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SNAM RETE GAS 2007 PRELIMINARY RESULTS

Price sensitive
 
  • EBIT € 1,022 million +12.2%; adjusted EBIT* € 946 million +4.5% on 2006 
  • net profit € 594 million +32.6%; adjusted net profit* € 442 million -0.7% on 2006
  • earnings per share** € 0.335 +42.5%; adjusted earnings per share € 0.249 +6.8%
  • controllable fixed costs -3.4% in real terms
  • investments € 728 million +7.9%; increase in transportation capacity*** +5.8%
  • gas injected into the transportation network 83.28 billion cubic metres -5.4%
 

Proposed dividend € 0.21 per share (+10.5%), € 0.08 of which already distributed as interim dividend

San Donato Milanese, 13 February 2008 - The board of directors of Snam Rete Gas S.p.A. reviewed the group’s (unaudited) preliminary 2007 results yesterday.

Carlo Malacarne, CEO, commented:
“The company delivered a positive operating and financial performance in 2007 leveraging on its solid business model, which compensated for the impact of mild weather conditions on the gas market. This led to an increase in the adjusted EBIT and adjusted EPS of 4.5% and 6.8%, respectively. The proposed dividend, to be paid in May, shows a 10.5% increase on 2006 and confirms our commitment to sustainable and attractive returns to shareholders�?.

 
 

2006

2007

Var.ass.

Var.%

 

       

Principali dati operativi ed economici

 

 

 

 

Gas naturale immesso nella Rete Nazionale Gasdotti (miliardi di metri cubi)

87,99

83,28

(4,71)

(5,4)

Rigassificazione di gas naturale liquefatto (GNL) (miliardi di metri cubi)

3,13

2,38

(0,75)

(24,0)

Rete dei gasdotti (chilometri in esercizio)

30.889

31.081

192

0,6

Utile operativo (milioni di euro)

911

1.022

111

12,2

Utile operativo adjusted* (milioni di euro)

905

946

41

4,5

Utile netto (milioni di euro)

448

594

146

32,6

EPS (euro)

0,235

0,335

0,100

42,5

Utile netto adjusted* (milioni di euro)

445

442

(3)

(0,7)

EPS adjusted* (euro)

0,233

0,249

0,016

6,8


 

* Adjusted net profit is profit net of non-recurring transactions and other special items
** Calculated considering average number of shares outstanding during the year
*** Continuous and interruptible transportation capacity at 1 October 2007, start date of the thermal year 2007-2008

Preliminary 2007 highlights

Financial

  • total revenue: € 1,868 million, of which € 1,757 million (+1.9%) was generated by transportation services. The increase is principally attributable to the contribution of investments made in 2005 and 2006 (+€ 79 million), partly offset by smaller volumes transported, mainly due to the mild weather conditions in the first few months of the year (-€ 31 million) and by updated transportation tariffs (-€ 15 million)

  • decrease in recurring variable costs (€ 11 million), mainly for fuel gas, and in controllable fixed costs (€ 3 million, -3.4% in real terms)

  • adjusted EBIT: € 946 million, +€ 41 million. The increase is principally the result of higher transportation revenue (€ 33 million) and the decrease in operating costs (€ 18 million)

  • adjusted net profit: € 442 million -€ 3 million. The decrease is principally due to the greater net financial expense (€ 42 million) and higher income taxes (€ 2 million), partly offset by the higher EBIT (€ 41 million). Adjusted earnings € 0.249 per share, +6.8% compared to 2006

  • net financial debt: € 5,882 million; +€ 627 million compared to 31 December 2006

  • leverage (debt/debt+equity): 62.6% (31 December 2006: 58.7%)

Operating

  • investments: € 728 million (+7.9%), 85% of which is expected to be incentivised*. Investment outlays mainly related to development of the transportation network to upgrade the import system from North Africa

  • gas injected into the transportation network -4.71 billion cubic metres (-5.4%); the decrease is due to lower volumes of gas injected into storage, in a gas market scenario which showed a growth in the thermoelectric sector higher than the decrease in the residential sector due to mild weather conditions in the first few months of the year

Dividend

The board of directors intends to propose to the shareholders in their meeting to be held on 18 and 21 April (on first and second call, respectively) the distribution of a dividend of € 0.21 per share for 2007 (+ 10.5% on 2006), € 0.08 was of which already distributed as an interim dividend in October 2007. The remaining € 0.13 per share will be payable from 22 May 2008 (ex dividend date 19 May 2008)

Outlook

  • gas demand is expected to grow by more than 2% annually in the 2008-2011 period, due to the estimated increase in demand of the thermoelectric sector

  • the company confirms its commitment to making the investments necessary to develop the transportation capacity supporting the gas market’s growth as well as the system flexibility in the 2008-2011 period

Snam Rete Gas’s Chief Financial Officer, Antonio Paccioretti, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and information disclosures in this press release correspond to the company’s evidence and accounting books and entries.

Disclaimer

This press release includes forward-looking statements, especially in the section on the group’s outlook about future gas demand, investment plans and future performance. Such statements by their very nature are subject to risk and uncertainty as they depend on the fact that certain events and developments will take place. The actual results may differ from those communicated due to different reasons, such as foreseeable trends in demand, offer and natural gas prices, general macro-economic conditions, the effect of new energy and environment legislation, the successful development and implementation of new technologies, changes in the stakeholders' expectations and other changes in business conditions.

* The allocation of the 2007 investments to the different categories will be presented to the Electricity and Gas Authority during presentation of the tariff proposals for the thermal year 2008-2009.


 

Summary of the 2007 preliminary figures

Net profit(€ 594 million) increased by € 146 million (32.6%) compared to 2006 due to the greater EBIT (+€ 111 million), partly offset by the higher net financial expense (-€ 32 million) and lower income tax (+€ 67 million), mainly due to the changes introduced by the 2008 Budget Law. Excluding the effect of the non-recurring and other special items, the adjusted net profit decreased by € 3 million, mainly due to the greater net financial expense (-€ 42 million) and greater income tax (-€ 2 million), partly offset by the higher EBIT (+€ 41 million).

EBIT 1 recorded for 2007 amounted to € 1,022 million, up € 111 million or 12.2% on 2006. Excluding the effect of non-recurring and other special items recognised in 2006 and 2007, adjusted EBIT increased by € 41 million (4.5%) mainly due to: (i) the increase in transportation revenue (+€ 33 million), positively affected by investments (+€ 79 million) and negatively impacted by the smaller gas volumes transported (-€ 31 million) and by the updated transportation tariffs (-€ 15 million); and (ii) the decrease in operating costs (+€ 18 million) due to the reduction in recurring variable costs (+€ 11 million), mainly for the purchase of fuel gas used the compression stations and to the decrease in controllable fixed costs (+€ 3 million). These positive factors were partly offset by the higher depreciation and amortisation charges principally following the roll out of new transportation infrastructures (-€ 6 million). The non-recurring and other special items 2 of 2007 related to the recognition of income from: (i) the release to the income statement of the excess provision for deferred tax liabilities following the decrease in the IRES tax rate (from 33% to 27.5%) and the IRAP tax rate (from 4.25% to 3.9%) introduced by the 2008 Budget Law (€ 98 million); (ii) the receivable (including interest) from the Sicilian Regional Authorities for the amounts paid in 2002 by the company for the tax on title to pipelines, subsequently considered to be illegitimate by the EU Court of Justice and cancelled by the Sicilian Regional Authorities (€ 81 million); and (iii) the redetermination of the post-employment benefits at 31 December 2006 following the changes to the treatment of Italian post-employment benefits introduced by the 2007 Budget Law (€ 5 million).

The decrease in operating costs (-€ 38 million) was mainly due to the smaller recurring variable costs (-€ 11 million), principally attributable to the smaller volumes of fuel gas used by the compression stations and to smaller fixed costs (-€ 29 million), mainly related to the lower personnel expense following the costs incurred in 2006 for termination benefits.

Income tax (€ 228 million) decreased by € 67 million compared to 2006, mainly due to the release of the excess provision for deferred tax liabilities to the income statement following the reduction in the IRES tax rate (from 33% to 27.5%) and the IRAP tax rate (from 4.25% to 3.9%), partly offset by the higher profit before tax.

Net financial debt amounted to € 5,882 million, an increase of € 627 million on 31 December 2006. This change was mainly due to: (i) payment of the 2006 dividend of € 0.19 per share (-€ 334 million); (ii) payment of the 2007 interim dividend of € 0.08 per share, resolved by the board of directors on 18 September 2007 and paid from 25 October 2007 (-€ 141 million); (iii) the repurchase of treasury shares 3 (-€ 336 million); (iv) net investment outlays (-€ 750 million), only partly offset by net cash flows from operating activities (+€ 934 million). Net financial debt increased by € 264 million compared to 30 September 2007.

Non-current financial liabilities (€ 4,501 million) made up 77% of net financial debt. The average maturity of non-current loans was approximately four years (four and a half years at 31 December 2006).


 

Other information

Tax charged by the Sicilian Regional Authorities on title to gas pipelines
Following the decision by the EU Court of Justice on 21 June 2007, which considered the tax charged by the Sicilian Regional Authorities on title to gas pipelines to be illegitimate, the Sicilian Regional Assembly cancelled the law setting up this tax. Furthermore, the Sicilian Regional Authorities did not present any appeal against the seven rulings issued by the Palermo Provincial Tax Commission, and therefore the rulings became definitive. Snam Rete Gas has accordingly accounted a receivable of approximately € 81 million from the Sicilian Regional Authorities.

Buy back plan
The buy back plan, approved by the shareholders on 10 November 2005 was completed on 2 May 2007. Snam Rete Gas repurchased 194,737,950 ordinary shares (73,006,653 of which repurchased in 2007), equal to 9.95% of share capital, at an average price per share of € 4.06 for a total of € 791 million (€ 336 million of which in 2007).

1 EBIT is analysed by considering only those elements that have led to a change therein as application of the gas sector tariff regulations generates costs and revenue which are netted.
2
Income-generating components are classified as special items, when material, if: (i) they derive from events or transactions of a non-recurring nature or transactions or events that occur infrequently during normal business activities; or (ii) they derive from events of transactions that do not form part of the company’s normal business activities. Consob resolution no. 15519 of 27 July 2006 provides that income-generating components deriving from non-recurring events or transactions are disclosed, when material, separately in the directors’ report and notes to the financial statements.
3 The repurchase cost relates to the period from 1 January to 2 May 2007 when the buy back plan was completed.



 

Reclassified consolidated financial statements (*)

Consolidated income statement

 
         

(milioni di €)

 

2006

2007

Var. ass.

Var.%

Ricavi della gestione caratteristica

1.760

 

1.790

 

30

1,7

Altri ricavi e proventi

29

 

78

 

49

 

di cui non ricorrenti e altri special items

 

20

 

71

51

 

Ricavi totali

1.789

 

1.868

 

79

4,4

Costi operativi

(395)

 

(357)

 

38

(9,6)

di cui non ricorrenti e altri special items

 

(14)

 

5

19

 

Margine operativo lordo

1.394

 

1.511

 

117

8,4

Ammortamenti e svalutazioni

(483)

 

(489)

 

(6)

1,2

Utile operativo

911

 

1.022

 

111

12,2

Utile operativo adjusted

 

905

 

946

41

4,5

Oneri finanziari netti

(168)

 

(200)

 

(32)

19,0

di cui non ricorrenti e altri special items

     

10

10

 

Utile prima delle imposte

743

 

822

 

79

10,6

Imposte sul reddito

(295)

 

(228)

 

67

(22,7)

di cui non ricorrenti e altri special items

 

(3)

 

66

69

 

Utile netto (**)

448

 

594

 

146

32,6

Utile netto adjusted (**)

 

445

 

442

(3)

(0,7)


 

(**)The profit is totally attributable to the shareholders of Snam Rete Gas


 

Consolidated balance sheet

 
   

(milioni di €)

 

31.12.2006

31.12.2007

Var. ass.

Immobili, impianti e macchinari

9.715

9.957

242

Attività immateriali

48

41

(7)

Debiti netti relativi all'attività di investimento

(236)

(212)

24

Capitale immobilizzato

9.527

9.786

259

Capitale di esercizio netto

(539)

(368)

171

Fondi per benefici ai dipendenti

(34)

(29)

5

CAPITALE INVESTITO NETTO

8.954

9.389

435

 

 

 

 

Patrimonio netto

3.699

3.507

(192)

Indebitamento finanziario netto

5.255

5.882

627

COPERTURE

8.954

9.389

435



 

(*) Reference should be made to the paragraph on the reconciliation of the reclassified balance sheet with the mandatory balance sheet in the 2007 financial statements.

Consolidated cash flow statement

 
 

(milioni di €)

 

2006

2007

Utile netto

448

594

A rettifica:

   

- Ammortamenti ed altri componenti non monetari

496

488

- Interessi e imposte sul reddito

462

426

Flusso di cassa del risultato operativo prima della variazione del capitale di esercizio

1.406

1.508

Variazione del capitale di esercizio relativo alla gestione

73

2

Interessi e imposte sul reddito incassati (pagati)

(537)

(576)

Flusso di cassa netto da attività di esercizio

942

934

Investimenti in immobili, impianti e macchinari e attività immateriali

(629)

(727)

Disinvestimenti

2

1

Debiti netti relativi all'attività di investimento

31

(24)

Free cash flow

346

184

Variazione dei debiti finanziari

436

627

Flusso di cassa del capitale proprio

(782)

(811)

Flusso di cassa netto dell'esercizio

0

0

 

 

 

 

 

 

Free cash flow

346

184

Flusso di cassa del capitale proprio

(782)

(811)

Variazione indebitamento finanziario netto

(436)

(627)


 

Riferimenti societari

Investor Relations Snam Rete Gas
Tel.: +39 02.520.38272 - Fax: +39 02.520.3865
Casella e-mail: investor.relations@snamretegas.it


Relazioni Esterne Snam Rete Gas
Tel.: +39 02.520.58691 - Fax: +39 02.520.38227
Casella e-mail: relazioni.esterne@snamretegas.it


Ufficio Stampa Eni
Tel.: +39 02.520.31875 - +39 06.5982398
Casella e-mail: ufficio.stampa@eni.it

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updated
05 August 2016 - 16:18 CEST