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PGNiG cuts output forecast

Poland's gas monopoly PGNiG cut its 2009 domestic production forecast from 4.6 billion cubic metres to 4.3 Bcm, it said today.

The company produces about one-third of the gas it sells and imports the rest, a Reuters report said.

Meanwhile, the company posted an unexpected net loss of 310 million zlotys ($84.33 million) in the fourth quarter due to high import prices and oil price falls.

The fourth quarter net loss was nearly twice as big as the worst analyst expectations of a 162 million zloty net loss, and significantly lower than the 53 million average in the Reuters poll.

"The results are much lower than market expectations all across the board, smashed by sky-rocketing import gas prices," said BZ WBK analyst Pawel Burzynski.

PGNiG's revenues rose 8.7% year-on-year to 5.52 billion zlotys thanks to higher gas tariffs introduced by the market regulator in 2008.

However, the higher tariffs were insufficient to offset rising prices of imported natural gas, which rose 87% in the fourth quarter, pushing the monopoly to a 602.9 million zloty operating loss in the fourth quarter.

PGNiG imports about two-thirds of the roughly 13 billion cubic metres of natural gas it sells, mainly from Russia, and the rest it extracts from its domestic gas deposits.

Although the 2008 operating loss and net loss are lower year-on-year, the 2007 results were lowered by a 1.2 billion zloty one-off charge.

"Once the one-off is adjusted for... the operating priofit in (the) fourth quarter was 1.02 billion zloty lower and the net profit was 877 million zloty lower," the company said in a statement.

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