Romgaz administrators asks shareholders the changing of calculation for performance indicators because the influence brought by external factors make it impossible for them to fulfill the objective in their current form, according to a document issued by the gas producing company. The proposal will be voted on in the General Shareholders Meeting of 17 June.

“It is necessary to amend the calculation of performance indicators, according to the management plan, in order to eliminate the effects of external factors, which are not under the control of the management and the cause of which objectives and respective performance indicators cannot be fulfilled”, shows the overview made by the Board of Directors (CA).

According to company executives, the main external cause of failure is noncompliance with the calendar for gradual increase in the commodity price of gas from domestic production envisaged while developing and approving the management plan of Romgaz.

“As of July 1, 2014 prices for the supply of natural gas from domestic production have changed substantially from those approved by Memorandum, prices that stood at the basis of the management plan and under which administrators have assumed criteria and objectives for performance. If by 2015 the differences of the average price for households are around 6%, in the coming years these differences are very high, from 14% in 2016 to 21% in 2017 and 30% in 2018”, Romgaz administrators show.

According to them, the regulation of selling rates for gas from domestic production to a level far below those in the Memorandum, prices that were considered to substantiate the management plan has a significant negative impact over indicators like turnover, operation profit, labor productivity and cost-income ratio.

Mismatch of revenues and expenditures led to the reformulation of Romgaz budget for this year. The new form relies on an annual net profit of 1 billion lei and revenues of 3.81 billion lei. Expenditures are projected at 2.572 billion lei this year.