Fondul Proprietatea – Romgaz 1H 2011 key figures

Its sales came in at RON 2.0 bn, up 6.9% yoy while net profit stood at RON 488 mn, surging 117% yoy . The company said the higher sales were due to an increased quantity of imported gas sold, while the jump in profits was due to some cost cutting measures. We do not read too much into this surging net profit since we expect that the reduction in costs is due to lower net expenses for the build up of the development reserves. These are non-cash depreciation like expenses which Romgaz is required to make according to the law (they varied between 33% and 20% of its sales over the past three years). Moreover, these expenses are non-tax-deductible. Romgaz has also said that the quantity of delivered gas has decreased 8% yoy, probably due to the removal of the facility for the fertilizers producers. Its own production of gas stood at 2.85 bcm (out of the 5.65 bcm budgeted for this year), but no annual comparison is offered.