Revenue reported by the PGNiG Group for the first three quarters of 2013 was PLN 23bn, up 15% year on year, as sales of crude oil doubled and sales of gas also improved. At the operating level, the Group recorded strong EBITDA growth (up 215%) to PLN 4.8bn (compared with PLN 1.5bn in Q1-Q3 2012), on the back of improved results across all segments of its business.
In the third quarter of 2013, the Group recorded PLN 654m in net profit, against PLN 78m in the corresponding period of 2012. Q3 2013 revenue grew 17% to PLN 6.2bn year on year, lifting EBITDA 194%, to nearly PLN 1.5bn.

“We are announcing yet another quarter of bottom-line growth, supported by improved performance across all segments of our business. As in the previous quarter, a key performance driver was the substantial increase in the volumes of crude oil and natural gas produced from our two strategically important projects,” noted Jacek Murawski, Vice-President of the Management Board, Chief Financial Officer. “In addition, our gas storage facilities are filled to capacity ahead of the winter season. Thanks to the consistent pursuit of projects to expand our underground storage capacities, this year for the first time we have stocked nearly 2.5 billion cubic metres of gas”. 

 

Exploration and Production segment - Strong earnings growth
Revenue from the Exploration and Production segment for the first three quarters of 2013 came in at PLN 4.3bn, a year-on-year increase of 38%, which translated into EBITDA of PLN 2.9bn, up 67% on the same period last year. In the third quarter alone, EBITDA was up 76% relative to the same quarter of 2012, and stood at PLN 1.1bn.
The segment’s robust performance was mainly led by the doubling of crude oil sales, combined with higher inter-segment sales of gas from the Norwegian fields to PGNiG Sales & Trading. This result also confirmed that our investment in oil and gas production was a good decision.
The Group’s oil and condensate production in the first three quarters of 2013 went up to 789 thousand tonnes, from 353 thousand tonnes in the corresponding period of 2012. The sales volume grew twofold, to nearly 705 thousand tonnes in Q1-Q3 2013, taking the revenue from sale of oil and condensate up from PLN 926m to PLN 1.75bn year on year.
In the third quarter alone, production of oil and condensate grew 150%, to 327 thousand tonnes, as a result of which the Group reported nearly twofold increase in revenue, which improved from PLN 332m to PLN 651m year on year.
The volume of gas produced in the third quarter of 2013 amounted to 1 billion cubic metres, on a par with the previous year’s level.
Reduction of negative margin on gas sales
The lower price of gas purchased under the revised Yamal contract (renegotiated in 2012) benefited the performance of the Trade and Storage segment. Its Q1-Q3 2013, its EBITDA came in at PLN 238m, an improvement from the negative EBITDA of PLN 1.67bn in the corresponding period of 2012. EBITDA also improved in the third quarter of 2013 to PLN 123m, from the negative EBITDA of PLN 299m in the same quarter of 2012.
Revenue of the Trade and Storage segment went up 13%, to PLN 18.7bn, thanks largely to PGNiG Sales & Trading's increased share in total revenue from gas sales, from PLN 135m in Q1-Q3 2012 to PLN 1.3bn in Q1-Q3 2013. Another positive contributor was a nearly tenfold rise in revenue from sale of electricity, to PLN 660m in the first three quarters of 2013, from PLN 70m in the same period last year.
However, the segment’s performance did not improve enough to drive the margin on sales of high-methane gas to a positive value. At minus 2% in the first three quarters of 2013, it showed some improvement relative to minus 11% in the same period of 2012. The average tariff price was still insufficient to cover the cost of gas.
Sales of gas increased 12% year on year, to reach about 11.7 billion cubic metres in the first three quarters of 2013. By customer category, increased gas sales were recorded for refineries, trade and services and households. Sales of gas on the German market through PST grew by 1 billion cubic metres in the first three quarters of 2013, from 100 million cubic metres in the first three quarters of 2012.
“Our sound financial standing, backed by higher revenue from crude oil production, allowed us to pay out dividends in October. It is also a good starting point for the continued pursuit of our ambitious investment plans,” said Jacek Murawski.
PGNiG Group’s performance in Q1-Q3 2013 (PLNm)

	Q1-Q3 2012	Q1-Q3 2013	Change
Revenue	20,064	23,003	15%
Operating expenses	(20,043)	(19,948)	0
EBITDA	1,528	4,807	215%
EBIT	21	3,054	x147
Net profit/(loss)	122	2,081	x17

PGNiG Group’s performance in Q3 2013 (PLNm)

	Q3 2012	Q3 2013	Change
Revenue	5,300	6,212	17%
Operating expenses	(4,799)	(4,741)	-1%
EBITDA	501	1,471	194%
EBIT	(2)	880	-
Net profit/(loss)	78	654	738%

Steady improvement in the Distribution segment’s results
The Distribution segment’s performance has been steadily improving, mainly on the back of higher gas distribution volumes (up 10% in the first three quarters of 2013, and up 16% in Q3 2013 alone). In Q1-Q3 2013, the Distribution segment saw a 23% rise in revenue, to PLN 3.14bn, from PLN 2.5bn in the same period of 2013. This increase was a result of amendments to the Distribution and Transmission Grid Codes. In the first three quarters of 2013, EBITDA rose 18%, to PLN 1.4bn, from PLN 1.2bn in the same period of the year before. In the third quarter alone, EBITDA improved 65%, to PLN 305m, relative to PLN 185m in Q3 2012.

Solid performance of the Generation segment on high sales volumes
In Q1-Q3 2013, the Generation segment saw a 7% growth in revenue, which came close to PLN 1.45bn, compared with PLN 1.35bn in the corresponding period of 2012. A key factor behind the growth was the 23% rise in heat sales in Q3 2013, with the coldest September in a decade. The higher volume of heat sales also benefited the segment’s EBITDA, which went up 15%, to PLN 347m, in the first three quarters of 2013. In Q3 2013 alone, the Generation segment recorded a 50% improvement in EBITDA, to PLN 27m.
Record high utilisation of gas storage capacity
The stocks of high-methane gas held in underground storage at the end of September 2013 were at a record high level of 2.5 billion cubic metres, which is equal to the full available capacity, relative to 1.9 billion cubic metres in September 2012.
Press Team
PGNiG S.A.