Good afternoon, ladies and gentlemen. Thank you for joining our conference call to discuss the results recorded by Romgaz Group in the first quarter of 2026. We released the data quarterly report and the financial statements at March 31st, 2026, which included a presentation of our economic and financial performance. A presentation of Romgaz Group is available on our website and is shared in the investor section. I would like to emphasize some aspects regarding the gas market environment and also to highlight the group's performance. Let me start with some aspects regarding the gas market operating the first quarter of 2026. According to our assessment, natural gas consumption in Romania advanced by 5.4% to 44 TWh , mostly based on volume sold from the domestic production.
Imported gas volumes were roughly flat and in SNGN Romgaz, at 20% rate in total consumption, almost the same as last year. On the Central European Gas Hub, the average reference price declined by 28% year-on-year, according to data provided by the National Agency for Mineral Resources. On the Bucharest Stock Exchange, the wholesale market recorded a similar trend in Q1 2026, with a still weak liquidity due to the regulation in force. Regarding the fiscal environment in 2026, Romgaz activities continue to be influenced mainly by ordinances issued to regulate gas prices.
The main legal provisions applicable to gas producers includes regulated gas selling price of RON 100 per MWh , applied until March 31st of this year for the gas sold to household consumers, the heat producers for the production of thermal energy for households, and to the transmission operator and gas distributors for a maximum of 75% of their technological consumption. A new regulated price of RON 110 per MWh is applied during April 1st, 2026, and March 31st, 2027, for the first mentioned categories of clients. For the gas sold at regulated prices, payment of the windfall profit tax is exempted, and gas royalties are computed based on these regulated prices instead of CEGH reference prices.
Regarding the operational and financial performance reported by Romgaz Group in the first three months of 2026, we can point out the following main aspects. Natural gas production amounted to 1.24 BCM, adjusted by 3.9% compared to one 2025 or by 0.3% from the quarterly average recorded in 2025. The output level in the first three months was the result of the natural decline in our main production fields, while we continue to take specific measures to consolidate our portfolio of onshore resources, which included interventions and recompletion operations aiming to resume production at some inactive wells, ensuring optimal operation of all compression and dehydration stations, optimize operations to remove water from wells, continuous rehabilitation projects on, of the main mature gas fields.
We performed workover operations at 53 wells, finalized one surface facility, while bio-stripper facilities are in execution, aiming to stream into production a total number of 42 wells. We can also underline that our condensate production increased by 4.3% in Q1 to the level of 12,752 tons, based on higher production in our Caragele field. Regarding Caragele commercial field, it stands as the second-largest field operated by Romgaz. In Caragele, we have 76 Rosetti wells successfully tested with gas and waiting for tie-in, 78 Rosetti wells in production, 54 Amina wells in production test, and 56 Amina wells for which the execution contract was signed and is now preparing for drilling. Six more wells are in different stages of drilling preparations.
The continuous program undertaken to consolidate our portfolio of gas resources in line with the development strategy of Romgaz Group led us to achieve a favorable reserve replacement ratio of 60% in 2025, according to our assessment. We continue to hold a strong position on the Romanian gas market. Romgaz represents the leading gas supplier with a substantial contribution of 39% in gas consumption covered from domestic production, according to our estimates. We are strongly positioned of total gas delivered in Romania, holding a significant share of 31% in Q1, according to our assessment. We recorded total revenues from the gas sold from production of RON 1.83 billion, lower by 11.6% compared to RON 2.7 billion in 21.25, based also on lower volumes extracted and sold from storages.
Revenues from storage services increased by over 15% to RON 156 million compared to RON 136 million in Q1 2025, with withdrawal services higher by 31% and weighing 50% of the total storage revenues. Revenues from electricity were roughly steady year-on-year at RON 110 million, while production of our own power plant was half year-on-year to 170 kWh in Q1 2026 compared to 200 kWh in Q1 2025. Overall, Romgaz Group reported total revenues of RON 20.14 billion, adjusted by 10% compared to RON 20.38 billion in the previous year based on the contribution of the gas sales segment.
On the expenses side, the windfall profit tax reports a decrease of 26% to RON 237 million, compared to RON 322 million reported in Q1 last year, due to a higher rate of volumes sold to households. Gas royalties declined by 17% to RON 153 million, mostly due to lower gas production and prices. Altogether, these factors decreased by 23% with a positive effect on our profitability. Bottom line, we reported a consolidated profit of RON 973 million, increasing by 2.3%, the sum of RON 951 million reported in Q1 2025. In Q1, both profitability and revenue remained at substantial levels. EBITDA margin at 66.7%, EBIT margin at 50.2%, net profit rate at 45.5%.
On the CapEx side, Romgaz Group invested around a consolidated amount of almost RON 1 billion in Q1 2026, of which the investments of Romgaz SA represented RON 769 billion. With regard to our flagship project, Neptun Deep, the progress recorded this year is in line with the budget and with the execution calendar. The Transocean Barents rig located in Domino field is currently drilling and completing its production wells. Construction of the national offshore production platform is ongoing. Construction works on the 150-kilometer offshore pipeline that will transport gas from offshore to shore have kicked off in May, representing an essential milestone in the development of the Neptun Deep project. As we already informed the market, in 2026, we will make significant progress in Romania by installing the offshore pipeline, subsea equipment, and the production platform.
The installation work will mobilize a fleet of around 50 vessels. At the turn of week are involved in the pipeline installation works. All activities are carried out with the highest safety and quality standards. As a result of these significant developments, Romgaz and its partners are on track to safely deliver the first gas from Neptun Deep in 2027, and the project remains within just the EUR 4 billion guidance for development. Another strategic objective is the combined cycle gas turbine power plant in Iernut, standing at a 99.8% completion rate. Following the termination of the work contract with the former contractor on October 13th, 2025, we took over the role of an EPC contractor. Currently, closing procurement procedures are being carried out for an import that should be initiated to support the completion of the plant.
Please note that there are constraints related to the public procurement law specific to majority state-owned companies, which influence the steps related to the public acquisition procedure. With respect to dividend distribution, I would like to mention that on the 29th of April, the shareholders decided upon the total gross dividends of RON 860 billion or total gross dividend per share of RON 0.157. The dividend level will allow Romgaz to partially finance its ambitious in-investment and development plans. In the end of this presentation, I will also mention the release of the consolidated financial statements for 2025. This includes the consolidated sustainability reporting for 2025, which was prepared in accordance with the Corporate Sustainability Reporting Guidelines and represents an important tool for investors in Romgaz share development. With this, I would like to close our presentation.
Thank you for your attention.
Now I would like to give the floor over to and to open the line. I would like to remind you that you have two options to address questions. Either raise a hand and turn on your microphone or write a question. The line is now open to take the questions. We'll give the floor over to Ioana Andrei.
Hello. Thank you for the presentation. Can you hear me?
Yes.
Okay, great. First, I have a question regarding the production guidance. You previously guided around 4.9 BCM for 2026. Q1 was low. The budget points to a 5.7 decline. Can you please provide an updated view on the expected volumes for 2026? Should I go further with my other questions?
No, we're good with this one.
Okay.
For 2026, we estimate that the production will be somewhere around 4.8 billion cubic meters. In 2025, we had a significant production during the first quarter, due to some unexpected events in early Q1, as you may remember, due to technical difficulties. On some quantities could not be extracted from alleged storages. Due to this situation, in order to meet maintenance and our contractual obligations, we had to increase the level of production to the maximum extent possible, of course, without affecting the safety of the equipment and the employees. However, due to this, some maintenance programs or repairs were postponed. These had to be executed during this year.
This explains the production, which is slightly lower than the 0.5 target that we have in our strategy.
Okay. Thank you. Second, can you please share the ANRE volumes for the remaining quarters of 2026 for the capped, for the volume sold at the capped prices and for Q1 2027?
Yes. In for the period April 2026 to March 2027, we will sell that related prices at EUR 35,176 GW h.
35 TB hour for.
Yeah, 35 TB. Yes.
For the remaining periods, starting April to April 2027 and for the first quarter of 2027, can you give us a hint so we can compute the what's going on for 2036? Or the volumes for the full-year 2036.
For the first quarter of 2027, it will be around 10 TWh, 10.4.
Okay. Thank you. My third question is regarding Iernut power plant. You actually had just one month from the period functioning. Can you explain a little bit what happened? Do you plan to restart the power plant this year? My second question goes to whether you expect commercial operations. When do you expect the commercial operations for the new plant?
Yes. As you pointed out, we have not only functioned, one month, this year in January. In February, the plant broke down. The group, remain broke down, and we are working on fixing it. Our estimate is that starting June, it should be back in operation. For the new power plant, we are working with the target of completing the plant by the thirty-first December of this year. Of course, it will depend on how we will sign the contracts, still needed to complete the works.
Okay. For the old power plant, in the budget, you had expected an increase of the electricity produced for the year, because of the difficulties. Okay. You are actually working only on half a year for the Iernut power plant. Do you have an estimate for the production? An updated estimate for the production?
We estimate that around 731,000 MWh will be available in 2026.
700, is that right?
Yes.
Okay. Thank you very much. My last question is regarding Azomures. It would be very helpful if you could share some details regarding the transaction. Maybe something on the acquisition price or at least something for Azomures regarding its operational status at 2035 net debt on the PPA. Some CapEx guidance also would be helpful. This is an important strategic transaction and investors are quite expecting some details here.
Yes, I understand that the interest of investors in the transaction, which as you said, is a very important one for Romania. Currently, we are still negotiating with Azomures, so we cannot make available too much information on this transaction. We expect that in about two weeks' time, we will have the authorization of the Board of Directors to go ahead with the transaction. Then we will appoint a shareholders meeting, and in the documents that will be published on our website for that shareholder meeting that will approve the transaction. We will make available more information on it, including the price and conditions. Regarding net debt of Azomures, I would like to point out that we are not buying the company.
We are buying the assets. The net debt that Azomures has will remain their debt. We will not take over that.
Okay. For CapEx, who's paying the CapEx? You are actually, aren't you?
The CapEx that will be invested after the takeover, yes. We will take over it. It will include the maintenance and modernization of the current plants. I cannot give a guidance on this at the moment.
Okay. Thank you. That's all from my side.
Thank you.
We have also some questions from Marian Popescu, Gândul Financiar. I think we already answered his question. Anyway, I will read them. Congratulations on the results. Could you please tell me how the acquisition of Romgaz will be reflected in Romgaz business? Secondly, what is the value of that acquisition?
The acquisition of Azomureș will be reported in the center zone of financial statements for Romgaz. We will take over the plant, the equipment. We will take over the inventory they have regarding to the plants of spare parts, raw materials that will still be in stock at the closing date of the transaction. Depending on the valuation that accounting regulations require for recording such a transaction in the financial statement. The transaction will either generate or a goodwill or a bargain purchase impact on the result of this valuation. On the value of the acquisition, I'm sorry, I cannot give any guidance at the moment.
We are giving the floor over to Laura Scena.
Hello. Thank you for the presentation. I have some follow-up questions for the Dejului plant. You had a volume half compared to Q1 2025. If you could detail a bit how What is behind the revenue which was nearly flat. Did you have some revenues from balancing budget or a significant share of trading?
Yes.
When do you register the cost with acquired energy in your P&L?
The revenue that was from electricity sold indeed remained pretty much the same as the one reported in Q1 2025. About half of the electricity that we sold in 2026 in the first quarter was electricity bought from the market. We bought it and we sold it. The cost of the electricity is in the cost of goods sold in the P&L.
Okay, thank you. That's all for my side.
Thank you.
We have a question from Vladimir Davis. Hi. Can you please repeat what % of your gas sales in Q1 2026 were done at regulated prices?
In the first quarter, we sold 78.78% of our gas at regulated prices.
We are giving the floor over to Irina Redila.
Good afternoon, and thank you for taking my question. A follow-up question on Azomureș, if I may. Just to correctly understand, you will not buy the company, only the assets, right?
That's right, yes.
Yeah, because in the public statement, you said transfer of going concern, and I was thinking that it is a business takeover.
It is a business takeover, but, the assets and the people and, yeah, the main company is another company.
Okay. You're not Okay, I understand. How, from your due diligence process, what is the value of assets, equipment, and I think that's what you are actually buying because you're not buying liabilities or debt. Employees will go as an expense probably.
After the completion.
How is the value of assets and equipment, you are buying compared to their accounting value? Will we see here some, I don't know, impairments or, contrary, we can see some gains here, if you could provide some color from your current assessment.
It's too early to talk about impairments on the plans that we are going to buy. It depends on the valuation that will be performed according to our accounting standards. As for the value of the assets that we are buying, again, I cannot provide information on the price or any other information that was not yet made public.
Okay. Given the fact that, right now, Azomureș is a loss-making company, how do you see it integrating in Romgaz business, or how do you plan to make it profitable?
Azomureș is loss-making due to the price of the gas. If we are going to buy the assets and not another company which will be a subsidiary company, will be a branch from that, so the activity will benefit from the onshore gas that we are going to produce. In our accounting standards, we cannot recognize the internal process from it is generated within the company. The gas will be that produced by Romgaz, and it will be accounted for in the financial statement as well.
Okay. How do you see actually the margin that you will gain there compared to the margin you are actually obtaining on the gas market? If you have any indication here.
This is a fluctuating business. It depends a lot on the market conditions. As you saw, gas prices and the fertilizer prices have increased dramatically due to the war in Ukraine. It's hard to tell.
Okay. Thank you. One more follow-up question on the production and the deliveries on the gas market. I saw that the actual demand on the market has increased a bit, while Romgaz deliveries have declined. What actually happened? Because I saw the decline is both due to gross production and due to volumes from storage. What actually happened on the storage, if you could detail a bit?
Our storage obligations for last year and this year were pretty low, as most of an important share of the gas produced had to go to the regulated segment of the market. We were allocated a margin of quantities for storage. In 2025, we had storage obligation of 345 GWh, and in 2026, only 19,000 GWh. We don't have available capacity to inject more. The capacity was distributed to other players in the market.
That's why you reduced your own production just to match with the storage capacity?
That's right.
Okay. Okay. Thank you very much for your answers.
Thank you.
We have some more minutes. There is time for another question. I would like to remind you that you have two options to address questions. Raise a hand and turn on your microphone or write a question. Magic, the floor over to you, Anna.
Hi. I had one follow-up question regarding the electricity production for this year. If I understood correctly, you mentioned that around 700 GW for this year, right?
That's right.
How is that possible if you're expecting to start operation only in June? You had last year a full- year, and you barely had 750, if I remember correctly.
Last year was also affected by several breakdowns of the plant. We expect the repairs that we are in the process of making to be sufficient to have the plant running for the rest of the year.
Okay. This is it, around 700 GW for the full- year, right?
Yes.
Okay. Thank you very much. That's all.
Thank you.
Are there any questions?