Earnings call transcript: Romgaz sees 9% revenue rise in Q2 2025

In the second quarter of 2025, Romgaz, officially known as Societatea Nationala de Gaze Naturale Romgaz SA, reported a 9% increase in total revenues, reaching $4.1 billion. Despite this growth, the company’s net profit fell by 9% year-over-year to 1.68 billion RON. Following the earnings announcement, Romgaz’s stock price experienced a slight decline of 0.84%, closing at $5.96. According to InvestingPro data, the stock has shown remarkable strength with a 59.28% return over the past six months and is currently trading near its 52-week high. InvestingPro analysis suggests the stock is fairly valued based on its comprehensive Fair Value model.

Key Takeaways

• Romgaz’s total revenues increased by 9% year-on-year, reaching $4.1 billion.
• Net profit decreased by 9% to 1.68 billion RON, reflecting margin pressures.
• Gas sales revenues rose by 9.4%, driven by a 12.6% increase in gas volumes sold.
• The company maintains a dominant market position with a 47% share in total gas deliveries.
• The stock price declined by 0.84% after the earnings release.

Company Performance

Romgaz demonstrated robust revenue growth of 9% compared to the same quarter last year, largely due to increased gas sales and higher volumes sold. While the decline in net profit by 9% indicates margin pressures, InvestingPro analysis reveals the company maintains strong financial health with a "GOOD" overall score of 2.52. The company remains a dominant player in the domestic gas market, holding a 47% share in total gas deliveries, and has maintained consistent dividend payments for 12 consecutive years. For deeper insights into Romgaz’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Total revenues: $4.1 billion, up 9% year-on-year
• Net profit: 1.68 billion RON, down 9% year-on-year
• EBITDA margin: 54%
• EBIT rate: 46%
• Net profit rate: 30%
• Gas sales revenues: Increased 9.4% to over 3.7 billion RON
• Gas volumes sold: 2.53 billion cubic meters, up 12.6% year-on-year

Outlook & Guidance

Romgaz has provided a positive outlook for the remainder of the year, with a full-year gas production estimate of 4.9 billion cubic meters. The company is planning to increase its regulated gas sales from 84% in 2025 to 87% in 2026, indicating a strategic focus on stable revenue streams. This outlook aligns with analyst expectations, as InvestingPro data shows a strong consensus recommendation and price targets ranging from $4.21 to $5.14. Additionally, Romgaz is evaluating a potential acquisition of Azomures, which could further strengthen its market position.

Executive Commentary

Osman Popezcu, CEO of Romgaz, stated, "We are on track to safely deliver the first gas from Neptune Deep in 2027," highlighting the company’s commitment to long-term growth through strategic projects. Deputy CEO Alistotel Joudet mentioned, "We are looking forward to having a decision by the end of this year" regarding the potential Azomures acquisition, indicating ongoing strategic evaluations to enhance the company’s portfolio.

Risks and Challenges

• Contractor financial difficulties at the Yernoult Power Plant could delay the project.
• Increased competition in the domestic gas market may pressure margins.
• Fluctuations in global gas prices could impact revenue and profitability.
• Regulatory changes in the energy sector may affect operational strategies.
• The potential acquisition of Azomures carries integration and execution risks.

Q&A

During the earnings call, analysts inquired about the challenges faced with the Yernoult Power Plant contractor and the company’s storage injection strategies. Executives clarified their approach to overcoming these issues and emphasized the strategic rationale behind the potential Azomures acquisition. Additionally, detailed breakdowns of regulated gas sales volumes were provided to address investor concerns about future revenue stability.

Full transcript - Societatea Nationala de Gaze Naturale Romgaz SA (SNG) Q2 2025:

Conference Moderator, RONGAS Group: Good afternoon, ladies and gentlemen, and welcome to our conference call for discussing the results recorded by RONGAS Group in the 2025. After introducing the speakers, Mr. Osvampo Pesco, Chief Executive Officer, will make an opening speech. Thereafter, the Q and A session will take place. Please be advised that this conference is being recorded for internal purposes.

On behalf of the company, the following speakers attend this conference: Mr. Osman Popezcu, Chief Executive Officer Mr. Alistotel Joudet, Deputy Chief Executive Officer Ms. Gabriela Trumbitaj, Chief Financial Officer Mr. Robert Kirke, Exploration Production Director Mr.

Jan Voigtas, Production Department Director and our Investor Relations department. Now I would like to give the floor over to Mr. Esbampo Pescu, who will open the conference call with an opening speech.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Good afternoon, ladies and gentlemen, and thank you for joining our conference call to discuss the results recorded by the Ramgas Group in the first half of this year. Today, we released the Board of Directors report, which comprises a detailed presentation of our economic performance and the consolidated interim financial statements. Also, an overall presentation of the group is available on our website in the Investors section. I will start by highlighting some aspects of the gas market environment in the 2025 compared to the same period of the previous year. We estimate that natural gas consumption in Romania increased by around 4% to 58 tera, while imported volumes grew significantly by over 60% and increased their weight to 26% in total gas consumption.

On the Central European Gas South, the average reference price advanced by over 45% according to the data provided by the National Authority for Regulation of the Mining Oil and CO2 Geological Storage Activities. Similarly, we assess that on the Norwegian commodities exchange, the wholesale average price spot forward in balancing segments increased significantly in the first six months, the market still having a weak trading liquidity as a result of the current regulation in force. Regarding the gas and energy sector legislation in Romania, Rongia’s activities continue to be influenced mainly by June number 27 issued in March 22, valid for the 2025, and government GEO number six issued in 2025 in force starting 04/01/2025. The main legal provision applicable to the gas producers include regulated gas selling price of 120 Roan per megawatt hour for the gas sold to households and supplier of households, heat producers and their suppliers for the production of thermal energy and also for transportation operator and distributors for maximum 75% of their technological consumption. The price level is applied starting at April 2024 and will be valid until the March 2026.

For the gas soldered regulated prices, payment of the windfall profit tax is exempt and gas royalties are computed based on these regulated prices instead of the reference prices. Regarding the operational and financial performance recorded by Roan Gas in the 2025, we can highlight the following results. Natural gas production amounted to 2.49 bcm, adjusted marginally by 0.1 year on year, but elevated by 1% compared to the semester average recorded over the three previous years. In the second quarter alone, we succeeded to increase our gas production by 0.4% compared to the same period of 2024 to 1.2 BCM. The six months performance was achieved through steady efforts, to consolidate the potential of our production, which includes the specific activities of intervention, recompletion operations that allows us to resume production at 85 inactive wells and improve production by over 100,000,000 cubic meters.

Continuous rehabilitation projects of our main mature gas fields, optimization of gas fields exploitation and investment to extend production infrastructure and connect new fields to it. Regarding investments in our production facilities, you can point out that we performed drilling preparation for one production well, while other wells are in different drilling preparation stages. We finalized five surface facilities, have seven in execution and 20 other are in different preparation stages. We performed reactivation and capitalizable repairs for 105 production wells. We can also highlight that all these measures led to a significant 53% increase in our condensate production to over 25,000 tonnes in the 2025 due mostly to a higher production level in our Carajele commercial field.

Regarding the Carajele deep, works are progressing with 76 Rossetti and 54 Damianca wells in execution and 78 Rossetti wells in production and other seven wells in different stages of drilling preparation. We continue to improve our significant position already held on the domestic gas market. In the first six months, our market share reached 47% of total gas deliveries in Romania. Regarding gas consumption covered from domestically produced gas, we are strongly positioned with a 64% estimated share, significantly over 54% held in the 2024. We succeeded to increase our total revenues from gas sold by 9.4% year on year to over 3,700,000,000 compared to TRY 3,400,000,000.0 in the 2024.

The strong result was due to gas volumes sold significantly higher by 12.6% year over year to 2.53 bcm in each, one compared to 2.24 bcm a year before based on the optimum management of our gas flows, thus lower volumes injected into underground storages and higher volumes withdrawn from storages this year. These revenues from storage services were higher by 8% year on year, amounting to $276,000,000 with capacity reservation at 54% weight. Reserve capacity was 93.76% at the June 2025, with a filling rate of a little over 56%. Revenues from electricity adjusted by 1.5% year on year and added 177,000,000 in revenues. Production from our old power plant, which operates only one unit, has unexpectedly declined to three forty two gigawatt hours in the 2025, still supporting the security of supply in the energy market of Romania.

Overall, the Rong Gas Group reported total revenues of billion dollars higher by 9% compared to R3.9 billion dollars in the previous year based especially on the contribution of our gas sales. Regarding the expenses, the WinCo’s profit tax increased by 24% to R475 million in the 2025 compared to R383 million last year in same period. This is due to the heightened expense that we recorded in the 2025. Gas and UGS royalties increased by 6% to CHF292 million, mostly due to higher expense in the first quarter. Altogether, these taxes, including the duty to the Energy Transition Fund, were higher by 18% year on year and represent an expense of million compared to ZAR664 million from last year with a negative effect on our profitability.

This was the cumulative effect of increased gas volume sales, higher weight of gas holder regulated prices and also gas pricing. Bottom line, we achieved a net profit of ZAR 1,680,000,000.00, lower by 9% compared to the historically high value of 1,840,000,000.00 recorded in the first half of last year. All profitability rates were substantial, EBITDA margin standing at 54%, EBIT rate 46% and net profit rate at over 30%. On the CapEx side, Brom Gas Group invested a total consolidated amount of R1.89 billion dollars in the first half of this year. Of this amount, billion dollars represents the investment of RB SL and 47,000,000, the investment made by ROM Gas alone, mainly in the onshore exploration and production modernization.

Regarding our strategic project Neptune Deep, the project made in ’25 is in line with the work programs, the budget and with the execution calendar. In the first quarter of this year, the first gas production well was spudded, and we are currently drilling on the Pelican South. Out of a total number of 10 wells, four are to be drilled in the Pelican South and six other wells on the Domino Field. In the second quarter, closer to shore, we started the works for the micro tunnel that will connect the pipeline to the land near Tuzla on Tanzania County. Also, work is in progress at the natural gas metering station, another key element of this development.

Offshore infrastructure is also advancing. In Italy, fabrication of the jacket is underway. And in Indonesia, the works continues on the topside module. As a result of this significant development, ROM gas and its partner are on track to safely deliver the first gas from Neptune Deep in 2027, and the project remains within the up to EUR 4,000,000,000 guidance for the total investment. Another strategic objective is the CCTG power plant in Yemen.

At the July ’25, the total work progress of the investment of the Turkey project stands at 98%, Related only to the new EPC contract that started August 2023, the total progress of the investment was around 90%. In the first six months, work were carried out on the electric and automation side mainly, and some tests were performed on the tempo mechanical side. However, I would like to highlight some of the recent difficulties encountered during the execution of the project. As it is well known, the contractor is currently facing financial hardship, being involved in a pre insolvency procedure in its home country. The distress also affected the progress on the works on our power plant.

Despite the fact that Rov has paid on time all invoices that may met the payment criteria, having no outstanding debt, the contractor became unable to support the execution of the works, incurring overdue liabilities towards the subcontractors on-site. The hardship faced by the contractor also caused a lot lower mobilization than that was expected on-site, and the contractor failed to meet intermediate deadlines to achieve the contractual commissioning date. This delay was planned repeatedly by Rongas and the site supervisor to the contractor. Although the contractor benefited from the option to extend the duration of the works by six months, they still could not recover these delays. Among other drawbacks that we can mention was the partial impossibility of entering the site for a period of around forty five days due to some floods cut caused by the mullish livres in some areas that also had a negative effect on the progress.

Raw gas does undertake all efforts to support the contractor and find the best legal and technical solution to finalize the plan as soon as possible. I would like to also mention dividends distributed this year. We remind you that on April 29, the shareholders of Royal Gas decided upon total gross dividends of $6.00 4,000,000, which resulted into a total payout ratio of 20% for the last year and will allow to partially finance its significant investment plans. At the end of this presentation, I would like to highlight the strong performance recorded by Roombia share on the Bucharest Stock Exchange. S and G share price boosted by over 65% this year and by almost 50% over the past six months period.

We believe that the positive stance of investors is due, among others, to the significant investment strategy of our company, solid position on the market and good perspectives for the energy sector. With this, I would like to close our presentation, and thank you for your attention.

Conference Moderator, RONGAS Group: Thank you for the presentation. Ladies and gentlemen, the line is now open to Ms. Johanna Andre, you may now address your question.

Johanna Andre, Analyst: Hello, and thank you for the presentation. I have a couple of questions. First, regarding the volume sold at the regulated price over the next quarter. If you could please disclose the grid volumes for each of the following quarters and for the 2026. Second, regarding the Yernut power plant update.

I understand the difficulties, but in the last call, you mentioned the commercial production until the end of the year. Is this still possible? And if not, when to expect it? And third, if you could please give us an update regarding the Azomura acquisition. Thank you.

That’s all from my side.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Questions? I will start with the the first one. So the volume sold in the this half year of 2025 at regulated prices was 77%.

Johanna Andre, Analyst: And for the next quarters?

Osman Popezcu, Chief Executive Officer, RONGAS Group: So for the entire year of 2025, it’s around 84% of total sales are at regulated prices. And for the 2026, they will be over 87%. Does that answer your question for the quantities?

Johanna Andre, Analyst: Yes. Thank you very much.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Thank you. On the Yernoult Power Plant, we we we have encountered this unexpected problem with the subcontractor. Longest has done everything that stands in our power to have direct payments made to to critical subcontractors to keeping them on-site. Unfortunately, our contractor decided to send us a letter last week in which they are looking to suspend the works works on the power plant. This is contrary to our contract.

We have sent them a corresponding letter in which we do not agree with the with such approach. And right now, we are analyzing both internally with the payers and with the interested parties. The actual, let’s say, options that has, but we need to take into account the fact that Rhoping has may be able to finalize this power plant without this this contractor. But, of course, this will probably incur additional time and also maybe additional costs.

Johanna Andre, Analyst: Okay. But could you actually give us a guidance? The postponement should be, I don’t know, 2026.

Osman Popezcu, Chief Executive Officer, RONGAS Group: It’s very it’s very hard to to to to say. We are looking to this year to to be able to inject the first megawatt in the system. So we are looking by the end of the year to try and inject the first megawatt from the new power plant in the system.

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: Okay.

Osman Popezcu, Chief Executive Officer, RONGAS Group: So that’s part of the the final testing because, basically, part of the testing has been done, and we need to have the final testing done regarding the injection of of megawatt in the system.

Johanna Andre, Analyst: Okay. And one more question related to. Once the first megawatt is into the system, we could expect that the all the full that’s the power plant will start operating at full capacity?

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: There are a few months to be to be tested, and that’s why it’s a little bit hard for us to express a certain answer. But exactly as Manes said, we would like to start the testing before the end of this year. And as the case may be based on the testing to allow the market to know when for the entire year of power plant will will start. Everything is subject to the testing period.

Johanna Andre, Analyst: Thank you.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Regarding the Alomoris, we’ve attributed the contract to KPMG and to Austria. They are helping us in the evaluation. We’ve already had the first meeting on-site last week with the consultants together with the wrong guest team, and we are we started the proper analysis, both technical and and economical of the possibility of taking over the other mortgage.

Johanna Andre, Analyst: Thank you.

Osman Popezcu, Chief Executive Officer, RONGAS Group: You’re welcome.

Conference Moderator, RONGAS Group: Ms. Daniel Amundro, you may now address your question. Ms. Daniel Amundro, please activate your microphone and you may address your question.

Daniela Amundro, Analyst: Can you hear me?

Conference Moderator, RONGAS Group: We can hear you. Yes.

Daniela Amundro, Analyst: Good. Thank you for the presentation. Several follow-up questions on the previous questions, of course, and I have also my own questions. So regarding your note, so from my understanding of what you said before, is that with you or not everything is on set? So you are in the testing period.

Correct?

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: No. There are a few works to be done because at the moment, we are at 95% from the from the total execution. And also under this 2% are the testing, but certain works has to be finished. And as Juan has said that Part of

Osman Popezcu, Chief Executive Officer, RONGAS Group: the testing has been Part

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: of the testing is part of this 2%. And at the moment, due to the fact that the entrepreneur has some problem in its own cash flow and with its subcontractors. We are analyzing how we will finish the yellow power plan. Option one is with the and And the second two, Ron gets himself to finish the remaining works to be executed and testing. Because for us, putting a function near the power plant, it is a priority.

Daniela Amundro, Analyst: Yeah. Because I’ve read that if you slip the commissioning date be after February 2026, you have to repay the grant.

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: As such, situation will be analyzed case by case and based on the actual facts and situation. In our in our perspective, if the testing starts, we will discuss also with the Penn A commission in order to extend the the Penn A. So That’s the case.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Yeah. That’s the case.

Daniela Amundro, Analyst: So so there is a possibility to postpone this commissioning after June from my understanding. There is a possibility.

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: The the actual the actual due date under the is December 2025. And as the case may be, will be prolonged, but it’s subject to the part discussion with the commission and our our authority, namely energy minister.

Daniela Amundro, Analyst: Okay. And now also regarding your note, given this testing period, how would you see the production of your note in the following quarters? So first in the first half, okay, the production declined by 24%. In the second half, to assume a same percentage decrease, what are the plans here?

Osman Popezcu, Chief Executive Officer, RONGAS Group: You can assume similar to to the first to the first half. It depends a lot on the time when we’re gonna start the testing of the new power plant because the two cannot work together. So the the moment that we start the testing and injection in the system from the new power plant, the whole one will have to be shut.

Daniela Amundro, Analyst: So if you for example, if you start testing in q four, the production there will be close to zero or zero, something like this.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Not exactly zero, but we’ll

Daniela Amundro, Analyst: not Close to very low. Yes. Okay. Good. Now I have several questions regarding the the first half results.

What I’ve noticed that you record the you record FX losses from debt revaluation and other gains and losses. So you I do not understand why you report these losses as an OpEx. So you understate the operating profit and overstate the financial costs. This is a question. So I didn’t see up to now the the debt revaluation losses, FX losses reported as this.

But, anyway, please detail for half for first for the first half because you don’t have any note the financial cost and also the third parties and other cost split, please. Because in your report, there is no note on this cost. So finance costs for for the first half of the year and third parties costs also for the first half of the year.

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: Hello. Thank you for your question. Regarding finance cost, we include here the interest charge on the existing liabilities. Meaning, the loan we took in 2022 when we acquired the current Roanghast Black Sea and the bonds on the bonds that we issued last year. Forex, we always presented it in other gains and losses.

Regarding third party services and other costs, the increase is due mainly to transportation costs, charged by, the system, operator.

Daniela Amundro, Analyst: Yeah. I know all these things. Yes. I know also because you have some. I know what each cost contains.

What I want, I want the figures. So split, for example, finance cost. I want the interest expense. I want I want the the commission unwinding of the commissioning expenses. Also, for third parties, you should report there, I don’t know, transmission, capacity booking cost, and something.

So for us, it’s hard to guess what is there. You present a total, and we need to estimate it.

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: Yeah. Just a second, please.

Osman Popezcu, Chief Executive Officer, RONGAS Group: But

Daniela Amundro, Analyst: please, this is a kind request if it’s possible to present such notes in your reports. So finance costs and third parties split, please.

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: Yes. We will take into consideration your request. For this first half year, interest expense was at 53,000,000 late, and the unwinding of the decommissioning provision, 13,000,000.

Daniela Amundro, Analyst: 13,000,000. Okay. Thank you. And for the third parties?

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: For third parties, gas capacity reservation transport was 180,000,000 lay. Then we had other operating expenses, movement in provisions, in in the decommissioning provision, insurance costs, water and energy.

Daniela Amundro, Analyst: Yes. You see, there there are a lot of details that we we do not have access to. So please take my request into consideration. Now okay. So I will I will ask the IR for details to have all the split for the first half of the year.

Also, regarding in assets impairment, I’ve seen not significant, but quite large assets impairment in the first half of the year. What is the outlook for the second half of the year? So to expect the same amounts, to expect these assets impairments to continue at these levels?

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: No. This is not a regular event that happens. Some of the wells we drilled that were not successful, so we reported an impairment, but it doesn’t have to be every quarter. Okay. We didn’t we we didn’t record an impairment based on a re on an impairment test.

We didn’t identify any impairment indicators.

Daniela Amundro, Analyst: Okay. Thank you. Thank you. This is all from my part.

Conference Moderator, RONGAS Group: Thank you. We go on with Mr. Ore Galbur. You may now address your question. Mr.

Oleg Galbur, please activate your microphone. So we continue with Mrs. Laura Simeon. Please activate your microphone and you may address your question. Miss Laura Simeon, please activate your microphone.

Okay. Good afternoon.

Laura Simeon, Analyst: So I have a couple of follow-up questions. First one, also regarding. I I heard that you consider finishing the works with some other company. But if I remember correctly, this was a problem when you first canceled the contract with Duofer Gura because you will lose the warranties for the work done. So this risk, I think, it’s still the it’s still there if you will decide to to finish the works with someone else.

Osman Popezcu, Chief Executive Officer, RONGAS Group: We never said that we’re gonna finish with another company. We said that might finish the works, and wrong gas will be the EPC of finalizing the works. Indeed, we did have that issue before, and not only this issue that stemmed from the old works contract that was signed in 02/2016. But for us, given the analysis that we have done and that we are currently doing, it wouldn’t be a big difference to have a EPC company that’s in bankruptcy and not having any type of guarantees wherein the long gas taking over the site. So in this respect, we’ll definitely inform the market when we have taken a decision regarding regarding this.

We are currently in in analysis.

Laura Simeon, Analyst: Okay. Thank you. And and then referring also to the to the forex gains, which Daniela referred to, I expecting the forex forex losses because of your euro bonds and other euro denominated loans, but you also registered some forex gains about 50 millions. And I was wondering where what generate this this forex gains?

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: We didn’t use money we collected from the bonds immediately. So some of the cash was placed in bank deposits. These generated the the first gain.

Laura Simeon, Analyst: Ah, okay. So there were some assets in euro. Okay.

Daniela Amundro, Analyst: Yes.

Laura Simeon, Analyst: And sorry. Just to to find my my document, and I I put the questions. For the second bond issue, initially, the plan was for this autumn. Is this still in place, or you will delay the the second bond issue?

Osman Popezcu, Chief Executive Officer, RONGAS Group: It depends on on the market for for the most. We do not have any stringent cash necessities at the moment, and we are looking we are looking at the market and seeing how how it will evolve. If the timing for us would be correct, we will be in the market by end of this year. If not, maybe next year. But it depends a lot on the market conditions.

Laura Simeon, Analyst: Next year, sorry, next year in the first quarter? Or

Osman Popezcu, Chief Executive Officer, RONGAS Group: Yes. In the first quarter.

Laura Simeon, Analyst: Okay. Okay. Thank you. That’s all from my side.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Thank you.

Conference Moderator, RONGAS Group: Thank you. We continue with Mr. Oleg Galbur. If you can hear us now, please turn on your microphone.

Oleg Galbur, Analyst: Can you hear me now, please?

Conference Moderator, RONGAS Group: Yes.

Oleg Galbur, Analyst: Yes. Okay. Thank you. So thank you for the opportunity to ask questions. I have two follow ups.

The first one is on the volume sold at regulated prices. Could you please give us the exact figure in terawatt hour for the second quarter? And the second follow-up is on Azomutas. Since at least based on the publicly available information, this company was a loss making one in the in the in the recent years. I was wondering if you can talk a bit about your investment criterias for for this specific company, which are you trying to meet in order to make a take a positive investment decision.

Is it some a minimum level of invest IRR, or is it your, capability to turn the company, profitable? Anything you could tell us would would help to understand the logic for this acquisition. And lastly, on your storage segment, I noticed a drop of the earnings before tax on a year on year comparison. Could you tell us what was the trigger behind? Was it due to tariffs or some one off expenses that resulted in the drop?

Thank you.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Yes. Thank you for for the questions. So on the second quarter, at regulated prices, we have 10.37 terawatts sold. That will continue in in the the third quarter around 9.5. And then in the fourth and 2026, somewhere in between twelve and eleven terawatts for each quarter in part.

Does this answer your question?

Oleg Galbur, Analyst: Yes. Yes. Thank you.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Yes. On Azomutish on Azomutish, we are looking to I think also in terms of business, but we are looking also at acquiring the Alomoures production facilities. Our evaluation is a bit more complex. It takes into account that the fact that mainly was loss making was because the lack of access to natural gas volumes. That is something that can supply.

So the logic behind it is if taking into account, of course, market pricing and the estimation that we have for CapEx investment, environmental measures that have to be taken, and also the future price for fertilizer cooperating with the future price of gas. If Alamore will in terms of a business will look more profitable than outright selling the gas for obvious, then it will make sense to be an acquisition target. This is how we view the we view the acquisition.

Oleg Galbur, Analyst: Okay. Understood.

Osman Popezcu, Chief Executive Officer, RONGAS Group: And can you please repeat regarding the storage? What have you seen? The storage segment regarding the storage segment?

Oleg Galbur, Analyst: Sorry. I I didn’t hear your your your question.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Can repeat the last question re regarding the the storage segment?

Oleg Galbur, Analyst: Yeah. Yeah. So I was looking at the earnings before tax reported for the segment, and it was lower in comparison to last year’s second quarter. And I was wondering whether this is due to some one off expenses or to tariff revision or whatever that triggered this drop.

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: Revenue in q two was around 13,000,000 lower than in q one. Also, they recorded third party services higher by about 51,000,000 than in q one. I will get back to you with the exact services that they incurred that caused such an increase.

Oleg Galbur, Analyst: Okay. So it was rather the mix of of of of services provided that resulted in this drop of of earnings?

Johanna Andre, Analyst: Yes.

Oleg Galbur, Analyst: Okay. Thank you.

Gabriela Trumbitaj, Chief Financial Officer, RONGAS Group: You’re welcome.

Osman Popezcu, Chief Executive Officer, RONGAS Group: And it’s also partially because of the lower injection that that they had in the first the first half of this year. But it will probably be recouped by by the end of of October.

Oleg Galbur, Analyst: Understood. Thank you.

Conference Moderator, RONGAS Group: Miss Daniel Amondro, please address your question.

Daniela Amundro, Analyst: Yeah. Speaking about storage, what is please remember us what is the minimum what what is the quantity, the obligatory quantity for store to be stored? I think it’s 3.9 terawatts, correct me if I’m wrong. And by the end of the year, where do you see the stored volumes? Because I think you all you from my computation, you are above the 3.9 terabytes right now.

Osman Popezcu, Chief Executive Officer, RONGAS Group: It was 3.9 last year.

Conference Moderator, RONGAS Group: Mhmm.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Has much less obligation this year. We have around three around three hundred and forty five weeks to inject. And we are seeing the capacity reservation right now is around 94%, but we think that by the end of the injection cycle, it will reach almost a 100%.

Daniela Amundro, Analyst: But injection cycle is ending in q one two thousand twenty six or or when? No.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Is ending on the 10/31/2025 and from the first Okay.

Daniela Amundro, Analyst: This this answer doesn’t help me. I wanted to see I want I would like to to hear from you what volumes you will have in storage by the end of the year, if it’s possible.

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: Wrong guess or the third parties?

Daniela Amundro, Analyst: Wrong guess is reported in your, you know, in your TPI’s report. It’s not reported, but can be deducted, of course. It can be implied. So the question basically is from now on, you you in the second half of the year, you plan to withdraw gas or you will keep the current level of quantities as it is now?

Osman Popezcu, Chief Executive Officer, RONGAS Group: No. But we I don’t understand the question. Why would we we withdraw gas? We are injecting gas. We’re not withdrawing up.

Because

Daniela Amundro, Analyst: there is a lot of gas in the storage. That’s why. And I asked you, of okay. What is the minimum obligation?

Osman Popezcu, Chief Executive Officer, RONGAS Group: For You said that 345 gigs.

Daniela Amundro, Analyst: Okay. 345. You you the question is because you usually say about these obligations. So that’s why. Yes.

Osman Popezcu, Chief Executive Officer, RONGAS Group: We will probably be about this obligation.

Daniela Amundro, Analyst: Yeah. You usually this is your business usual business to say about the obligation. Yeah. Correct. Okay.

Thank you. Thank you.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Depends a lot on the quantity management and on the prices. It’s going to be something flexible. It’s not something that we can have, let’s say, pinpoint. It will be definitely above the obligation of 345 gigs.

Daniela Amundro, Analyst: Okay. Thank you.

Osman Popezcu, Chief Executive Officer, RONGAS Group: You’re welcome.

Conference Moderator, RONGAS Group: Thank you. We received several written questions from mister Chornay Mario Scalin. I will read them separately, and you will be provided an answer. The first question is please provide an update related to following projects: ERP Soft for household invoicing and status of the 40 megawatt photovoltaic park?

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: We already signed the contract with the company is going to create the soft for the household and the non household consumers. We have one hundred and fifty days in order to have finalized the soft and the platform or the household and non household super consumers. And the second, it was related to Yeah. At the moment, we are current analysis in order to award the contract according to the documentation published by WrongGuest. Probably in the next week, we will announce the winner.

Conference Moderator, RONGAS Group: Another written question from Mr. Czernay Mario Skalin related Azomuresh. Will you make a decision until the end of the year?

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: Everything is subject to the data that will be provided by Azomuresh and the reports that will be issued by our consultants. We will not speed the the decision if the if we will not have enough accurate and complete data and information from Azovolish. We would like to have all the details before having a decision taken. And prior to everything, we have to present some decision to the board of directors and, as the case may be, to the general assembly. And once the board of director is convened or the general assembly is convened, we have to have all the documents and management proposal to the board of directors and general assembly.

At the moment, we are looking forward having a decision by the end of this year. But such decision is subject to the data and reports that will be issued by the due diligence consultant.

Conference Moderator, RONGAS Group: Thank you. And another written question from Mr. Chornay Marius Kalin. Is the filling degree of storages with natural gas of 54% on 06/30/2025, enough? Which should be the filling degree of storages at the beginning of the gas year?

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: From our perspective, by the end of the injection cycle, we will have more than 95% of the total capacity used. And due to that, the storage will be enough to the supplier in order to supply gas to the final end consumers.

Conference Moderator, RONGAS Group: You. If there are any other questions?

Alistotel Joudet, Deputy Chief Executive Officer, RONGAS Group: Present will be higher than that based on the contracts or capacity that will be awarded or completed. Probably, the final figure will be more than 98%, 99%.

Conference Moderator, RONGAS Group: Ms. Daniela Mundrum, please address your question.

Daniela Amundro, Analyst: In terms of gas production for this year, for the first half, the production ended about flat year on year. For the full year, what is your estimate? And please do not say that your target is keep the decline at 2.5%. Just give us an approximation for the for 2025 production gas production.

Osman Popezcu, Chief Executive Officer, RONGAS Group: Our estimation until or till end of the year in terms of production volume, it’s up to 4,900,000,000 cubes this year. Those are our estimations. Align with those 2.5 decline year by year. Thank you.

Daniela Amundro, Analyst: Thank you.

Conference Moderator, RONGAS Group: We received another written question from Mr. Chornay Mario Scalin. Will the winner, the awarding contract for the photovoltaic parks will be announced on Bucharest stock market?

Osman Popezcu, Chief Executive Officer, RONGAS Group: No. We don’t have any obligation to to announce. It was a public tender, but if it’s such a big interest, we can inform. It’s not something that we we want to keep a secret.

Conference Moderator, RONGAS Group: Are there any other questions? Please feel free to address them. Mr. Oleg Galbo, please address your question. Mr.

Oleg Galbo, please turn on your microphone.

Oleg Galbur, Analyst: Can you hear me now?

Laura Simeon, Analyst: Yes.

Oleg Galbur, Analyst: Yes. Thank you. Just one follow-up question on the generation segment. Now that the energy price regulation has ended, what shall we expect in the third and fourth quarter for this segment? Do you see the do you see the segment turning to profit or just reducing the losses?

And this is, you know, ignoring what what can happen on the on the new power plant development if there will be, let’s say, a less generation from the old power plant? Assuming the status quo, what would be your expectations in terms of the segment results? Thank you. Yeah.

Osman Popezcu, Chief Executive Officer, RONGAS Group: It’s hard to tell because we’re operating a very old power plant, so we have had issues with it in the in the first part part of this year. So we are still looking to to produce up until the testing in the new power plant will start, but we are probably doing it in line with the with the first part of this this year, maybe with smaller smaller losses in the business.

Oleg Galbur, Analyst: Okay. Thank you.

Conference Moderator, RONGAS Group: If there are no further questions, we will conclude this conference call. Thank you for your questions. If you need further information, please contact our Investor Relations team. The conference is now concluded. On behalf of ROM Gas team, thank you for attending today’s conference

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