Consolidated Financial Statements

Transcription

1 2016 Consolidated Financial Statements

2 2016 Consolidated Financial Statements Focus on results and performance numbers

3 OPERATING AND FINANCIAL RESULTS Constant growth in all indicators All of the Hera Group s economic indicators for 2016 showed growth over the previous year. EBITDA rose by 3.6%, operating profits by 3.4% and net profits by 13.4%. From a financial point of view as well, positive results were seen: net debt dropped by 3.5% and the net debt/ebitda indicator settled at 2.79, with a clear improvement compared to The economic-financial results achieved in 2016 point once again towards the Group s consolidated multi-business strategy and its ability to successfully balance regulated and free-market activities, while at the same time maintaining a sustainable risk profile. These results are furthermore the outcome of a well-adjusted combination of internal and external growth was particularly positive if one considers the increasingly challenging context defined by regulatory and market factors, within which Hera proved its agility and demonstrated a great capacity to react when faced with changes in external circumstances. Among the main events that marked the year, one must recall the reduction in regulated revenue, following the revision of return on regulated invested capital (Wacc, weighted average cost of capital) introduced by the Authority for electricity, gas and the integrated water cycle (hereinafter the Authority ) and the reduction in incentives for environmental certificates. The main corporate operations having an effect on 2016 are described as follows, in chronological order. Concerning above all the waste and sales businesses, they allowed the Group to maintain its sector leadership and to consolidate its presence in the market. As of 1 November 2015, Biogas 2015 became part of the Group s corporate structure. This company s activities involve energy recovery and energy production from waste recycling, and it is also responsible for constructing, installing and managing the plants involved. As of 1 December 2015, Herambiente acquired control of a few branches of Geo Nova Srl. In particular, the dangerous and non-dangerous waste storage plant in San Vito al Tagliamento (near Pordenone) and the active landfills for nondangerous waste in Loria (near Treviso) e Sommacampagna (near Verona) were taken over. Additionally, as of 28 December 2016, a further branch was acquired, involved in non-dangerous waste disposal at the landfill in the municipality of Cordenons. On 23 December 2015 Herambiente acquired 100% of shareholding in Waste Recycling Spa, whose activities concern the treatment and recovery of special waste in the province of Pisa, and that in turn holds shares in Rew Trasporti Srl and Neweco Srl. During the second half of 2016 the two aforementioned controlled companies were fused into Waste Recycling Spa. On 29 December 2015 Hera Spa sold 90% of Hera Energie Rinnovabili, later renamed Aloe Spa, to third parties. It therefore no longer falls within the Group s consolidated scope. Approved by the Hera Spa Board of Directors on 21 March

4 On 30 December 2015 the interest held in Trieste Onoranze e Trasporti Funebri by AcegasApsAmga Spa was sold. On 8 April 2016 Hera Comm Srl definitively won the call for tenders announced by the Municipality of Giulianova to acquire 100% of the share capital of Julia Servizi Più Srl, a gas and electricity sales company which operates in the municipality of, and the area surrounding, Teramo. As of 1 November 2016 the company Gran Sasso Srl, which is involved in free market electricity and gas sales in the L Aquila, Pescara and Chieti areas, became part of the Group s consolidated scope. In order to respect sector regulations concerning unbundling, with effective date 1 July 2016 Hera Spa conferred its corporate branch dealing with electricity and gas distribution on Inrete Distribuzione Energia Spa. This consolidated income statement reflects the application of accounting principle IFRIC12 Service concession arrangements. The effect of applying this principle, which leaves the results unchanged, is that investments made in goods granted under concession, only including network services, are acknowledged in the income statement. The following table shows the economic results for the years ended 31 December 2016 and 2015: Constant and increasing growth Income statement ( /mln) Dec 2016 % Inc. Dec 2015 % Inc. Abs. change %Change Revenues 4, , % Other operating revenues % % % Raw materials (2,176.8) -48.8% (2,256.6) -50.3% % Service costs (1,198.8) -26.9% (1,132.1) -25.2% % Other operating costs (75.0) -1.7% (62.3) -1.4% % Personnel costs (524.1) -11.7% (510.8) -11.4% % Capitalised costs % % % EBITDA % % % Amort. & Prov. (459.6) -10.3% (442.2) -9.9% % Operating profit % % % Financial operations (117.4) -2.6% (134.3) -3.0% % Pre-tax profit % % % Taxes (119.3) -2.7% (113.5) -2.5% % Net profit of the year % % % Attributable to: Shareholders of the Parent Company % % % Non-controlling interests % % % Approved by the Hera Spa Board of Directors on 21 March

5 4.5 billion in revenues Consolidated revenues amounted to 4,460.2 million in 2016,, dropping by 26.8 million (0.6%) compared to the 4,487.0 million recorded in Various factors are responsible for this contraction: revenues from electricity and gas sales and trading fell by roughly 1988 million following a decrease in thee price of raw materials; regulated gas, electricity and water cyclee services saw a drop of roughly 31.1 million due to a change in the rate of return on invested capital, partiallyy offset by other positive tariffary effects coming to roughly 19 million; and the 16 million decreasee caused by a reduction in incentives for environmental certificates. This reduction was almost entirely offset by thee revenues derived fromm higher volumes of gas sold, the greater amount of waste disposed of, higher revenues for production activities on the dispatch market and, lastly, changes in the scope of operations. For further details, see the analyses of each single business area. Other operating revenues grew over December 2015 by 72.6 million (21.9%). This increase is mainly due to the contribution coming from energy efficiency certificates following the greater obligations assigned to distributors coming to roughly 50 million, higher revenues fromm Ifric12 concessions amounting a too roughly 9 million, greater contributions for recovery of materials, capital gains from the sale of goods involving the transfer to Unica Reti Spa of the gas networks in the Municipalities of Meldola and Forlimpopoli, including works and plants. The cost of raw and other materials fell by 79.8 million compared to 2015, down 3.5% %; as with revenues, this drop was due to lesser trading activities, an overall decreasee in the price of raw materials and the different method used in recording energy incentives, as further explained in paragraph Other operating costs increased by 79.4 million overall (o 66.7 in higher costs for services and 12.7 million in higher operating expenses), mainly caused by changes in the scope of operations ( 29.0 million), higher disposal costs for the increase in volumes treated,, and higher Ifric12 costss ( 11 million). m Furthermore, note the higher costss for the implementationn of transactional systems in some Group companies, higher costss for sales personnel inn commercial companies, aimed at widening the customer base, and higherr costs for plant maintenance in network services.. Personnel costs rose by 13.3 million (2.6%), going g from million at 31 December 2015 to million in This increase is mainly related to the salary raises provided for by the National labour agreement.. The entrance of new resources belonging to acquired companies in the waste w area was partially offset by a reduction in the average presence of resources. Capitalised costss at 31 December 2016 fell compared to the previous year by 0.7 million (2.5%). Approved by the Hera Spa Board of Directorss on 21 March

6 EBITDA at million (+3.6%) EBITDA settled at million, recording a growth of 32.2 million (3.6%) compared to This increase in EBITDA is essentially due to the performance of the energy areas, thanks to the greater profit margins derived from power plants and the good performance of the sales and trading business. A positivee result also came from the networkss area, considering that 2016 felt the effects of lower revenues in gas, electricity and water distribution coming to 31.1 million (respectively: 9.8 in gas, 2.99 in electricity and 18.4 in water) following the reduction in return on regulated invested capital and inflation. The waste area was stable, in spite of lower energy incentives coming to roughly 16 million. Amortisation and provisionss rose overall by 17.4 million (3.9%), going from million in 2015 too million in Amortisation increased mainly due to the change in the scope of operations of Group company Herambiente and of the saless companies Julia Servizi Più Srl and Gran Sasso Srl, while the decrease in amortisation for landfills andd WTE plants and the decrease in provisions for third party assents in the gas area duee to the duration of the concession c in the Forlì-Cesena areaa more than offsett the higher amortisation for new investments. Provisions for bad debts rose, mainly in the AcegasApsAmgaa Group and in the sales companies. EBIT at million (+3.4%) EBIT at 31 December 2016 reached million, up o 14.9 million (3.4%) compared to the million seen in Approved by the Hera Spa Board of Directorss on 21 March

7 The results of financial management at the end of 2016 came to million, improving by 16.9 million (12.6%) compared too The good performances are due to lower average debt, efficiency in rates obtained among other things thanks to the effects of the liability management operations set inn place during the year, and higher earnings involving recovery of default indemnities i from safeguarded customers includes roughly 13.1 million in devaluation of shares mainly held in the company Galsi Spa, compared to the 8.1 million seen in In light of the above, pre-tax profits grew by 31.7 million,, going from million in 2015 to million in Income taxes went from the million seen in 2015 to million in The tax rate also improved notably, going from 36.9% to 35.1% %. The reasons for this improvement include the benefits introduced by the recent r Stability Laws: the patent box and tax credits for f maxi amortisations and for research and development, in addition to Help for Economic Growth benefits ( beneficio ACE ) and the positive effects created by the payment of a substitute tax for exemption from goodwill and by higher values created following non-recurring operations finalised during the t year. Note furthermore that the 2015 tax rate suffered from a non-recurring effect caused by adjusting deferred taxes to the new IRES rate of del 24% %, effective as of Net profits therefore rose by 13.4%, million in 2015 to million in equivalent to 26.0 million, going from Earnings post minorities at million (+14.8%) Group net profits reached million, rising by 26.8 million over the amount seen in Approved by the Hera Spa Board of Directorss on 21 March