INTERIM FINANCIAL STATEMENTS FOR 1H 2020 (UNAUDITED) Prepared in - PowerPoint PPT Presentation

INTERIM FINANCIAL STATEMENTS FOR 1H 2020 (UNAUDITED) Prepared in accordance with IFRS - UE 2020 SEPTEMBER 3 1

Summary 1. Interim Income statement as of 30.06.2020 2. Interim Balance sheet as of 30.06.2020 3. Main revenue drivers 4. Main costs drivers 5. Main business drivers 6. Main indicators 2

1. Interim income statement as of 30.06.2020 (1) MAIN INDICATORS CHANGES 1H2020/1H2019 THOUSAND LEI 30.06.2020 30.06.2019 Absolute Relative Operational income before the balancing and construction activity according to IFRIC12 759.029 774.994 -15.965 97,94% Revenue from the balancing activity 111.953 -71.256 183.208 61,11% Income from the construction activity according to IFRIC12 673.000 297.898 375.102 225,92% Financial income 42.417 33.199 9.218 127,77% Operational costs before the balancing and construction activity according to IFRIC12 517.072 560.033 -42.961 92,33% Cost of balancing gas 111.953 183.208 -71.256 61,11% Cost of assets constructed according to IFRIC12 673.000 297.898 375.102 225,92% Financial expenses 7.228 16.433 -9.205 43,98% Profit before tax 277.146 231.726 45.419 119,60% Profit tax expense 45.978 36.225 9.752 126,92% Net profit for the period 231.168 195.501 35.667 118,24% EBITDA 346.836 311.739 35.097 111,26% Turnover 851.174 938.808 -87.634 90,67% Thousand Lei 346.836 311.739 277.146 231.726 231.168 195.501 Profit before tax Net profit for the period EBITDA 3 30.06.2020 30.06.2019

1. Interim income statement as of 30.06.2020 (2) MAIN INDICATORS CHANGES THOUSAND LEI 1H2020/1H2019 30.06.2020 30.06.2019 Absolute Relative Revenues from domestic gas transmission activity 677.824 582.317 95.507 116,40% Revenues from international gas transmission activity 59.231 170.431 -111.200 34,75% Other revenues 21.974 22.246 -272 98,78% Operational income before the balancing and construction activity according to IFRIC12 759.029 774.994 -15.965 97,94% Employees costs 206.906 189.003 17.903 109,47% Technological consumption, materials and consumables used 49.996 58.981 -8.985 84,77% Expenses with royalties 73.705 75.275 -1.569 97,92% Maintenance and transport 9.282 10.777 -1.495 86,13% Taxes and other amounts owed to the State 31.994 -16.032 48.026 66,62% Revenues/ Expenses with provision for risks and expenses -7.863 -7.996 133 98,33% Other operating expenses 48.172 -41.016 89.188 54,01% Depreciation 104.878 96.778 8.100 108,37% Operational costs before the balancing and construction activity according to IFRIC12 517.072 560.033 -42.961 92,33% 241.957 214.961 112,56% Operational profit before the balancing and construction activity according to IFRIC12 26.996 Thousand Lei 774.994 759.029 560.033 517.072 241.957 214.961 Operational income before the balancing and Operational costs before the balancing and construction Operational profit before the balancing and construction construction activity according to IFRIC12 activity according to IFRIC12 activity according to IFRIC12 30.06.2020 30.06.2019 4

2. Interim Balance Sheet as of 30.06.2020 CHANGES 30.06.2020 31.12.2019 THOUSAND LEI Absolute Relative FIXED ASSETS 5.214.185 4.484.129 730.055 116,28% CURRENT ASSETS 1.034.686 1.285.039 -250.353 80,52% TOTAL ASSETS 6.248.871 5.769.168 479.702 108,31% EQUITY 3.830.967 3.781.940 49.027 101,30% LONG TERM DEBTS 1.680.470 1.489.789 190.681 112,80% CURRENT DEBTS 737.433 497.439 239.994 148,25% TOTAL DEBTS 2.417.903 1.987.228 430.676 121,67% TOTAL EQUITY AND DEBTS 6.248.871 479.702 108,31% 5.769.168 6.248.871 5.769.168 3.830.967 3.781.940 2.417.904 1.987.228 TOTAL ASSETS EQUITY TOTAL DEBTS 30.06.2020 31.12.2019 5

3. Main revenue drivers (1) 2.000.000 Revenues 1H 2020 vs. Revenues 1H 2019 (thousand lei) 1.800.000 1.600.000 1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 - 1H2019 Revenues Revenues from the Capacity booking Financial revenues Revenues from the Revenues from Volumetric Other revenues 1H2020 Revenues construction component international balancing activity component activity transmission activity 6

3. Main revenue drivers (2) 1H2020 compared to 1H2019 Operating revenue before the balancing and construction activity, according to IFRIC12 decreased by 2% as compared to Semester I 2019, which is lower by lei 15.965 thousand The revenue was influenced mainly by the following factors: revenue from capacity booking higher by lei 155.058 thousand due to: • - capacity booking tariff higher by 9.250.046 MWh, with a positive influence of lei 20.131 thousand; - booked capacities higher by 0,67 lei/MWh, with a positive influence of lei 134.927 thousand, increase mainly determined by the invoicing of revenue from the auction premium, following the capacity booking auctions performed according to the CAM-NC by interconnection points; commodity component revenue lower by lei 59.551 thousand due to: • - the commodity transmission tariff lower by lei 0,74 lei/MWh, with a negative influence of lei 51.931 thousand; - the gas transmitted capacities lower by 3.318.172 MWh/337.992 thousand cm ( ▼ 5%), as compared Semester I 2019, with a negative influence of lei 7.620 thousand, detailed by categories of consumers as follows: 6 months 2019 6 months 2020 Differences MWh 27.775.663 26.331.627 -1.444.036 Quantity transmitted for direct consumers thousand m 3 2.607.415 2.456.197 -151.218 MWh 45.504.092 43.629.956 -1.874.136 Quantity transmitted for distribution thousand m 3 4.238.520 4.051.746 -186.774 MWh 73.279.756 69.961.583 -3.318.172 Total thousand m 3 6.845.935 6.507.943 -337.992 The tariffs decreased in 01.01-30.06.2020 as compared to 01.01-30.06.2019 was mainly triggered by: Order 10/2017 of the ANRE President on the amending and supplementing of Order 32/2014 of ANRE President on the approval of the Gas Transmission Regulated Revenue, Total • Revenue and Regulated Tariffs Methodology, which establishes the increasing by 5% per year of the percentage by which the approved revenue is recovered by the application of the capacity booking tariff, up to 85%, and the decreasing of the percentage by which the approved revenue is recovered by the application of the commodity tariff. In gas year 2018- 2019 the variable component of the total revenue at the basis of the commodity tariffs is 30% of the total revenue and in gas year 2019-2020 it decreased to 25% of the total revenue; the nonrecognition of the monopoly tax by ANRE in the category of the costs passed-through and implicitly in the regulated revenue at the substantiation of the tariffs for gas year • 7 2019-2020.

3. Main revenue drivers (3) 1H2020 compared to 1H2019 • international gas transmission revenue lower by lei 111.200 thousand due to the termination of the transmission contract with Gazprom Export Ltd for the Isaccea 2 - Negru Voda 2 pipeline and regulation of the Isaccea 1 – Negru Voda 1 pipeline transmission revenue according to the methodology approved by ANRE Order 41/2019 following the connection of this pipeline to the National Transmission System from 1 October 2019; • other operating revenue lower by lei 272 thousand . Revenue from the balancing activity decreased by lei 71.256 thousand based on the following factors: - trading price lower by lei 41,74 lei/MWh, with a negative influence of lei 73.278 thousand. - quantity higher by 19.165 MWh with a positive influence of lei 2.022 thousand. Revenue from the construction activity higher by lei 375.102 thousand , registered in line with IFRIC 12, according to which revenue and costs related to the construction activity or the improvement of the transmission network, in exchange of which the intangible asset is registered, must be acknowledged in line with IAS 11, Construction Contracts. Financial revenue has a positive influence of lei 9.218 thousand due to the increasing of exchange gain. 1H 2019 1H 2020 Revenues from the domestic transmission activity, due to: 582.317 677.824 - Volumetric component 165.193 105.642 - Capacity booking component 417.124 572.182 8

4. Main costs drivers (1) Expenses 1H 2020 vs. 1H 2019 (thousand lei) 1.700.000 1.500.000 1.300.000 1.100.000 900.000 700.000 500.000 300.000 100.000 1H2019 Cost of assets Employees Depreciation Cost of Expenses with transmission Expenses with Other Taxes and Cost of Financial Maintenance Royalties 1H2020 Expenses constructed costs repairs provisions for system gas balancing gas operating other auxiliary expenses and transport Expenses risk and consumption expenses amounts materials and expenses owed to the other material state expenses 9