Romanian energy companies report hike in profits
Two major Romania energy companies — natural gas and electricity producer Romgaz and nuclear power company Nuclearelectrica — have reported sharp hikes in their profits for the first half of 2022.
Romgaz reported a net profit of RON1.7bn (€340mn) in the first half of 2022, up 127% compared to the same period last year. Nuclearelectrica, meanwhile, announced its profits rose more than threefold year on year RON1.22bn (€244mn). The surges in profitability came against the background of strongly rising energy prices, and despite windfall taxes levied by the Romanian government on energy producers in order to finance the ‘cap and subsidy’ scheme aimed at protecting households and small firms from excessive electricity prices.
Both companies are majority owned by the Romanian state, which owns 70% of Romgaz and 82% of Nuclearelectrica.
Romgaz attributed the increase in profits to the evolution of natural gas prices and significantly higher electricity production.
Romgaz’s revenues rose three times, to RON7.5bn and the company's reported turnover for the first half of 2022 was 31% higher than for the full year of 2021. The company’s natural gas production for H1 2022, was 2.52bn cubic metres, marking an insignificant production decline (-0.16%) related to the production recorded in H1 2021.
In H1, Romgaz paid a windfall profit tax and fees of about RON4.6bn, compared to only RON399mn in the same period last year.
Romgaz has a 61.4% market share in terms of deliveries from internal natural gas production, 10.5pp higher than the share held in the same period of 2021.
The company’s electricity production reached 545 GWh, 341.58 GWh higher (+168%) compared to the same period of 2021. This gave Romgaz a market share of 1.95%.
Nuclearelectrica, the operator of Romania’s nuclear plant located in Cernavoda, achieved the hike in profit despite the marginal 2.3% decline in the volume of electricity produced and the RON586mn of “additional income tax expense” — the windfall profit tax. The additional income tax is calculated as 80% of the revenues above RON450 per MWh.
The average weighted sale price, for the quantities of electricity sold (without the bilateral market), in the first half of 2022, was RON615 per MWh (including Tg, a fee paid to the power grid operator) — more than double compared to the RON254 in the same period last year but lower compared to the average price of RON752 in the first half of this year on the markets where Nuclearelectrica is operating.
The average sale price for Nuclearelectrica’s bilateral contracts in H1 was RON534 per MWh (Tg included), an increase of 117% compared to the average price recorded in the first half-year of 2021.
On the day-ahead market, the average price realised by Nuclearelectrica was RON1,030 per MWh (Tg included), compared to RON290 (Tg included) recorded in the first half of 2021.
Nuclearelectrica’s revenues from the sales of electricity thus increased by 130% y/y to nearly RON3.1bn while the operating expenses, less depreciation and amortisation and additional income tax, increased by only 30% y/y to RON847mn.