Romgaz 2Q Net Profit Down 22% On Low Gas Demand

08.14.2015 By Bogdan Neagu

Romania’s largest natural gas producer Romgaz (SNG.RO) Friday reported a 22.5% drop in its second-quarter net profit due to a decline in domestic gas demand.

Romgaz posted net profit of 203.6 million lei (EUR45.8 million) in April to June, from RON262.6 million in the same period of 2014.

Revenue declined 19.3% to RON869.6 million, from RON1.08 billion in the second quarter of last year.

“The quarterly evolution shows the seasonable demand, emphasized by warm weather during May and June, and also the decrease of natural gas demand, especially from the chemical fertilizers’ industry, which led to a decrease of the production of natural gas delivered and implicitly to a lower revenue, operating income and profit than expected,” the state-run company said in its financial report.

For the first half, Romgaz reported net profit of RON766.6 million, down 12% on the year, while revenue fell 11.5% to RON2.24 billion.

Romgaz produced 2.78 billion cubic meters of natural gas during the first half of 2015, down 3.1% from the same period of the previous year.

“The major decrease of demand in the chemical fertilizer sector and the decrease of electric power production, the delay of the regulations on minimum inventories for the 2015-2016 winter, the lack of will to comply with regulations of the main actors in natural gas sector due to the uncertainties on carrying out the price liberalization process, the entering into insolvency of some customers represented the determining factors (for the drop in production),” the report reads.