LNG Boosts Spanish GN's 1Q Profit
Spain’s two largest independent energy suppliers, Gas Natural and Iberdrola, both increased 1Q profits on the back of high demand and higher year on year prices.
Gas Natural said April 26 said its net income grew 7.4% year on year to €320mn ($390mn) in 1Q2018, particularly buoyed by a 47% increase in LNG sales volumes during the winter quarter.
The results improvement was “mainly driven by gas supply and higher efficiencies” and by its international gas traded volume "capturing the higher prices" offered during the recent winter season.
GN’s gas sales volume increased by 17% year on year to 100 TWh (9.3bn m3) in 1Q2018. Whereas its Spanish gas sales declined by 3% year on year to 51.7 TWh-gas in 1Q2018, and those in Chile eased by 2% to 3.8 TWh, GN’s gas sales in the rest of the world increased by 38% to some 62 TWh. The latter split out as 41 TWh, or 3.8bn m3, as LNG (up 47%) and 21 TWh piped gas in Europe (up 22%)
Its €1.5bn divestment of a 20% stake in Spanish gas distributor Nedgia was completed that quarter; smaller disposals were “progressing” in Colombia (gas interest, initiated 2017) and in Moldova and Kenya (both power). It also completed the €736mn sale of its Italian subsidiary to Edison in February 2018 (followed post-quarter by the €30mn sale of its Shah Deniz gas contract this month). The divestments helped GN to reduce debt by 16% year on year to €13bn at end-March 2018.
The pending divestment in Colombia to Canadian fund Brookfield is of a 59.1% stake in GN's Colombian gas distributor for €482mn. Meanwhile GN remains involved in arbitration against the Colombian government over the latter's expropriation of debt-laden power distributor Electricaribe.
It was the first set of results presented by GN’s new chairman and CEO Francisco Reynes, and comes as Repsol’s $4.7bn deal to divest its long-held 20% strategic stake in GN is pending completion.
Iberdrola said April 24 its 1Q net profit of €838mn was 1.2% higher year on year; the mainly power-producing company said it was on course to realise a full year 2018 net profit close to €3bn ($3.65bn).