SNGN Romgaz (SNG) Q2 2024 earnings summary

Executive summary

• Natural gas production increased 4.3% year-on-year in H1 2024, exceeding budget, with a market share of 45% in total gas delivered and over 54% in domestic consumption.

• Net profit reached a historical semiannual high of RON 1.84 billion, up 8.99% year-on-year, despite a 20% revenue drop due to lower gas prices and volumes.

• EBITDA margin was 60.5% in H1 2024, with the upstream segment contributing 93% of revenue and 100% of EBITDA.

• Major investments continued in Neptun Deep and Iernut Power Plant, both progressing on schedule.

• Net cash position at end-June 2024 was RON 2,499 million.

Financial highlights

• H1 2024 revenues were RON 3.9 billion, down 20% year-on-year; Q2 2024 revenues were RON 1.62 billion, down 18%.

• H1 2024 EBITDA was RON 2.36 billion, down 26% year-on-year; Q2 2024 EBITDA was RON 770 million, down 40%.

• Net profit margin rose to 47.1% in H1 2024, with EBIT margin at 53.3% and EBITDA margin at 60.5%.

• Taxes and duties expense fell 30% year-on-year, mainly from lower windfall tax and elimination of the solidarity contribution.

• CapEx reached RON 1.25 billion in H1 2024, with significant allocation to Neptun Deep.

Outlook and guidance

• Neptun Deep project remains on track for first gas in 2027, with total investment guidance up to EUR 4 billion.

• Iernut Power Plant targeted for completion by end-2024, with commissioning tests expected to take 3–6 months and 91% completion as of July.

• Investments for 2024 are planned at RON 4,089.9 million, focusing on Neptun Deep and Iernut.

• Regulated gas sales expected to remain at 56–70% of total volumes for 2024.

• Decarbonization strategy to be finalized in Q4 2024, with ESG targets including a minimum 10% reduction in emissions by 2030 and net zero CO2 by 2050.