Spain’s Naturgy posted on Wednesday a 43.6% hit to its net profits during the first half of 2020, as the Covid-19 outbreak poses significant challenges to the industry, Kallanish Energy reports.
Net profits fell to €334 million, compared with €592 million in 1H19. The financial results reflect the impact of the pandemic, particularly in the second quarter, on gas and power demand in Spain and Latin America, where Naturgy operates.
Other contributing factors include a “more challenging” scenario in its International LNG segment; foreign currency depreciation in key LatAm regions; and new regulatory framework and lower remuneration in electricity distribution in Spain.
“The Covid-19 has posed significant challenges to business activities and introduced a high degree of uncertainty on economic activity and energy demand on a global scale,” the firm said.
Natural gas demand in Spain has decreased on average by 9.7% during the first half the year when compared to previous year. Across Latin American, gas demand dropped by around 13.9%.
Naturgy’s gas sales were down 23.7% in 1H20, following a 61.8% decline in sales to third parties, a 17.7% retraction in sales to industrial clients, and a 16.4% decrease in retail sales due to mild weather conditions.
Although the company was still able to report a profit and not a loss, the financial performance has also been impacted by lower commodity prices. (See related story)
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