MADRID (Reuters) - Spanish gas company Naturgy (NTGY.MC) reported a 7% rise in core earnings for the first half of the year on Wednesday, supported by the strength of its gas network business in Spain and abroad.
The networks offset lower revenue from power generation in its home country and thinner margins in its liquefied natural gas (LNG) business.
The global LNG market has been inundated by soaring production that has outstripped demand growth in Asia, forcing down prices and contributing to a glut at Spanish terminals.
Naturgy’s core earnings before interest, tax, depreciation and amortization (EBITDA) rose to 2.15 billion euros in the first half of the year from 2 billion euros in the same period of 2018.
The company said planned savings from its cost-cutting efforts would rise 50% in 2019 to 150 million euros ($167 million).
The company’s stock has been buffeted over the past month by a proposal from Spain’s competition watchdog to cut regulated revenues from gas and electricity transport and distribution.
Since the proposal was published, investors have knocked 2 billion euros off Naturgy’s market value, lowering it to 23 billion euros. In response to the proposal, Naturgy said it would temporarily stop investing in its gas network in Spain.
The company maintained its current shareholder remuneration program, which includes share buybacks worth 400 million euros and returning almost all profits to shareholders in the form of dividends.
After a management reshuffle last year, Naturgy has focused on cutting costs and moving out of countries including Colombia, Italy, Moldova and South Africa.
Investment funds GIP and CVC each hold a 20% stake in the company, which changed its name from Gas Natural last year.
Reporting by Andres Gonzalez and Isla Binnie