2Q results – strong underlying business despite disappointing EBITDA
On Friday (18 August), PGNiG posted strong EBITDA in all segments, except trade and storage, where the EBITDA contribution was a negative PLN 268m. The underlying picture, however, is one where sales volumes are growing in the distribution and generation segments, and earnings from exploration and production have increased. The EBITDA in the trade and storage segment was negative due to purchase prices rising more than sales prices, a function of the crude oil-based contract pricing. Given the recent lower crude prices, we do not see this level of price squeeze in the next quarter. We do, however, expect a greater level of seasonality in the trade and storage segment going forward. The majority of the company’s earnings are not related to these price dynamics. We continue to like the diversified underlying business model, and we see volume growth in the distribution and generation segments. We believe that PGNiG should remain a beneficiary of the growing Polish market, the continued integration of the regional gas markets and access to more numerous sources of natural gas. We remain BUYers of the company.
Polskie Gornictwo Naftowe I Gazownictwo SA Polish Oil & Gas Co (PGNiG) is an integrated natural gas company based in Poland. Co.'s core activity covers exploration and production of natural gas and crude oil as well as import, storage, trade and distribution of gas and liquid fuels. Co.'s scope of activity includes gas trading and commercial support, as well as operation, maintenance and expansion of its distribution system. Co.'s distribution networks comprises over 100 thousand kilometers of gas pipelines (high, upper-medium, medium and low pressure), which cover primarily industrialized and urbanized areas of the country.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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