Naturalness generated 557 million euros in the first half, up 15 percent from a year earlier, but the figure reflects a negative 126 million euro impact from its Chilean subsidiary Metrogas, which Naturgy disclosed to the National Securities Market Commission in a relevant case. The gas company was expected to submit its accounts to the auditor last week, but presentation was delayed to Thursday due to a decision by Metrogas, in which Naturgy has held a 55 percent stake since 2016, and a long running dispute with the Chilean operation dating back to 2009. The gas company has not yet consolidated the Chilean entity.
The government of Cristina Fernández de Kirchner restricted natural gas exports from Argentina to Chile. This move sparked disagreements involving Chilean gas distribution and the Argentine shipping sector. Northern Gas Carrier, the gas carrier, filed a breach of contract suit that was decided last week in favor of the Argentine company, resulting in a 250 million euro payment to Metrogas. Metrogas appealed, but Naturgy booked a provision of 55 percent of that amount, or 126 million euros. Net profit, excluding this provision, stood at 717 million euros, up 28 percent from July 2021.
Ordinary gross operating profit, or EBITDA, for the first half of 2022 reached 2,184 million euros, an 11.5 percent rise versus the same period the previous year. The six months were marked by significant volatility in energy markets, with prices climbing in most international markets and a strong impact on LNG activities due to elevated gas prices globally, especially in Europe. Naturgy benefited from higher LNG prices, with the LNG business EBITDA rising fivefold, rising to 86 million euros in 2021. Gross margin rose from 101 million euros in 2021 to 447 million euros this year.
In Latin American operations, there were updates on rate increases in the countries where the company operates, and a positive development in the exchange rate. In Spain, marketing activities continued to face margin pressure, attributed by the company to contracts with end customers that have not yet reflected the increases in gas and electricity prices at the main international hubs. Grid activity remained stable as growth in electricity distribution offset declines in gas distribution amid reduced gas demand and the gradual decrease in natural gas under the 2021-2026 regulatory framework.
During the Gemini Project presentation, first announced in February and slated to be operational by year end, Naturgy unveiled plans to split the company into two listed entities: one focused on free market activities and the other on regulated services. The project was described as ongoing, though the timeline has been slowed by the war in Ukraine and ongoing market volatility. The board stated that the project remains aligned with the company’s strategic goals and that the formal analysis process continues to validate the strategic fit.
Naturalness reduced its net debt by roughly 7 percent in the period to about 11,976 million euros due to strong cash generation, working capital management, and favorable exchange rates. In line with the 2021-2025 Strategic Plan, the board approved a first dividend on account of 0.30 euros per share for 2022, the same level as last year, to be paid on August 18.