Transgaz 4Q 2010 results

The operating profit came in double than expected at RON 104 mn on higher revenues but also lower grid losses costs and lower maintenance expenses. The net profit for the quarter reached RON 84 mn, also 2x higher than our forecast. For 2010 the company reported a net profit of RON 368 mn, which would translate into a dividend per share of RON 28. The results are significantly better than expected. However the company recently published its 2011 budget which shows a profit three times lower than in 2010. We view the news as positive and we place our RON 285.5 target price under review but for the moment we keep our 'hold' recommendation.