Spain's Naturgy Reports Heavy Loss, But LNG Gains

Spain’s largest gas utility Naturgy released its nine-month results November 5. Its statutory net loss was €3.04bn ($3.46bn), chiefly as a result of an overall €4.905bn writedown it  made during the first half of this year. That writedown halved its book value.

Excluding that and other non-recurrent items, Naturgy said its recurrent net income increased by 38% to €877mn.

Naturgy gas sales increased by 2% January 1-September 30, driven by the Spanish residential and industrial segments, up  14.9% and 4.1% respectively year on year and offsetting a 12.2% decline in sales to CCGT power plants, while its power sales were stable. Non-recurrent costs amounted to €272mn, of which €116mn was higher gas purchasing costs in Argentina thanks to local currency devaluation. Naturgy said that Argentina’s energy ministry recognised October 4 that distributors were entitled to pass through such costs into final gas tariffs, and may thus be able to recover some cost via client billing. But Naturgy said its accounts have yet to allow for any such reduction of its Argentinian costs.

Pre-tax earnings (Ebitda) from LNG reached €347m, up 96% as a result of higher margins and sales. LNG nine-month sales volume increased by 28.5% year on year supported by the entry of Sabine Pass and the first shipments of Yamal LNG. Naturgy noted that it invested €380m during 1H2018 for the acquisition, under a financial lease, of two LNG carriers.

(Banner photo shows Naturgy HQ building in Barcelona, courtesy of the company)