Gas Natural Fenosa posts net profit of 793 million euros and EBITDA of 3.14 billion euros up until September

Transcription

1 Press Room Spain Press releases Home / News / Press releases / Content in detail Gas Natural Fenosa posts net profit of 793 million euros and EBITDA of 3.14 billion euros up until September The annual net profit forecast for the current year remains between 1.3 and 1.4 billion euros. This falls in line with the strategic plan and is subject to the operational sales closure calendar in Italy. The international networks and generation businesses continue to perform well, accounting for over 75% of the EBITDA as a whole. Gas distribution in Latin America grew by 15.9% due to the figures from Chile, Mexico, Brazil and Argentina. In terms of international generation, the EBITDA rose 14.2% on the previous year as a result of good performance in Mexico. It is worth noting the increasing weight of renewable energies in the company s mix following the award of over 900 MW of wind power and photovoltaic power, which will require a total investment of around 900 million euros (approximately 500 million forecast for 2018). The Board of Directors approved an interim dividend for 2017 of 0.33 euros/share, to be paid fully in cash on 27 September. The company is maintaining its remuneration commitment of 1 euro/share. Overall performance shrank due to the adverse weather conditions in Spain (leading to a 72.4% decrease in hydropower generation) and the impact from natural disasters, mainly in Chile and Mexico. Owing to their value creation for shareholders, it is also worth noting the successful agreements reached by the company in terms of both retail sales for gas distribution in Spain (which will have a positive impact on equity amounting to around 1 billion euros) and total sales in Italy (which will produce gains of around 190 million euros after tax). The management of financial liabilities is contributing to a steady improvement in results. Hence, the average cost of debt has fallen from 4.3% to 3.6% a decrease of 70 basis points on the previous year. GAS NATURAL FENOSA obtained a net profit of 793 million euros in the first nine months of 2017, 14.7% less than the same period from the previous year, while the EBITDA stood at 3.14 billion euros, down 7.4% on the period January-September 2016 following restatement due to the discontinuation of gas distribution and marketing businesses in Italy and in adjusted terms that do not consider Electricaribe. This reduction is mostly accounted for by the electricity business in Spain, the progress of which has been affected by weather conditions resulting in a significant decline in hydropower generation by GAS NATURAL FENOSA (down 1/16

2 72.4%). The gas distribution business accounted for 42.8% of the overall consolidated EBITDA; electricity distribution, 25.9%; gas operations, 17.4%; and electricity operations, 15.2%. The EBITDA resulting from overseas business by the company accounted for 50% of the total, compared with 45.2% in the same period from the previous year. The provisions for amortisations and impairment losses to 30 September 2017 amounted to 1.25 billion euros (down 3%). This was mainly due to the extended useful life of combined cycle power plants from 25 to 35 years. Overseas investments on the rise GAS NATURAL FENOSA invested a net total of 1.13 billion euros between January and September The main focus for investment by the group up until September was focused on the electricity distribution business, accounting for 38.7% of total consolidated material and intangible investments. In turn, the gas distribution business accounted for 32.9% of the total. This is a reduction of 18.3% on the same period from the previous year due to a 55.7% reduction in investments in Spain, which included a part of the investment to acquire new LPG supply points in The investment in electricity distribution in Latin America accounted for 24.4% of the consolidated total (up 12.8%), mainly due to increased investment in Chile, which continues to implement its growth plans. By geographical area, foreign investments represented 61% of the total whilst in Spain it reduced to 39%. Continued streamlining of financial debt The average cost of debt fell by 70 basis points. At 30 September 2017, the borrowing ratio stood at 46.5%. This is slightly lower than in 2016, when it stood at 46.9%. The net financial debt/ebitda ratio stands at 3.5, which is slightly higher than the figure of 3.3 posted in In the third quarter, the company has undertaken debt refinancing and renegotiation worth a total of approximately 3 billion euros in lines of credit and loans, which has enabled the average cost of debt to continue falling and to now stand at approximately 3.6% at 30 September 2017 (70 basis points lower than in the first nine months of 2016). 93.3% of the net financial debt matures in or after 2019 and the average net debt lifetime stands at 5.5 years. At 30 September, GAS NATURAL FENOSA had 9.78 billion euros of liquidity available, equivalent to all financial liabilities over 24 months. Shareholder remuneration The company remains committed to attractive remuneration for its shareholders, with a minimum dividend of 1 euro/share. The shareholder remuneration proposal, approved by the Shareholders General Meeting on 20 April, meant allocating the same amount as last year to dividends a little over 1 billion euros. The proposal involves the payment of 1 euro/share, with a dividend yield of 5.6%, when taking the listed price of euros/share on 31 December 2016 as the reference. The Board of Directors approved an interim dividend for 2017 of 0.33 euros/share, to be paid fully in cash on 27 September /16

3 At 30 September 2017, the equity held by GAS NATURAL FENOSA amounted to billion euros. Gas distribution in Spain The distribution network in Spain has grown by 1,194 km. EBITDA from the gas distribution business in Spain came to 680 million euros, up by 4.1% from the same period last year. This increase is basically associated with piped liquefied petroleum gas activity after the purchase of supply points in the last quarter of Sales from the regulated gas business in Spain rose by 5.6% when compared with the figure posted at the close of the third quarter in 2016 to 138,583 GWh. Residential demand stood 3.6% below the figure posted in the same period of the previous year. Growth in demand was mainly in the industrial market with an increase of 7.2% (up 4,775 GWh) in the sector under 60 bars and an increase of 13.5% (up 3,685 GWh) in demand from transport and industry of over 60 bars. The distribution network expanded by 1,194 km in the first nine months of 2017 to a total of 53,150 kilometres. The number of supply points at 30 September stood at 5,348,000 (up 0.7%). Gas distribution in Latin America grows 15.9% For the first time, the number of supply points in Latin America has surpassed 8 million. The EBITDA from gas distribution in Latin America stood at 664 million euros, an increase of 12.6% from activity and 15.9% when considering currency exchange performance.per country, the EBITDA posted in Brazil was a notable 209 million euros (31.5% of the total), Mexico posted a figure of 137 million euros (20.6% of the total), while Colombia and Chile contributed 104 and 175 million euros to the EBITDA, respectively. The EBITDA from Argentina amounted to 42 million euros, very similar to the figure posted in the same period of 2016, following the entry into force (on 1 April) of a new tariff framework for all markets although application of the new tariff will take place in three stages. Sales from the gas business in Latin America amounted to 217,029 GWh, up 8.1% on the same period of 2016, especially due to increased sales in Mexico and Brazil. The gas distribution network in Latin America grew by 1,473 kilometres in the last 12 months to a total of 84,251 kilometres at 30 September. Expansion of the network in Mexico made a considerable contribution to this figure, with an increase of 906 kilometres. For the first time, GAS NATURAL FENOSA has over 8 million supply points (8,003,000) in Latin America, a year-on-year increase of 312,000 customers. Particularly noteworthy is the growth in Colombia and Mexico, with 111,000 new supply points in both countries. Electricity distribution in Spain 94% of the meters installed are now smart. The EBITDA from electricity distribution activity in Spain amounted to 460 million euros in the first nine months of the year, up 0.7% on the same period of the previous year. At 30 September, supplied power amounted to 23,884 GWh. This is on par with the previous year due to the warm temperatures recorded this year. Domestic demand stood at 186,880 GWh in September 2017, an increase of 0.7% according to the balance posted by Red Eléctrica de España (REE). At the end of the third quarter, the company had 3,715,000 supply points. This is a net annual increase of 18,579. At the end of the third quarter, 94% of the meters installed were already smart and 91% of billing was done remotely. 3/16

4 The Interruption Time Equivalent to Installed Capacity (Spanish acronym: TIEPI) stood at 29 minutes (disregarding the force majeure resulting from the storms experienced in Galicia during February) and showed a positive trend when compared with the same period of 2016 due to good weather conditions and the absence of other significant incidents. Electricity distribution in Latin America Electricaribe was deconsolidated, leading to a sales decrease of 37.5%. The EBITDA from electricity distribution activity in Latin America amounted to 332 million euros at the close of the third quarter of 2017, down 36%. When discounting operations by Electricaribe from the EBITDA between January to September 2016, the EBITDA from business shows an increase of 1.2%. The EBITDA for Chile and Argentina (CGE) amounted to 253 million euros and showed an increase of 11 million euros when disregarding the exchange rate effect. Distribution business in Panama amounted to 79 million euros. Sales from electricity distribution activity in Latin America decreased by 37.5% to 16,271 GWh, essentially due to the derecognition of Electricaribe. Without this effect, distribution sales would have increased by 1.9%. Overall, supply points at the end of the first quarter totalled 3,700,000. Electricity distribution in Moldova Decrease of 42.9% in contribution to the result owing to the tariff reform. The EBITDA from electricity distribution in Moldova stood at 20 million euros at 30 September, 42.9% lower due to the adjustment applied by the regulator to the approved tariff in March 2017 and reform of the tariff distribution method as from May. Sales from electricity activity stood at 1,999 GWh (up 2.8%) and the number of supply points stood at 886,000 (up 1.1%) at 30 September. Electricity in Spain Hydropower generation by the company shrank by 72.4% this year. The EBITDA from electricity business in Spain (generation, wholesale and retail sales and PVPC supplies) stood at 260 million euros (down 53%). The EBITDA trend was especially affected by weather conditions, with a contraction in hydropower generation by the company of 72.4% when compared with the first nine months of the previous year. When compared with the figures posted in the same quarter of 2016, electricity demand in Spain fell by 0.4% to 62,240 GWh, thus ending the upward trend seen in the last five quarters. GAS NATURAL FENOSA accounts for a 16.6% power generation market share, similar to that posted at the same date in Per technology over this nine-month period, conventional hydropower generation stood at 1,019 GWh (down 72.4%); nuclear generation at 3,341 GWh (up 0.4%); combined cycle generation at 10,060 (up 25.3%); and coal-powered thermal generation at 3,808 (up 25%). Electricity sales in the third quarter stood at 8,964 GWh, including supply in the deregulated and last resort market (voluntary price for the small end-consumer), a decrease of 5.1% in the quarter and 4.7% to date this year. Gas Natural Fenosa Renovables closed the third quarter with a consolidated total installed capacity of 1,147 MW, of which 979 MW came from wind power, 110 MW from mini-hydroelectric generation and 58 MW from cogeneration and photovoltaic plants). 4/16

5 Finally, it is worth noting that GNF was awarded 250 MW of photovoltaic energy on 26 July at the renewable energy auction promoted by the Government of Spain. This joins the 667 MW awarded at the auction in May and together represent a significant increase in renewable power for GNF in Spain. International Electricity Strong growth in the markets especially Mexico reaching a total installed power of 2,770 MW. The EBITDA from Electricidad Internacional stood at 217 million euros at 30 September (an increase of 14.2% on the previous year) mainly due to a greater contribution to the EBITDA in Mexico. In Mexico, the EBITDA rose by 21.3% due to a better margin from contribution stemming from an increased surplus margin, increased availability and performance, and favourable performance by the benchmark indices in contracts, despite a production decrease from Bii Hioxo (down 23.6%) owing to problems caused by the earthquake in Oaxaca. The electricity generated in all assets increased by 4.2% in the period to 13,925 GWh. At 30 September, GAS NATURAL FENOSA had an installed capacity of 2,770 MW worldwide and guaranteed projects in Australia and Chile to build an additional 411 MW by In September 2017, the first photovoltaic generation project by GAS NATURAL FENOSA in Brazil entered commercial operation:, its solar farms Sobral I and Sertao I located in the region of Piauí, northern Brazil, with an installed power capacity of 68 MW (equivalent to 60 MW). Gas: Infrastructure The EBITDA from infrastructure activity, which includes operation of the Maghreb Europe Gas Pipeline and the exploration, production, storage and regasification of gas, rose by 0.5% to 222 million euros in the first nine months of the year. At 30 September, the gas transport business operated in Morocco through the companies EMPL and Metragaz represented a volume of 67,900 GWh, a decrease of 18.4% compared to the same period of This figure includes 40,093 GWh transported for GAS NATURAL FENOSA by Sagane and 27,807 GWh for Portugal and Morocco. Gas: Marketing The EBITDA from gas wholesale and retail supply operations amounted to 325 million euros, a decrease of 15.4% compared to the same period of the previous year. Between January and September, wholesale supply by GAS NATURAL FENOSA amounted to 240,118 GWh, an increase of 11.5%, mainly due to the contribution from international operations (up 26.1%), which amounted to 131,083 GWh owing to the international LNG supply. Marketing to end customers in the Spanish gas market amounted to 109,035 GWh, a 2.1% decrease compared to the same period in As regards the marketing of natural gas in Europe, the group maintains a consolidated position in France, Belgium, Luxembourg, Ireland, Portugal, the Netherlands and Germany. In the period up until September, it posted sales in France amounting to 27.2 TWh to customers in various sectors that range from companies in the industry sector to local authorities and the public sector. Sales in Belgium, the Netherlands and Germany amounted to 12.5 TWh in the same period. The company also operates in the Irish wholesale market, where it sold a volume of 1.2 TWh to September. In the Portuguese market, GAS NATURAL FENOSA remains the second-largest operator in the country, and the largest foreign operator, with a market share of 12% and a sales volume of 4.2 TWh between January and September. 5/16

6 Retail market sales amounted to 16,338 GWh, with 11.7 million active gas, electricity and maintenance service contracts at 30 September. GAS NATURAL FENOSA s combined supply of electricity and gas already reaches more than 1.5 million households in Spain. Consolidated balance account Madrid, 07 November ( millions) 9M17 9M16 Net sales 17,940 16,576 Procurements -12,796-10,940 Gross margin 5,144 5,636 Other operating revenue Staff costs Taxes Other operating expenses -1,150-1,135 EBITDA 3,140 3,582 Other revenue - - Depreciation & Amortisation, and impairment losses -1,247-1,286 Allocation to provisions OPERATING INCOME 1,791 2,078 Financial results Income from disposal of financial instruments - - Income from institutions via shareholding 17 2 EARNINGS BEFORE TAX 1,313 1,453 Corporate income tax /16

7 ( millions) 9M17 9M16 Income from interrupted operations Non-controlling interests PROFIT ATRIBUTABLE TO EQUITY HOLDERS OF THE PARENT Consolidated balance sheet ( millions) 30/09/ /09/2016 Non-current assets 36,945 38,504 Intangible assets 9,904 10,621 Fixed assets 22,903 23,809 Investments via shareholdings 1,517 1,662 Non-current financial assets 1,720 1,331 Deferred tax assets 901 1,081 Current assets 8,874 8,996 Non-current assets held for sale Stock Trade and other receivables 4,563 4,725 Other current financial assets Cash and equivalent liquidity 2,231 3,142 TOTAL ASSETS 45,819 47,500 ( millions) 30/09/ /06/ /16

8 ( millions) 30/09/ /06/2016 Equity 18,060 18,262 Equity attributed to the parent company 14,356 14,477 Non-controlling interests 3,704 3,785 Non-current liabilities 20,672 21,223 Deferred income Non-current provisions 1,251 1,433 Non-current financial liabilities 14,905 15,188 Deferred tax liabilities 2,461 2,653 Other non-current liabilities 1,209 1,104 Current liabilities 7,087 8,015 Liabilities linked to non-current assets held for sale Current provisions Current financial liabilities 3,112 4,194 Trade and other payables 3,099 3,416 Other current liabilities TOTAL LIABILITIES AND EQUITY 45,819 47,500 Distribution business Main aggregates 9M17 9M16 % 8/16

9 9M17 9M16 % Gas distribution (GWh) 355, , Spain 138, , Third-party access to the network* 138, , Latin America 217, , Gas sales 124, , Third-party access to the network 92,465 84, Electricity distribution (GWh) 42,154 51, Europe 25,883 25, Electricity sales 1,999 1, Third-party access to the network 23,884 23, Latin America** 16,271 26, Electricity sales 14,941 24, Third-party access to the network 1,330 1, Electricity transmission (GWh) 10,868 10, Latin America 10,868 10, Gas distribution supply points, in thousands (on 30/09): 13,351 13, Spain 5,348 5, Latin America 8,003 7, Electricity distribution supply points, in thousands (on 30/09): 8,301 10, Europe 4,601 4, /16

10 9M17 9M16 % Latin America** 3,700 6, EFOF in Spain (minutes)*** * Third-Party Access to the network (distributed power). TPA services included in secondary transport. ** 9M16 includes the contribution from Electricaribe to the consolidated amounts. *** Interruption Time Equivalent to Installed Capacity. Distribution business Main aggregates 3T17 3T16 % Gas distribution (GWh) 118, , Spain 39,670 36, Third-party access to the network* 39,670 36, Latin America 79,308 69, Gas sales 46,935 41, Third-party access to the network 32,373 28, Electricity distribution (GWh) 13,870 17, Europe 8,550 8, Electricity sales Third-party access to the network 7,907 7, Latin America** 5,320 8, Electricity sales 4,811 8, /16

11 3T17 3T16 % Third-party access to the network Electricity transmission (GWh) 3,472 3, Latin America 3,472 3, Gas distribution supply points, in thousands (on 30/09): Spain Latin America Electricity distribution supply points, in thousands (on 30/06): Europe Latin America** EFOF in Spain (minutes)*** * Third-Party Access to the network (distributed power). TPA services included in secondary transport. ** 9M6 includes the contribution from Electricaribe to the consolidated amounts. *** Interruption Time Equivalent to Installed Capacity. Gas Business 9M17 9M16 % Wholesale supply (GWh) 240, , Spain 109, , Rest of Europe 45,150 46, LNG International 85,933 57, Retail supply (GWh) 16,338 18, /16

12 9M17 9M16 % Gas transport EMPL (GWh)* 67,900 83, * Maghreb-Europe Gas Pipeline Gas Business 3T17 3T16 % Wholesale supply (GWh) 77,283 71, Spain 34,233 38, Rest of Europe 12,720 14, LNG International 30,330 18, Retail supply (GWh) 545 1, Gas transport EMPL (GWh)* 18,467 30, * Maghreb-Europe Gas Pipeline Electricity Business 9M17 9M16 % Electricity generated (GWh) 33,860 33, Spain 19,935 20, Power Generation 18,228 18, Hydroelectric 1,019 3, Nuclear 3,341 3, Coal 3,808 3, Combined cycles 10,060 8, Renewable and cogeneration 1,707 1, /16

13 9M17 9M16 % International 13,925 13, Mexico (CC) 12,211 11, Mexico (wind power) Brazil (solar) Costa Rica (hydraulic) Panama (hydraulic) Dominican Republic (fuel) Kenya (fuel) Installed capacity (MW) 15,486 15, Spain 12,716 12,714 - Power Generation 11,569 11,569 - Hydroelectric 1,954 1,954 - Nuclear Coal 2,010 2,010 - Combined Cycles 7,001 7,001 - Renewable and cogeneration 1,147 1, International 2,770 2, Mexico (CC) 2,035 2,035 - Mexico (wind power) Brazil (solar) /16

14 9M17 9M16 % Costa Rica (hydraulic) Panama (hydraulic) Dominican Republic (fuel) Kenya (fuel) Electricity Business 3T17 3T16 % Electricity generated (GWh) 11,636 12, Spain 6,775 7, Power Generation 6,334 6, Hydroelectric Nuclear 1,156 1, Coal 977 2, Combined cycles 3,919 3, Renewable and cogeneration International 4,861 4, Mexico (CC) 4,286 4, Mexico (wind power) Brazil (solar) Costa Rica (hydraulic) Panama (hydraulic) /16

15 3T17 3T16 % Dominican Republic (fuel) Kenya (fuel) Installed capacity (MW) Spain Power Generation Hydroelectric Nuclear Coal Combined Cycles Renewable and cogeneration International Mexico (CC) Mexico (wind power) Brazil (solar) Costa Rica (hydraulic) Panama (hydraulic) Dominican Republic (fuel) Kenya (fuel) Scope and subject: Corporation, Financial 15/16

16 Gas Natural Fenosa 16/16