- The growth recorded in the first nine months of the year is based on the sound position of its regulated businesses and expansion in Latin America.The Chilean company CGE, which was acquired in late 2014, contributed 464 million euros to the EBITDA figure posted by the multinational.
- The Board of Directors agreed to allocate 408 million euros (0.4078 euros per share) to payment of the cash interim dividend on 8 January corresponding to the results from 2015.This represents an increase of 2.72% on the interim dividend in 2014.
- While maintaining its sound financial policy, GAS NATURAL FENOSA posted a borrowing ratio of 46.9% at 30 September, with an average financial debt maturity of over five years.
- The multinational is on the right path to meeting the 2015 targets set in its Strategic Plan 2013-2015, which include posting an EBITDA in excess of 5 billion euros, a net result of close to 1.5 billion euros and maintaining a pay out of almost 62%.
The net profit posted by GAS NATURAL FENOSA amounted to 1.09 billion euros (up 3.8% in comparable terms) and the consolidated EBITDA rose by 10.9% to 4 billion euros in the first nine months of 2015. Within a turbulent economic and energy environment, growth up till September was based on the sound nature of its regulated businesses and the growth of operations in Latin America.
Incorporation into the GAS NATURAL FENOSA consolidation group of Compañía General de Electricidad (CGE) in Chile added 464 million euros to the consolidated EBITDA figure. This offset the impact of both 56 million euros from RDL 8/2014 (affecting regulated gas activities in Spain since 5 July 2014) and the allocation of 32 million euros from telecommunications businesses (divested in June 2014).
The incorporation of CGE increased the weight of international activities in the EBITDA to 50.1%, compared with 42.7% in the same period last year. The weight of operations in Spain in the EBITDA dropped to 49.9%.
The net profit of 1.09 billion euros fell by 11.7% in the first nine months of the year, mainly due to the fact that fewer extraordinary results were posted in 2015 than in 2014, when the sale of Gas Natural Telecomunicaciones and its investee companies took place.
In adjusted terms, i.e. adjusting the gains made in both periods, the net profit rose by 3.8%. This increase in the recurring result within a context of heightened global uncertainty is due to the balanced profile of the company, the diversification of its businesses and strict financial discipline.
At 30 September, the company posted a borrowing ratio of 46.9% and a net financial debt of 16.03 billion euros. 96.2% of its debt matures in or after 2017, with an average life of slightly over five years.
At the close of the third quarter, GAS NATURAL FENOSA had 9.93 billion euros of liquidity available, equivalent to all financial obligations for over 24 months.
The multinational is maintaining the 2015 commitments established in its Strategic Plan 2013-2015, which include posting an EBITDA in excess of 5 billion euros, a net result of close to 1.5 billion euros and maintaining a pay out (proportion of net profit allocated to dividends) of almost 62%.
Interim dividend of 0.4078 euros per share (up 2.72%)
The Board of Directors agreed to allocate 408 million euros (0.4078 euros per share) to payment of the cash interim dividend on 8 January 2016, which will be drawn from the 2015 results. This dividend, which is in line with the target set in the Strategic Plan, represents an increase of 2.72% on the interim dividend in 2014.
The multinational invested a total of 1.21 billion euros in the first nine months of 2015, an increase of 14.4% on 2014. The main focus for investment by GAS NATURAL FENOSA was on gas distribution activity, which rose by 26.9% and accounted for 38.9% of the consolidated total.
Investment in electricity distribution activity rose by 14.5% to account for 21.2% of the total, mainly due to growth in Spain. In turn, CGE accounted for 16.8% of the total. By geographical area, investments in Spain fell by 7% (but would increase by 28.3% when excluding the investment made in the LNG tanker in 2014). Overseas, investments rose by 39.5% due to the incorporation of CGE.
Gas distribution in Spain
The EBITDA from gas distribution activity in Spain amounted to 665 million euros, down 1.6% on the first nine months of the previous year.
Sales from regulated gas activity in Spain rose by 5.3% on the same period in 2014 to 128,091 GWh due to more favourable meteorological conditions. Industrial demand fell by 1.1%, mainly due to regulatory changes in the cogeneration sector.
At 30 September, the company had 5,231,094 supply points (up 0.4%) and the distribution network stood at 50,463 kilometres, up 3.9% on the figure reported at the close of the third quarter last year. The number of municipalities with access to natural gas rose to 1,171.
Gas distribution in Italy
The EBITDA from the gas distribution business in Italy amounted to 50 million euros, in line with the same period last year.
Gas distribution activity amounted to 2,807 GWh, an increase of 10.4% on 2014 due to more favourable meteorological conditions. The distribution network stood at 7,143 kilometres at 30 September, with an increase of 105 kilometres in the last 12 months. GAS NATURAL FENOSA has 456,344 supply points in Italy, which is a slight increase on the previous year.
Gas distribution in Latin America
The EBITDA from gas distribution in Latin America amounted to 478 million euros, with an increase of 4.1% on the first nine months of 2014. This was affected by positive currency performance in Argentina (up 9.5%) and Mexico (up 2.4%), partly offsetting the currency devaluation in Colombia (down 9.1%) and Brazil (down 10.6%). When disregarding the exchange rate effect, the EBITDA would have increased by 10.8%.
By country, the EBITDA in Mexico posted noteworthy growth (contributing 124 million euros, an increase of 39.3%). However, the EBITDA in Brazil (200 million euros) continues to be the highest in the region, in spite of a significant economic deceleration in the country.
Net turnover for gas distribution in Latin America amounted to 2.56 billion euros and posted an increase of 2.5%, with sales volume growth of 0.6% on last year.
The distribution network in Latin America grew by 2,270 kilometres (3.2%) in the last 12 months to a total of 72,555 kilometres at the close of the third quarter.
GAS NATURAL FENOSA has over 6.8 million supply points in Latin America, following the addition of 281,000 new points in the period. Significant increases took place in Mexico (106,000 additional supply points) and Colombia (105,000 additional supply points).
Electricity distribution in Spain
The EBITDA from electricity distribution activity rose by 2.7% to 451 million euros during the same period in 2014, while the net turnover rose by 2% to 627 million euros.
At 30 September, supplied energy stood at 23,809 GWh. This is 0.5% less than in the same period of 2014. The company had 3,679,000 supply points at the close of third quarter, a similar figure to that from the same period last year.
The Interruption Time Equivalent to Installed Capacity (TIEPI) stood at 33 minutes, a 10.8% improvement on 2014.
Electricity distribution in Moldova
The EBITDA from electricity distribution activity in Moldova amounted to 24 million euros in the first nine months of the year, representing a decrease of 7.7%. The decrease in EBITDA was due primarily to the depreciation of Moldovan local currency against the euro. When disregarding the exchange rate effect, EBITDA growth would stand at 4.3% due to increased tariff revenue, improved network loss indicators and application of the cost of extending the useful life of assets.
Sales from electricity activity amounted to 1,988 GWh (up 3.6%) and the number of supply points reached 864,000 (up 1.2%) at the close of the period.
Electricity distribution in Latin America
The EBITDA from electricity distribution activity in Latin America, which includes Colombia and Panama, amounted to 275 million euros at the close of third quarter, an increase of 10% on the previous year. When disregarding the exchange rate effect, the EBITDA would increase by 12%.
The distribution business in Colombia contributed 187 million euros to the EBITDA, which represents a 16% increase when disregarding the exchange rate effect. The distribution companies in Panama contributed 88 million euros (up 23.9%).
Sales from electricity distribution activity in Latin America rose by 5.4% to 13,485 GWh, due to growth in demand in both Colombia and Panama. Overall, the number of customers rose by 4.2%.
The EBITDA from 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, amounted to 216 million euros in the first nine months of the year, an increase of 2.4%. In spite of a lower volume transported via the Maghreb–Europe Gas Pipeline in 2015, activity was boosted by the positive effect of the exchange rate against the Dollar.
At 30 September, the gas shipment business conducted in Morocco through the companies EMPL and Metragaz, posted a total volume of 82,210 GWh, down 10.5% on the same period in 2014 due to a lower volume of gas transported to Spain. Of this figure, 55,346 GWh (down 15.7%) was transported for GAS NATURAL FENOSA through the company Sagane and 26,864 GWh (up 2.2%) for Portugal and Morocco.
Gas: Supply and sales
The EBITDA from global gas supply and sales activity amounted to 595 million euros, which is a moderate reduction of 12.5% on the energy price adjustment figure reported during the year. Flexibility in the management of the global contract portfolio to adapt to the current price context should allow a gradual stabilisation of constricting business margins.
At 30 September, wholesale commercialisation by GAS NATURAL FENOSA amounted to 210,187 GWh. This is an increase of 1.4% on 2014 due to the commercialisation of natural gas overseas and in spite of a 3.6% fall in gas sold in the Spanish market stemming from reduced supply to third parties.
Gas Natural Europe, the sales subsidiary in Europe, currently has a subscribed portfolio of 24.8 TWh/year in France, with customers in various sectors that range from industry to local authorities and the public sector. The French subsidiary is consolidating its position in Belgium, Luxembourg, the Netherlands and Germany with a subscribed portfolio of 14.8 TWh/year.
In Italy, Gas Natural Vendita reported a subscribed portfolio of 6.5 TWh/year in the wholesale market at the close of third quarter.
In the Portuguese market, GAS NATURAL FENOSA remains the second-largest operator in the country with a market share of over 15%, maintaining its position as the leading foreign operator in the country. In the industrial market, where its business is focused, this market share stands above 20%. This is enabling the company to maintain its leadership on the Iberian Peninsula ahead of the upcoming launch of the Iberian gas market.
In the foreign market, the increase in market diversification is particularly noteworthy, with gas sales in America (Caribbean and South) and Asia (Japan, India and South Korea). The company is consolidating its presence in the major international Liquefied Natural Gas (LNG) markets.
Within the retail market, the company reported a figure of 12.4 million active gas, electricity and maintenance service contracts at 30 September, of which 542,000 are in Italy. GAS NATURAL FENOSA, a pioneer in the integration of joint gas and electricity supply, now has over 1.5 million households in Spain with contracts for both energies. Furthermore, a large proportion of these households (82%) also receive the maintenance service.
Electricity in Spain
The EBITDA from electricity activity in Spain (generation, wholesale and retail sales, and supply of electricity under the last resort tariff) amounted to 553 million euros, down 2%. This reduction was mainly due to the different performance by pool prices between the periods in question.
The average weighted daily market price for the period July-September this year stood at 57.04 €/MWh, four euros higher than the 53.02 €/MWh in the same quarter in 2014 and 15% higher than the price in the previous quarter.
Electricity production amounted to 23,690 GWh, 3.8% more than in the same period the previous year. Of this figure, 22,212 GWh correspond to generation under the traditional regime (up 4.6%), while renewable generation and cogeneration amounted to 1,478 GWh (down 6%).
Gas Natural Fenosa has a market share in the aggregate traditional generation market at 30 September 2014 of 18.8%, slightly higher than the figure of 18.6% in 2014.
Hydropower generation amounted to 2,141 GWh at the close of the third quarter, far lower than the 3,410 GWh in 2014. The year began with the hydrological characteristics of an average year, changing to a dry year in the second quarter and now very dry in this third quarter.
In turn, and as regards the annual total, nuclear generation rose by 5% to 3,326 GWh. However, these figures are affected by the rescheduling of scheduled downtime.
Combined cycle generation in the first nine months of 2015 amounted to 10,931 GWh, up 4.2% on the same period in 2014. In the third quarter, generation using this technology amounted to 4,264 GWh (down 6.3%).
Coal-based thermal generation amounted to 2,843 GWh in the third quarter, up 6.2% on last year. In the first nine months of the year, coal-based generation stood 39.3% higher than last year. However, the 2014 figure contains various operational criteria stemming from application of the Royal Decree on Supply Guarantee in force until the end of the year.
Electricity sales, which include sales in the deregulated and last resort market, amounted to 26,583 GWh at 30 September (up 3.1%). The figures from the electricity sales portfolio are in line with the position adopted to maximise profit margins, and optimise market share and the degree of coverage that GAS NATURAL FENOSA wishes to have vis-à-vis the price changes taking place in the electricity market.
Gas Natural Fenosa Renovables
Gas Natural Fenosa Renovables ended the third quarter with a total installed capacity subject to consolidation of 919 MW (878 MW in operation), of which 752 MW correspond to wind technology, 110 MW to mini-hydroelectric plants and 57 MW to cogeneration.
Generation stood 6% lower than in 2014 (1,478 GWh vs. 1,572 GWh). This was mainly due to lower wind generation and the effect caused by downtime at the cogeneration plants associated with slurries that were in operation until February 2014.
Gas Natural Fenosa reached an agreement in June to acquire 100% of the renewable energies company Gecalsa for the amount of 260 million euros. After obtaining the necessary permits, the deal was closed in October.
Global Power Generation
In October 2014, GAS NATURAL FENOSA incorporated the company Global Power Generation (GPG) to encompass 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.
In March, GAS NATURAL FENOSA and the Kuwait Investment Authority (KIA) signed an agreement to undertake a share capital increase of 550 million dollars in Global Power Generation (GPG), which will be wholly underwritten by KIA. Following the share capital increase, KIA holds a 25% stake in GPG while GAS NATURAL FENOSA maintains control of the company.
After obtaining the necessary permits, the deal was closed in October and represents a partnership with a sound investment partner for expediting the development of its international power generation expansion plans, which, for the medium term, include building an additional 5 GW of generation capacity in international markets, mainly in Latin America and Asia.
The EBITDA from GPG corresponding to the period January-September 2015, amounted to 199 million euros. This 25.2% increase on the same period last year was mainly due to the exchange rate effect and the entry into commercial operation of the Bii Hioxo Wind Farm (Mexico) in October 2014 and the Torito Hydropower Plant (Costa Rica) in May 2015.
Compañía General de Electricidad (CGE)
The Chilean company CGE was added to the scope of consolidation of GAS NATURAL FENOSA via the global integration method as from 30 November 2014. CGE contributed 464 million euros to the consolidated EBITDA to September 2015.
In the gas distribution business, CGE increased its sales over the period by 11% to 36,715 GWh. Meanwhile, the electricity distribution business also grew by 3.2%, mainly due to increased sales to regulated customers (up 4.2%).
Transported power rose by 3%, corresponding mainly to the subsidiary Transnet (Chile), due to the evolution of physical sales by electricity distributors in Chile, who are part of the Central Interconnected System (SIC).
Wholesale sales of LPG fell by 27.1%, due to reduced activity, while sales to end customers fell by 1.4% due to the effect of the temperature.
Barcelona, 4 November 2015.
Consolidated Income Statement
|(Million €)||9M 15||9M 14|
|Other operational income||206||205|
|Other operating costs||-1,570||-1,402|
|Depreciations and impairment losses||-1,337||-1,184|
|Allocation to provisions||-194||-185|
|Income from disposal of financial instruments||-||-|
|Income from institutions via shareholding||-5||-75|
|Tax on profits||-434||-448|
|INCOME ATTRIBUTABLE TO THE GROUP||1,094||1,239|
|Investments via shareholdings||1,971||2,322|
|Non-current financial assets||1,394||1,562|
|Deferred tax assets||1,001||1,091|
|Trade and other receivables||4,895||4,792|
|Other current financial assets||413||333|
|Cash and equivalent liquidity||2,280||3,905|
|Net equity attributed to the parent company||14,431||14,420|
|Non-current financial liabilities||16,806||14,884|
|Deferred tax liabilities||2,672||2,014|
|Other non-current liabilities||1,010||869|
|Current financial liabilities||1,722||2,866|
|Trade creditors and other payable accounts||3,686||3,617|
|Other current liabilities||348||418|
|TOTAL LIABILITIES AND EQUITY||46,886||43,048|
Physical key figures
|Gas distribution (GWh)||318,863||310,897||2.5|
|Rate-regulated gas sales||121,079||119,033||1.7|
|Electricity distribution (GWh):||39,282||38,649||1.6|
|Rate-regulated electricity sales||1,988||1,919||3.6|
|Rate-regulated electricity sales||12,702||12,011||5.8|
|Gas distribution supply points, in thousands (on 30/09):||12,489||12,185||2.5|
|Electricity distribution supply points, in thousands (at 30/09):||7,672||7,528||1.9|
|EFOF in Spain (minutes)||33||37||-10.8|
|Wholesale sales (GWh):||210,187||207,356||1.4|
|Other gas sales||92,584||85,391||8.4|
|Retail sales (GWh)||22,021||19,220||14.6|
|Gas transport – EMPL (GWh)||82,210||91,901||-10.5|
*TPA services included in secondary transport.
|Electricity produced (GWh):||36,923||36,307||1.7|
|Renewable and cogeneration||1,478||1,572||-6.0|
|Global Power Generation||13,233||13,492||-1.9|
|Mexico (wind power)||604||-||-|
|Costa Rica (hydraulic)||266||118||-|
|Dominican Republic (fuel)||812||628||29.3|
|Electricity generation capacity (MW):||14,847||14,551||2.0|
|Renewable and cogeneration:||919||902||1.9|
|Global Power Generation||2,702||2,429||11.2|
|Costa Rica (hydraulic)||101||51||98.0|
|Dominican Republic (fuel)||198||198||-|
Compañía General de Electricidad
|Gas business sales (GWh)||36,715|
|Supply points, in thousands (as at 30/09)||610|
|Electricity business sales (GWh)||11,955|
|Supply points, in thousands (on 30/09)||2,906|
|Electricity transmitted (GWh)||10,932|
|Wholesale sales to third parties (GWh)||6,141|
|Sales to end customers (GWh)||4,298|