The company's net earnings increased due to its international business and capital gains from the sale of Gas Natural Fenosa Telecomunicaciones, despite provisions made due to the impact of its stake in Damietta (Egypt) and of the gas and electricity regulatory changes in Spain.
- Consolidated EBITDA for the period was 4.85 billion euros, a 0.1% increase, thanks to the good performance of its international business, where EBITDA increased by 3.7% and now represents 44.7% of the total.
- EBITDA from the electricity and electricity distribution businesses in Spain grew by 2.6% and 1.7%, respectively, despite the new changes to the regulations passed by the Government (an additional impact of €141 million in 2014 compared to 2013) and thanks to lower costs and spending.
- In 2014, EBITDA for worldwide natural gas supply and sales grew by 1.7% to €902 million, due mainly to activity abroad.
- GAS NATURAL FENOSA continued to reduce its debt levels, now standing at 48.5%. The average maturity of its financial debt is over 5 years.
- The company focused its investments mainly on the gas distribution business, which rose by 45.1%, particularly in Latin America, accounting for 39.4% of the consolidated total. Its electricity distribution investment increased by 1.4% in Spain.
- The company is still committed to its solid policy of cash dividends to shareholders, and allocated €909 million of its 2014 income to dividends, a payout of 62%.
- In November 2014, the company successfully concluded a takeover bid for the Chilean company CGE (Compañía General de Electricidad) with a 96.7% acceptance rate. CGE contributed 36 million euros to the consolidated EBITDA for 2014.
GAS NATURAL FENOSA obtained a net profit of 1.46 billion euros in 2014, 1.2% more than the previous year. The company's business profile, its well-established international presence and a strict financial policy enabled it to offset the performance of its businesses in Spain, affected by RDL 9/2013 governing electricity generation and distribution in Spain, and RDL 8/2014 governing the regulated gas business.
Net results include capital gains of 252 million euros for the sale of Gas Natural Fenosa Telecomunicaciones and depreciation of fixed assets and investments of 532 million euros (part of which correspond to provision of depreciation of the stake in the Damietta gas liquefying plant in Egypt), in addition to the corresponding tax effects. Meanwhile, the net result includes the positive impact of the lower general corporation tax rate established in Law 27/2014, of 325 million euros.
Consolidated EBITDA in 2014 was 4.85 billion euros, 0.1% more than the same period last year, despite a harsh macroeconomic, energy and regulatory climate, and thanks to a good balance between the regulated and liberalised gas and electricity markets, and the growing and diversified contribution of the company’s international presence.
The differential impact on EBITDA compared to 2013 of the regulatory measures in RDL 9/2013, and RDL 8/2014, which affects the regulated gas business, came to 141 million euros. The total impact of the new regulations on EBITDA was €600 million last year.
EBITDA for GAS NATURAL FENOSA's international business rose by 3.7% in 2014 and represented 44.7% of the total, compared to 43.2% in 2013. EBITDA for business in Spain was down by 2.7% to 55.3% of the total.
Last November, GAS NATURAL FENOSA successfully concluded its takeover of the Chilean Compañía General de Electricidad, CGE, in which it is now the majority shareholder with a 96.7% stake. CGE had contributed 36 million euros to the company's consolidated EBITDA at the close of 2014.
Maintaining the payout
GAS NATURAL FENOSA will allocate 909 million euros to dividends (0.908 euros/share), 1.2% more than last year, in line with the increased net profit in 2014. The company continues committed to a solid cash dividend policy and foresees maintaining payout levels at 62%, in line with recent years, compatible with the forecast growth and deleveraging targets.
As of 31 December, net financial debt stood at 16.94 billion euros, with a debt level of around 48.5%. 95.3% of the net financial debt matures in or after 2016, and the average maturity of the debt was slightly over five years.
GAS NATURAL FENOSA's tangible and intangible investments came to 1.79 billion euros during the year, 23.6% more than in 2013. This growth is mainly due to the incorporation of the LNG tanker Ribera del Duero in March, under a financial lease agreement worth 177 million euros. Adjusting for this figure, the remaining tangible and intangible investments grew by 11.5%.
The company focused its investments mainly on the gas distribution business, which rose by 45.1%, accounting for 39.4% of the consolidated total. Its electricity distribution investment increased by 1.4% in Spain.
By geographical area, investments in Spain rose by 25.6% (4.4% without the LNG tanker). Meanwhile, international investment was 20.9% higher than the previous year, largely due to registering some of the Brazilian gas distribution commitments for 2014-2016.
Gas distribution in Spain
EBITDA for gas distribution in Spain was 871 million euros, 5% less than the previous year, due to the remuneration adjustments in the regulated gas business established by RDL 8/2014, in force from 5 July 2014.
Sales in the regulated gas business in Spain as a whole were down 10.1% compared to 2013, at 171,816 GWh.
The group continued expanding its distribution network and increasing its supply points, despite low activity levels in the new build market. The distribution network grew by 1,253 kilometres (+2.6%) in 2014, bringing gas to 48 new towns. The company created 54,000 new supply points, with 5,226,000 at the end of the year.
Gas distribution in Italy
EBITDA for gas distribution in Italy was €66 million, down 4.3%. The reduction was mainly due to lower remuneration caused by the new regulatory model, partly offset by lower net spending. Gas sales were 3,407 GWh.
GAS NATURAL FENOSA reached 457,000 supply points in Italy, 0.4% more than at the close of 2013, while the distribution network was increased by 2% to 7,100 kilometres.
Gas distribution in Latin America
EBITDA for gas distribution in Latin America was 605 million euros, 11.7% less than in 2013, largely due to the negative effect of the exchange rate after the devaluation of the currencies of Brazil, Colombia, Argentina and Mexico. Without the effect of the exchange rate, EBITDA decreased by 4.5%.
By countries, EBITDA for Brazil was a notable 300 million euros, which with Colombia, 173 million euros, represented 78.2% of the total. Net turnover was 3.451 billion euros, a 7% increase over the previous year.
At the end of the year, gas business sales in Latin America, including sales of gas and third-party access to the network (TPA), rose to 249,067 GWh, 9.5% more than in 2013.
The distribution network in Latin America increased by 2.7% to 70,890 kilometres at the end of the year. The expansion of the network in Mexico, with an extra 711 kilometres, contributed especially to this growth.
GAS NATURAL FENOSA had over 6.5 million supply points at 31 December, 272,000 more than the previous year. The increase was particularly notable in Colombia, where there was an increase of 117,000 supply points. The net increase of customers in Mexico was also important, growing by 62.8% over the year, with 20.8% more new installations than in 2013. Meanwhile, Brazil saw 29.3% higher gas sales and TPA to the generation market over the year.
Electricity distribution in Spain
EBITDA for electricity distribution was €585 million, a 1.7% increase in 2014. Turnover fell by 0.2% due to the knock-on effects of the new regulations. The change in turnover was offset by lower spending.
Electricity sales totalled 31,641 GWh, 1.9% less than in 2013. At 31 December, the company had 3,673,000 supply points, a similar figure to the end of the previous year.
Electricity distribution in Moldova
EBITDA for electricity distribution in Moldova totalled 37 million euros in 2014, up by 5.7%.
Electricity sales grew to 2,621 GWh (+3.1%) with 856,000 supply points (+1.2%) at the end of the year.
Electricity distribution in Latin America
EBITDA for electricity distribution in Latin America, including Colombia and Panama, totalled 348 million euros in 2014, up by 2.4%.
The distribution business in Colombia contributed 242 million euros to EBITDA up to the end of the period, up by 6.6%, without taking into account the effect of the exchange rate.
Sales by the electricity distribution business in Latin America rose by 4.3% to 17,150 GWh. There was a notable rise in demand in both Colombia and Panama and customer numbers increased in both countries, with joint growth of 3.7% at the end of the year.
EBITDA for infrastructure activity, which includes the Maghreb–Europe Gas Pipeline operation; maritime transport management; the development of integrated liquefied natural gas (LNG) projects; and hydrocarbon exploration, development, production and storage, rose to €288 million, 11.6% more than in 2013, mainly due to the logistical optimisation of the fleet and the increased international transport tariff of the Maghreb–Europe Gas Pipeline over the year.
On 31 December, gas transport in Morocco through the companies EMPL and Metragaz had reached a total volume of 120,558 GWh, down 1.8%, mainly due to less gas being transported in the fourth quarter compared to the same period the previous year. Of this figure, 34,671 GWh (-8.8%) was transported for Portugal and Morocco, and 85,887 GWh (+1.3%) for GAS NATURAL FENOSA through the company Sagane.
Gas: Supply and sales
EBITDA from worldwide gas supply and sales came to €902 million in 2014, 1.7% higher than in 2013, basically due to increased sales on the overseas market. At 31 December, 172,265 GWh of gas had been sold in the Spanish market, a 4.1% decrease.
Gas Natural Europe, the company’s European sales affiliate, currently has a portfolio of 25.8 TWh per year in France with customers from various sectors. The subsidiary is consolidating its position in Belgium and Luxembourg with a portfolio of 7.4 TWh/year. In the Netherlands it is holding steady with 6.0 contracted TWh per year, while Germany, where it began business in late 2012, it already had a portfolio of 1.9 TWh/year at the end of 2014.
In Italy, Gas Natural Vendita achieved a contract portfolio in the wholesale market of 5.1 TWh/year at the end of 2014.
In the Portuguese market, GAS NATURAL FENOSA continued consolidating its position as the leading foreign operator in the wholesale gas market, with a portfolio of industrial contracts for 7 TWh/year. The company closed the period with 17% market share which, according to the Portuguese Regulatory Body (ERSE), made it the second largest operator in the country.
In the overseas market, notable developments include increased market diversification, with gas sales in America and Asia. The company consolidated its presence in the main international LNG markets, with a medium-term position in growing and leading markets for liquefied natural gas.
In procurement, in June 2014 the company signed a new LNG supply contract with Cheniere, through which the US company will supply GAS NATURAL FENOSA with two 2 bcm per year, to be sold anywhere in the world.
In the retail market, the company ended 2014 with 12.1 million active gas, electricity and service contracts, representing a 4% increase. The company maintains an active growth policy in the retail market, and in 2014 secured a total of 1,820,000 new contracts. There are now more than 1.4 million households with a joint gas and electricity supply contract with GAS NATURAL FENOSA, and it has more than 2.5 million active maintenance service contracts.
Electricity in Spain
EBITDA for the electricity business in Spain (generation, wholesale and retail sales and supply of electricity under the last resort tariff) was €782 million, 2.6% more than the same period in 2013.
In cumulative values, the daily market weighted average price in 2014 was €41.99/MWh, €2.26/MWh below the cumulative value of the previous year.
Electricity production was 30,542 GWh, 7.2% lower than in 2013. Of this figure, 28,465 GWh corresponded to generation under the traditional regime (-6.8%), while renewable generation and cogeneration stood at 2,077 GWh (-11.7%).
Hydroelectrical production was 4,275 GWh for the year as a whole, 3.6% lower than in 2013. Meanwhile, nuclear power production rose by 3.2% in 2014 to 4,425 GWh.
GAS NATURAL FENOSA’s combined cycle production was 14,143 GWh, down 13.7% on the previous period.
Coal-fired thermal production rose to 5,622 GWh (+3.5%) from 5,430 GWh in 2013.
Electricity sales, including sales in the liberalised market and the Voluntary Price for the Small Consumer (PVPC), were 34,718 GWh at the end of the year, up by 5.4%. These figures from the electricity sales portfolio are in accordance with the positioning of margins maximisation, market share optimisation and the level of coverage that GAS NATURAL FENOSA wishes to have in view of electricity-market price variations.
Gas Natural Fenosa Renovables
Gas Natural Fenosa Renovables ended the period with a consolidatable operational installed capacity of 902 MW, of which 738 MW came from windpower, 107 MW from mini-hydroelectric production and 57 MW from co-generation plants.
Production over the year was 2,077 GWh compared to 2,352 GWh the previous year, mainly due to lower cogeneration production after the publication of the Ministerial Order setting new prices for electricity exports.
Global Power Generation
On 1 October last, GAS NATURAL FENOSA created Global Power Generation (GPG), a company that brings together its electricity generation assets and businesses outside Europe. The new company is aimed at driving GAS NATURAL FENOSA's overseas generation business within the framework set out in its current Strategic Plan, which contemplates growth on the international market by undertaking generation projects, particularly in Latin America and Asia.
EBITDA for the electricity business in Latin America, contributed by generation assets in different countries and assets operated by third parties through the company O&M Energy, was 221 million euros at the end of the year, a 0.5% increase. The power generated was 17,740 GWh, 2.4% less than in 2013.
Compañía General de Electricidad (CGE)
Last November, GAS NATURAL FENOSA successfully concluded its takeover of the Chilean company, CGE, in which it is now the majority shareholder with a 96.7% stake.
After the acquisition, the company was added to the scope of consolidation of GAS NATURAL FENOSA by global integration from 30 November 2014, contributing 36 million euros to the consolidated EBITDA in 2014.
In the gas distribution business, CGE increased its sales over the year by 11.1% to 43,668 GWh. Meanwhile, electricity distribution business also grew by 3.3%, mainly due to increased sales to regulated customers.
Transported power rose by 4.7%, corresponding mainly to the subsidiary Transnet (Chile), which can be explained by the evolution of physical sales by electricity distributors in Chile, who are part of the Central Interconnected System (SIC).
LPG procurement ended the year at 10,456 GWh (+3.3%).
Barcelona, 17 February 2015.
Consolidated balance sheet
(*) Re-expressed applying IFRS 11
Re-expressed applying IFRS 11
Physical key figures
Global Power Generation