Naturgy Earnings Fall 14% in H1

Spanish utility Naturgy saw a 11.1% year-on-year decline in core earnings (Ebitda) in the first half of this year, it said on July 22, on weaker demand for gas and power.

The company's Ebitda came in at €1.87bn ($2.16bn) in the six-month period, down from €2.18bn a year earlier. Net income slumped to €334mn, from €592mn, while free cash flow dropped to €1.1bn, from €1.45bn.

Naturgy blamed these weaker numbers on coronavirus lockdowns, which led to lower demand and depressed prices. Its gas sales in Spain were down 13.2% at 107.4 TWh, while its electricity sales fell 9.9% to 15.7 TWh. Sales of international LNG were up 4.4% in volume terms, but revenues plunged 43% to €90mn, with the collapse in prices.

Currency devaluation in key Latin America countries was also a key factor, Naturgy said.

Naturgy, a major buyer of LNG, said it had managed to terminate long-term contracts early for the annual supply of 20 TWh of LNG this year, and expected to reach more agreements on cancelling volumes during the second half. It also expects to achieve its €500mn efficiencies target by the end of 2020, two years ahead of schedule, as part of its 2018-2022 strategic plan.

The company will hold a capital markets day in the final quarter, when it will update its targets. It said it would continue to prioritise shareholder renumeration, "reaffirming its commitments with the dividend." But it has put its buyback programme on hold until the economic outlook becomes clearer.