S.N.T.G.N. Transgaz (TGN) Q4 2024 earnings summary

Executive summary

• Net profit increased by 204% year-over-year, reaching 391.4 million lei, with gross profit up 217% and EBITDA up 142%, driven by higher transmission tariffs, operational revenues, and major infrastructure investments.

• Operating revenues rose by RON 173 million, with domestic transmission revenue increasing to 2.15 billion lei from 1.52 billion lei.

• Major cost increases were offset by savings in gas consumption and lower financial expenses.

• Strategic focus on infrastructure modernization, hydrogen integration, and regional interconnectivity, with a multi-year decline in employee numbers to 3,900.

• Total comprehensive income for 2024 was 394.1 million lei, compared to 209.9 million lei in 2023.

Financial highlights

• Operating revenue before balancing and construction activity rose 123% year-over-year to 2,105,214 thousand lei, with turnover up 109% to 2,436,802 thousand lei.

• Net profit reached 372,260 thousand lei, up from 182,645 thousand lei in 2023, and consolidated net profit for the group was 391,423 thousand lei, up 197% year-over-year.

• Financial revenues were negatively impacted by RON 26 million due to lower inflation and concession receivables, while financial expenses decreased by RON 43 million.

• Royalty expense increased by RON 169 million due to a higher percentage applied to transmission tariffs, but is recovered in regulated revenue.

• Cash and cash equivalents at year-end were 1.07 billion lei, up from 713 million lei.

Outlook and guidance

• Major investment program for 2024-2033, with over EUR 4.1 billion allocated to new pipelines, interconnections, and hydrogen-ready infrastructure.

• CapEx for next year estimated at RON 2 billion, with major projects like Tuzla-Podișor and Mintia prioritized.

• Focus on integrating hydrogen and green gases into the transmission system, with pilot projects underway.

• Budget for 2025 to be published imminently, providing further clarity on investments and regulated asset base.

• Dividends related to 2023 were distributed in 2024, reflecting ongoing shareholder returns.