PGNiG Group posts more than PLN 22.6bn in revenue for H1 2019
Revenue generated by the PGNiG Group grew 8% year on year in the face of falling natural gas prices and rising oil prices. The Group increased volumes of sales of natural gas and electricity.
In the first half of 2019, the PGNiG Group generated revenue of PLN 22.63bn and a net profit of PLN 1.3bn. The Group’s EBITDA amounted to PLN 3.1bn. It was lower than in the first half of 2018 due to, among other factors, impairment losses on non-current assets (PLN -222m in the first of 2019, while in the first half of 2018 they increased EBITDA by PLN 312m).
‘Despite difficult external conditions and the effect of seasonality in the second quarter, we managed to deliver EBITDA of almost PLN 1bn in the second quarter and more than PLN 3.1bn in the first half of the year, which we consider satisfactory performance,’ said Piotr Woźniak, President of the PGNiG Management Board. ‘The second quarter of the year was a challenging period, mainly on account of declining prices of natural gas and rising prices of crude oil on the spot market. Lower gas prices directly affect our revenue from sales of this fuel. On the other hand, in 2019 we paid higher gas procurement costs under the Yamal contract, which are pegged to the prices of crude oil and petroleum products, and they were much higher than in 2018,’ Mr Woźniak added.
Exploration and Production
In the for the six months 2019, the segment’s revenue was PLN 2.99bn, down 18% year on year. The decrease follows from lower prices of natural gas compared with the previous year and a drop in the volume of crude oil sold (down 23% year on year for the entire segment). In the first half of the year, the average price of gas on the Day-Ahead Market of the Polish Power Exchange (TGE) fell by as much as 19% year on year. Gas production remained stable, at approximately 2.22 bcm.
Trade and Storage
The segment’s revenue for the first half of 2019 grew 13% yoy, to PLN 17.88bn. At the same time the cost of gas rose by 14%, mainly due to higher prices of gas procurement from the eastern direction under the Yamal contract. The segment’s gas sales volume rose 4% year on year, to 15.53 bcm.
The segment’s performance in the first half of the year was under pressure due to deep price drops in natural gas and serious increases of oil prices. In the first half of 2019, prices on the Day-Ahead Market at TGE fell on average by 20.8% year on year. Even greater dynamics of falling prices had been observed on key European markets, where the natural gas spot price fell by 23.5% from the average level of EUR 21.31 per MWh in the first half of 2018 to EUR 16.30 per MWh in the current period. Whereas in the first half of 2019 the natural gas spot price on the Polish and foreign markets fell by approx. 57% between January and June – from the level of EUR 21.26 down to EUR 9.15 per MWh at Gaspool and from PLN 92.4 per MWh to PLN 39.9 per MWh at TGE.
In the first half of 2019, the average Brent oil price was 7% lower year on year, while the 9-month average price of Brent oil, affecting the cost of gas procurement from the eastern direction, went up 23% in the period.
In the first half of 2019, the volume of distributed gas remained almost unchanged, at 6.31 bcm (down 1% year on year). In the second quarter of the year, the volume of distributed gas went up 14% year on year, to 2.43 bcm, with the average temperatures in the period higher by 0.7 ºC. Revenue from distribution services fell 5% year on year due to the lower distribution tariff in force from February 15th 2019.
In the first six months of 2019, the segment’s revenue grew 11% year on year, to PLN 1.41bn. The volume of electricity sold (own production) grew 6% year on year, to 2.26 TWh, while sales of heat went down 2% year on year, to 23.01 PJ.
Source: PGNiG Group