PGNiG Records 17 Million Zloty Loss
Polish state-controlled PGNiG has today recorded a loss of 17 million zloty (approximately €4.16 million) for the first half of 2012, despite an increase in revenue of 28 per cent.
The company said in a statement today that the primary contributor to the loss was a negative margin on gas sales, frustrated by a massive leap in the cost of gas imports. The cost, which increased by 46 per cent year on year for the first half of 2012, contributed to the margin on gas sales reducing to -11 per cent for the first half of the year. The depression on the margin for the second quarter of the year was the worst the company has seen since 2008, it said, at -13 per cent.
A tariff approved earlier this year by the President of the Energy Regulatory Authority had failed to offset its losses, the company said.
PGNiG says that it is taking a number of steps to raise the margin on gas sales including renegotiating gas prices with Russian supplier Gazprom and preparations for the imminent deregulation of the Polish gas market.
"The poor performance of the PGNiG Group in the first half of 2012 is attributable to factors over which the company has very limited control," CEO and President of PGNiG Grażyna Piotrowska-Oliwa said today. "Therefore, jointly with PGNiG employees, we have made a number of decisions with the aim of reversing the current trend.
"The arbitration procedure is under way to solve our dispute with Gazprom, and we believe that it will result in a reduction of the contractual gas prices, which are the key driver of our performance. We have initiated restructuring processes whose primary purpose is to prepare the company for the challenges it is facing. These include in particular the imminent deregulation of the Polish gas market and the unavoidable emergence of real competition."
Ms. Piotrowska-Oliwa also said that PGNiG was not only looking to reductions in cost to minimise the shortfall in profits but that it was actively seeking to generate new profit.
"Let me emphasise that the steps we are taking are not confined to cost-cutting -- we are making an effort to generate additional income," she said.
The company says that the restructuring initiatives, including merging of units and reduction in management roles, being taken should help to minimise its losses. It does not currently foresee mass lay-offs taking place.