Spain's Naturgy Halves Its Book Value in 2Q
Spanish marketer Naturgy, legally known as Gas Natural until the end of June, said its first half 2018 net profit was up 22% at €532mn ($622mn) while its pre-tax earnings (Ebitda) increased by 6% to €2.1bn.
This was helped by a €70mn rise in LNG earnings on higher sales and margins on trading in Asia. The company had nine more LNG carriers at end-June 2018 than a year earlier, increasing the transport capacity of its LNG fleet by one-third to 1.46mn m3 (the regas equivalent of almost 0.9bn m3). Ebitda from its international LNG increased to €233mn, from €163mn in 1H2017.
Naturgy noted the first contractual cargo under its long-term contract with Yamal LNG arrived in Spain June 21; this was the first of 37 cargoes each year from Yamal into Iberia from now until 2041, it said.
The company also provided its first detailed breakdown of a €4.851bn writedown of assets following its strategic review, which has reduced the book value of Naturgy assets by 51% from €9.31bn to €4.459bn; the headline figure was released a week ago.
The writedown broadly halves the book value of both of its Spanish conventional power plants and of its 50% equity interest in its ‘Union Fenosa Gas’ LNG joint venture with Eni (see graphic below).
Naturgy also said it completed disposals in 1H2018 that yielded some €2.5bn of proceeds: of which, €766mn from Italian asset sales, €1.5bn from a 20% stake sale in its Spanish gas distributor Nedgia (both in 1Q); and €334mn from a Colombia gas disposal completed June 30 to Canada’s Brookfield.
Its July 26 statement provided no update on the status of its unrelated Mar.2017 arbitration referral against Colombia over its expropriation of Naturgy’s 85.38% stake in power distributor Electricaribe in early 2017, after the latter’s failure to collect bills and maintain the network over several years. (Credit for graphic below, and banner photo of its HQ building in Barcelona: Naturgy. Its legal domicile is in Madrid)
