actual results and developments to differ materially from those expressed or implied by these statements, beliefs or opinions. Past performance of the Company cannot be relied on as a guide to future performance.
This document does not purport to contain all information that may be necessary in respect of the Company or its securities and each person receiving this document should make an independent assessment.
Neither SNGN Romgaz S.A. nor its directors, management, employees and their consultancies can be held responsible for any losses or damages howsoever arising, directly or indirectly, from any use of this document or its contents.
All figures included in this presentation are rounded ("round to nearest" method).
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Contents
page # | |
Gas market overview | 4 |
ROMGAZ: Highlights | 7 |
Main events / Fiscal framework applicable / Group developments in | |
Q4/FY 2023 | |
ROMGAZ: Group Overview | 10 |
Main Activities | 13 |
Financial Performance | 24 |
Investments | 27 |
Main Strategic Objectives / ROMGAZ Strategy 2021 - 2030 | 28 |
Dividend Distribution | 33 |
Romgaz - Investment Case | 34 |
The Board | 35 |
Shareholder Structure and Stock Performance | 36 |
3
Gas market overview
Romania: Among TOP Gas Consumers & Producers in the Region
ROMGAZ: Among top Gas Producers in the region1
(2023 output, kboepd) | |
125 | 112 |
83 | |
59 | |
40 | |
12 |
Sources:
-
Companies' reports, Romgaz computation; Petrom: Romania+abroad,
OMV excluding Petrom, PGNIG's acquisition by
Orlen to boost reported production in 2023. - CEIC data; Romgaz computation for Romania.
ROMANIA: 2nd Gas Consumer in CEE2
1.7 | (2022, bn Cub ft/day) | ||||
1.0 | 0.9 | ||||
0.7 | |||||
0.5 | 0.3 | ||||
Poland | Romania | Hungary | Czech | Slovakia | Bulgaria |
Republic |
Natural gas - important clean source of energy.
In the region:
- ROMGAZ - important gas producer
- ROMANIA - among top gas consumers in CEE !
4
Gas market overview
Romania: Prices on the Commodities Exchange 2023 vs 2022, Romgaz - Leading Gas Producer
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Natural Gas Prices on BRM, Current Imports and CEGH (RON/MWh)
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J-22 | F-22 | M-22 | A-22 | M-22 | J-22 | J-22 | A-22 | S-22 | O-22 | N-22 | D-22 | J-23 | F-23 | M-23 | A-23 | M-23 | J-23 | J-23 | A-23 | S-23 | O-23 | N-23 | D-23 |
BRM - Commodities Exchange (gas forward & spot) Prices are shown in the month of delivery
Current Imports, all mkts in Romania
CEGH Day Ahead Market *
All prices might include storage tariffs
Source: BRM - Romanian Commodities Exchange, ANRE Reports, CEGH data provided by ANRM
- The base of computation of gas royalties since 2018 (only for production sold to industrial clients starting with April 1, 2022)
Gas producers in Romania (2023)
Final Consumption in Romania (2023)
49.3%
ROMGAZ
Others
50.7%
Source: ANRE Reports
Households consumption (does not include gas used in power- plants to provide central heating for households)
64% 36%
Industrial consumption
Source: ANRE Reports
5
Gas market overview
Romania: Total Gas consumption lower by 6.5% y/y in 2023
Total Natural Gas Consumption* (million MWh)
Energy Resources - on sources (million MWh)
130
98
65
33
0
24 | 32 | |||||||
28 | ||||||||
17 | ||||||||
103 | 98 | 85 | ||||||
81 | ||||||||
2020 | 2021 | 2022 | 2023 |
Coal/gas-fired
plants
Hydroplants
Nuclear plants
Other renewables
Production - total
Imports
2023
2022
* Including from underground storages | Domestic production | Energy Resources - | |
Source : ANRE Reports, Romgaz estimates/computation | Imports | total | |
- | 5 | 10 | 15 | 20 | 25 | 30 | 35 | 40 | 45 | 50 | 55 | 60 | 65 |
Seasonality of Gas Consumption (million MWh)
20
15
10
5
0
J-20F-20M-20A-20M-20J-20J-20A-20S-20O-20N-20D-20J-21F-21M-21A-21M-21J-21J-21A-21S-21O-21N-21D-21J-22F-22M-22A-22M-22J-22J-22A-22S-22O-22N-22D-22J-23F-23M-23A-23M-23J-23J-23A-23S-23O-23N-23D-23
Mix of Energy Resources (2023)
13% | 27% | Coal/gas-fired plants | |
Hydroplants | |||
14% | Nuclear plants | |
Other renewables | ||
17% | 28% | Imports |
Source: Statistics Institute
Domestic Production Imports
6
ROMGAZ Group: Highlights of events
Selected Events - important for our activity
March / June 2022
FINANCING CONTRACT:
March 30: Romgaz signed a loan
agreement with Raiffeisen Bank for EUR 325 million to partially finance the acquisition of 50% of Neptun Deep Project
June 28: Parties agreed BCR to join
the loan agreement
May / August 2022
INVESTMENT - Neptun Deep:
May 3: Romgaz signed the Share Sale
and Purchase Agreement for the
acquisition of ExxonMobil
Exploration and Production Romania Ltd that holds 50% of Neptun Deep
August 1: Transaction completion
March 16 / May 16, 2023
MANAGEMENT:
SGM appointed the BoDs with a 4-year mandate; BoDs appointed the CEO, the Deputy CEO and the CFO for a 4-year mandate
May 16, 2023
CONTRACT:
Raiffeisen International Bank started
providing Issuer Market Making
services for Romgaz
May 10 / August 1, 2023
INVESTMENT - Iernut plant:
May 10: SGM approved the
Settlement Agreement between
Romgaz and Duro Felguera
Aug 1: Romgaz issued the Order to start the works on the investment objective
April 3, 2023
INVESTMENT - Iernut plant:
Romgaz and Duro Felguera signed
the Procurement Contract to
complete the works and commission
the new power plant
May 17, 2023
INVESTMENT - Depogaz:
Depogaz signed the Grant Agreement for increasing the daily gas delivery capacity of the Bilciurești UGS, also correlated with an increase in the storage capacity. The total estimated value of the investment is EUR 124 million
June 20 / August 3, 2023
INVESTMENT - Neptun Deep:
FID on June 21: Romgaz and OMV Petrom approved the Development Plan for the commercial natural gas fields in Neptun Deep block;
Aug 3: NAMR approved the
Development Plan
December 12, 2023
INVESTMENT:
Neptun Deep: Over 80% of
the execution agreements awarded
to deliver the project
Depogaz: Bank loan of EUR 50
million to finance the investment in
Bilciurești UGS
7
ROMGAZ Group: Highlights regarding legislation
Fiscal framework with impact on Romgaz Group's operations
- Law no. 296 / Oct 2023 regarding fiscal-budgetary measures: a 0.5% tax or a 1% tax on turnover of some companies operating in the oil and gas sector (including producers), starting with the fiscal year 2024;
- GEO no. 91/ Oct 2023: gas royalties in some production perimeters are up with approx. 1,5 ppts starting with Oct 30, 2023; gas storage royalties increased to 3.5% of related revenues from 3.0% before.
- GEO no. 27/2022, GEO no. 119/2022, Law no. 357/2022 and GEO no. 32/2024 - regarding measures applicable to the energy & gas markets starting with April 1st, 2022, and change of norms in the energy market.
Gas producers - main provisions applicable include:
-
REGULATED selling prices: during April-December 2024 - 120 RON/MWh for the allocated gas delivered until end-March 2025 to HHs (households) and heat producers for the production of thermal energy for HHs;
During Sept 2022 - March 2024 - 150 RON/MWh for the above-mentioned categories; during April-August2022 - 150 RON/MWh for gas sold to HHs and 250 RON/MWh for the gas sold to heat producers for the production of thermal energy for HHs; maximum 100 RON/MWh for the gas transferred to the Electricity Segment until end-March 2024; - Windfall profit tax: Revenues from the gas sold to HHs and assimilated clients are exempted from the windfall tax;
- Royalties: Royalties owed for the gas produced to be delivered at regulated prices are based on these prices (instead of CEGH prices, as computed for industrial consumers).
Gas suppliers have CAPPED selling price levels for some end-clients:max 0.31 RON/kWh for HHs, and 0.37 RON/kWh for industrials with a previous-yearconsumption < 50,000 MWh, for power plants and industrial parks.
Gas storage: mandatory for suppliers/heat producers to secure the maximum between 30% of consumption of final clients during Nov 2024 - March 2025 and 90% of the underground storages' capacity.
Energy: pricing norms until end-March 2025 + an 80% windfall profit tax until end-Aug 2022.
The Energy Transition Fund: contributors include energy producers (Sept 2022 - March 2025).
- GEO no. 186 / Dec 2022: a Solidarity Contribution of 60% is applied for the 2022-2023 fiscal years, to the portion of the annual Taxable Profit that exceeds by 20% the average recorded over 2018-2021.
8
ROMGAZ Group: Highlights of Results for Q4/FY 2023
Strong Results, Historically-high EBITDA/Net Profit and EBITDA/EBIT Margins in 2023
Market share | ||
2023: | in domestically- | Capex |
Gas production | produced gas | |
RON 1,214 mln | ||
4.8 bcm | consumption | |
Estim 60% |
Revenues -32.6%y/y
Q4/2023:
Revenues
-14%
Windfall Tax + | EBITDA |
Royalties + | +18.6% y/y |
Solidarity Tax | EBITDA margin |
-79% y/y | 59.7% |
Windfall Tax + | EBITDA |
Royalties + | -32.8% y/y |
Solidarity Tax | EBITDA margin |
-49% y/y | 50.2% |
NET PROFIT RON 2.81 bn Net Profit margin 31.2%
NET PROFIT RON 643 mln Net Profit margin 29.4%
EBITDA, NET PROFIT and EBITDA / EBIT rates at historical annual height in FY 2023 | 9 |
ROMGAZ: Group Overview
Top Producer and Supplier of Natural Gas, Operator of UGS in Romania
Other activities
- Include wells workover and recompletions and special well operations, and also - technological transport and maintenance;
- Support operations at Group level and third-party clients.
Gas Exploration, Production & Supply
- 8 exploration blocks onshore (Romgaz - 100% working interest); onshore exploration potential, important discoveries and enhancements made lately;
- Important partnerships offshore;
- Top gas producer in Romania (output of 4.8 bcm in FY2023);
- Significant market share in the total gas supply in Romania.
Underground Gas Storage
- Working capacity: 2.87 bcm at end - December 2023;
- Important investments to secure the gas supply;
- Market share of 91% in Romania;
- Regulated activity.
Electricity Production
- New power plant in construction (430 MW);
- Old power plant adjusted operations;
- Market share of 1.72% in terms of production in 2023.
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SNGN Romgaz SA published this content on 15 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 April 2024 08:06:03 UTC.
