Gas Natural Fenosa makes a net profit of 1,201 million euros in 2010
The net profit for last year illustrates a 0.5% increase in relation to the 2009. The Catalan multinational’s activities in Latin America grew by 30.4%. The energy giant is confident it will reach an agreement with the Algerian company Sonatrach on a pending issue on natural gas price adjustments.
Barcelona (ACN).- Gas Natural Fenosa ended 2010 with a net profit of 1,201 million euros, which represents a 0.5% increase in relation to 2009. These results are the first since Gas Natural merged with Unión Fenosa. The profit before taxes, interests and amortizations was 4,477 million euros, 14.1% more than in 2009. According to Gas Natural Fenosa, its regulated or almost regulated activities in Latino America grew by 30.4% and contributed positively to the 2010 figures. Besides, Gas Natural Fenosa’s CEO, Rafael Vilaseca, was optimistic about the company’s issue with Sonatrach, an energy company from Algeria. A Referee Court from Algeria decided that Gas Natural Fenosa has to pay Sonatrach price adjustments for 2 natural gas contracts, the latter ending in 2021. The price adjustments would be from January 2007 and the quantity claimed reaches 1,970 million euros. Gas Natural Fenosa considers this amount to be excessive and wants to reach an agreement with Sonatrach. Negotiations are ongoing, as well as further legal procedures. Nevertheless, Vilaseca explained that from the 2010 gross profits, the company already put 305 million euros aside for a provision fund.
Tangible and intangible investments reached 1,543 million euros in 2010, 17.6% less in relation to those of 2009, when the company closed combined cycle power plants.
Matter with Sonatrach
Rafael Vilaseca, Gas Natural Fenosa’s CEO stated that “it would be reasonable” to reach an agreement with Sonatrach. He is optimistic about the issue and hopes to agree on a positive solution before summertime. In fact, this conflict made Gas Natural Fenosa’s net profits decrease from what they could have been. The Catalan multinational company decided to put aside 305 million euros for a provision fund to pay Sonatrach. However, Gas Natural Fenosa disagrees on the amount to pay. A Referee Court from Algeria decided that the Catalan company had to pay 1,970 million euros to Sonatrach in relation with two natural gas contracts. According to the Algerian company, Gas Natural Fenosa had to pay some price adjustments from January 2007, which have not yet been paid. Gas Natural Fenosa seems willing to negotiate and agree on a price that would be convenient for both companies’ interests. For this reason, the company created a special provision fund. However, Vilaseca did not want to disclose the total amount of the fund, which received 305 million euros from the 2010 gross benefits. Vilaseca argued that while the company is still negotiating with Sonatrach and the legal procedures are still ongoing, a full disclosure of the company’s provisions and strategy would be negative for its own interests.