Company officials say the underestimated forecast is due to the fact that Transgaz has to take into account the estimates of the Economy Ministry, the National Statistics Institute and of the central bank, which anticipated slower business, lower revenues from gas shipment and inflation at just 3.5%, the central bank’s target at the start of the year. In the first five months of this year, inflation stayed at around 8%.
At the same time, the company built its budget taking into account a flat gas shipment tariff, which remained unchanged last year, but is likely to be raised in 2011.
Transgaz estimated net profit of RON123.9 million (EUR29.2 million) for 2011, three times lower than last year’s RON376.3 million, and a 9% decrease in overall revenue at RON1.25 billion.
Nevertheless, the company managed to exceed the profit budgeted for the entire year as early as in the first quarter, when it reported a net profit of RON194.9 million (EUR46 million), slightly up on the year.
Transgaz also saw turnover rise by 2.4% to RON457.7 million in the same period.
Radu Moldovan, the company’s financial manager, says that though Transgaz management proposed that half of profit be paid as dividends, the state voted for a 90% distribution rate during the general meeting of shareholders.
“The company will be facing big problems should it continue to pay 90% of profit for dividends as it is left with no money for investments. Last year, we had to take out a loan to cover investment needs, which were RON38 million higher than the sources available. If these works are not completed in a year, we will need even more money next year,” Moldovan said.
As the state is likely to distribute almost the entire profit of the company as dividends next year as well, leaving Transgaz with no investment money, the management plans to earmark the largest part of expenses in 2011 for pipe rehabilitation, which is likely to cut the company’s profit and the sums set to be paid as dividends next year.
“We could have no more funding problems if the National Energy Regulation Authority acknowledges our expenses and raises the transmission tariff,” said Moldovan, admitting that the current tariff is quite high, though.