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UPDATE 1-PGNiG surprises with Q4 profit on gas cost cuts
March 20, 2012 / 7:53 AM / in 6 years

UPDATE 1-PGNiG surprises with Q4 profit on gas cost cuts

* PGNiG Q4 net profit at $97 mln vs expected $55 mln loss

* Boosted by smaller dependence on costly Russian gas (Adds more detail, analyst)

WARSAW, March 20 (Reuters) - Poland’s gas monopoly PGNiG surprised with a fourth-quarter net profit on Tuesday as more diversified supplies helped cut losses on Russian imports.

The state-controlled group said its profit in the last three months of 2011 hit 302 million zlotys ($97.3 million), while analysts polled by Reuters expected a loss of 171 million zlotys.

“This is an excellent result. The costs of gas purchases are surprisingly low,” said Pawel Burzynski, analyst at Warsaw-based broker DM BZ WBK.

Poland buys over two thirds of the gas it consumes from abroad. Annual imports in 2011 rose to 10.9 billion cubic metres of gas each year, with the bulk coming from Russia’s Gazprom .

The price in PGNiG’s deal with Gazprom is linked to a nine-month moving average of oil prices, which grew 44 percent year-on-year in the fourth quarter. A 12 percent increase of the dollar-zloty exchange rate also took its toll, PGNiG said.

Nonetheless, more and broader connections to gas systems in neighbouring countries, including a possibility to buy Russian gas cheaper from Germany, let PGNiG acquire gas more cheaply than in its long-term supply contract.

The group also said it planned to invest around 1 billion zlotys in gas exploration in 2012 and that it has not yet decided on a dividend from 2011 profit.

PGNiG’s share price lost 3 percent this year versus an 8-percent growth of the country’s large-cap index WIG20 . ($1 = 3.1045 Polish zlotys) (Reporting by Maciej Onoszko and Pawel Bernat; Editing by Hans-Juergen Peters)

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