Romanian gas transmission company Transgaz [BSE:TGN] said on Friday its 2018 net profit fell 14% on the year to 498.9 million lei ($119 million/105 million euro).

Operating revenues dropped 6% on the year to 1.64 billion lei in 2018, mainly because of the lower revenues from the commodity charge, capacity booking and international gas transmission, Transgaz said in an unaudited fourth-quarter report, according to Seenews.com.

Financial revenue declined by 143.7 million lei due to the transfer of the provision for the impairment of Transgaz`s share in the share capital of Nabucco Gas Pipeline International.

Operating costs were 3% lower at 1.05 billion lei in 2018, as the company registered savings mainly on lower consumption and technological gas loss and lower prices for auxiliary materials as well as lower expenses for personnel, maintenance and transmission.

Expense overruns were registered in the following categories of costs: maintenance and transmission, taxes and duties, provision for employees benefit, Transgaz said.

Romgaz, lower profit by 22%

At the same time, Romanian natural gas producer Romgaz [BSE:SNG] said on Friday that its 2018 net profit fell by 22% year-on-year to 1.43 billion lei ($339 million/301 million euro), as royalties and taxes increased.

The drop in profit was mainly due to a 51% increase to 445 million lei in petroleum royalty expenses that the company had to pay for 2018, the company said in a financial report submitted to the Bucharest Stock Exchange, BVB.

Also, Romgaz’s net profit was affected by a 43% increase of the windfall tax further to the deregulation of prices in the gas sector to 164 million lei.

Romgaz’s said its 2017 net profit was adjusted from 1.8 billion lei to 1.6 billion lei with the recognized income from the reimbursement of excise duty for technological gas consumption.

Exploration expenses rose to 247.1 million lei in 2018 from 185 million lei in the previous year, mainly due to a growing number of 3D seismic activities studies. Romgaz stressed that the increase in expenses prove its engagement for the discovery of new reserves.

The company’s revenue for 2018 rose 9% on the year to 5 billion lei, due to a 17.7% rise of revenue from sales of internal produced gas and of gas purchased for resale as well as gas from joint ventures. This offset the decrease by 30.6% of revenue from electricity sales and by 41.08% of revenue from storage services. The company produced 5.33 million cubic meters of natural gas in 2018, up 3.4% on the year.