SNGN Romgaz (SNG) Q3 2024 earnings summary

Executive summary

• Net profit for the first nine months of 2024 reached a historical high of RON 2.27 billion, up 4.84% year-on-year, despite a 17% revenue decline mainly due to lower gas prices and the elimination of the solidarity contribution.

• Natural gas production increased 4.5% year-on-year to 3.67 BCM, with electricity production up 13.7% to 729.7 GWh.

• Market share rose to over 52% of total Romanian consumption and 64% of domestically produced gas, maintaining a leading position.

• Major growth projects include Neptun Deep offshore development and a new power plant nearing completion.

• Strong cash generation resulted in a net cash position of RON 1.15 billion at end-September 2024.

Financial highlights

• Total revenues for the first nine months were RON 5.63 billion, down 17% year-on-year, mainly due to a 21% decrease in gas sales revenue.

• EBITDA was RON 3.03 billion, down 29% year-on-year, with an EBITDA margin of 53.8%; EBIT margin was 46.2%.

• Q3 2024 net profit was RON 436 million, down 10% year-on-year.

• Capital expenditures reached RON 2.16 billion in the first nine months, mainly for Neptun Deep and modernization.

• Cash and cash equivalents increased to RON 1,734.6 million at September 30, 2024.

Outlook and guidance

• Neptun Deep project is on track for first gas in 2027, with over 90% of execution contracts awarded and key infrastructure under construction.

• Full-year 2024 gas production is expected to be around 4.9 BCM, slightly higher than 2023.

• The new Iernut power plant (430 MW) is 95% complete and expected to enhance efficiency and energy security.

• Strategy targets net zero CO₂ emissions by 2050 and at least a 10% reduction in carbon, methane, and other gas emissions by 2030.

• Dividend policy remains cautious and flexible due to high investment needs in 2025–2026.