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* Says looking for oil and gas deposit takeover targets (Adds company comments, details)
By Adrian Krajewski
WARSAW, May 9 (Reuters) - Poland’s dominant gas firm PGNiG signalled a possible upgrade to its full-year earnings targets after record oil sales brought the state-controlled company a larger than expected net profit gain in the first quarter.
The group sees revenue this year up a notch at 32.7 billion zlotys ($11 billion) and core profit or EBITDA up 5 percent to 5.9 billion due to larger oil and gas production from deposits in Poland and Norway.
“We announced a forecast, and since the first quarter is a little better, one can expect that the whole year may be better than we forecast,” PGNiG Chief Financial Officer Jaroslaw Bauc told a news conference.
“However, it needs to be remembered that the fundamental reasons for the better first-quarter results are not going to be reproduced in the following quarters.”
PGNiG has little room to adjust gas prices in line with demand as they are fixed by the country’s industry regulator. Three quarters of the gas it sells is imported from Russia under long-term contracts with Gazprom.
A mild winter led to a 7-percent fall in the group’s first-quarter revenue to 9.5 billion zlotys. But lower costs and a 40-percent jump in oil volumes boosted PGNiG’s net profit by 10 percent to almost 1.2 billion zlotys.
Analysts had forecast 955 million, according to a Reuters poll.
Saddled with investments in Polish shale gas exploration, PGNiG is seeking to cut costs and wants to use a chance to renegotiate gas prices with Gazprom in November. It also wants changes to a deal to import Qatari liquefied natural gas (LNG).
The contract could mean Poland paying some of the highest prices in the world for LNG as eastern Europe’s biggest economy seeks to wean itself off Russian supplies and kick-start growth.
PGNiG is under pressure to help reduce Poland’s energy reliance on its former Soviet master by seeking alternative oil and gas deposits abroad. Norway is the company’s top choice.
“With our net debt to EBITDA ratio falling to 0.46 in the first quarter (from 1.01 a year earlier), we are comfortable about financing any such possible deal,” CFO Bauc said.
“I think the net debt ratio level of 2 times EBITDA is safe, so the cushion is pretty wide.” ($1 = 3.0184 Polish Zlotys) (Additional reporting by Marcin Goclowski; editing by Tom Pfeiffer)