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In the period, the Group's revenue stayed broadly flat year on year, at PLN 22.8m. The revenue figure was determined by such factors as rising sales of crude oil, a PLN 820m drop in revenue from sales of gas due to a mild winter, and increased electricity trading volumes, leading to a 71% rise in revenue from sales of electricity, to PLN 1.2m.

The Group's EBITDA grew by 4%, to approximately PLN 5bn (PLN 4.8bn in the same period of 2013). With a 59% share, the Exploration and Production segment was the largest contributor to the Group's net profit, followed by Distribution with a 30% share, and the Trade & Storage and Generation segments, each accounting for 6% of the total.

In Q3 2014, the Group earned PLN 616m in net profit, compared with PLN 654m in the same period of the previous year. In the quarter, revenue rose 4% year on year, to PLN 6.4bn, with a 3% growth in EBITDA, to approximately PLN 1.5bn.

Exploration and Production - sound operating results

Revenue from the Exploration and Production segment for the first three quarters of 2014 came in at PLN 4.8bn, a year-on-year increase of 13%, which translated into EBITDA of around PLN 3bn, a level similar to that posted in the same period last year. The segment's performance was driven by stable natural gas production and increased crude output.

The Group's oil and condensate production in the first three quarters of 2014 went up by almost 20%, to 936 thousand tonnes, from 789 thousand tonnes in the first three quarters of 2013. Sales of oil and condensate grew by 30% in the period, to just under 921 thousand tonnes, compared with 704.6 thousand tonnes in the first three quarters of 2013.

Natural gas output totalled 3.4 bcm in the first three quarters of 2014 and remained largely unchanged from the level recorded in the same period last year.

Zero margin on gas sales

The Trade and Storage segment's performance in the first three quarters of 2014 was driven mainly by stable volumes of gas sold and a stable contribution of PST to total gas sales revenue, of PLN 1.3bn.

In Q3 2014, high-methane gas was sold at a negative margin of -1%, compared with -3% in the same period of 2013. The average margin in the year to date was 0%, relative to -2% in the same period of 2013.

The Group sold 11.7 bcm of gas, with the sales volumes remaining largely flat on the first three quarters of 2013.

By customer groups, larger gas volumes were sold to the customers of PGNiG Sales & Trading, as well as in the retail, services and wholesale segment, and on the Polish Power Exchange (TGE). The key factors with a bearing on the volumes and structure of gas sales included average air temperatures and changes on the gas market (launch of sales through the TGE and formation of a retail subsidiary PGNiG OD).

PGNiG Group's performance in Q1-Q3 2014 (PLNm)

PGNiG Group's performance in Q3 2014 (PLNm)

Distribution segment's stable performance

In the first three quarters of 2014, the Distribution segment's revenue reached PLN 3.2bn and was flat year on year. In the same period, the volume of distributed gas dropped by 11%, to 6.7 bcm, due to the average air temperatures being 2°C higher than in the same period last year.

Generation segment's performance weakens on difficult market environment

In Q1-Q3 2014, the Generation segment saw an 8% fall in revenue, to PLN 1.32bn, compared with PLN 1.44bn in the corresponding period of 2013. The fall reflected a 14% decline in the volume of heat sold and a 4% drop in revenue from heat sales, offset by a rise in heat tariff, and a 10% contraction in sales of electricity, achieved at lower average selling prices, with electricity volumes down 5%.

Sales of electricity from the Group's own generation sources fell 6%, to 2.4 TWh, in the first three quarters of 2014, while sales of heat energy were at 23.6 PJ, down by 14%.

Utilisation of gas storage capacities

As at the end of September 2014, the Group held 2.72 bcm stocks of high-methane gas in its underground storage facilities, relative to 2.48 bcm in September 2013.

Dorota Gajewska

Press Officer