-         Net Revenues Grew 16%

-         Operating Income Grew 6% to €1,167 million (€1.1 billion)

  • Total capex amounted more than €300m in 1Q19, mainly reflecting the development of new renewable capacity expected and, therefore, the group’s solid industrial project, both nationally and internationally.
  • Net debt stood at €15 billion, below that recorded on 31 December 2018, thanks to a greater focus on cash generation.
  • The company confirms its commitment to deliver on shareholder remuneration, aligned with the Strategic Plan objective. Thus, it has allocated €560m to dividend payment against 2018 results and €135m shares bought back during the quarter.

Naturgy reported today a robust start to 2019, with continued momentum in the implementation of its Strategic Plan, that included gaining value for shareholders and a firm commitment to renewable energies, which shows the solid industrial plan of the group.

At the same time, the company has continued to make progress on the gradual de-risking of its business profile and increased its visibility in remunerated networks. On the other hand, and thanks to increased focus on cash flow generation, the group has managed to reduce its net debt and complies with its shareholder remuneration commitment.

Francisco Reynés, Chairman and CEO of Naturgy, stressed that “The group continues with its industrial plan, investing in renewables and networks, which allows us to adapt to the mix of the future and the quality of service that customers require and demand. We also stay on track to comply with the commitments we adopted a year ago in shareholder remuneration, while maintaining stable debt levels. Naturgy also continues to advance in the execution of the Strategic Plan, with a notable progress in the efficiencies and reduction of the risk profile. Part of this progress has been made thanks to the tariff update of some countries in Latin America and certainly to the progressive improvement in the risk profile of liberalized businesses. “

Naturgy reported first quarter fiscal year 2019 EBITDA of €1.16 billion, an increase of 6 percent versus the prior year and a net ordinary profit of €377 million, which represents an increase of 16%. Noteworthy are the tariff updates in Latin America, recognizing the FX and movements during 2018.

Total capex amounted to €301m in the period, mainly reflecting ongoing investments in renewables projects as well investments in remunerated networks, consistent with our golden rules of investment.

This investment effort represents an advance in Naturgy’ s industrial plan, with 138 MW of renewable energy already put in operation in 1Q19 and other 777 MW expected to come into operation throughout the year.

As such, the global installed operating capacity as of 31 Mach 2019 reached 1,319 MW, a 15% increased over one-year period. The company has also invested in the development of 180 MW of wind capacity in Australia and 324 MW of wind and solar capacity in Chile that will come into operation before 3Q20 and 1Q21, respectively.

As of 31 March 2019, net debt amounted to €15 billion, down 1.2% vs. 31 December 2018, after the €560m dividend payment and €135m shares bought back during the quarter.

During the first quarter of 2019, the rating agencies S&P and Moody’s re-affirmed the company long-term rating at BBB and Baa2 respectively, both with stable outlook.

Efficiency plan and risk profile reduction

Naturgy has continued to make progress on its efficiencies plan and the gradual de-risking of its business profile. The efficiencies achieved since the launch of the SP 18-22 are noticeable across the businesses and will remain a key driver of performance going forward. In this respect, the company has incurred additional capture costs of €50m during 1Q19, accounting for the bulk of non-ordinary effects in the quarter. Naturgy is on track to deliver the €100m additional efficiencies expected for 2019, and reiterates its total commitment of €500m efficiencies by 2022.

Shareholder remuneration

Naturgy also continues to deliver on shareholder remuneration. On 20 March 2019, the company paid out its final dividend against 2018 results. Furthermore, and since the beginning of its strategic plan until 31 March 2019, Naturgy has invested €238m on a share buyback program, as part of its €400m annual schedule to be completed by the end of June 2019. In this respect, the Ordinary General Shareholders’ Meeting, held in March 2019, approved a share capital reduction of the company through the amortization of the shares bought under the abovementioned program.

Results by business unit

By business units, Gas & Power recorded an ordinary EBITDA of €409m, an increase of 1.2%, mainly due to the fact that the group’s new commercial policies which, together with efficiencies and new renewables capacity, have helped offset the global decline in gas prices during the quarter.

Infrastructure EMEA increased its ordinary EBITDA by 7.7% to €475m euros, as a result of a good performance across all business. In gas infrastructures, the efficiencies achieved have compensated for the lower volumes due to the mild temperatures recorded this winter. The reduction of costs has also been key in the electricity networks, together with the entry into operation of new assets.

The result of Infrastructure South LatAm (Chile, Argentina and Brazil, mainly) grew significantly, with an ordinary EBITDA of €194m (+ 15%), thanks to the efficiencies achieved and the tariff indexation.

In the case of Infrastructures North LatAm (Mexico and Panama) the ordinary EBITDA was €101m, with a rise of 68% compared to the same period of 2018, on the back of positive regulatory impacts, higher demand and efficiency improvements.

 

Madrid, April 30th, 2019

Consolidated income statement

Reported Ordinary
(€ millions) Q1 19 Q1 18 Variation Q1 19 Q1 18 Variation
Net sales 6,349 6,386 -0.6% 6,349 6,386 -0.6%
EBITDA 1,119 1,053 6.3% 1,167 1,104 5.7%
Depreciation, amortisation and impairment losses -389 -590 -34.1% -389 -420 -7.4%
Impairment owing to credit losses -33 -29 13.8% -33 -29 13.8%
EBIT 697 434 60.6% 745 655 13.7%
Financial results -167 -160 -4.4% -167 -160 4.4%
Result using the equity method 21 15 40.0% 21 15 40.0%
Corporate income tax -119 -99 20.8% -131 -108 21.9%
Income from interrupted operations - 183 - - - -
Non-controlling interests -91 -54 68.5% -91 -77 18.2%
Net income 341 320 6.7% 377 326 15.8%

 

Contribution to EBITDA per activity

Reported Ordinary
(€ millions) Q1 19 Q1 18 Variation Q1 19 Q1 18 Variation
Gas & Electricity 402 399 0.5% 409 404 1.2%
EMEA infrastructure 446 441 1.1% 475 441 7.7%
LatAm South infrastructure 193 137 40.9% 194 169 14.8%
LatAm North infrastructure 101 60 -68.3% 101 60 68.3%
Rest -22 16 - -12 30
TOTAL 1,119 1,053 6.3% 1,167 1,104 5.7%