I'd like to thank you for attending this phone conference, organized for the presentation of the financial results for first half 2023. The conference will be recorded. It will be held in Romanian with simultaneous translation into English. If you would like to hear this phone conference in English, you have to use the Zoom button for English. The presentation material can be referred to on Transgaz website at the section investors relations financial reporting. On behalf of Transgaz, Ms. Elisabeta Ghidiu, Director of Corporate Management Division attends, Mr. Marius Vasile Lupean, Chief Financial Officer, Ms. Elena Sasu, Accounting Director, my colleague Edit Malcher, and translations, my colleagues, Alina Veres and Alexandra Fodor. I would give the floor to Ms. Elisabeta Ghidiu. Hello, everyone. I would like to thank you for attending this conference for the presentation of the unaudited interim financial statements for half one. I would like to pass on the greeting of Mr. Sterian for participating in the conference and for being here. He has always supported the economic activity, he's very present in this area and created a constructive relationship in this area. We'd like to thank you for your cooperation in this respect. I hope we will cooperate very well. Your support is well appreciated by us, and we will be eager to answer your questions related to the presented results. I pass on the floor to Mr. Lupean to present the results, and after all, we'll have a briefing in order to be able to answer your questions, as we have accustomed you, or asked you to. I would like to thank you and to pass on over to Mr. Marius Lupean. Thank you. I will start, as my colleague, Ms. Ghidiu, said. I will start with the, the brief enumeration of the facts leading to Transgaz results for six months, first half 2023. I will start with the, the factors influencing the revenue. The operating revenues, as, as you have seen, the financial results, it is similar to the one recorded during the previous year. I would like to remind the fact that the revenues from transmission remained unchanged for the last two years, but starting with 1 September 2023, for the gas transmission activity, a different revenue was approved, which increased by 60%. The revenues from transmission services will be recorded in the financial statements starting with the fourth quarter of 2023. The factors with an influence on the revenues are the following: The revenues obtained from Balancing Activity increased by RON 40 million. The revenues by the Auction Premium by RON 47 million, increased capacities by RON 37 million with the megawatts positive influence. The tariffs for Capacity Booking lower by RON 0.35. The tariffs were not changed during this period, but out of the structure of the product, so this tariffs, this lower tariff, resulted. The capacity, short-term capacity products being more expensive than the long term, and the Capacity Overruns higher by RON 13 million as compared to the same period of the previous year. The revenues obtained from the Commodity Component, lower by RON 1.7 million. This decrease was generated by the decrease in the transmitted quantity by 2%. The revenues from international transmission increased by RON 16,000 as compared to the previous period of the for previous year. They are related to the termination of the legacy contract with Gazprom. They were provisioned, fully provisioned for 6 months. Gazprom failed to pay the amount. For Transgaz, starting with October 2022. Transgaz has taken the relevant actions to hire a law firm- ... in order to start an arbitration against Gazprom to, to recover such amounts. The revenues from the balancing activities decreased by RON 277 thousand. It is a neutral activity, this balancing activity, and this decrease is also related to, to the, the expenses related to the balancing activity. This was mainly determined by the trading price, lower by 219, with a negative influence of RON 208 thousand, and a quantity lower by 138 MWh. This activity, balancing activity, is a neutral activity without any impact on Transgaz profitability and indicators. The revenues from construction activity are lower by RON 69 thousand. The such revenue is related, is related to the, the cost for the construction activity, so they have no impact upon Transgaz profitability and indicators. As regards financial revenue, they decreased by RON 152 thousand, mainly due to the recording of the discounts of the regulated assets value to the inflation rate, compared to the 9.95% for the first half of 2022. A RON 92 thousand, as at June 2023, compared to RON 185 thousand as at 30th June 2022. Another factor determining the reduction of the financial results was the fact that last year, revenues from participations in EUROTRANSGAZ. Well, this did not happen this year. As far as the operating costs are concerned, they increased by 8%, their level being by RON 50 million higher than the one recorded in the previous year. The company has made savings, mainly on the technological consumption, RON 16 million, due to the gas quantities for the technological consumption, lower by 131,000 MWh, and the average procurement price higher by RON 16,000, with a negative influence of RON 5 million. Also, savings were recorded in the provision expenses in amounting to RON 38,000. The main factor that determined that decrease is the fact that the provision for the reduction for the voluntary leaves or the voluntary leaves were made to an extent of 30% in the first half of the year, which influenced the revenue on provisions as at the thirty-first of December. Overruns of personnel expenses, depreciation expenses, expenses with maintenance, monopoly tax, and other operating expenses by RON 45 million. In the first quarter of last year, in the first part of the year, on the provision passed on to revenues for Electrocentrale Bucuresti, amounting to RON 100 billion, which did not occur this year. They would have been recorded and cashed in 2022. As far as the financial expenses are concerned, a decrease of RON 20 million was recorded due to the decrease in the share capital in Eurotransg az and the increase in the interest expense. The interest expense increased due to the fact that the capitalization stopped. The interest expenses for major investments were stopped because of the completion of the investment, of those investments. The financial results display such such results, and you can find them there. All such factors determined a gross result lower by 60%, RON 128 million, compared to the previous year. As I also said in the beginning of the conference, 2023, the first half of 2023, resembled with the first semester of 2022, which the Regulated Revenue were not adjusted, and this determined the, the recording of operating profit, which made a difference. The difference was the fact in the decrease in the revenues for the financial expenses, mainly the ones determined by the reduction in the inflation from the Concession Agreement. Mainly, these are the factors. All the, these, reasons and substantiation are available in the report issued by the Board of Administration and in the financial statements, which are presented in more detail. You can find the relevant information there and in the presentation, which was, published on our website. If there are any questions, please feel free to ask. {Foreign language} buna, buna ziua. Iuliana Ciopraga from- Hello. Ms. Cepraga. I have some questions, but no- not only related to the results for first half, but related to the investment plans and the, the recent announ- announcement regarding the funding under the Modernization Fund. The, the major investment project is the connection of BRUA to the Black Sea. I wanted to ask you, how much, what percentage of it will be funded by grants? Do, do you have a more clear image now? For the moment, EUR 85 million grants are insured, but we applied for other amounts. EUR 85 million grants for the Black Sea connection. Black Sea, Black Sea connection, Black Sea Podișor. With respect to the fact, it will be reflected into the RAB, do you have any idea how will it be made? We asked for an advance for the project of Black Sea connection, the profit related to the Black Sea Port shore. ANRE did not approve this acknowledgment, advanced recognition. They will be constructed and implemented partially. This revenue, with informations were published on the website for 2023 down to 224, does not comprise the advanced recognition of the Black Sea project. When will it be commissioned? The construction deadline is for two and two years, and the commencement order was issued this year during the summer. I know that the works were announced, but I was not aware if they started or not. The commissioning is estimated for 2025. Starting with October 2025, this investment should be reflected into the RAB, R-A-B. What is the total investment? This number, the amount, is, is Has not changed. No, the estimations depend upon the respective contracts by adjustments, will depend upon the variation of the material cost, but maximum, EUR 500 million. Apart from this project, are there any other significant projects to be financed from the Modernization Fund? The funds you like to access are substantial. The amount you talk about do not include the one from the Modernization Fund. Are they separate? Yes, they are separate. We are talking about the, the EUR 85 million only for the Marea Neagră Port shore project, Black Sea Port shore project. We will apply in addition for other funds, for other different projects. Out of this EUR 154, EUR 85 are for Black Sea Port shore. You did not divide each other, the other? Yes. Okay. As far as I remember, the other projects were not- You did, you did not have a FID for them. Am I right? If we look into the CapEx in the Ten-Year Development Plan, the only one who had a major FID was, this Marea Neagră, Black Sea Port shore. Yes, you are right, but they were updated and they are being updated. They are in the procurement procedure. Where can we find the last list with the project that have the financial investment decision? There is no list in the current development plan because they were presented as major project. They were not presented as major project, but they are presented as a project in the development plan. We will update this situation, and you will be able to see them. Where can I find such project? We have a financial investment decision. I, can I find them in the Ten-Year Development Plan? In the development plan, the one which are marked with the financial investment decision, are mentioned as conditional upon the obtaining such funds. They are in addition to the ones who had a financial investment decision, so I understand. Those EUR 85 million are part of the EUR 554 ones. Am I right? The announcement was that you applied for them, not that you received them. The 85 are only potential. Do I understand correctly? No. 85 are about to be, is signed. The, the, the contract is not signed yet, they are about to be signed, they are sure. The financing contract is not approved yet, it will be approved soon. Do I understand correctly that you intend to obtain additional financing, financing in addition to this? Yes. Yes, of course. Yes, grants. We are talking about grants now. Do, you do not know for sure? It depends on the National Development Plan. We communicated the request, the results will be also communicated when we will have it. Can you tell us what amounts did you apply for in addition to the 85 ones, so that we have an idea of the grants which will influence? I think it would be best to communicate you in the in the next meeting, when we will have greater clarity on the grants to be obtained. It is premature to say now the exact amounts. We requested some money for the Black Sea offshore when they were... when the 85 were applied for, so it's premature to talk about that now. When we'll have a greater clarity, we will communicate it to you. From what other project, out of these 550 ones, what other projects are included? Which is the part financed by the companies? What will, will it bring to the RAB? What will be the impact upon the RAB? It... Which is the, that part, which will influence the RAB, a percentage maybe, an average percentage in the investments that will be, invested from such funds? We intend to finance 20% and 80% from grants. So 20%-30% will be the, the part, financed by the company. Okay. She, Mr. Cristian Petre would like to ask a question. Hello. some clarification. 20%-30% of the project is to be funded by European funds? No, 20, 30 to be funded by Transgaz, and the rest by grants. It is only an initial discussion. This is what we, we asked for, what we applied for, but we will see how much is going to be approved. The, the ones with the grants will not be included in the RAB, but they will be remunerated by 2% in addition. The second question: the project, Black Sea offshore, amounts approximately to EUR 500 million, which you have, already covered by grants. I mean, EUR 85 million. Yes, but the grants agreement was not signed yet. First, you mentioned that the tariffs have not increased for two years. You mentioned that the transmission tariffs will increase by 60%. No, no, no. The regulated revenue is RON 1.6 billion. The structure can be RON 1.65 billion. The last approved regulated revenue was- Okay, thank you. It increased 60%, but there are two years since then. The inflation increased and the costs over last year was an exceptional year, and we hope that this year will be exceptional. This increase, even if it would have been made in stages, and we've had different revenue the last year and this year. Okay. Okay. The last value was RON 1.1? Yes. Okay. Thank you. No other questions. If you have any other question, please feel free. Yes, one more clarification regarding transit. Transit will vanish completely, actually, starting from 2024? Yes. Not in principle. Yes, at the end of 2023, there will be no more transit. Everything is assimilated from the transmission revenue? Yes, that's right. I just wanted to make sure that I understood correctly. Yes, you're right. If there are any other question, please feel free to ask. Yes, I would have a question. I noticed that in this semester, the transmitter quantities were significantly lower than the planned ones, and my question is: Do you plan to revise the annual budget, or which was the reason that contributed to such differences? Thank you. Yes, the budgeted quantities are based on an estimate made in December. The quantities decreased as compared to previous years by 2%. The decrease is not dramatic to say so. We do not plan to revise the budget, as it does not fulfill the condition to revise the budget by the budget law. You saw that the quantities decreased, but compared to the budget, the indicators look better than the ones which were estimated in the beginning of the year. There will be no revision. We do not intend to make a budget revision for 2023. The quantities, I would like to repeat, in the first semester did not decrease significantly as compared to the same semester of the previous year. Okay, thank you. You're welcome. I had an additional question, please, related to dividends and what you used this year. This year, did You did not distribute 50%, you kept the part for investments. Is it possible to see a similar phenomenon this year? Last year, you had a lot of financial revenue, which were not actually cash, and this, this is why you resorted to this measure. Such financial revenue that determine this variation from year to year is a non-cash revenue. This will happen in 10 years' time, at the end of the concession contract, or maybe it will not happen if the transmission will continue to be performed, if we have a transmission activity. For sure, there will be 50%, a minimum of 50%, because this is what the law requires. Will you decrease in investments? Because out of the profit of 2022, you decreased something for investment. Will you do the same this year? We will see at the end of the year. It's the decision of the Board of Administration. It is very hard for me to predict this, but for sure, if it is necessary, if resources are needed, financial, financial resources are needed, this is an option. Practically, next year, it will improve. You have a revenue which improved, so the financial indicators will look better. If you preserve the policy that you applied this year, it will be pretty weak, but it would have been better to have a clear view if you distribute 50% or not. You do not distribute 50% if you put aside some money for investments. Yes, this is the, the decision of the Board of Administration, and they will decide after all. What I would like to say is that in the, in the period with major investments, it is healthier to invest than to distribute dividends. It, it would be not the best decision, but the investment plan of Transgaz is huge every time, so we will actually not be able to expect dividends. No, I do not say that when there are investment periods, I underline it each time. When there are investment periods, the shareholder has to decide what he wants. I, for sure, you can ensure development, but it's for the shareholder to decide if he wants investments or the investment fund budget. Black Sea is a major project. Not all projects are major. As in our previous year, this year is a year when the revenues are what they are, because the transmission tariffs was kind of blocked. Next year, these projects will be commissioned, they will generate cash, and dividends will be distributed to shareholders for sure. There's practically, there is not a risk this year, probably also extended to 2024, because they will not be commissioned in 2024, probably in the end of 2025. No, I do not say that it is a risk. I would like to say that such revenue, such adjusted revenue, will be reflected more in the following year. Yes, you're right. It depends on the cash, and the shareholder will decide accordingly. I cannot predict it now. It will be possible for shareholders to decide to, to distribute 100%, how the case was last year. It will be analyzed and subsequently decided. No, I thought that this decision took into account the fact that the profit of 2022 came from the financial revenue, which was non-cash. This year, it is clear that it is contributes lower to the net profit because the revenues are lower. This was my curiosity, if this was taken into account. This is why I wanted to ask, but I think it was taken into account. Yes, it will be taken into account in the end of 2024. Okay, thank you very much. Mr. Florin Turcas would like to ask a question. Hello. You have an increase of the adjustments for the depreciation of the commercial receivable, RON 40 million. Can you tell me what they are and how you could avoid having such amounts? Mainly, it is generated by the provisions we have in relation to Gazprom Export. As I mentioned at the start of my presentation, Gazprom Export fails to pay its invoices starting with October 2022. Everything related to Gazprom Export, amounts to EUR 30 million were provisioned in full. We took actions to hire a law firm to defend us, to start the arbitration procedure against Gazprom. Until up to the moment we get a decision, we will have a full provision. There are We, we have made, we have prepared letters, and everything that the company had to do was done, but we have to go to court and to receive an order. Such information can be referred to in the financial statements. RON 60 million in provision for Gazprom, and there are some receivables, outstanding receivables, and for the moment, RON 40 million. Are there any questions? If you have no other questions... Are there any other questions? You mean 631 is the value of the RAB for now, adjusted with the inflation. I, I wanted to check the figures. No other questions? We remain available to, to take any questions delivered by you by email, and we will provide answers to you. If you consider necessary to make other planifications, plans, and for, for the moment, you are not ready to ask questions, you, you could ask questions by email, and we will come back to you. This pass-through costs for October 2024, RON 98 million, what do they represent? I remember that they were the taxes related to salaries. The royalties are not so high as far as I've seen. Such a cost, RON 98 million pass-through costs. Just one second, please. Yes, it's the interest that was not capitalized mainly. Is it about interest? Interest at pass-through costs? Yes, at pass-through costs is also the interest from the investment project cost after the investment in the project. We have to pay an interest. This is an element that will probably disappear because it is a new year? Or no. The interest is until the payment of the loan. It will decrease as the credit is paid. Is this? The interest is recognized also? Yes. This is, this is something new. They were not recognized. It is new. It's for the current regulatory period from 2019, the methodology related to 2019. The, the, the interests are recognized now. Yes. It's not all interest, but all those related to major investment projects. You're right. Okay. In this pass-through cost is interest. I suspect it's we are talking about the annual interest, not something historic, but. Will it decrease similarly? Yes. Yes. It is the interest related to the period. Oh, okay. It is not something recognized for the previous year, for example, where you're at the level of 2023, 2024. I just wanted to check whether I understood correctly. I'm glad that I asked. Are there any other questions? If not, we'd like to thank you, and we are looking forward, as I said, before, to your additional question, if there are many. Excuse me, please. I, I failed to look on the components and the regulated... What is SR minus RON 300 million? They are the, the chief revenues in addition- Okay. -to the ones. So the following one, the correction related to the year 2023, I suspect will vanish in the beginning of 2024. Including the efficiency increase? Yes, including the efficiency increase, because it is the last year we have such an increase. Actually, we will witness a significant increase. Yes, you're right. I, I'm so sorry. I'm so sorry I interrupted you when you wanted to close the conference. We have no intention to close the conference. We have several times if there are any additional questions, so we are glad to answer. Thank you very much. Thank you, too. Goodbye. Have a nice day. Goodbye. Have a nice day.