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2021/06/25 / Erste Group Research

NET4GAS: Solid business model, credit metrics still to improve

NET4GAS reported consolidated group revenues of CZK 10,029mn (+24.5% y/y) for the financial year 2020. This increase is primarily attributable to the capacity expansion of the transit network as well as the strong development of short-term transit sales. Profitability remained at the very high level of previous years’, significantly exceeding the segment average and the peer median. Operating results have continuously improved since 2017, resulting in a positive development of credit metrics over the past few years despite roughly constant net debt levels. When compared to peers, however, credit metrics still show some room for improvement.

Due to the strong and mostly predictable cash flows from long-term contracts and the group's strategically and geographically important position, the pandemic has had 'no material operational or financial impact' on NET4GAS, according to the management. At the end of 2020, Moody's and Fitch affirmed their ratings.

The management does not provide any guidance for the financial year 2021. The decarbonization process is seen as a medium-term challenge for the utilities sector in general. NET4GAS considers natural gas as a transitional solution and is conducting joint studies with other European gas network operators on how a European (green) hydrogen backbone infrastructure could be developed in the coming years with the significant contribution of the existing infrastructure.

As of ESG, no data is disclosed by the company.

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General information

AuthorErste Group Research
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusCzech Republic
Currency in focusCzech Koruna
Sector in focus-


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