PGNiG Capital Group first quarter of 2008 results
Posted on May 14, 2008 – 8:51 am | by vchris
The net profit of the PGNiG Capital Group for the first quarter of 2008 was comparable to the results for Q1 2007, amounting to PLN 779 million. Profit from operating activities increased by 7 percent, amounting to PLN 987 million.
The results for Q1 2008 confirm the firm market position of the PGNiG Capital Group. The results of the PGNiG Capital Group were mainly influenced by increased profit from operating activities, resulting largely from a 71 percent increase in revenues from sale of crude oil and condensate. Crude oil and condensate production and sales are one of the most profitable fields of operations. Revenues from the sale of crude oil and condensate amounted to PLN 238 million, compared with PLN 138 million for the same period last year, while crude oil production increased by 8 percent compared with Q1 2007.
Revenues from the core business, i.e. sale of natural gas, increased by PLN 361 million in Q1 2008 compared with the same period in 2007. The 8 percent increase in revenues was directly related to the increased volume of natural gas sales, resulting mainly from a colder winter than the previous year. As a result, demand increased for natural gas from municipal customers, which use it for heating. Moreover, the volume of natural gas sales to industrial customers increased slightly. Sales volume increased by 6 percent whereas production decreased by 4 percent compared with Q1 2007. The decrease in production was due to the natural barriers to a production increase during the analysed period.
Operating costs of the PGNiG Capital Group increased by 5 percent to PLN 4,343 million, compared with PLN 4,129 million in the same period of 2007. The increase resulted from the higher volume and price of natural gas imports.
Investment rationale
The results for Q1 2008 serve as a sound basis for further undertakings, aiming to implement projects to add value and improve national energy security, i.e. the implementation of Scandinavia-related projects, construction of an LNG terminal in Świnoujście, increase of production, and expansion of underground gas storage facilities.
The investment plan of PGNiG calls for expenditure of about PLN 1.9 billion, with about PLN 1.8 billion committed to direct investments of PGNiG SA and its branches. About PLN 275 million has been earmarked for expansion of underground gas storage facilities in the investment plan for the current year.
The PGNiG Capital Group is steadily expanding its business outside natural gas trading. Exploration, as well as geological and geophysical operations aiming to increase both domestic and foreign output, serve as good examples. About PLN 570 million has been earmarked to increase domestic output in the investment plan for the current year.
Expenditures of more than PLN 63 million have been planned for exploration abroad (excluding Norway).
New management
On 12 March 2008, the Supervisory Board of PGNiG SA concluded a competition process and appointed the following persons to the Management Board of PGNiG SA:
• Mr Michał Szubski to serve as the President of PGNiG SA,
• Mr Mirosław Dobrut to serve as the Vice-President for Technical and Investment Affairs,
• Mr Sławomir Hinc to serve as the Vice-President for Economic and Financial Affairs,
• Mr Radosław Dudziński to serve as the Vice-President for Strategic Projects.
On 20 March 2008, the Supervisory Board appointed Mr Mirosław Szkałuba, elected by the employees of the PGNiG Capital Group, to the Management Board of PGNiG SA to serve as the Vice-President for Employee Affairs.
Joanna Zakrzewska
Spokesperson for PGNiG SA
Phone +48 22 691 79 30
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