# Naturgy’s profit rises on LNG gains, soothing shareholders
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-07-24
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Naturgy Reports 88% Profit Jump Boosted by LNG Business
Meta Description: Discover how Spanish power utility Naturgy's strong LNG earnings are pleasing shareholders and reshaping the company's future. Read more here.
URL: https://financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-ofhtml

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# Naturgy’s profit rises on LNG gains, soothing shareholders

By Pietro Lombardi

MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors.

Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority.

Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive.

Naturgy’s first-half [net profit](https://www.financedigest.com/sabadell-doubles-q2-net-profit-lifts-guidance-for-2023.html "Sabadell doubles Q2 net profit, lifts guidance for 2023") jumped to 1.05 billion euros ($1.16 billion), boosted by its liquefied natural gas (LNG) business.

Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner.

Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding [“cash flows](https://www.financedigest.com/aegon-bets-on-transamerica-to-boost-cash-flow-and-dividend-in-2025.html "Aegon bets on Transamerica to boost cash flow and dividend in 2025") also beat our expectation,” and debt fell more than expected.

After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this [year and hedging gains had boosed profits](https://www.financedigest.com/taylor-wimpey-expects-full-year-profits-to-halve-amid-housing-gloom.html "Taylor Wimpey expects full-year profits to halve amid housing gloom").

In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said.

After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO.

Earlier this month, the company raised the dividend floor to 1.40 [euros a share](https://www.financedigest.com/asia-shares-subdued-yen-shunned-as-euro-shines.html "Asia shares subdued, yen shunned as euro shines"), from 1.20 euros.

Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025.

Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy [businesses into two listed](https://www.financedigest.com/exclusive-softbank-considering-us-listing-for-its-paypay-business-sources.html "Exclusive-SoftBank considering US listing for its PayPay business – sources") companies.

The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical.

“We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia.

($1 = 0.8986 euros)

(Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)


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