A. Volintiru: GEO 114/2018 cuts 20% to 25% from revenues and profit of Romgaz in 2019

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UPDATE 31.01.2019

In a press release sent to the Bucharest Stock Exchange on January 31, Romgaz comes up with some clarifications on estimates of expected earnings and profit for 2019. We selected the relevant paragraphs below.

„Up until now both E.G.O. 114/2018 together with the calculations made by Romgaz specialists are in progress and Romgaz has drafted several scenarios relating to the possible impact of the legislative act on the current work context. Any possible subsequent amendments will result in a re-evaluation of these scenarios.

As it is known, The National Regulatory Authority for Energy (ANRE) is about to issue, in the following period, regulations related to the implementation procedures of E.G.O. 114/2018, regulations which could determine the modification of the company’s present estimations related to the turnover and profit for 2019.

The company’s forecast of the Income and Expenditure Budget for 2019, which will be prepared taking into account all the factors of influence, will be submitted for the General Meeting of Shareholders approval after the approval of the State Budget Law for 2019 and it can be different from the values presented within the press conference and taken over by the media.”

Initial article

Romgaz, the main natural gas producer in Romania, controlled by the Government, through the Energy Ministry, anticipates a decline of up to 25% in revenues and profit in 2019, as compared to 2018, as a result of the GEO 114/2018. In particular, the profits would decrease by 420 million lei, said general manager Adrian Volintiru.

Romgaz organized a press conference for presenting the 1 million lei sponsorship to Sibiu County Emergency Clinical Hospital for buying with high performance medical equipment. The amount adds to the 1.78 million lei offered by Romgaz to SCJU Sibiu in 2016 and 2017. Answering a question, the general manager said: “Revenues will decline by 20 to 25% this year and profitability in the same proportion. The impact on estimated profit is 420 million lei, in 2019”, said Adrian Volintiru.

The budget that can be allocated to CSR activities, usually at 2-2.5%, will be reduced proportionally accordingly with the profit.

In the first nine months of 2018, Romgaz had a turnover of 3.44 billion lei, up 6.3% over the same period in 2017. Net profit decreased by 14% to 1.026 billion lei, compared to 1,193 billion lei, for the first nine months of 2017.

The company had a net profit of 1.85 billion lei in 2017, by 81.0% more than in 2016, (+830.2 million lei), with a net profit margin of 40.5%.

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