Photo: Courtesy of Naturgy

Naturgy’s H1 earnings slip

Spain’s Naturgy reported a 30.3 per cent slip in its net income for the first six months of 2020 under the impact of COVID-19.

Naturgy's H1 earnings slip
Courtesy of Naturgy

The company reported a net income of €490 million ($567.2 million) in the first half of the year. This compares to €703 million ($813.9 million) reported in the first half of 2019.

The drop was attributed to the “acute” impact of COVID-19 in the form of lower gas power demand in Spain and Latin America. It was also attributed to a more challenging scenario in International LNG business.

International LNG business reported a profit of €92 million, 42.1 per cent down from €159 million reported in the first half of 2019.

The drop was a result of a challenging scenario which was exacerbated by a temporary increase of procurement volumes due to ongoing contract renegotiations.

As of June 30, 2020, contracted sales for 2020 and 2021/2022 stand at 98 per cent and 79 per cent respectively. Sales stood at 63.24 TWh, 4.4 per cent up on the 60.55 TWh reported in the corresponding period of 2019.

Naturgy is renegotiating its gas procurement contracts, based on the ordinary and extraordinary review mechanisms contemplated in such agreements, to better align its procurement costs with the prevailing market conditions.

International LNG’s sales dropped 19.5 per cent. The business reported net sales of €1.25 billion, as compared to €1.25 billion in the first six months of 2019.