TIDMSNGR
RNS Number : 0210E
S.N.G.N. Romgaz S.A.
25 February 2020
IDENTIFICATION DETAILS ON REPORT AND ISSUER
Preliminary annual report according to Article 61 of Law
24/2017
Financial year: 2019
Report date: February 25, 2020
Name of the Company: Societatea Nationala de Gaze Naturale
(SNGN) ROMGAZ SA
Headquarters: Medias, Constantin I. Motas Square, no.4, code
551130
Telephone/fax number: 004-0374-401020 / 004-0269-846901
Fiscal Code: RO14056826
LEI code: 2549009R7KJ38D9RW354
Trade Registry No: J32/392/2001
Subscribed and paid in share capital: RON 385,422,400
Regulated markets where the issued securities are traded:
Bucharest Stock Exchange (BVB), London Stock Exchange (LSE)
PRELIMINARY CONSOLIDATED ANNUAL REPORT
(issued based on unaudited consolidated financial information
prepared
in compliance with the International Financial Reporting
Standards)
ON THE ECONOMIC AND FINANCIAL ACTIVITY OF SNGN "ROMGAZ" SA
GROUP(1) for 2019
OVERVIEW
S.N.G.N. Romgaz S.A. is a Romanian natural gas producer and
supplier, the business segments of the Group being: gas
exploration, gas production and supply, underground gas storage and
electricity production.
Romgaz Group preliminary performances in the year ended on
December 31, 2019 were influenced by the following factors:
Ä Gas production was 5,276.9 million m(3) , 56.4 million m(3)
lower than the production recorded during the previous year
(-1.06%) and 1.37% lower than budgeted;
Ä Estimated revenue for the year 2019: RON 5.08 billion (2018:
RON 5.00 billion), increased by 1.52%;
Ä Preliminary net profit for the year 2019: RON 1.43 billion
(2018: net profit RON 1.37 billion), increased by 4.55%;
Ä The estimated Net Profit recorded in Q4 was RON 243.18
million, a decrease by 34.21% as compared to the same period of the
previous year (Q4 2018) but 16.25% higher than the previous quarter
(Q3 2019) pursuant to a revenue increase of 40.78% in Q4 2019
compared to Q3 2019;
Ä The estimated Net Profit Margin in 2019 was 28.11% increased
by 2.98% as compared to 2018 and the estimated EBIT margin was
32.42% (year 2018: 30.61%);
Ä Decrease by 22.97% of petroleum royalty expenses (RON 342.9
million in 2019 as compared to RON 445 million in 2018) pursuant to
the decrease of the reference price taken into account;
Ä Increase by RON 166.1 million (30.16%) of the windfall tax
further to the deregulation of prices in the gas sector, pursuant
to an average gas selling price higher as compared to the previous
year, although quantity supplied was lower by 3.4%;
Ä Net assets impairment of RON 391.3 million pursuant to the
abandonment of certain investment projects in wells (RON 250.3
million, out of which the amount of RON 55.9 million related to
Trinity 1X Well from the EX 30 Trident Block in the Black Sea),
pursuant to insignificant recent investments in projects started in
previous years (RON 88.9 million), and a net impairment of RON 20.5
million pursuant to a gas field impairment test conducted in
December 31, 2019;
Ä Decrease of investments realized by the Group in 2019, from
RON 1,188.6 million in 2018 to RON 891.6 million. The degree of
investment achievement is 64.67% as compared to the budget. In
2019, the investment level in the new electric power plant from
Iernut was RON 301.4 million, as compared to RON 568.9 million in
2018.
Ä It is estimated that the electricity production decreased in
2019 as compared to the previous year by 49.4% due to investment
works carried out at CTE Iernut. These works restrict the operation
of energy groups of the old part of the electric power plant. As a
consequence, it is estimated that the income from the sale of
electricity decreased by 50.95% as compared to the previous
year;
Ä Gas trading from internal production aimed at securing a
balanced portfolio of customers, at reducing the risk related to
payment defaults and at being present on the free market to ensure
price flexibility. Nonetheless, in 2019, the Group recorded net
impairment losses of receivables estimated to RON 116.7 million,
due to the risk of non-collecting some receivables from insolvent
customers. The Group was forced by decisions of the courts to
deliver gas to such customers considered "captive" by the
insolvency law. Subsequent to the issuance of such decisions, the
Group did not record any additional outstanding receivables from
these customers, but, according to IFRS, it recorded impairment
losses on receivables according to the estimated risk of
non-collection;
Ä Increase of consolidated revenue from natural gas storage
activities by 11% as compared to 2018, this revenue being estimated
to RON 330.8 million (year 2018: RON 298.0 million) where the
reservation services had the greatest influence (increase by RON
35.4 million, respectively, an increase by 15.33% as compared to
the previous year). The reserved capacity for 2019 - 2020 storage
cycle (period April 2019 - March 2020), including the part of the
Group, increased by 26.08% as compared to the 2018 - 2019 storage
cycle (period April 2018 - March 2019). The quantities injected in
storage in 2019 increased by 51.40%, which explains also the
increase of revenue from storage services.
Ä Introduction in 2019 of a monetary contribution levied from
the licence holders in the field of electricity and natural gas of
2% of the revenue achieved from the activities covered by the
licences granted by ANRE, in amount of RON 86.96 million;
Ä EBITDA related to 2019 remains at a high level of 50.37%
related to the revenue.
PHYSICAL INDICATORS
The table below shows a comparison of the main indicators
related to gas and condensate production, royalty, electricity
production and invoiced UGS injection/withdrawal services:
Q3 2019 Q4 2019 Q4 2018 <DELTA> Main Indicators 2019 Year <DELTA>
P Q4 (%) P 2018 12 months
(%)
Gross gas production
1.25 1.33 1.411 -5.93 (BCM) 5.277 5.333 -1.06
-------- -------- -------- ------------------------ -------- -------- -----------
Condensate production
3,697 4,388 2,589 69.45 (tonnes) 17,340 7,867 120.42
-------- -------- -------- ------------------------ -------- -------- -----------
Petroleum royalty
0.09 0.096 0.104 -7.83 (BCM) 0.379 0.388 -2.28
-------- -------- -------- ------------------------ -------- -------- -----------
Electricity production
120.4 298.0 414.5 -28.11 (GWh) 590.1 1,165.2 -49.37
-------- -------- -------- ------------------------ -------- -------- -----------
Invoiced UGS withdrawal
services (million
0 347.1 819.0 -57.62 m(3) ) 1,271.8 1,949.9 -34.78
-------- -------- -------- ------------------------ -------- -------- -----------
Invoiced UGS injection
services (million
1,226.5 346.1 119.6 189.38 m(3) ) 2,620.5 1,731.2 51.37
-------- -------- -------- ------------------------ -------- -------- -----------
The preliminary natural gas quantities produced, supplied,
injected in/withdrawn from the underground storages (UGS) and gas
quantities used for electricity production between January
-December 2019 in comparison to 2018 and 2017 are described in the
table below (million m(3) ):
<DELTA>
Item 12 months
no. Specification 2017 2018 2019P (%)
0 1 2 3 4 5=((4/3)-1)x100
--------------------------------- -------- -------- -------- ----------------
Total - gross production,
1 out of which: 5,157.5 5,333.3 5,274.9 -1.1
--------------------------------- -------- -------- -------- ----------------
1.1. * internal gas production 4,987.7 5,177.1 5,276.9 1.9
--------------------------------- -------- -------- -------- ----------------
* Schlumberger joint venture
1.2. (100%) 169.8 156.3 0.0 -100.0
--------------------------------- -------- -------- -------- ----------------
2 Technological consumption 74.5 86.4 78.9 -8.7
--------------------------------- -------- -------- -------- ----------------
Net internal gas production
3 (1.-1.2.-2.) 4,913.2 5,090.6 5,198.0 2.1
--------------------------------- -------- -------- -------- ----------------
Internal gas volumes injected
4 in storages 253.5 348.1 526.0 51.1
--------------------------------- -------- -------- -------- ----------------
Internal gas volumes withdrawn
5 from storages, of which: 723.5 479.4 257.7 -46.2
--------------------------------- -------- -------- -------- ----------------
5.1 - gas cushion 6.9 0.0 -100.0
--------------------------------- -------- -------- -------- ----------------
Differences resulting from
6 GCV 2.7 1.4 0.0 -100.0
--------------------------------- -------- -------- -------- ----------------
Volumes supplied from internal
7 production (3.-4.+5.-6.) 5,380.5 5,220.5 4,929.7 -5.6
--------------------------------- -------- -------- -------- ----------------
8.1 Gas sold in storages 8.1 0.0 -100.0
--------------------------------- -------- -------- -------- ----------------
Gas supplied to Iernut and
Cojocna Power Plants from
8.2 Romgaz gas 506.4 326.7 173.0 -47.0
--------------------------------- -------- -------- -------- ----------------
Gas supplied from internal
production to the market
9 (7.+8.1.-8.2) 4,874.1 4,901.9 4,756.7 -3.0
--------------------------------- -------- -------- -------- ----------------
Natural gas from partnerships*)
10 - total, out of which: 175,5 163,6 140,5 -14.1
--------------------------------- -------- -------- -------- ----------------
*Schlumberger (50%) 84.9 78.2 0.0 -100.0
--------------------------------- -------- -------- -------- ----------------
*Raffles Energy (37.5%) 0.1 0.0 0.0 0.0
--------------------------------- -------- -------- -------- ----------------
*Amromco (50%) 90.5 85.4 140.5 64.5
--------------------------------- -------- -------- -------- ----------------
Purchased internal gas volumes
11 (imbalances included) 27.0 9.7 4.4 -54.6
--------------------------------- -------- -------- -------- ----------------
Sold internal gas volumes
12 (9.+10.+11.) 5,076.6 5,075.2 4,901.6 -3.4
--------------------------------- -------- -------- -------- ----------------
Supplied internal gas volumes
13 (8.2+12.) 5,583.0 5,401.9 5,074.6 -6.1
--------------------------------- -------- -------- -------- ----------------
14 Supplied import volumes 33.0 181.4 53.0 -70.8
--------------------------------- -------- -------- -------- ----------------
Gas supplied to Iernut and
Cojocna Power Plants from
other sources (imbalances
15 included) 40.3 19.4 4.5 -76.8
--------------------------------- -------- -------- -------- ----------------
16 Total gas supplies (13.+14.+15.) 5,656.3 5,602.7 5,132.1 -8.4
--------------------------------- -------- -------- -------- ----------------
Invoiced UGS withdrawal
* services 1,745.5 1,949.9 1,271.8 -34.8
--------------------------------- -------- -------- -------- ----------------
* Invoiced UGS injection services 1,497.6 1,731.2 2,620.5 51.4
--------------------------------- -------- -------- -------- ----------------
ECONOMIC-FINANCIAL INDICATORS
The economic-financial indicators have been calculated based on
unaudited preliminary consolidated financial statements and may be
different from the actual audited results.
The Group's revenue is mainly generated by the sale of natural
gas (internal and import), by the underground gas storage services
and by the electricity production and sale.
Preliminary consolidated comprehensive income for the year ended
on December 31, 2019 (unaudited)
Description Preliminary Preliminary Actual Actual Variation Variation
Q4 2019 2019 Q4 2018 2018 Q4 2019-2018
------------ ------------- ----------- --------------- ---------------- ----------------
(thousand (thousand (thousand (thousand (%) (%)
RON) RON) RON) RON)
------------ ------------- ----------- --------------- ---------------- ----------------
1 2 3 4 5 6=[(2/4)-1]x100 7=[(3/5)-1)x100
------------ ------------- ----------- --------------- ---------------- ----------------
Revenue 1,289,626 5,080,482 1,559,590 5,004,197 -17.31 1.52
------------ ------------- ----------- --------------- ---------------- ----------------
Cost of commodities
sold (5,409) (107,800) (59,933) (245,020) -90.97 -56.00
------------ ------------- ----------- --------------- ---------------- ----------------
Investment
income 8,020 38,124 13,299 53,279 -39.69 -28.44
------------ ------------- ----------- --------------- ---------------- ----------------
Other gains
or losses (33,035) (63,069) (44,951) (102,989) -26.51 -38.76
------------ ------------- ----------- --------------- ---------------- ----------------
Net losses
from impairment
of trade receivables (85,508) (116,746) 176 (19,941) n/a 485.46
------------ ------------- ----------- --------------- ---------------- ----------------
Changes in
inventory 1,417 80,008 (50,793) (32,180) n/a n/a
------------ ------------- ----------- --------------- ---------------- ----------------
Raw materials
and consumables
used (16,183) (76,048) (22,277) (75,460) -27.36 0.78
------------ ------------- ----------- --------------- ---------------- ----------------
Net depreciation
and amortization (317,716) (912,255) (297,936) (708,142) 6.64 28.82
------------ ------------- ----------- --------------- ---------------- ----------------
Employee benefit
expenses (189,047) (670,408) (186,409) (621,330) 1.42 7.90
------------ ------------- ----------- --------------- ---------------- ----------------
Financial costs (8,015) (24,740) (7,691) (29,724) 4.21 -16.77
------------ ------------- ----------- --------------- ---------------- ----------------
Exploration
expense (73) (24,564) (52,015) (247,123) -99.86 -90.06
------------ ------------- ----------- --------------- ---------------- ----------------
Share of associates'
result 90 1,472 572 622 -84.27 136.66
------------ ------------- ----------- --------------- ---------------- ----------------
Other expenses (363,374) (1,552,192) (468,042) (1,409,447) -22.36 10.13
------------ ------------- ----------- --------------- ---------------- ----------------
Other income 8,306 32,834 7,971 18,442 4.20 78.04
------------ ------------- ----------- --------------- ---------------- ----------------
Profit before
tax 289,099 1,685,098 391,561 1,585,184 -26.17 6.30
------------ ------------- ----------- --------------- ---------------- ----------------
Income tax
expense (45,916) (256,811) (21,949) (219,016) 109.19 17.26
------------ ------------- ----------- --------------- ---------------- ----------------
Profit for
the period 243,183 1,428,287 369,612 1,366,168 -34.21 4.55
------------ ------------- ----------- --------------- ---------------- ----------------
Other comprehensive
income
------------ ------------- ----------- --------------- ---------------- ----------------
Items that
will not be
reclassified
subsequently
to profit or
loss
------------ ------------- ----------- --------------- ---------------- ----------------
Actuarial
gains/(losses)
on post-employment
benefits 4,074 4,074 (17,106) (17,106) n/a n/a
------------ ------------- ----------- --------------- ---------------- ----------------
Income tax
relating to
items that
will not be
reclassified
subsequently
to profit or
loss (652) (652) 2,737 2,737 n/a n/a
------------ ------------- ----------- --------------- ---------------- ----------------
Total items
that will not
be reclassified
subsequently
to profit or
loss 3,422 3,422 (14,369) (14,369) n/a n/a
------------ ------------- ----------- --------------- ---------------- ----------------
Other comprehensive
income for
the period
net of income
tax 3,422 3,422 (14,369) (14,369) n/a n/a
------------ ------------- ----------- --------------- ---------------- ----------------
Total comprehensive
income for
the period 246,605 1,431,709 355,243 1,351,799 -30.58 5.91
------------ ------------- ----------- --------------- ---------------- ----------------
EBITDA 598,795 2,559,229 676,198 2,240,047 -11.45 14.25
------------ ------------- ----------- --------------- ---------------- ----------------
EBITDA margin(%) 46.43 50.37 43.36 44.76 7.09 12.53
------------ ------------- ----------- --------------- ---------------- ----------------
EBIT 281,079 1,646,974 378,262 1,531,905 -25.69 7.51
------------ ------------- ----------- --------------- ---------------- ----------------
EBIT margin
(%) 21.80 32.42 24.25 30.61 -10.14 5.90
------------ ------------- ----------- --------------- ---------------- ----------------
EPS (RON) 0.63 3.71 0.96 3.54 -34.21 4.55
------------ ------------- ----------- --------------- ---------------- ----------------
Note: The information for Q4 2018 were restated - for additional
information, see the 2018 consolidated report of the Board of
Directors.
Revenue
In 2019, Romgaz estimates a consolidated revenue of RON 5.1
billion as compared to RON 5.0 billion achieved in 2018.
The increase resides from a 4.4% rise of revenue from sales of
gas produced by Romgaz and of gas purchased for resale as well as
gas from joint ventures, an increase by 11% of revenue from storage
services and an increase by 115.7% of revenue from gas condensate
sale, despite the decrease of revenue from electricity sales by
50.95%.
As for the quantities, as compared to 2018, the Group estimates
that in 2019:
- it sold 3.4 % less gas;
- it provided gas injection services in storages by 51.4%
higher, gas extraction services from storages by 34.8% lower,
reserved a storage capacity by 42.51% higher for 2019 - 2020
storage cycle as compared to the previous cycle partly due to
minimum stock obligations established by ANRE;
- sold by 120.4% more gas condensate; and
- produced by 49.4% less electricity.
Cost of Commodities Sold
In 2019, cost of commodities sold decreased by 56% as compared
to the previous year, mainly due to the decrease by 70.8% of the
gas quantity purchased from import for resale.
Investment Income
Investment income represent income from placing Group's
liquidities in bank deposits or in state bonds.
Other Gains and Losses
Net losses are lower due to receiving a favourable decision on a
litigation with ANAF. During December 2016-April 2017, there was a
partial fiscal inspection to review the VAT for the period December
2010 - June 2011, and to review the income tax for the period
January 2010-December 2011. The scope of the inspection were the
discounts granted by Romgaz to interruptible consumers for the
delivery of internal gas between 2010-2011. This category was
established by the transmission system operator, TRANSGAZ. The
notice of assessment set additional payment obligations in amount
of RON 15,284 thousand, as well as late payment penalties of RON
3,129 thousand. In 2019, the court ruled in favour of Romgaz so
that the adjustment of RON 18.4 million was reduced by releasing it
to income.
In 2019, the Group recorded a net loss of financial investments
measured at fair value through profit and loss of RON 4.5 million,
as compared to the net loss of RON 40.8 million in 2018. In both
periods, the loss was generated by the decrease of the value of the
2.49% share in Electrocentrale Bucuresti capital, which on December
31, 2019 was measured at RON 0.
In 2019, the Group wrote-off non-current assets of RON 71.4
million. Nonetheless, the effect in result of these written off
assets is insignificant, the Group recording an income
corresponding to the release of the impairment for these assets, as
presented in the expenses with amortisation and impairment.
Net Losses from impairment of trade receivables
In 2019, the Group recorded net impairment losses of receivables
estimated at RON 116.7 million, due to the risk of non-collecting
some receivables from insolvent clients. The Group was forced by
decisions of the courts to deliver gas to such customers considered
"captive" by the insolvency law. Subsequent to the issuance of
these decisions, the Group did not record any additional
outstanding receivables from these customers, but, according to
IFRS, it recorded adjustments for the impairment of the receivables
according to the estimated risk of non-collection.
Thus, for receivables uncollected in due date, the Group
recorded a net impairment of RON 34.08 million, and from the
analysis of non-collection risk of current receivables, an
impairment of RON 82.67 million. In case of the risk of
non-collection does not materialize in 2020, the amount of RON
82.67 million shall be released to income.
Changes in Inventory
During 2019 the gas quantity injected in storages was higher
than the quantity withdrawn from storages, thus generating
favourable changes in inventory (income), unlike the year 2018 when
the injected quantity was lower than the withdrawn quantity
generating unfavourable changes in inventories (loss). The quantity
of gas injected in storage by the company in 2019 as compared to
2017 increased by 51.1% while the withdrawn quantity decreased by
46.25%.
Depreciation, Amortization and Impairment
In 2019, the estimated depreciation and amortization of
non-current assets was of RON 520.96 million, lower by 11.89% as
compared to the previous year. Following the impairment recorded in
2018 for the assets associated with gas fields and Iernut current
power plant, the depreciable amount of the assets decreased by RON
189 million, generating lower depreciation expense.
In 2019, the Group recorded net impairment losses of RON 391.3
million due to:
- the abandonment of certain investment projects in wells (RON
250.3 million, of which RON 55.9 million related to Trinity-1X Well
from EX 30 Trident Block in the Black Sea);
- some insignificant recent investments in projects started in
previous years (RON 88.9 million);
- a net adjustment of RON 20.5 million pursuant to a gas field
impairment testing conducted in December 31, 2019.
Exploration expenses
Exploration expenses recorded in 2019 of RON 24.6 million
decreased by 90.06% compared to the previous year.
The decrease is due to lower exploration expenses (seismic
prospections) by RON 96.0 million.
Exploration expenses also include the costs of wells written
off. In 2019 the cost of these decommissioned investments was RON
23.05 million, compared to RON 149.6 million in 2018. These costs
are mainly offset by net impairment income.
Other expenses
In 2019 other expenses increased by 10.13% as compared to 2018.
The increase of RON 142.75 million is mainly due to higher windfall
tax and the introduction of monetary contribution levied from the
licence holders in the field of electricity and natural gas of 2%
of the revenue achieved from the activities covered by the licences
granted by ANRE (+ RON 169.38 million).
Other expenses also include a net income of RON 51.76 million
from the decrease of the decommissioning provision of the wells. In
2019, the Group re-analyzed the costs generated by well abandonment
works, which generated a decrease in the provision for the
production wells.
Other income
Other income increased by 78.04% in the year ended on December
31, 2019 as compared to the same period of 2018, due to the
increase of incomes from compensations, fines and penalties for
uncollected amounts according to contract terms or incompliance of
suppliers with execution terms (+ RON 9.26 million). Of the total
income from penalties of RON 20.41 million, RON 14.40 million was
not collected up until December 31, 2019, the Group recording an
impairment loss for these receivables.
Preliminary Statement of Consolidated Financial Position as of
December 31, 2019
INDICATOR Preliminary Actual
December 31, December 31, Variation
2019 2018
------------- ------------- --------------
RON thousand RON thousand (%)
------------- ------------- --------------
1 2 3 4=(2-3)/3x100
------------- ------------- --------------
ASSETS
------------- ------------- --------------
Non-current assets
------------- ------------- --------------
Tangible assets 5,989,172 6,279,748 -4.63
------------- ------------- --------------
Other intangible assets 9,164 4,970 84.39
------------- ------------- --------------
Investments in associates 24,770 23,298 6.32
------------- ------------- --------------
Deferred tax assets 163,411 127,491 28.17
------------- ------------- --------------
Other financial assets 5,388 9,812 -45.09
------------- ------------- --------------
Right of use asset 8,590 - n/a
------------- ------------- --------------
Total non-current assets 6,200,495 6,445,319 -3.80
------------- ------------- --------------
Current assets
------------- ------------- --------------
Inventories 311,013 245,992 26.43
------------- ------------- --------------
Trade and other receivables 602,633 826,046 -27.05
------------- ------------- --------------
Contract costs 312 583 -46.48
------------- ------------- --------------
Other financial assets 1,075,224 881,245 22.01
------------- ------------- --------------
Other assets 42,484 168,878 -74.84
------------- ------------- --------------
Cash and cash equivalents 363,943 566,836 -35.79
------------- ------------- --------------
Total current assets 2,395,609 2,689,580 -10.93
------------- ------------- --------------
TOTAL ASSETS 8,596,104 9,134,899 -5.90
------------- ------------- --------------
EQUITY AND LIABILITIES
------------- ------------- --------------
Equity
------------- ------------- --------------
Issued capital 385,422 385,422 0.00
------------- ------------- --------------
Reserves 1,587,388 1,824,999 -13.02
------------- ------------- --------------
Retained earnings 5,520,305 5,458,196 1.14
------------- ------------- --------------
Total equity 7,493,115 7,668,617 -2.29
------------- ------------- --------------
Non-current liabilities
------------- ------------- --------------
Retirement benefit obligation 138,763 139,254 -0.35
------------- ------------- --------------
Deferred income 21,244 21,128 0.55
------------- ------------- --------------
Lease liability 8,285 - n/a
------------- ------------- --------------
Provisions 366,393 510,114 -28.17
------------- ------------- --------------
Total non-current liabilities 534,685 670,496 -20.26
------------- ------------- --------------
Current liabilities
------------- ------------- --------------
Trade payables and other
liabilities 109,909 186,702 -41.13
------------- ------------- --------------
Contract liabilities 42,705 46,381 -7.93
------------- ------------- --------------
Current tax liabilities 64,326 68,001 -5.40
------------- ------------- --------------
Deferred income 3,729 8,442 -55.83
------------- ------------- --------------
Provisions 82,701 93,645 -11.69
------------- ------------- --------------
Lease liability 694 - n/a
------------- ------------- --------------
Other liabilities 264,240 392,615 -32.70
------------- ------------- --------------
Total current liabilities 568,304 795,786 -28.59
------------- ------------- --------------
TOTAL LIABILITIES 1,102,989 1,466,282 -24.78
------------- ------------- --------------
TOTAL EQUITY AND LIABILITIES 8,596,104 9,134,899 -5.90
------------- ------------- --------------
NON CURRENT ASSETS
The total of non-current assets decreased by 3.80% by the end of
2019, compared to the end of 2018, meaning by RON 244.82 million,
from RON 6,445.32 million on December 31, 2018 to RON 6,200.50
million, on December 31, 2019, despite the total investments
achieved in 2019 of RON 891.58 million. The decrease is due to
depreciation, amortization and net impairment of RON 912.26
million, but also due to the decrease of the wells decommissioning
provision that generated a decrease of non-current assets of RON
135.01 million.
The increase of 84.39% recorded in Other Non-current Assets
during 2019 is due to the development of the Group information
systems.
With regard to Other Financial Assets during 2019, the Group
recorded a loss of RON 4.5 million from the measurement to fair
value of the investment in Electrocentrale Bucuresti, the
investment being measured at RON 0.
Investments in associates are accounted for in the consolidated
financial statements by the equity method which implies that the
investment is initially recognized as cost and adjusted afterwards,
depending on the post-acquisition modifications, in the apportioned
share of the Group in the associate's net assets in which the
investment had been made. The Group's profit or loss includes its
share of the associate's profit or loss.
In 2019, International Financial Reporting Standard 16 "Leases"
entered into force and replaced International Accounting Standard
17 "Leases" (IAS 17). According to the new standard, the lessee
accounts finance lease contracts and operating lease (rent)
contracts in the same manner. As such, the lessee records a "right
of use" asset for the underlying asset subject to the lease
contract simultaneously with the recognition of a lease liability.
The Group has no finance leases. The "right of use" assets derive
from lease contracts concluded by the Group; previously, these
contracts were reported in form of rent-related expenses.
Deferred tax asset
Deferred tax asset is based on the temporary differences between
the accounting value and the tax value of balance sheet items.
These temporary differences may be taxable, meaning they will
result in taxable values when determining the taxable result of
future periods, or deductible, meaning they will result in values
that are deductible when determining the taxable result of future
periods.
Taking into account the impairment recorded for the fields
operated by the Group and for abandoned investment projects, the
temporary difference between the accounting and the tax value of
the assets increased, which generated a rise in the deferred tax
asset on December 31, 2019 as compared to December 31, 2018.
CURRENT ASSETS
Inventories
Inventories increased at the end of 2019, as compared to
December 31, 2018 by 26.43% as a result of the increase of gas
stock from storage. The value of the gas stock on December 31, 2019
increased compared to the end of the previous year by 94.62% due to
the increase by 51.1% of the stored gas volume in 2019 as compared
to 2018 and the decrease by 46.25% of the extracted gas volume.
Trade and other receivables
Trade receivables decreased in 2019 as compared to December 31,
2018 by 27.05% as a result of lower gas quantities delivery in
December 2019 as compared to December 2018 by approximately 16.64%
but also due to net impairment losses for trade receivables of RON
116.75 million.
NON-CURRENT LIABILITIES
At the end of 2019, non-current liabilities decreased by 20.26%
as compared to December 31, 2018, mainly due to the decrease of the
decommissioning provision for wells with RON 146.23 million
(-27.57%). In 2019, the Group re-analyzed well abandonment costs
based on which this provision is calculated. Following this
analysis, the provision decrease generated an income of RON 51.76
million and a decrease of non-current assets with RON 135.01
million.
CURRENT LIABILITIES
Current liabilities decreased with RON 227.48 million from RON
795.79 million recorded on December 31, 2018 to RON 568.30 million
at the end of 2019.
Trade payables and other liabilities
Trade payables decreased compared to December 31, 2018 by 41.13%
due to lower work volume at Iernut power plant towards the end of
2019 compared to the end of 2018, liabilities to the contractor
decreasing by RON 85.26 million.
Other liabilities
Other liabilities recorded a decrease by 32.7% as a result of
the following:
- decrease of the Group's petroleum royalty liability (decrease
by RON of 71.69 million, as a result of a lower reference price
communicated by the Mineral Resources National Agency in Q4 2019 as
compared to Q4 2018);
- decrease of the windfall tax liability with RON 10.78 million,
due to the decrease of average price for gas delivered in December
2019 as compared to December 2018 by approximately 11.54% and the
quantity of gas delivered during this month compared to the same
period of 2018 by approximately 16.64%;
- decrease of value added tax liability by RON 26.34 million due
to lower sales during December 2019 as compared to December
2018;
- payment to Schlumberger of the Group's liability as a result
of concluding the association in 2018 (RON 22.5 million).
Provisions
On December 31, 2019, current provisions recorded a decrease by
11.69% as compared to December 31, 2018. This decrease is due,
mainly, to the decrease of the provision for greenhouse gas
emission certificates (RON 16.7 million).
EQUITY AND RESERVES
Group's equity decreased by 2.29% due to the distribution of
dividends from the 2018 profit and a part of the reserves. The
changes in the Group's equity in 2019, respectively 2018, are
presented below:
Description Share capital Legal reserve Other reserves Retained earnings Total
RON thousand RON thousand RON thousand RON thousand RON thousand
-------------- -------------- --------------- ------------------ -------------
Balance as of January 1, 2019 385,422 77,487 1,747,512 5,458,196 7,668,617
-------------- -------------- --------------- ------------------ -------------
Allocation to dividends - - (362,297) (1,244,914) (1,607,211)
-------------- -------------- --------------- ------------------ -------------
Increase in legal reserves - 2,413 - (2,413) -
-------------- -------------- --------------- ------------------ -------------
Allocation to other reserves - - 105,356 (105,356) -
-------------- -------------- --------------- ------------------ -------------
Profit for the year - - - 1,428,287 1,428,287
-------------- -------------- --------------- ------------------ -------------
Reinvested profit reserves - - 16,917 (16,917) -
-------------- -------------- --------------- ------------------ -------------
Other comprehensive income - - - 3,422 3,422
-------------- -------------- --------------- ------------------ -------------
Balance as of December 31, 2019 385,422 79,900 1,507,488 5,520,305 7,493,115
-------------- -------------- --------------- ------------------ -------------
Description Share capital Legal reserve Other reserves Retained Total
earnings
RON thousand RON thousand RON thousand RON thousand RON thousand
----------------- ----------------- ------------------- ----------------- ---------------------
Balance as of
January 1, 2018
(before change
in
accounting
policy) 385,422 77,084 2,235,448 6,635,380 9,333,334
----------------- ----------------- ------------------- ----------------- ---------------------
Effect of change
in accounting
policy *) - - - (415,096) (415,096)
----------------- ----------------- ------------------- ----------------- ---------------------
Effect of
correction of
accounting
errors - - - 57,202 57,202
----------------- ----------------- ------------------- ----------------- ---------------------
Balance as of
January 1, 2018
(restated) 385,422 77,084 2,235,448 6,277,486 8,975,440
----------------- ----------------- ------------------- ----------------- ---------------------
Allocation to
dividends - - (716,886) (1,923,258) (2,640,144)
----------------- ----------------- ------------------- ----------------- ---------------------
Increase in
legal reserves - 403 - (403) -
----------------- ----------------- ------------------- ----------------- ---------------------
Allocation to
other reserves - - 185,563 (185,563) -
----------------- ----------------- ------------------- ----------------- ---------------------
Profit for the
year - - - 1,366,168 1,366,168
----------------- ----------------- ------------------- ----------------- ---------------------
Reinvested
profit reserves - - 43,387 (43,387) -
----------------- ----------------- ------------------- ----------------- ---------------------
Effect of change
in accounting
policy as a
result
of adopting
IFRS 15 and
IFRS 9 - - - (18,478) (18,478)
----------------- ----------------- ------------------- ----------------- ---------------------
Other
comprehensive
income - - - (14,369) (14,369)
----------------- ----------------- ------------------- ----------------- ---------------------
Balance as of
December 31,
2018 385,422 77,487 1,747,512 5,458,196 7,668,617
----------------- ----------------- ------------------- ----------------- ---------------------
*) In 2018 the Group voluntarily modified the accounting policy
regarding recognition of costs with seismic, geological,
geophysical works and other similar operations. Pursuant to the new
policy, these costs are recognized as expenses when incurred.
Previously, these costs were recognized as intangible exploration
assets.
Preliminary Statement of Consolidated Statement of cash flow for
the year ended on December 31, 2019 (unaudited)
The consolidated cash flows registered during January-December
2019 and the similar period of 2018 are as follows:
INDICATOR Preliminary Actual
December 31, December 31, Variation
2019 2018
--------------- --------------- --------------
(RON thousand) (RON thousand) (%)
--------------- --------------- --------------
1 2 3 4=(2-3)/3x100
--------------- --------------- --------------
Cash flows from operating
activities
--------------- --------------- --------------
Net profit for year 1,428,287 1,366,168 4.55
--------------- --------------- --------------
Adjustments for:
--------------- --------------- --------------
Income tax expense 256,811 219,016 17.26
--------------- --------------- --------------
Share from the associates'
result (1,472) (622) 136.66
--------------- --------------- --------------
Interest expense 543 - n/a
--------------- --------------- --------------
Unwinding of decommissioning
provision 24,197 29,724 -18.59
--------------- --------------- --------------
Interest revenue (38,124) (53,279) -28.44
--------------- --------------- --------------
Loss on disposal of non-current
assets 68,046 62,961 8.08
--------------- --------------- --------------
Change in decommissioning
provision recognized in
the result of the period,
other than unwinding (51,760) (34,390) 50.51
--------------- --------------- --------------
Change in other provisions (4,852) 30,152 n/a
--------------- --------------- --------------
Impairment of exploration
assets expense 208,350 (118,809) n/a
--------------- --------------- --------------
Exploration projects written-off 23,051 149,620 -84.59
--------------- --------------- --------------
Net impairment of non-current
assets 182,948 235,661 -22.37
--------------- --------------- --------------
Depreciation and amortization 520,957 591,290 -11.89
--------------- --------------- --------------
Amortisation of contract
costs 651 1,291 -49.57
--------------- --------------- --------------
(Earning)/loss on financial
investments at their fair
value through profit or
loss 4,424 40,782 -89.15
--------------- --------------- --------------
Loss on trade receivables
and other receivables 102,822 20,048 412.88
--------------- --------------- --------------
Other leasing earnings
and losses (52) - n/a
--------------- --------------- --------------
Net impairment of inventories 5,125 (2,052) n/a
--------------- --------------- --------------
Income from prescribed
debts (89) (58) 53.45
--------------- --------------- --------------
Income from subsidies (81) (269) -69.89
--------------- --------------- --------------
Cash generated from operational
activities before movements
in working capital 2,729,782 2,537,234 7.59
--------------- --------------- --------------
Movements in working capital
--------------- --------------- --------------
(Increase)/Decrease in
inventories (38,428) 143,114 n/a
--------------- --------------- --------------
(Increase)/Decrease in
trade and other receivables 116,144 (8,156) n/a
--------------- --------------- --------------
Increase/(Decrease) in
trade and other liabilities (78,117) (194,681) -59.87
--------------- --------------- --------------
Cash generated by operational
activities 2,729,381 2,477,511 10.17
--------------- --------------- --------------
Income tax paid (297,058) (334,324) -11.15
--------------- --------------- --------------
Net cash generated by operational
activities 2,432,323 2,143,187 13.49
--------------- --------------- --------------
Cash flows from investing
activities
--------------- --------------- --------------
Net collections/(payments)
related to financial assets (203,972) 1,917,569 n/a
--------------- --------------- --------------
Interest received 43,470 49,338 -11.89
--------------- --------------- --------------
Income from noncurrent
assets sales 1,305 961 35.80
--------------- --------------- --------------
Payments for purchase of
non-current assets (694,349) (948,588) -26.80
--------------- --------------- --------------
Payments for purchase of
exploration assets (173,563) (205,371) -15.49
--------------- --------------- --------------
Net cash used in investing
activities (1,027,109) 813,909 n/a
--------------- --------------- --------------
Cash flows from financing
activities
--------------- --------------- --------------
Dividends paid (1,607,246) (2,638,535) -39.09
--------------- --------------- --------------
Subsidies received - 21,108 -100.00
--------------- --------------- --------------
Repayment of lease liability (861) - n/a
--------------- --------------- --------------
Net cash used in financing
activities (1,608,107) (2,617,427) -38.56
--------------- --------------- --------------
Increase/(decrease) in
net cash and cash equivalents (202,893) 339,669 n/a
--------------- --------------- --------------
Net cash and cash equivalents
at the beginning of the
year 566,836 227,167 149.52
--------------- --------------- --------------
Cash and cash equivalents
at the end of the year 363,943 566,836 -35.79
--------------- --------------- --------------
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
Constantin Adrian Volintiru
(1) Romgaz Group consists of SNGN Romgaz SA ("the
Company"/"Romgaz") as parent company, Filiala de Înmagazinare Gaze
Naturale Depogaz Ploie ti SRL ("Depogaz"), is the subsidiary owned
100% by Romgaz, and its associates SC Depomures SA (40% of the
share capital) and SC Agri LNG Project Company SRL (25% of the
share capital)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FIFLRFTIEFII
(END) Dow Jones Newswires
February 25, 2020 02:00 ET (07:00 GMT)
SNGN Romgaz (LSE:SNGR)
Historical Stock Chart
From Jun 2024 to Jul 2024
SNGN Romgaz (LSE:SNGR)
Historical Stock Chart
From Jul 2023 to Jul 2024
