Transgaz Q1 2025 presentation: Net profit surges 87% amid robust revenue growth

Introduction & Market Context

Societatea Nationala de Transport Gaze Naturale Transgaz SA (BVB:TGN), Romania’s state-controlled natural gas transmission operator, unveiled its Q1 2025 financial results on May 21, showing exceptional performance across key metrics. The company’s stock has recorded a 14% increase since the beginning of 2025, outperforming relevant market benchmarks.

Currently trading at 28.45 lei per share, Transgaz has demonstrated strong operational execution amid ongoing strategic investments in its national gas transmission infrastructure and emerging hydrogen initiatives. As a member of the European Network of Transmission System Operators for Gas (ENTSOG), the company continues to play a vital role in regional energy security and transmission capacity development.

Quarterly Performance Highlights

Transgaz reported a remarkable 87% year-over-year increase in net profit for Q1 2025, reaching 453.3 million lei compared to 241.9 million lei in Q1 2024. This performance was driven by a substantial 48% increase in operational income before balancing and construction activity, which grew to 950.1 million lei.

The company’s turnover surged by 59% to 1.07 billion lei, while EBITDA rose by 71% to 601.6 million lei, demonstrating significant improvement in operational efficiency and profitability.

As shown in the following comprehensive income statement, Transgaz achieved substantial growth across all major financial indicators:

Revenue from domestic gas transmission activity, the company’s core business, increased by 49% to 907.8 million lei. This growth was primarily driven by higher capacity booking tariffs, which increased by 1.89 lei/MWh and contributed an additional 210 million lei to revenue.

Detailed Financial Analysis

The company’s financial position strengthened considerably during the quarter, with equity increasing by 11% to 4.73 billion lei compared to December 31, 2024. Simultaneously, total debt decreased by 7% to 5.58 billion lei, improving the company’s overall financial stability.

The following statement of individual financial position illustrates these improvements:

Profitability metrics showed significant enhancement, with EBITDA margin improving from 52.38% to 56.23% and return on capital increasing from 5.76% to 9.58%. Liquidity ratios also strengthened, with the current liquidity ratio improving from 1.01 to 1.31 and quick liquidity ratio from 0.66 to 0.92.

The main revenue drivers for the quarter’s exceptional performance are visualized in the following waterfall chart:

Operating costs before balancing and construction activity increased by 16% or 63.3 million lei, substantially lower than the revenue growth rate. This cost discipline contributed significantly to the improved profitability. The main cost increases were related to royalties (up 49% to 104.4 million lei) and employee costs (up 7% to 141.8 million lei).

On a consolidated basis, which includes results from subsidiaries EUROTRANSGAZ SRL and VESTMOLDTRANSGAZ SRL, the performance was equally impressive, with consolidated net profit increasing by 100% to 516.6 million lei:

Strategic Initiatives

Transgaz continues to execute its ambitious strategic investment program for 2024-2033, which includes major infrastructure development projects valued at approximately 4.15 billion euros. These investments focus on expanding the National Gas Transmission System, which currently comprises 13,994 km of transmission pipelines and associated infrastructure.

The company’s national gas transmission infrastructure is illustrated in the following map:

Key strategic projects include the development of the Southern Transmission Corridor (493.9 million euros), the amplification of the bidirectional gas transmission corridor Bulgaria-Romania-Hungary-Austria (BRUA Phase III, 855 million euros), and various interconnection projects with neighboring countries.

Additionally, Transgaz is positioning itself for the energy transition by developing hydrogen transmission capabilities. The company has identified 11 potential corridors for hydrogen transmission and plans investments of 4.94 billion euros in hydrogen-related infrastructure through 2033.

The following map illustrates the proposed hydrogen transport corridors:

Forward-Looking Statements

Transgaz’s strategic objectives for 2021-2025 focus on ensuring continuity of activity, enhancing energy safety and security, increasing competitiveness, enabling sustainable development, and maintaining financial balance and operational stability.

The company’s stock performance has been strong, with a 14% increase since the beginning of 2025. The following chart illustrates the stock’s evolution during Q1 2025:

As of March 26, 2025, the shareholder structure remains stable with the Romanian State through GSG holding 58.51%, natural persons owning 32.92%, and legal persons accounting for 8.57% of shares.

With its robust financial performance, strategic infrastructure investments, and forward-looking hydrogen initiatives, Transgaz appears well-positioned to maintain its growth trajectory while supporting Romania’s and the region’s energy security objectives. The company’s improved operational efficiency and financial metrics provide a solid foundation for executing its ambitious investment program in the coming years.

Full presentation:

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