‘The improved performance of the PGNiG Group was mainly attributable to its Exploration and Production segment. Its contribution to the Group’s EBITDA at the end of September was 68%, largely an effect of soaring hydrocarbon prices on global markets. The Group is leveraging this trend to constantly grow its upstream business,’ said Piotr Woźniak, President of the Management Board of PGNiG SA.

The PGNiG Group reported a 15% yoy increase in Q1–Q3 2018 revenue, to PLN 28.48bn, with EBITDA up 10%, to PLN 5.77bn, and net profit growing 15%, to PLN 2.82bn.

On the other hand, a 16% yoy increase was recorded in the Group’s operating expenses, to PLN 22.71bn after the first nine months of 2018, chiefly on high gas procurement costs (driven by the rising hydrocarbon prices) incurred by the Trade and Storage segment.

The PGNiG Group is continuing with its policy of strongly increasing LNG imports. The volume of LNG imported in the nine months to September 30^th 2018 was 47% higher  than in the same period of 2017, amounting to 1.96 bcm after regasification. LNG’s share in total gas imports was 18%, compared with 13% a year earlier.

For Q3 2018 alone, the PGNiG Group reported a 26% yoy increase in revenue, to PLN 7.6bn, with EBITDA up 36%, to PLN 1.47bn, and net profit surging 50%, to PLN 0.55bn. ‘Compared with the same period of the previous year, Q3 2018 was very successful for the PGNiG Group. The high prices of hydrocarbons boosted revenue from oil and gas sales, especially in the Exploration and Production segment. Increases were also recorded in gas volumes sold and revenue earned from its sales by the Trade and Storage segment, and in electricity sales by the Generation segment,’ said Piotr Woźniak.

An overview of Q3 2018 results by segment is provided below:

Exploration and Production

The segment’s Q3 2018 revenue rose 46% yoy, to PLN 1.85bn. Revenue from sales of crude oil and condensate came in at PLN 0.6bn, having grown 89% yoy on increased sales volumes (up 23% yoy) and higher average oil prices for the quarter (up 49% yoy when calculated in PLN). Crude oil and condensate production from the Norwegian Continental Shelf increased by over 7% yoy, to 118,000 tonnes.

The segment’s revenue from natural gas sales reached PLN 1.08bn, up 37% yoy, reflecting higher prices of the fuel.

Trade and Storage

The segment’s Q3 2018 revenue rose 29% yoy, to PLN 5.55bn, led by a 2% increase in the volumes of gas sold (5.50 bcm) and rising gas prices.

The higher sales volumes were primarily driven by volumes supplied to PGNiG Supply & Trading’s customers (0.86 bcm, up 91% yoy), and to power plants and combined heat and power plants (0.53 bcm, up 51% yoy). In the third quarter of 2018, the average volume-weighted price of contracts traded on POLPX was 19% higher than in the previous year.

The increased supply volumes and rising cost of gas procurement were reflected in a 32% yoy increase in the segment’s operating costs, to PLN 6.02bn.

During the third quarter, the PGNiG Group received five LNG deliveries with a total volume of 0.63 bcm after regasification, 35% more than the year before. All the deliveries were made under long-term contracts with Qatargas.

Distribution

The segment’s financial results were at last year’s levels, with revenue of PLN 1.08bn. Gas distribution volumes fell slightly year on year, to 1.95 bcm (down 1%), mainly on softer demand for gas used for heating.

Generation

The segment delivered strong electricity sales figures. Sales volumes rose 28% year on year, to 523 GWh, mainly as a result of a new unit at the Zofiówka CHP plant which started operating. Revenue from electricity sales rose by a strong 58% yoy, to PLN 0.11bn. On the other hand, heat sales dropped 15%, to 2.94 PJ, due to a 0.9˚C rise in the average temperature for the quarter. Revenue from sales of heat slipped 9% yoy, to PLN 0.13bn. The segment’s performance was also impacted by rising hard coal prices, which led to a 12% yoy increase in operating costs, to PLN 0.27bn. However, the rise in costs was slower than revenue growth, which reached 15% yoy, bringing the top-line figure to PLN 0.3bn.