Unaudited condensed consolidated interim financial statements for the first half-year 2018

Transcription

1 Unaudited condensed consolidated interim financial statements for the first half-year 2018 Eurogrid GmbH Berlin Page 1 of 17

2 Consolidated income statement 1 Jan to 30 June Jan to 30 June 2017 (restated*) Revenue 5, ,991.4 Cost-matching income (4,618.7) (4,338.4) Revenue from grid business and other revenue Other income Total turnover Cost of materials and purchased services (4,934.7) (4,739.0) Income-matching cost 4, ,338.4 Cost of materials and purchased services, grid business (316.0) (400.6) Personnel expenses (53.2) (49.6) Amortization, depreciation and write-downs (77.5) (73.1) Changes in provisions Other expenses (2.3) (0.8) Result from equity investments accounted for using the equity method (0.7) (0.1) Earnings before interest and taxes Financial result (23.4) (28.0) Financial income Financial expenses (23.8) (29.2) Earnings before taxes Income taxes (59.2) (43.6) Group profit Consolidated statement of comprehensive income 1 Jan to 30 June Jan to 30 June 2017 (restated*) Group profit for the year Other comprehensive income (OCI): Items that will not be reclassified to the income statement in the future: Actuarial gains and losses - - Deferred taxes on changes recognized directly in equity Other comprehensive income after taxes Total comprehensive income The entire total comprehensive income disclosed is attributable to Eurogrid International. * The Group applied IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated. We refer to note 2 in the attached Notes to the condensed consolidated financial statements for more details. Page 2 of 17

3 Consolidated statement of financial position 31 Dec Jun 2018 (restated**) Non-current assets 4, ,582.7 Property, plant and equipment 4, ,484.6 Intangible assets Trade and other receivables Other financial assets at fair value through OCI Other financial assets at amortised cost Investments accounted for using the equity method Deferred tax assets Current assets 2, ,531.2 Inventories Trade and other receivables 1, ,117.5 Receivables from income taxes Cash and cash equivalents 1, ,406.7 Anticipatory assets Total assets 7, , Dec Jun 2018 (restated**) Equity 1, ,357.3 Issued capital* Reserves 1, ,179.2 Total comprehensive income for the year Non-current liabilities 3, ,120.0 Loans 2, ,829.3 Provisions for employee benefits Other provisions Deferred tax liabilities Other liabilities Current liabilities 2, ,301.2 Loans Other provisions Trade payables and other liabilities 2, ,151.5 Liabilities from income taxes Anticipatory equity and liabilities Regulatory items Total equity and liabilities 7, ,113.9 * Eurogrid GmbH s issued capital remains unchanged at EUR 25,000. ** The Group applied IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated. We refer to note 2 in the attached Notes to the condensed consolidated financial statements for more details. Page 3 of 17

4 Consolidated statement of changes in equity Issued capital Total compre- Reserves hensive income Total for the year As of 1 Jan 2017 (as reported) 0.0 1, ,296.6 Changes in accounting policy (IFRS 15)* - (23.0) - (23.0) As of 1 Jan 2017 (restated) 0.0 1, ,273.6 Group profit (restated) Other comprehensive income (OCI) Total comprehensive income Distribution - - (99.7) (99.7) Reclassifications (28.6) 0.0 As of 30 Jun , ,260.9 Issued capital Total compre- Reserves hensive income Total for the year As of 31 Dec 2017 (as reported) 0.0 1, ,380.8 Changes in accounting policy (IFRS 15)* - (23.0) (0.5) (23.5) As of 31 Dec 2017 (restated) 0.0 1, ,357.3 Changes in accounting policy (IFRS 9)* - (0.2) As of 1 Jan 2018 (restated) 0.0 1, ,362.5 Group profit Other comprehensive income (OCI) Total comprehensive income Distribution - - (107.8) (107.8) Reclassifications (73.7) 0.1 As of 30 Jun , ,390.7 * The Group applied IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated. We refer to note 2 in the attached Notes to the condensed consolidated financial statements for more details. Page 4 of 17

5 Consolidated statement of cash flows Cash flow from operating activities 1 Jan to 30 June Jan to 30 June 2017 (restated*) Group profit Adjusted for: Net finance expenses Income tax expenses Depreciation of property, plant and equipment and amortization of intangible assets Gain on the disposal of intangible assets and property, plant and equipment (0.1) 0.0 Impairment of current assets Changes in provisions (70.5) (4.9) Change in deferred taxes 9.6 (33.3) Share of profit of associates accounted for using the equity method, after tax Change in other non-cash items Change in inventories 0.0 (0.3) Changes in trade receivables and other receivables Change in trade payables and other liabilities Change in regulatory items Change in working capital Interest paid (21.1) (21.1) Interest received Income taxes paid (62.4) (38.3) Cash flow from operating activities Cash flow from investing activities Cash paid for the procurement of property, plant and equipment and intangible assets Cash paid/received for the acquisition of financial assets measured at fair value through OCI (previous year: measured at cost) Cash received from disposal of financial assets measured at fair value through OCI (previous year: measured at cost) (123.3) (120.1) - (0.0) Net cash flow from disposals of property, plant and equipment Cash flow from investing activities (122.9) (117.2) Cash flow from financing activities Distribution (107.8) (99.7) Cash flow from financing activities (107.8) (99.7) Change in cash and cash equivalents Cash and cash equivalents as of 1 January 1, ,222.7 Cash and cash equivalents as of 30 June 1, ,586.6 Change in cash and cash equivalents * The Group applied IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated. We refer to note 2 in the attached Notes to the condensed consolidated financial statements for more details. Page 5 of 17

6 Notes to the condensed consolidated interim financial statements for the first half-year 2018 Unaudited condensed consolidated interim financial statements of Eurogrid GmbH Berlin Page 6 of 17

7 Table of contents 1. Basic information Summary of significant accounting policies Basis of presentation Changes in accounting policies IFRS 9 Financial Instruments Impact of adoption IFRS 15 Revenue from contracts with Customers Impact of adoption Seasonal fluctuations Selected explanations on the consolidated statement of financial position Segment reporting Distribution of profit Contingent liabilities and other financial obligations Related party disclosures Subsequent events...16 Page 7 of 17

8 1. Basic information Eurogrid GmbH, Berlin (hereafter Eurogrid or the Company ), is a limited liability company founded in accordance with the law of the Federal Republic of Germany. Via the shareholder Eurogrid International CVBA/SCRL (Eurogrid International), Brussels, Belgium, the Belgian transmission system operator Elia System Operator NV/SA (Elia) and Global InfraCo S.à.r.l., Luxembourg, Luxembourg (Global InfraCo) have shareholdings in the Company. The ultimate parent company is Elia System Operator NV/SA. As a parent company domiciled in Germany, Eurogrid is required to prepare consolidated financial statements within the meaning of Sec. 315a HGB [ Handelsgesetzbuch : German Commercial Code]. Eurogrid has its registered office at Berlin, Heidestrasse 2, and is filed in the commercial register of the Berlin-Charlottenburg district court under HRB B. Eurogrid invests in electric grid infrastructure and holds 100% of the shares in 50Hertz Transmission GmbH. The Group consists of Eurogrid, 50Hertz Transmission GmbH (50Hertz Transmission) and 50Hertz Offshore GmbH (50Hertz Offshore) a 100% subsidiary of 50Hertz Transmission as well as the participations and equity-accounted investee of 50Hertz Transmission. The Group is responsible for the operation, maintenance, planning and expansion of the 380/220 kilovolt transmission grid in eastern Germany, Berlin and Hamburg. 2. Summary of significant accounting policies 2.1. Basis of presentation The condensed consolidated interim financial statements for the first half-year of 2018 have been prepared in accordance with International Financial Reporting Standards (IFRS) on interim financial reporting (IAS 34), as endorsed by the European Commission for application within the EU. In line with IAS 34.10, the Company decided to publish a set of condensed financial statements. All figures - unless otherwise stated - are expressed in million euros (). The accounting policies applied in these condensed consolidated interim financial statements are the same as those described in the consolidated financial statements of the Company as of and for the year ended December 31, 2017, except for the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. The other new or amended standards which became applicable for the current period did not have any impact on the group s accounting policies and did not require retrospective adjustments. Page 8 of 17

9 2.2. Changes in accounting policies The Group has chosen for the full retrospective application of IFRS 15, which implies that comparatives were restated for the effect of IFRS 15. The group has elected to apply the exemption in IFRS 9 under paragraph relating to transition for classification, measurement and impairment, and, accordingly has not restated comparative periods in the year of initial application. The reclassifications and the adjustments arising from the new impairment rules are therefore not reflected in the restated balance sheet as at 31 December 2017, but are recognized in the opening balance sheet on 1 January In addition, the Group has elected, in accordance with IFRS 9, to recognize changes in fair value of an equity investment that is not held for trading in OCI (aside from dividend income). The following tables show the adjustments recognized for each individual line item. Line items that were not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. Impact on the consolidated statement of financial position 31 Dec 2017 (as reported) IFRS Dec 2017 (restated) IFRS 9 1 Jan 2018 (restated) TOTAL ASSETS 7, , ,119.1 Non-current assets 4, , ,588.1 Other financial assets Current assets 2, ,531.2 (0.2) 2,531.0 Trade and other receivables 1, ,117.5 (0.2) 1,117.3 TOTAL EQUITY AND LIABILITIES 7, , ,119.1 Equity 1,380.8 (23.5) 1, ,362.5 Reserves 1,202.2 (23.0) 1,179.2 (0.2) 1,179.0 Total comprehensive income for the year (0,5) Non-current liabilities 3, , ,120.0 Deferred tax liabilities (9.9) Other liabilities Page 9 of 17

10 Impact on the consolidated income statement 1 Jan to 30 June 2017 (as reported) IFRS 15 1 Jan to 30 June 2017 (restated) Revenue 4, ,991.4 Revenue from grid business and other revenue Total turnover Earnings before interest and taxes Earnings before taxes Income taxes (43.4) (0.2) (43.6) Group profit IFRS 9 Financial Instruments Impact of adoption IFRS 9: Financial Instruments (effective as of 1 January 2018) reflects all phases of the financial instruments project and replaces IAS 39: Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting. - Classification and measurement Trade receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification for these instruments is not required. Equity shares in non-listed companies are intended to be held for the foreseeable future. No impairment losses were recognized in profit or loss during prior periods for these investments. The Group has decided to apply the option to present fair-value changes in OCI (FVOCI). The effect of the restatements on the equity shares in non-listed companies is presented here-under: Equity shares in non-traded companies Carrying Amount Closing balance 31 December 2017 IAS Reclassify non-traded equities from available-for-sale to FVOCI 5.4 Opening balance 1 January 2018 IFRS Page 10 of 17

11 There is no impact on the Group's accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss, and the Group does not have any such liabilities. IFRS 9 does not have an impact on the accounting policies for derecognition of financial assets and liabilities. - Impairment IFRS 9 requires the Group to record expected credit losses on all of its debt securities, loans and trade receivables, either on a 12 month or on a lifetime basis. The Group applies the simplified approach and record lifetime expected losses on all trade receivables. The loss allowances for trade receivables as at 31 December 2017 reconcile to the opening loss allowances on 1 January 2018 as follows: Trade receivables carrying amount Closing loss allowance as at 31 December 2017 calculated under IAS Amounts restated through opening retained earnings 0.2 Opening loss allowance as at 1 January 2018 calculated under IFRS IFRS 15 Revenue from contracts with Customers Impact of adoption IFRS 15 establishes a new comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18: Revenue, IAS 11: Construction Contracts, IFRIC 18: Transfers of Assets from Customers, and IFRIC 13: Customer Loyalty Programmes. Under IFRS 15, recognized revenue should reflect the consideration received by an entity in exchange for the transfer of control of promised goods or services to customers. The Group used a five-step approach to assess whether a contract falls within the scope of IFRS 15 and how revenue should be recognized. The only impact of the adoption of IFRS 15 on the Group s financial situation results from customer contributions. Under IFRIC 18 customer contributions were recognized as revenue at a point in time, whereas under IFRS 15 the cash considerations should be presented as deferred revenue and will be recognized in revenue over the lifetime of the underlying asset. 3. Seasonal fluctuations The Group s revenues are affected by the seasonality of its operations as its main activity is the transmission of electricity and the operations regarding renewable energies which can be highly affected by weather conditions and thus have a material impact on the course of business. On an annual basis, the Group s revenues are not cyclical. Page 11 of 17

12 4. Selected explanations on the consolidated statement of financial position The increase in property, plant and equipment is mainly caused by the increase in assets under construction resulting from ongoing investment activities of the group concerning the offshore grid connection of the Westlich Adlergrund cluster, the Kriegers Flak combined grid solution and preparations for further offshore grid connections as well as various onshore projects (e.g. the HVDC line Corridor D). The loans contain bonds, liabilities to banks and deferred interest. The bonds had a fair value of in total EUR 2,748.1m on the reporting date. Fair value was determined by reference to published price quotations in an active market (classified as level 1 in the fair value hierarchy). Interest on 3 of the 5 bonds is paid in October and November and accrued for during the rest of the year. This leads to a higher amount of accrued interests during the first half-year than at year-end. On the reporting date other financial assets classified as FVOCI had a fair value of in total EUR 24.8m and falls into level 3 in the fair value hierarchy. 5. Segment reporting Segment reporting is performed in line with the Group s reporting and organizational structure underlying its internal management reporting system. The Segment reporting comprises the reportable segments Non-profit business and Grid business. The chief operating decision-maker for the allocation of resources is Eurogrid International s board of directors. The board of directors assesses the result of the business segments on the basis of net profit (group profit). The segment Non-profit business comprises all compensation mechanisms. For a detailed description, please refer to the 2017 Group s Annual Report. The segment Grid business primarily comprises grid provision and grid management as well as balancing group management. The segment figures have been determined in accordance with the Group s accounting policies. Net profit (group profit) was chosen as the segment result. Page 12 of 17

13 Segment reporting by business segment for the period from 01 January 2017 to 30 June 2017 (restated*) Non-profit business Grid business Revenue 4, ,991.4 Other income Total turnover 4, ,021.1 Cost of materials and purchased services (4,338.4) (400.6) (4,739.0) Personnel expenses - (49.6) (49.6) Depreciation or amortization and changes in provisions - (73.1) (73.1) Other expenses - (0.8) (0.8) Result from equity investments accounted for using the equity method Total - (0.1) (0.1) Net finance expenses - (28.0) (28.0) Finance income Finance expenses - (29.2) (29.2) Profit before tax Income taxes - (43.6) (43.6) Profit for the year from continuing operations Group profit Timing of revenue recognition At a point in time 4, ,990.9 Over time * The Group applied IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated. We refer to note 2 in the attached Notes to the condensed consolidated financial statements for more details. Page 13 of 17

14 Segment reporting by business segment for the period from 01 January 2018 to 30 June 2018 Non-profit business Grid business Revenue 4, ,189.6 Other income Total turnover 4, ,218.2 Cost of materials and purchased services (4,618.7) (316.0) (4,934.7) Personnel expenses - (53.2) (53.2) Depreciation or amortization and changes in provisions - (8.8) (8.8) Other expenses - (2.3) (2.3) Result from equity investments accounted for using the equity method Total - (0.7) (0.7) Net finance expenses - (23.4) (23.4) Finance income Finance expenses - (23.8) (23.8) Profit before tax Income taxes - (59.2) (59.2) Profit for the year from continuing operations Group profit Timing of revenue recognition At a point in time 4, ,189.1 Over time Segment reporting by business segment 31 December 2017 (restated*) Non-profit business Grid business Total Non-current assets - 4, ,582.7 Current assets , ,531.2 Non-current liabilities - 3, ,120.0 Current liabilities 1, ,301.2 Equity and regulatory items - 1, ,692.7 Segment reporting by business segment 30 June 2018 Non-profit business Grid business Total Non-current assets - 4, ,607.8 Current assets , ,796.7 Non-current liabilities - 3, ,079.1 Current liabilities 1, ,490.1 Equity and regulatory items - 1, ,835.3 * The Group applied IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated. We refer to note 2 in the attached Notes to the condensed consolidated financial statements for more details. Page 14 of 17

15 6. Distribution of profit A dividend of EUR 107.8m relating to the fiscal year 2017 was paid to Eurogrid International in the interim reporting period. 7. Contingent liabilities and other financial obligations Contingencies We currently do not expect any risk of claims relating to contingent liabilities to arise. Other financial obligations On 30 June 2018, there was a purchase obligation for investments and maintenance measures of EUR 519.3m (31 December 2017: EUR 465.7m). 8. Related party disclosures Controlling entities: Via Eurogrid International CVBA/SCRL, Elia System Operator NV/SA and Global InfraCo together hold 100% of the shares in Eurogrid. In April 2018 Elia completed the acquisition of an additional 20% stake in Eurogrid International after Global InfraCo decided to sell half of its 40% shareholding in Eurogrid International. Following the transaction, Elia owns 80% (31 December 2017: 60%) of Eurogrid and obtained full control. Global InfraCo retains a 20% minority-interest (31 December 2017: 40%). No material business transactions were settled with Global InfraCo, or the administrative investment company IFM Investors in the first half-year Various service agreements have been in place between Elia and 50Hertz Transmission GmbH since Costs for consulting projects and other services are also cross-charged. In the first half-year 2018 expenses were incurred in the amount of EUR 1.2m (prior half-year: immaterial amount). This also generated revenue in the amount of EUR 0.8m (prior half-year: immaterial amount). No material receivables and liabilities were recognized on the reporting date. The Group distributed a dividend of EUR 107.8m (prior half-year: EUR 99.7m) to Eurogrid International in the first half-year. No other transactions with Eurogrid International took place that had material effects on the Group s financial position and result. Page 15 of 17

16 Subsidiaries of the controlling companies outside the Group: Eurogrid International holds 100% of the shares in GridLab GmbH, Schönefeld (GridLab). In the first half-year 2018, GridLab rendered technical and commercial services to 50Hertz Transmission of EUR 0.7m (prior first half-year: EUR 0.7m). On 30 June 2011, Eurogrid granted a loan of EUR 1.4m to GridLab which is due on 30 June On the reporting date the Group has a liability to GridLab from cash-pooling for an amount of EUR 0.4m (31 December 2017: EUR 0.6m). Associates: 50Hertz Transmission holds 49.99% of the shares in EGI and consolidates this entity at equity. Assets under construction based on service agreements with EGI for consulting and engineering services in the area of grids and system services have been recognized in the amount of EUR 11.2m as of the end of the first half-year 2018 (31 December 2017: EUR 11.2m). Furthermore various service agreements have been in place between EGI and 50Hertz. Key management personal includes Eurogrid International Board of directors, who are responsible for monitoring the activities of Eurogrid. Key management personal also includes the Board of management of 50Hertz Transmission and the supervisory board Key management personnel did not receive stock options, special loans or other advances from the Group during the year. There were transactions with entities in which the members of Eurogrid International Board of directors, the Board of management of 50Hertz Transmission or the Supervisory board exercise a significant influence (e.g. holding positions such as CEO, CFO or members of the management committee) in the amount of EUR 0.8m (expenses) in the first half of No other material transactions took place. 9. Subsequent events In May 2018 Elia received notification from Global InfraCo that it intends to sell its remaining 20% stake in Eurogrid International. Up to the date of preparing the consolidated financial statements Elia hasn t decided yet whether it wants to exercise its pre-emption right. No significant events were performed that had an effect on the Group s net assets, financial position and results of operations in the reporting period. Page 16 of 17

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