Societatea Nationala De Gaze Naturale Romgaz S.a. · BVB:SNG
Societatea Nationala De Gaze Naturale Romgaz — Romgaz — 9M 2021 Earnings Presentation
36 slides from Societatea Nationala De Gaze Naturale Romgaz's earnings presentation, November 2021
Slide 1: ROMGAZ 9M/Q3 2021 Results Group Overview
ROMGAZ 9M/Q3 2021 Results Group Overview https://www.romgaz.ro/en/summary-results-and-presentation-investors November 2021 1
Slide 2: Disclaimer
Disclaimer Romgaz Group (Romgaz or Romgaz Group or The Company) consists of SNGN Romgaz SA as parent company, Filiala de Înmagazinare Gaze Naturale Depogaz Ploieşti SRL (subsidiary owned 100% by Romgaz SA), Depomureş SA (40% owned by Romgaz SA) and SC Agri LNG Project Company SRL (25% owned by Romga
Slide 3: Contents
Contents page # Gas market overview 4 ROMGAZ: Highlights 7 Main events / Fiscal framework applicable / Group developments in 9M / Safety Measures against COVID-19 pandemic ROMGAZ: Group Overview 11 Main Activities 14 Financial Performance 23 Investments 26 Main Strategic Objectives / ROMGAZ Group St
Slide 4: Gas market overview
Gas market overview Romania: among TOP gas consumers & producers in the region ROMGAZ: Among top Gas Producers in the region1 (2020 output, kboepd) Source: 1 Companies’ reports, Romgaz computation, Petrom: Romania+abroad, OMV excluding Petrom. 211 2 CEIC Data; 78 78 75 56 15 ROMANIA: 2nd Gas Consume
Slide 5: Gas market overview: prices and market structure
Gas market overview Romania: Prices on the Commodities Exchange 2020/2021, Market structure Natural Gas Prices on BRM, Current Imports and CEGH (RON/MWh) 180 180 160 160 140 140 BRM - Commodities Exchange (gas forward & spot) Prices are shown in the month of delivery 120 120 Current Imports, all mkt
Slide 6: Gas market overview: total gas consumption
Gas market overview Romania: Total Gas consumption estimated higher y/y in 9M/2021 Total Natural Gas Consumption* (million MWh) Mix of Energy Resources (9M/2021) 130 17 24 28 +3% y/y Coal/gas-fired plants 12% 13% 36% Hydroplants 65 Nuclear plants 113 103 90 Other renewables 93 18% Imports 31% 0 Sour
Slide 7: ROMGAZ Group: Highlights of events
ROMGAZ Group: Highlights of events Selected Events – relevant for our activity Sept 22, 2020 August-September 2020 INVESTMENT: INVESTMENT: Oct 27, 2021 Gov’t prolonged by 6 years (2021- Romgaz concluded a MoU with 2027) the concession agreement for MANAGEMENT: GSP Power SRL exploration/development/
Slide 8: Highlights regarding legislation
ROMGAZ Group: Highlights regarding legislation Romanian Legal Fiscal framework and in place - withRegulatory Environment impact on Group’s operations GEO no. 106 / June 2020, ANRE Orders no. 143 and 144 / July 2020: – Large gas producers are required to offer on centralized markets around 40% of t
Slide 9: ROMGAZ Group: Highlights for 9M/Q3 2021
ROMGAZ Group: Highlights for 9M/Q3 2021 Strong financial and operational performance 9M/2021: Market share in domestic Capex Gas production consumtion 349 mln RON +15.9% y/y 45.8% Total Net Profit Windfall Profit EBITDA +23% y/y Revenues +17% y/y +20% y/y Tax & Royalties Net Profit margin 52% y/y EB
Slide 10: ROMGAZ Group: Highlights for 2020/2021
ROMGAZ Group: Highlights for 2020/2021 Safety Measures against COVID-19 pandemic to protect employees and business “Together for Romania” 2020-2021 We are a Strategic Company – business continuity and employees safety are priority Romgaz is involved and actively supports the fight against Covid-19 p
Slide 11: ROMGAZ: Group Overview
ROMGAZ: Group Overview Major Producer and Supplier of Natural Gas, Operator of UGS in Romania Gas Exploration, Production & Supply • 8 exploration blocks (Romgaz - 100% working interest) - significant onshore and offshore exploration potential, important discoveries and enhancements made lately • Am
Slide 12: Group Overview: Major Producer and Supplier of Natural Gas
Group Overview Major Producer and Supplier of Natural Gas in Romania – general picture Over 100 years continuous history in gas exploration and production, with a well established infrastructure Petroleum operations in 8 Exploration, Development Moldova Nord and Production blocks (operator with
Slide 13: Group Overview: Portfolio of reserves and resources
Group Overview Significant portfolio of reserves and resources – Next independent audit Reserves Replacement Ratios (RRR) (%) We assessed a RRR of 63% for 2020 102 82 RRR is mainly due to revaluation of commercial fields (updates of reserves and resources assessment studies) and by 56 63 complet
Slide 14: Exploration Activities
Exploration Activities 9M/Q3 2021: Current Development of our natural gas resources 9M/2021: We continue the efforts to add new resources and reserves to our portfolio: 1 well drilled and successfully tested with gas. 2 exploration wells abandoned: 1 from drilling and another 1 from testing. D
Slide 15: Exploration Activities: on-shore and off-shore
Exploration Activities 9M/Q3 2021: Current Development of our natural gas resources ON-SHORE: OFF-SHORE: CARAGELE DEEP: Ongoing exploration efforts to unlock the full potential of the project, both in terms of exploration TRIDENT BLOCK: 12.2% working interest and evaluation of previously discove
Slide 16: Natural Gas Production
Natural Gas Production 9M/Q3 2021: Robust performance y/y, we consolidated production potential Romgaz: Significant Production levels in Q3/9M (MMCM) 9M/Q3 2021: Recovery continued 4,000 +15.9% Output in 9M higher by almost 16% y/y 3,500 Output significantly up in Q3: +24.7% vs the same period o
Slide 17: Gas Supply & Sales: market share
Gas Supply & Sales 9M/2021: Significantly higher market share in domestic consumption Romgaz: Market share in domestic consumption (%, MMCM) 80% Imports Production delivered (incl 100% Schlumberger, deliveries to 181 Iernut/Cojocna), technological consumption, resold domestic gas 60% 53 - Estimated
Slide 18: Gas Supply & Sales: domestic volumes sold
Gas Supply & Sales 9M/Q3 2021: Domestic volumes sold - at record high since our listing, Strong gas revenues also Romgaz: Gas Sales (including resales) Romgaz: Gas Chain Management (MMCM) to meet - revenues and volumes - seasonality and demand 4,000 3,756 2,985 3,300 2,971 2,376 2,600 9M/2020 +26% +
Slide 19: Underground Gas Storage
Underground Gas Storage Romgaz Group: Romania’s Largest Operator of UGS (Underground Storage) facilities Romgaz Group: Underground Gas Storages at end – Sept 2021 - working capacities (mln cm/cycle) - Bilciuresti 1,310 Ghercesti 150 Sarmasel 900 Balaceanca 50 Urziceni 360 Total Working Capacity: 2,7
Slide 20: Underground Gas Storage: capacity reservation
Underground Gas Storage1 9M/Q3 2021: Capacity Reservation provides high contribution Romgaz: Revenue from Storage Services (million RON) - capacity reservation, withdrawal, injection - Romgaz: Storage tariffs (RON/MWh) 300 15 250 1.9 2.29 3.67 1.61 200 218 10 1.74 2.03 150 280 142 100 196 5 9.98 9.3
Slide 21: Electricity Production & Trading: Gas to Power investment
Electricity Production & Trading “GAS to POWER” Investment: Construction of a new power plant – Latest developments Investment Overview o Gross electric power capacity: 430 MW o Gross electrical efficiency at nominal load: 56.4% o Max emissions: NOx 50 mg/Ncm, CO 100 mg/Ncm o CCGT Iernut benefits
Slide 22: Electricity Production & Trading
Electricity Production & Trading1 9M/Q3 2021: Higher revenues, on lower production of the old plant Romgaz: Revenues from Electricity (million RON) Romgaz: Electricity Production (GWh) 150 9M/2021 426 100 9M/20 618 146 114 Q3/2021 223 50 103 56 Q3/20 323 0 Q3/20 Q3/2021 9M/20 9M/2021 0 100 200 300 4
Slide 23: Financial Performance: profitability
Financial Performance1 9M/Q3 2021: Robust Profitability rates, Q3 margins increased significantly Romgaz Group: Profitability Rates are significant Romgaz Group: EBITDA by Segments (million RON) 49.9% 52.7% 51.7% 9M/2021 1,535 36 88 177 45.0% 36.7% 37.5% 9M/20 -7 1,413 59 95 35.0% 31.7% 32.3% 33.1%
Slide 24: Financial Performance: top and bottom lines
Financial Performance 9M/Q3 2021: Top and bottom lines – at significant levels Summary 9M/2021 (vs 9M/2020) Million RON 2018 2019 2020 Q3/20 Q3/21 %ch 9M/20 9M/21 %ch Revenues - total 3,497 million RON (20%) 72% 20% Revenues - of which 5,004 5,080 4,075 725 1,246 2,918 3,497 EBITDA 1,807 million RO
Slide 25: Financial Performance: Strong B&S Structure
Financial Performance Strong B&S Structure Romgaz Group: Selected Balance Sheet Items Million RON Dec 31, 2018 Dec 31, 2019 restated restated Dec 31, 2020 Sept 30,2021 Total non-current assets, thereof 6,445 5,822 5,943 5,751 • At 9M/2021, total cash position amounted to Property plant and equipment
Slide 26: Investments: Capex
Investments1 Capex – sanitary / market environment took the toll Romgaz Group: Capital Expenditures (RON million) ROMGAZ Group invested RON 349 million in 9M/2021, with the following main achievements: 500 o Exploration: we finalised 4 exploration wells, 5 wells are in drilling process or in prepa
Slide 27: Romgaz Group Strategy 2021-2030: Strategic Objectives
Romgaz Group Strategy 2021-2030 Strategic Objectives – Headlines 1. We continue to develop the portfolio of resources focused on mitigating climate changes effects, centered on resilient hydrocarbons and on operational safety and reliability 2. Electricity and energy with low CO2 emissions with larg
Slide 28: Strategy: Develop the gas resources portfolio
Romgaz Group Strategy 2021-2030 Develop the gas resources portfolio - focused on climate changes, safety and reliability Continue to develop the gas resources portfolio focused on mitigating climate changes effects, resilient hydrocarbons, operational safety and reliability Maximize the recovery I
Slide 29: Strategy: Develop the gas resources portfolio (exploration targets)
Romgaz Group Strategy 2021-2030 Develop the gas resources portfolio - focused on climate changes, safety and reliability Exploration-development-production activities in gas fields under concession Exploration - currently 3 major projects (with current production and significant potential); Over
Slide 30: Strategy: Sustainable Energy / Commercial Portfolio Diversification
Romgaz Group Strategy 2021-2030 Sustainable Energy / Commercial Portfolio and Business Diversification Electricity and Energy with Low CO2 Emissions Production of photovoltaic energy – minimum of 180 MW capacities, a 60 MW solar park to be operational by the end of 2023 Assess the feasibility to
Slide 31: Strategy: Decarbonization, Digital Transformation, Social Responsibility
Romgaz Group Strategy 2021-2030 Decarbonization Policy / Digital Transformation of the Group / Social Responsibility Decarbonization Policy Min 10% reduction of carbon, methane & other gas emissions by 2030 (10-10-10, vs 2020) Implement a Nox emissions management system, incl. reducing gas emissio
Slide 32: Dividend distribution
Dividend distribution Dividends paid in 2021: SGM in April approved a gross dividend of RON 1.79 /share Romgaz: Gross Dividend Distributions1 (RON million) Romgaz: Gross Dividend Payout ratios* 1 For the fiscal years 2019-2020: Dividend payment in the next fiscal year 800 * Payout ratios computed as
Slide 33: Romgaz Group – Investment Case
Romgaz Group – Investment Case Why to invest in Romgaz shares EBITDA margin of 52%, EBIT margin of 38% and Net Profit margin of 33% Operational excellence / robust margins at 9M/2021 Gross Dividend payout ratio of 55% for 2020 (computed as Total Gross Dividends Minimum dividend payout ratio requ
Slide 34: The Board of Romgaz SA: Balanced Team of Professionals
The Board of Romgaz SA: Balanced Team of Professionals Dan Dragos Dragan George Sergiu Niculescu Nicolae Bogdan Simescu BoDs Chairman George Sergiu Niculescu – re-appointed by the Nicolae Bogdan Simescu – re-appointed by Dan Dragos Dragan – re-appointed by the SGM held SGM held on September 9, 2021,
Slide 35: Shareholding Structure and Stock Performance
Shareholding Structure and Stock Performance Romgaz: Among blue-chips on the domestic capital market RON 12-Month: Share Price Performance on the BVB 50.0 SNG: Share price on the BVB (RON) Period Min (RON) Max (RON) 45.0 BET NG rebased Romanian Other 40.0 Q4/20 25.75 28.55 State shareholders 70% 35.
Slide 36: ROMGAZ Investor Relations
ROMGAZ Investor Relations Financial Calendar - 2021 E-mail: investor.relations@romgaz.ro Aug 13: Release of H1/Q2 2021 Financial Results IR: Manuela Ogrinja, CFA Aug 16: Conference call with financial analysts and investors Alexandra Posea Mihnea Dinescu Nov 12: Release of 9M/Q3 2021 Financial Resul