Naturgy 1H 2022 results: gain 15.1% despite the Metrogas sentence – Business Insider Spain

Although one week late, Naturgy today published its results for the first half of 2022. The electricity company should have made this presentation at the beginning of August, but received the first instance conviction against its Chilean subsidiary Metrogas and decided to delay it to be able to include this sanction in their accounts. According to the data provided by Naturgy to the CNMV, the company closed the first half of the year with an ordinary EBITDA of 2,184 euros, that is, 11.5% more than in the same period of the year past. The company highlights that this growth is mainly due to the liquefied natural gas business.”In Spain, however, the sale of energy continued to experience pressure on margins affected by contracts with end customers that still do not reflect the increase in prices of gas and electricity in the main hubs”, says Naturgy. This is how Naturgy is changing its business to adapt to the energy model of the futureNaturgy highlights that the first half of the year has been marked by “intense volatility in the energy markets, with a upward price trend in all international markets that have especially affected international LNG activities”. This period of the year has been marked by the European energy crisis derived from the war in Ukraine. In this context, Naturgy has reported an ordinary net profit of 717 million, 28% more than in 2021, and a reported profit of 557 million euros, 15.1% more than in the same period of the previous year. Its debt between January and June, it was reduced by 6.7%, to 11,976 million euros and was mainly supported by the “solid generation of cash derived from international activities and especially by the high ratios of cash conversion in international LNG”. In addition, Naturgy also increased its investments by 64%, reaching 721 million euros. These investments were mainly allocated to two legs: to the commitment to renewable energies in Spain, Australia and Latin America and to the gas and electricity distribution networks in Spain and Latin America. The activity of renewable generation experienced a growth in ordinary Ebitda of 5.1% compared to the first half of 2021. “In Spain, higher prices and contractual changes have been reflected, which were partially offset by lower hydraulic production and the negative impact of the new regulatory measures,” says the company. In addition, during the presentation of results, Naturgy has also talked about the so-called Gemini Project, with which it will divide the company in two. “The council continues to monitor the progress of all the analyzes of the project, which so far confirm its suitability and strategic sense. However, the current volatility of the markets, the evolution of the European energy situation and the multiple regulatory uncertainties still pending to be known They accurately advise adapting the execution schedule to the evolution of events”. Additionally, the board of directors has approved the first interim dividend out of the results of the 2022 financial year to be paid on August 18, 2022 and corresponding to 0.3 euros /share, in line with last year’s dividend and what was promised in the Strategic Plan. Problems in ChileNaturgy had planned to present its results on August 5, but, a day before, on the 4th, they received the first instance conviction against the Chilean company Metrogas, in which the company has a 55.6% stake since 2016. In this regard, Naturgy p He referred to delaying the presentation and restructuring his accounts to introduce the possible economic impact of the lawsuit, which they estimate to be around 126 million euros. The energy company chaired by Francisco Reynés explains that “regardless of the judicial appeals that are going to be filed, maximum accounting prudence has been chosen, provisioning the maximum amount that it is estimated could be paid based on the judgment received in the first instance. The gross amount would amount to 312 million euros, and contemplates both the claim of certain invoices, as well as the early termination of the contract, as well as the associated interests”. This sentence is established on a series of demands for alleged breaches of contract in the transport of Argentine gas filed by Transportadora de Gas del Norte originating in 2009, when Argentina stopped supplying gas to Chile during the Argentine gas crisis. Said ruling “condemns Metrogas to pay TGN for unpaid invoices and early termination of contracts , for an approximate amount of 250 million dollars (236 million euros), plus costs and int you are”, indicates Naturgy. However, as the company adds, this ruling and its possible effects “are not final and are subject to appeal, they have been provisioned and are incorporated as non-ordinary items in Naturgy’s accounts for the first half of 2022”.