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Snam announces results for the first quarter of 2013

Price sensitive
San Donato Milanese, 24 April 2013 – The Snam Board of Directors, chaired by Lorenzo Bini Smaghi, met yesterday and approved the consolidated results for the first quarter of 2013 [1] (unaudited).
 
Financial highlights
·                      Total revenue: €896 million [2], in line with the first quarter of 2012
·                      EBITDA: €717 million (+1.3%)
·                      EBIT: €531 million (-1.3%)
·                      Net profit: €242 million (-11.7%)
·                      Investments: €216 million
·                      Net financial debt: €12,138 million (€12,398 at 31 December 2012)
 
Operating highlights
·                      Gas injected into the transportation network: 18.62 billion cubic metres (-17.1%)
·                      Number of active meters: 5.912 million (+0.3%)
·                      Available storage capacity allocated: 10.7 billion cubic metres
  
Carlo Malacarne, Snam CEO, made the following comments on the results:
“Snam produced a good performance in the first quarter of 2013 with EBITDA of €717 million, up by 1.3% compared with the same period last year. This result was achieved despite lower gas demand as a result of the economic downturn and lower quantities injected into the network. The decrease in net profit was due to higher financial expense, partly as a result of the debt refinancing that followed the ownership unbundling from eni. We continue to remain focused on operating efficiency, strict financial discipline and strong capital structure. Furthermore, we confirm our capex plan and commitment to invest in profitable and value creating growth for our shareholders.”
 
 
Financial highlights
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Total revenue
969
957
(12)
(1.2)
Total revenue net of the effects of IFRIC 12
897
896
(1)
(0.1)
- of which revenue from regulated activities (*)
886
883 
(3)
(0.3)
Operating costs
261
240
(21)
(8.0)
Operating costs net of the effects of IFRIC 12
189
179
(10)
(5.3)
EBIT
538
531
(7)
(1.3)
Net profit (**)
274
242
(32)
(11.7)
EBIT per share (***)                                                              (€)
0.159
0.157
(0.002)
(1.3)
Net profit per share (***)                                                       (€)
0.081
0.072
(0.009)
(11.1)
Investments
259
216
(43.0)
(16.6)
Number of shares outstanding at the end of the period     (millions)
3,378.6
3,378.9
0.3
 
Average number of shares outstanding during the period (millions)   
3,378.6
3,378.8
0.2
 
   
 
   
   
 
   


(*)     Revenue from regulated activities in the first quarter of 2013 includes capital gains from the sale of plants to the municipal authorities awarding natural gas distribution concessions. The corresponding amounts for 2012, recognised under “Revenue from non-regulated activities”, have been restated accordingly.
(**) Net profit is attributable to Snam.
(***)         Calculated based on the average number of shares outstanding during the period.
 
Total revenue
Total revenue amounted to €957 million in the first quarter of 2013, down by €12 million (-1.2%) versus the corresponding period of the previous year. Net of the effects of IFRIC 12, total revenue was in line with the first quarter of 2012 (€897 million) at €896 million, comprising €883 million from regulated activities and €13 million (+18.2%) from non-regulated activities. Revenue from regulated activities refers to the natural gas transportation (€505 million; -4.0%), distribution (€248 million; +3.8%), storage (€124 million; +7.8%) and regasification (€6 million) segments. The reduction in transportation segment revenue (-€21 million) was due to lower natural gas sales made for the purpose of balancing the gas system (€12 million in the first quarter of 2013 versus €43 million a year earlier) [3]. Net of this, revenue from regulated transportation activities increased by €10 million (+2.1%) versus the first three months of 2012.  
 
EBIT
EBIT amounted to €531 million in the first quarter of 2013, down by €7 million (-1.3%) versus the same period last year. Higher revenue from regulated activities across all the main business segments (+€22 million, net of components offset in costs) was more than offset by higher operating costs (-€15 million, net of components offset in revenue), mainly due to changes in provisions for risks and charges, and by higher amortisation and depreciation (-€16 million), resulting essentially from the entry into service of new infrastructure.
 
Net profit
Net profit totalled €242 million, down by €32 million (-11.7%) on the first quarter of 2012. The reduction was due to higher net financial expense (-€40 million), resulting mainly from the higher average cost of debt attributable essentially to refinancing costs, and from a higher average debt for the period. These changes were partly offset by lower income taxes (+€13 million), owing primarily to the lower pre-tax profit.
 
Investments
Investments for the first quarter of 2013 totalled €216 million (€259 million in the first quarter of 2012). Incentivised investments [4]represent around 67% of total investments.
 
Net financial debt
The positive net cash flow from operating activities (€602 million) enabled Snam to fully finance its net investments for the period and to reduce its net financial debt [5]by €260 million compared with the end of 2012. As at 31 March 2013, this debt stood at €12,138 million.
 
 
Operating highlights
 
 
First quarter
Change
% change
 
2012
2013
 
 
Natural gas transportation (a)
 
 
 
 
Natural gas injected into the national gas transportation network (billions of cubic metres) (b)
22.45
18.62
(3.83)
(17.1)
Transportation network (kilometres in use)
32,018
32,244
226
0.7
Liquefied Natural Gas (LNG) regasification (a)
 
 
   
LNG regasification (billions of cubic metres)
0.41
0.05
(0.36)
(87.8)
Natural gas storage (a)
 
 
   
Available storage capacity (billions of cubic metres) (c)
10.0
10.7
0.7
7.0
Natural gas moved through the storage system (billions of cubic metres)
5.28
6.97
1.69
32.0
Natural gas distribution
 
 
 
 
Active meters (millions)
5.895
5.912
0.017
0.3
Gas distribution concessions (number)
1,449
1,435
(14)
(1.0)
Distribution network (kilometres) (d)
52,441
52,632
191
0.4
Employees in service at year end (number)
6,074
6,023
(51)
(0.8)
by business segment:
 
 
   
- Transportation
1,988
1,969
(19)
(1.0)
- Regasification
76
77
1
1.3
- Storage
292
301
9
3.1
- Distribution
3,049
3,002
(47)
(1.5)
- Corporate
669
674
5
0.7
 
 
 
   


(a)    Gas volumes are expressed in standard cubic metres (SCM) with an average higher heating value (HHV) of 38.1 and 39.4 MJ/SCM respectively for the businesses of natural gas transportation and regasification and natural gas storage.
(b)    Data for the first quarter of 2013 are correct as at 10 April 2013. 2012 data have been aligned with data from the national gas transportation network report.
(c)    Working gas capacity for modulation, mining and balancing services.
(d)    This figure refers to the kilometres of network managed by Italgas.
 
Natural gas injected into the national transportation network
A total of 18.62 billion cubic metres was injected into the national transportation network during the first quarter of 2013, down by 3.83 billion cubic metres (-17.1%) on the same period of last year. The fall was due to higher use of gas from storage and to lower natural gas demand in Italy (-4.8%), attributable essentially to less consumption by the thermoelectric and industrial sector.
 
Liquefied Natural Gas (LNG) regasification
In the first quarter of 2013, the LNG terminal at Panigaglia (SP) regasified 0.05 billion cubic metres of natural gas, a reduction of 0.36 billion cubic metres compared with the first quarter of 2012 (0.41 billion cubic metres).
 
Natural gas storage
The volumes of gas moved through the storage system in the first quarter of 2013 totalled 6.97 billion cubic metres, a rise of 32.0% compared with volumes in the first quarter of 2012 (5.28 billion cubic metres). This increase was due mainly to the higher gas withdrawals from storage (+41.5%).
 
Natural gas distribution
At 31 March 2013, Snam owned concessions for gas distribution services in 1,435 municipalities (the same number as at 31 December 2012), of which 1,337 in operation. It had 5.912 million active meters at gas redelivery points to end users (households, businesses, etc.), compared with 5.907 million at 31 December 2012.
 
Post-balance sheet events
TIGF – Signature of the definitive agreement with Total
On 5 April 2013, the consortium formed by Snam (45%), the Singapore sovereign wealth fund GIC (35%) and EDF (20%, through its fund dedicated to the dismantling of nuclear reactors), signed a definitive agreement with the Total group for the acquisition of TIGF (Transport et Infrastructures Gaz France), a natural gas storage and transportation company in the south-west of France.
Completion of the transaction is subject to approval from the competent authorities.
New bond issues as part of the EMTN programme
On 10 April 2013, as part of the EMTN (Euro Medium Term Notes) programme approved by the Board of Directors on 4 June 2012, Snam issued a two tranches bond for a total amount of €1.5 billion. The two tranches have the following respective characteristics: (i) €1 billion with a four-year term expiring on 30 June 2017 and a fixed-rate annual coupon of 2.375%; and (ii) €0.5 billion with an eight-year term expiring on 29 January 2021 and a fixed-rate annual coupon of 3.375%.
In order to optimise its debt structure, and in accordance with corporate objectives, on 22 April 2013 Snam extinguished in advance its €1.5 billion term loan with an original due date of 24 July 2017, which was taken out as part of the pool financing on 24 July 2012.
 
 
Outlook
Management’s priorities are to expand the Company's business by constructing significant new gas infrastructure in Italy and assessing strategic development opportunities in Europe.
Gas demand
On the basis of information currently available, natural gas demand on the Italian market at the end of 2013 will be down on 2012, due mainly to lower consumption in the thermoelectric sector.
Investments
Snam remains committed to developing natural gas transportation, storage and distribution infrastructure by way of its significant investment programme, for which total expenditure for the 2013-2016 period is forecast at around €6.2 billion at Group level.
Efficiency
Snam confirms its commitment to maximising the creation of value through both operating efficiency and an efficient capital structure.
***
This press release, detailing the group’s consolidated results for the first quarter of 2013 (unaudited), constitutes the interim directors’ report pursuant to Article 154- ter of the Consolidated Law on Finance (TUF).
The financial statements were compiled in accordance with the recognition and measurement criteria established by the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission under Article 6 of Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002.
The recognition and measurement criteria adopted for the preparation of the interim directors’ report at 31 March 2013 are the same as those used for the 2012 annual report, which should be referred to for a description thereof, except for the international accounting standards that came into force on 1 January 2013, as described in the “Recently issued IFRS” section of the 2012 annual report. There was no effect from the application of these standards, except for the changes to IAS 19 “Employee Benefits” approved by the European Commission through Regulation (EU) No 475/2012 of 5 June 2012. Among other things, the new rules, which came into force on 1 January 2013, provide for: (i) the obligation to recognise actuarial gains and losses in the statement of comprehensive income, removing the possibility of adopting the corridor method. Actuarial gains and losses recognised in the statement of comprehensive income are not subsequently reported on the income statement; (ii) the representation of the expected return on plan assets and the interest cost in a single aggregate known as “net interest”, which is calculated by applying the discount rate to net defined-benefit liabilities; (iii) the obligation to recognise on the income statement the effects arising from changes to plan arrangements (“past service costs”) fully in the year in which such changes were made.
These new measures, to be applied retrospectively as if the changes had always been in place, resulted in the restatement of the balance sheet items as at 1 January 2012 and 31 December 2012 and of the 2012 statement of comprehensive income.
In relation to the Snam group’s existing defined-benefit plans (severance pay, or TFR, and the supplementary healthcare provision for company executives of eni, or FISDE), the restatement of these balances was as follows: (i) as at 1 January 2012, an increase of €2 million in employee benefit liabilities and a reduction of €1 million in shareholders’ equity, net of tax effect; and (ii) as at 31 December 2012, a total increase of €21 million in employee benefit liabilities and a reduction of €14 million in shareholders’ equity, net of tax effect.
The effects of these changes mainly apply to the recognition of unrecognised actuarial gains and losses, which are recorded in other components of comprehensive income.
Income and expenses are provided in relation to the first quarters of 2012 and 2013; cash flows are reported in relation to the same periods. The information on the balance sheet refers to 31 December 2012 and 31 March 2013. The financial statements take the same form as those in the interim directors’ report of the half-year report and in the directors’ report of the annual report.
The consolidation scope at 31 March 2013 was the same as on 31 March 2012 and 31 December 2012.
Given their size, amounts are expressed in millions of euro.
Pursuant to Article 154-bis , paragraph 2 of the TUF, the CFO, Antonio Paccioretti, states that the accounting information included in this press release corresponds to documents, accounting ledgers and other records.
Disclaimer
This press release includes forward-looking statements, especially in the “Outlook” section, relating to: natural gas demand, investment plans, future operating performance and project execution. Such statements are, by their very nature, subject to risk and uncertainty as they depend on whether future events and developments take place. The actual results may therefore differ from those forecast as a result of several factors: foreseeable trends in natural gas demand, supply and price, actual operating performance, general macro-economic conditions, geopolitical factors such as international conflicts, the effect of new energy and environmental legislation, the successful development and implementation of new technologies, changes in stakeholders' expectations and other changes in business conditions.
 
A conference call will take place at 15:00 today, 24 April 2013, to present the results of the first quarter of 2013 to investors and financial analysts. An audio webcast of the presentation will be available on the Company’s website (www.snam.it). In conjunction with the start of the conference call, the presentation support material will also be made available in the “Investor Relations/Presentations” section of the website.
 
 
Summary of the results for the first quarter of 2013
INCOME STATEMENT
 
 (€ million)
 
First quarter
Change
% change
 
 
2012
2013
 
 
Core business revenue
 
916
937
21
2.3
Other revenue and income
 
53
20
(33)
(62.3)
Total revenue
 
969
957
(12)
(1.2)
Total revenue net of the effects of IFRIC 12 (*)
 
897
896
(1)
(0.1)
Operating costs
 
(261)
(240)
21
(8.0)
Operating costs net of the effects of IFRIC 12 (*)
 
(189)
(179)
10
(5.3)
EBITDA
 
708
717
9
1.3
Amortisation, depreciation and impairment losses
 
(170)
(186)
(16)
9.4
EBIT
 
538
531
(7)
(1.3)
Net financial expense
 
(85)
(125)
(40)
47.1
Net income from equity investments
 
13
15
2
15.4
Profit before taxes
 
466
421
(45)
(9.7)
Income taxes
 
(192)
(179)
13
(6.8)
Net profit(**)
 
274
242
(32)
(11.7)
     
 
   


(*)     The application of international accounting standard IFRIC 12 “ Service concession arrangements”, in force from 1 January 2010, has not had any effect on the consolidated results, except for the recording, in equal measure, of revenue and costs related to the construction and upgrading of distribution infrastructure (€72 million and €61 million, respectively, in the first quarter of 2012 and first quarter of 2013).
 (**) Net profit is attributable to Snam.
 
EBITamounted to €531 million in the first quarter of 2013, down by €7 million (-1.3%) on the same period of 2012.
Higher revenue from regulated activities (+€22 million, net of consolidation adjustments and components offset in costs), recorded across all the main business segments, was more than offset by higher operating costs (-€15 million, net of components offset in revenue), owing mainly to changes in provisions for risks and charges (-€12 million), and by higher amortisation and depreciation (-€16 million). As well as the entry into service of new infrastructure, this increase was due specifically to the amortisation of costs incurred to obtain natural gas distribution concessions, calculated over the lifetime of the concession.
In terms of business segments, the increase in EBIT [6]resulting from the robust performance of the storage segment (+€12 million; +12.5%) was offset by a decrease in operating income from the natural gas distribution (-€8 million; -6.0%) and transportation (-€5 million; -1.7%) segments.
 
Net profit amounted to €242 million in the first quarter of 2013, down €32 million (-11.7%) versus the previous year.
The fall was due to higher net financial expense (-€40 million) resulting mainly from the higher average cost of debt attributable essentially to debt refinancing costs, and from a higher average debt for the period, the effects of which were partly offset by lower income taxes (+€13 million), owing primarily to the decrease in pre-tax profit.
The consolidated tax rate was 42.5% (41.2% in the first quarter of 2012).
  
The following information concerns the operating and financial performance of the Snam business segments in the first quarter of 2013.
  
Information by business segment
 
Natural gas transportation
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Core business revenue (*)
486
496
10
2.1
- of which natural gas transportation revenue
483
493
10
2.1
Operating costs (*)
117
93
(24)
(20.5)
EBIT
303
298
(5)
(1.7)
Investments
151
95
(56)
(37.1)
- of which with incentives
133
72
(61)
(45.9)
- of which without incentives
18
23
5
27.8
Natural gas injected in the national gas transportation network (billions of cubic metres)
22.45
18.62
(3.83)
(17.1)
Transportation network (kilometres in use)
32,018
32,244
226
0.7
- of which national network
9,08 0
9,40 6
326
3.6
- of which regional network
22,938
22,838
(100)
(0.4)
   
 
   


(*)     Before consolidation adjustments.
 
Results
Natural gas transportation revenue totalled €493 million, up by €10 million (+2.1%) compared with the first quarter of 2012. This increase was due to the contribution of investments made in 2011 (+€25 million), the effects of which were partly offset by lower volumes of natural gas transported (-€12 million) and tariff updating (-€5 million). Higher revenue from tariff components offset in costs (+€6 million) also contributed to the increase in transportation revenue.
 
EBIT amounted to €298 million in the first three months of 2013, down by €5 million (-1.7%) on the same period last year. Higher transportation revenue (+€4 million, net of components offset in costs) was offset by less other revenue and income (-€5 million, net of components offset in costs) and by higher amortisation and depreciation (-€5 million) following the entry into service of new infrastructure.
  
Operating review
 
Natural gas injected into the national gas transportation network [7]
 
(billion m 3)
First quarter
Change
% change
 
   2012 (*)
2013
 
 
Domestic output
2.03
1.84
(0.19)
(9.4)
Imports (entry points)
20.42
16.78
(3.64)
(17.8)
Tarvisio
6.70
7.50
0.80
11.9
Mazara del Vallo
6.93
5.74
(1.19)
(17.2)
Cavarzere (LNG)
1.74
1.54
(0.20)
(11.5)
Gela
1.57
1.37
(0.20)
(12.7)
Gries Pass
3.01
0.58
(2.43)
(80.7)
Panigaglia (LNG)
0.41
0.05
(0.36)
(87.8)
Gorizia
0.06
… 
(0.06)
(100.0)
 
22.45
18.62
(3.83)
(17.1)


(*)     The data for 2012 have been aligned with those published in the financial statements of the national transportation network.
In total, 18.62 billion cubic metres of natural gas were injected into the national gas transportation network during the first quarter of 2013, a reduction of 3.83 billion cubic metres (-17.1%) compared with the corresponding period in 2012. This fall was mainly due to higher withdrawals from storage (2.47 billion cubic metres) and lower demand for natural gas in Italy (-4.8%), which was itself attributable primarily to reduced consumption by the thermoelectric (-16.3%) and industrial (-5.2%) sectors. Gas demand in the residential sector increased slightly (+0.9%) compared with the first quarter of 2012.
Natural gas injected into the national network from domestic production fields, or their collection and treatment centres, was 1.84 billion cubic metres, down by 0.19 billion cubic metres (-9.4%) compared with the first quarter of 2012.
Imports fell by 3.64 billion (-17.8%) compared with the first quarter of 2012. The reduction was due mainly to lower volumes injected at the entry points at Gries Pass (-2.43 billion cubic metres; -80.7%), following a reduction in imports from northern Europe, at Mazara del Vallo (-1.19 billion cubic metres; -17.2%) and at the Cavarzere and Panigaglia regasification terminals (-0.20 billion and -0.36 billion cubic metres respectively), offset by a rise in imports at the Tarvisio entry point (+0.80 billion cubic metres; +11.9%) following an increase in gas imports from Russia.
 
 
Investments
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Development
113
52
(61)
(54.0)
Investments with 3% incentive
58
39
(19)
(32.8)
Investments with 2% incentive
55
13
(42)
(76.4)
   
 
 
 
Maintenance and other
38
43
5
13.2
Investments with 1% incentive
20
20
   
Investments with no incentives
18
23
5
27.8
 
151
95
(56)
(37.1)


Investmentstotalled €95 million, down by €56 million (-37.1%) compared with the first quarter of 2012.
Investments were classified in accordance with Resolution ARG/gas 184/09 of the Electricity and Gas Authority, which identified various categories of projects with different incentive levels. 
Investments benefiting from incentive-based returns account for 76% of the total. The breakdown of investments for 2012 and 2013 by category will be submitted to the Authority when it approves the tariff proposals for 2014 and 2015, and may differ from the breakdown in the current regulatory period, which ends on 31 December 2013.
The main investments with a 3% incentive (€39 million) were:
·          continuation of material delivery and construction work on the Zimella-Cervignano natural gas pipeline from Veneto to Lombardy, as part of the project to upgrade national transportation infrastructure in the Po Valley (€19 million); continuation of construction work on the Poggio Renatico-Cremona natural gas pipeline from Emilia Romagna to Lombardy;
·          delivery of materials and continuation of renovation work at the Enna station in Sicily, as part of the project to upgrade import infrastructure in the south of Italy (€10 million);
·          continuation of planning works for the Cervignano-Mortara natural gas pipeline in Lombardy, as part of the Northern Exports programme (€3 million);
·          continuation of additional work on the main line of the Massafra-Biccari natural gas pipeline from Puglia to Basilicata, as part of the new transportation infrastructure project on the Adriatic coast (€3 million).
The main investments with a 2% incentive (€13 million) relate to a number of works to upgrade the network and to connect to new regional and national redelivery points, including:
·          continuation of construction work on natural gas pipelines and associated connections, as part of the natural gas conversion project in Calabria (€3 million);
·          continuation of construction work on the Derivazione per Sapri natural gas pipeline in Campania (€1 million);
·          continuation of construction work on the Monsummano-Lamporecchio natural gas pipeline in Tuscany (€1 million).
The investments with a 1% incentive (€20 million) relate to works to maintain plant quality and safety levels, including compensation for third parties (€4 million).
The investments with no incentives (€23 million) include plant and asset replacement programmes, as well as projects to develop new IT systems and implement existing ones (€4 million), and to acquire other core operating assets such as real estate (€4 million).
 
Balancing service
Exploratory investigation into gas balancing service provision methods
By way of Resolution 144/2013/E/gas, published on 18 April 2013, the Electricity and Gas Authority ended its exploratory investigation into balancing service provision methods during the period 1 December 2011 - 23 October 2012, started by way of Resolution 282/2012/R/gas. The Authority published successive resolutions to launch sanctioning proceedings against six users for violations pertaining to the natural gas balancing service, setting a term of 120 days for the related investigations.
By way of Resolution 145/2013/R/gas, the Authority also began proceedings to determine the share of costs arising from outstanding receivables owing to the Balancing Supervisor for the period 1 December 2011 - 23 October 2012. The time period for the investigation is 180 days from the notification date.
Regulation
Consultation document 164/2013/R/gas – “Criteria for determining the tariffs for transportation and dispatching natural gas service for the fourth regulatory period (1 January 2014 – 31 December 2017)”.
On 22 April 2013, the Electricity and Gas Authority published the consultation document 164/2013/R/gas relating to the criteria setting natural gas transportation and dispatching tariffs for the fourth regulatory period going from 1 January 2014 to 31 December 2017.
  
Liquefied Natural Gas (LNG) regasification
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Core business revenue (*) (**)
9
8
(1)
(11.1)
- of which LNG regasification revenue
6
6
   
Operating costs (**)
8
5
(3)
(37.5)
EBIT
1
2
1
100.0
Volumes of LNG regasified (billions of cubic metres)
0.41
0.05
(0.36)
(87.8)
Tanker loads (number)
13
1
(12)
(92.3)
   
 
   
   
 
   


(*)     Core business revenue includes the recharging to customers of expenses relating to natural gas transportation services provided by Snam Rete Gas S.p.A. For the purposes of the consolidated financial statements, this revenue is eliminated, together with transportation costs, within GNL Italia S.p.A. in order to represent the substance of the operation. 
(**)   Before consolidation adjustments.
Results
LNG regasification revenue amounted to €6 million, in line with the first quarter of 2012, and related mainly to capacity fees [8].
EBITtotalled €2 million, up by €1 million versus the first quarter of 2012. This increase was due essentially to lower operating costs (-€1 million, net of components offset in revenue), partly as a result of less plant activity.
Operating review
During the first quarter of 2013, the LNG terminal at Panigaglia (SP) regasified 0.05 billion cubic metres of natural gas (0.41 billion cubic metres in the first quarter of 2012), unloading 1 methane tanker (13 in the first quarter of 2012).
  
Natural gas storage
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Core business revenue (*)
125
140
15
12.0
- of which natural gas storage
125
140
15
12.0
Operating costs (*)
14
16
2
14.3
EBIT
96
108
12
12.5
Investments
31
50
19
61.3
- of which with incentives
28
46
18
64.3
- of which without incentives
3
4
1
33.3
Concessions (number)
10
10
   
- of which operational (**)
8
8
   
Natural gas moved through the storage system (billions of cubic metres)
5.28
6.97
1.69
32.0
- of which injected
0.36
0.01
(0.35)
(97.2)
- of which withdrawn
4.92
6.96
2.04
41.5
Available storage capacity (billions of cubic metres) (***)
10.0
11.2
1.2
12.0
   
 
   


(*)   Before consolidation adjustments.
(**)        With working gas capacity for modulation services.
(***) Working gas capacity for modulation, mining and balancing services. Available capacity is the capacity declared to the Electricity and Gas Authority at the start of the 2012-2013 thermal year, pursuant to Resolution ARG/gas 119/10. Available capacity for the 2013-2014 thermal year is 11.4 billion cubic metres.
Results
Natural gas storage revenue amounted to €140 million [9], an increase of €15 million (+12.0%) versus the first quarter of 2012. This rise was mainly due to the contribution of investments made in 2011 (+€8 million) and to tariff updating mechanisms related to the recognition of new amortisation and depreciation (+€3 million). Storage revenue relates to modulation storage (€121 million; +10.0%) and strategic storage (€17 million; +13.3%).
 
EBIT amounted to €108 million in the first quarter of 2013, up by €12 million (+12.5%) compared to the same period in the previous year. This increase was due to higher storage revenue (+€13 million, net of components offset in costs) and more efficient control of operating costs, offset partly by higher amortisation and depreciation (-€1 million).
 
 
Operating review
Natural gas moved through the storage system
The volumes of gas moved through the storage system in the first quarter of 2013 amounted to 6.97 billion cubic metres, an increase of 1.69 billion cubic metres (+32.0%) compared with the volumes moved in the first quarter of 2012 (5.28 billion cubic metres). The rise was due to greater withdrawals of gas from storage (+2.04 billion cubic metres; +41.5%).
Total storage capacity at 31 March 2013, including strategic storage, was 15.7 billion cubic metres (+0.7 billion cubic metres; +4.7%), comprising 10.7 billion cubic metres of available capacity allocated (10 billion cubic metres in thermal year 2011-2012), 4.5 billion cubic metres of strategic storage (5 billion cubic metres in thermal year 2011-2012) and0.5 billion cubic metres of capacity made available due to reduced strategic storage and to be allocated to users in accordance with the terms and conditions specified in the Ministerial Decree of 15 February 2013.
Investments
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Development of new fields (4% incentive over 16 years)
16
27
11
68.8
Upgrading of capacity (4% incentive over eight years)
12
19
7
58.3
Maintenance and other
3
4
1
33.3
 
31
50
19
61.3


Investments totalled €50 million, up by €19 million (+61.3%) compared with the first quarter of 2012.  
Investments were classified in accordance with Resolution ARG/gas 119/10 of the Electricity and Gas Authority, which identified various categories of projects with different incentive levels.
A total of 92% of these investments are expected to benefit from incentive-based returns. The breakdown of investments by category for 2012 and 2013 will be submitted to the Authority when it approves the tariff proposals for 2014 and 2015 respectively, and, in relation to 2013 investments, may differ from the breakdown in the current regulatory period, which ends on 31 December 2014.
Investments with a 4% incentive over 16 years (€27 million) relate to development activities in progress at the Bordolano and Fiume Treste storage fields, mainly for drilling, the acquisition of materials and the execution of work on the plants.
Investments with a 4% incentive over eight years (€19 million) refer to drilling and repowering activities, primarily at the Fiume Treste, Sabbioncello and Settala storage fields.
 
 
Withdrawals of strategic gas reserves from storage in 2010-2011
Resolution 91/2013/S/gas - “Proceedings for the adoption of prescriptive measures against Speia S.p.A. and Stogit S.p.A. in relation to possible anomalies in the management of withdrawals of strategic gas reserves”.  
With this resolution, published on 4 March 2013, the Electricity and Gas Authority initiated proceedings for the adoption of prescriptive measures against Speia S.p.A. and Stogit S.p.A. in relation to possible anomalies in the management of withdrawals of strategic gas reserves in the 2010-2011 thermal year for storage.
The proceedings in question began with the survey that was launched with Resolutions 282/2012/R/gas and 444/2012/R/gas, relating to anomalies recorded on the balancing market during the period from 1 December 2011 to 23 October 2012. The purpose of the proceedings is to ascertain the facts relating to the withdrawals of strategic gas from storage made by Speia during the 2010-2011 thermal year for storage. The duration of the investigation has been set at 120 days, starting from the date of notification of the resolution.
Regulation
Resolution 92/2013/R/gas – “Provisions for the allocation of storage capacity for the 2013-2014 thermal year for storage”.
With this resolution, published on 5 March 2013, the Authority defined how the auction procedure would be organised and how storage capacity would be allocated for the 2013-2014 thermal year, pursuant to the decree issued by the Minister of Economic Development on 15 February 2013 (“ Determination of modulation storage capacity and of the methods of distributing and allocating storage capacity”).
The Authority postponed, to be dealt with under subsequent measures, provisions for amending the time frames for settlement in order to ensure that storage companies have a revenue flow equivalent to that received under the settlement criteria applicable prior to the provisions introduced by the resolution in question, including in the event that the capacity allocation price is lower than the fees approved by the Authority.
Resolution 121/2013/R/gas – “Urgent provisions on settlement relating to storage services for the 2013-2014 thermal year”.
With this resolution, published on 29 March 2013, the Authority set out the provisions on settlement relating to storage services for the 2013-2014 thermal year, in order to mitigate the possible financial impact for storage companies in the event that, due to the provisions of Resolution 92/2013/R/gas, the storage capacity allocation price is different from the fees approved by the Authority.
 
 
Natural gas distribution
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Core business revenue (*)
310
307
(3)
(1.0)
- of which natural gas distribution
297
297
Core business revenue net of the effects of IFRIC 12
238
246
8
3.4
- of which natural gas distribution
225
236
11
4.9
Operating costs (*)
142
140
(2)
(1.4)
Operating costs net of the effects of IFRIC 12
70
79
9
12.9
EBIT
134
126
(8)
(6.0)
Investments
76
69
(7)
(9.2)
Gas distribution (millions of cubic metres)
3,548
3,544
(4)
(0.1)
Distribution network (kilometres) (**)
52,441
52,632
191
0.4
Active meters (millions) 
5.895
5.912
0.017
0.3
   
 
   


(*) Before consolidation adjustments.
(**) This figure refers to the kilometres of network managed by Italgas.
Results
Natural gas distribution revenue for the first quarter of 2013 totalled €297 million, unchanged from the first quarter of 2012. Excluding revenue arising from the application of IFRIC 12, distribution revenue rose by €11 million, or 4.9%, mainly due to the effects of tariff updating mechanisms.
 
EBIT totalled €126 million in the first quarter of 2013, down by €8 million, or 6.0%, compared with the first quarter of 2012. Higher revenue from natural gas transmission services (+€11 million) was more than offset by the increase in operating costs (-€9 million), attributable mainly to higher net expenses resulting from the management of energy efficiency certificates (-€7 million), and by higher amortisation and depreciation for the period (-€10 million). More specifically, this increase was due mainly to the effects of the amortisation of the expenses incurred in obtaining natural gas distribution concessions, calculated based on concession length (-€7 million).
 
Operating review
Natural gas distribution
In the first quarter of 2013, 3,544 million cubic metres of gas were distributed, more or less in line with the same period in 2012 (3,548 million cubic metres).
At 31 March 2013, Snam had concessions for gas distribution services in 1,435 municipalities (the same as at 31 December 2012), of which 1,337 had operational networks and 98 had networks yet to be completed and/or created, with 5.912 million active meters at gas redelivery points to end users (households, businesses, etc.), compared with 5.907 million at 31 December 2012.
 
 
Investments
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Distribution
53
44
(9)
(17.0)
Network maintenance and development
41
35
(6)
(14.6)
Replacement of cast-iron pipes (2% incentive)
12
9
(3)
(25.0)
Metering (8% remuneration)
19
17
(2)
(10.5)
Other investments
4
8
4
100.0
 
76
69
(7)
(9.2)


Investments amounted to €69 million, a decrease of €7 million, or 9.2%, compared with the same period in 2012.  
Investments in distribution (€44 million) mainly involved development projects (extensions and new networks) and the renovation of old sections of pipe, including the replacement of cast-iron pipes.
Investments in metering (€17 million) primarily related to the meter replacement programme and the remote meter reading project.
Other investments (€8 million) mainly related to investments in IT, property and vehicles.
Distribution network
At 31 March 2013, the gas distribution network covered 52,632 kilometres (52,586 kilometres at 31 December 2012). The change in the first three months of the year (+46 km) is due to the:
·          construction of new networks, particularly in Calabria;
·          extensions of networks to meet commitments deriving from concession contracts.
Isontina Reti Gas S.p.A. and framework agreement with Acegas-Aps S.p.A.
With regard to the purchase of 50% of the share capital of Isontina Reti Gas S.p.A. (IRG) and the subsequent transfer to the latter of certain business units of Italgas and Acegas-Aps, which was subject to approval by the Competition Authority, on 17 April 2013 the Authority decided to forbid the deal on the grounds that it would give IRG a dominant position that would eliminate or considerably and lastingly reduce competition on the market for future tenders for the natural gas distribution concessions in the regions of Gorizia, Trieste, Pordenone and Padua 1. Italgas does not agree with the Competition Authority’s decision and plans to take steps accordingly through the appropriate channels.
 
 
Other information
Litigation
Snam is involved in civil, administrative and criminal cases and legal actions related to its normal business activities. The following is a summary of the most important proceedings for which significant changes to the situation reported in the 2012 Annual Report occurred.
 
Electricity and Gas Authority
Italgas S.p.A. - Investigation into breaches with regard to information flows relating to gas metering data
With Resolution VIS 73/11 published on 18 July 2011 and notified to Italgas on 16 September 2011, the Electricity and Gas Authority commenced proceedings against three distribution companies, including Italgas, to investigate an alleged breach of provisions on information flows caused by attempts to collect metering data in the sellers’ favour. Following the proceedings, the Electricity and Gas Authority resolved to impose the relevant fines and adopt the necessary prescriptive actions.
On 20 December 2012, Italgas S.p.A. was notified of the results of the investigation carried out under the proceedings in question, which revealed a failure by the company to comply with the deadline for providing metering data to all sellers. Specifically, according to the Authority, Italgas S.p.A. did not comply with rules aimed at safeguarding a significant interest, such as the interest in the orderly and efficient performance of sellers’ activities, which affected the timely and definite invoicing of end customers.
With Resolution 134/2013/S/gas of 28 March 2013, the Electricity and Gas Authority ruled that Italgas S.p.A. had breached Article 15 of the Consolidated Gas Sales Act (TIVG) and issued it with a fine of approximately €58,000. 
The Company used the provisions for risks set aside in its financial statements.
Snam Rete Gas S.p.A. – Criminal proceeding no 7448/11R.G.R.N.
In relation to the proceedings pursuant to Article 589 of the Italian Criminal Code, a description of which is given on page 273 of the 2012 Annual Report, the proceedings were dismissed at a hearing on 16 April 2013, following the decision that there was insufficient evidence to proceed to trial.
  
The following summary tables show the reclassified consolidated income statement items.


Revenue
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Core business revenue
916
937
21
2.3
Business segments
 
 
 
 
Transportation
486
496
10
2
Regasification
9
8
(1)
(11)
Storage
125
140
15
12
Distribution
310
307
(3)
(1)
- of which effects of IFRIC 12
72
61
(11)
(15)
Corporate
37
39
2
5
Consolidation adjustments
(51)
(53)
(2)
4
Other revenue and income
53
20
(33)
(62.3)
Total revenue
969
957
(12)
(1.2)


Revenue – Regulated and non-regulated activities
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Revenue from regulated activities
958
944
(14)
(1.5)
Transportation
526
505
(21)
(4.0)
Regasification
6
6
   
Storage
115
124
9
7.8
Distribution (*)
311
309
(2)
(0.6)
- of which effects of IFRIC 12
72
61
(11)
(15.3)
Revenue from non-regulated activities
11
13
2
18.2
 
969
957
(12)
(1.2)


(*)     Revenue from regulated activities in the first quarter of 2013 includes capital gains on the sale of plants to municipalities granting distribution concessions. Accordingly, the corresponding values for 2012 have been reclassified from “Revenue from non-regulated activities”.
Operating costs
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Business segments
 
 
 
 
Transportation
117
93
(24)
(20.5)
Regasification
8
5
(3)
(37.5)
Storage
14
16
2
14.3
Distribution
142
140
(2)
(1.4)
- of which effects of IFRIC 12
72
61
(11)
(15.3)
Corporate
32
41
9
28.1
Consolidation adjustments
(52)
(55)
(3)
5.8
 
261
240
(21)
(8.0)


 
Operating costs – Regulated and non-regulated activities
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Regulated business costs
255
227
(28)
(11.0)
Controllable fixed costs
117
117
Variable costs
48
15
(33)
(68.8)
Other costs
90
95
5
5.6
- of which effects of IFRIC 12
72
61
(11)
(15.3)
Non-regulated business costs
6
13
7
 
261
240
(21)
(8.0)


 
Amortisation, depreciation and impairment losses
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Amortisation and depreciation
170
186
16
9.4
Business segments
 
 
   
Transportation
111
116
5
4.5
Regasification
1
1
   
Storage
15
16
1
6.7
Distribution
42
52
10
23.8
Corporate
1
1
   
 
170
186
16
9.4


 
EBIT
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Business segments
 
 
 
 
Transportation
303
298
(5)
(1.7)
Regasification
1
2
1
100.0
Storage
96
108
12
12.5
Distribution
134
126
(8)
(6.0)
Corporate
4
(3)
(7)
 
 
538
531
(7)
(1.3)


 
 
Net financial expense
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Expense on financial debt
72
122
50
69.4
- Expense on short and long-term financial debt
72
122
50
69.4
Losses on derivative contracts
19
 
(19)
(100.0)
- Difference in interest accrued in the period
19
 
(19)
(100.0)
Other financial (income) expense
3
11
8
 
Financial expense capitalised
(9)
(8)
1
(11.1)
 
85
125
40
47.1


 
Net income from equity investments
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Equity method valuation effect
13
15
2
15.4
 
13
15
2
15.4


 
Income taxes
 
(€ million)
First quarter
Change
% change
 
2012
2013
 
 
Current taxes
208
193
(15)
(7.2)
(Prepaid) deferred taxes
 
 
   
Deferred taxes
(21)
(11)
10
(47.6)
Prepaid taxes
5
(3)
(8)
 
 
(16)
(14)
2
(12.5)
Tax rate (%)
41.2
42.5
1.3
 
 
192
179
(13)
(6.8)


 
   
Reclassified balance sheet
 
The reclassified balance sheet set out below combines the assets and liabilities of the condensed consolidated balance sheet based on how the business operates, split into the three basic functions: investment, operations and financing.
Management believes that this format presents useful additional information for investors as it allows identification of the sources of financing (equity and third-party funds) and the application of such funds for fixed and working capital.
The reclassified balance sheet is used by management to calculate the key leverage and profitability ratios.
 
RECLASSIFIED BALANCE SHEET
 
(€ million)
31.12.2012
31.03.2013
Change
Fixed capital
19,567
19,728
161
Property, plant and equipment
14,522
14,504
(18)
Compulsory inventories
363
363
 
Intangible assets
4,593
4,609
16
Equity investments
473
482
9
Financial receivables held for operations
2
2
 
Net payables for investments
(386)
(232)
154
Net working capital (*)
(1,139)
(1,830)
(691)
Provisions for employee benefits (*)
(129)
(130)
(1)
Assets held for sale and directly related liabilities 
15
15
 
Net invested capital
18,314
17,783
(531)
Shareholders’ equity (including minority interests) (*)
5,916
5,645
(271)
Net financial debt
12,398
12,138
(260)
Coverage
18,314
17,783
(531)


(*)  The figures recorded at 31 December 2012 were restated following the retrospective application of the new provisions of IAS 19. The restatement resulted in: (i) an increase in provisions for employee benefits (€21 million); (ii) an improvement in net working capital (€7 million) following the reduction in deferred tax liabilities; and (iii) a reduction in shareholders’ equity (€14 million, net of tax effect). For further details, please refer to the notes on methodology on page 6.
Fixed capital (€19,728 million) rose by €161 million compared with 31 December 2012, mainly due to the reduction in net payables for investments (+€154 million), which was related to payment trends.
 
Equity investments
The item ‘equity investments’ (€482 million) includes the valuation of equity investments using the equity method and refers in particular to the companies Toscana Energia S.p.A. (€166 million), Azienda Energia e Servizi Torino S.p.A. (€131 million), Gasbridge 1 B.V. and Gasbridge 2 B.V. (€129 million in total) and ACAM Gas S.p.A. (€50 million).
 
 
 
Net working capital
 
(€ million)
31.12.2012
31.03.2013
Change
Trade receivables
1,921
2,327
406
Inventories
202
186
(16)
Tax receivables
125
40
(85)
Other assets
193
208
15
Trade payables
(764)
(1,047)
(283)
Deferred tax liabilities
(827)
(814)
13
Provisions for risks and charges
(757)
(764)
(7)
Prepaid income from regulated activities
(309)
(287)
22
Tax payables
(81)
(285)
(204)
Other liabilities 
(842)
(1,394)
(552)
 
(1,139)
(1,830)
(691)


Net working capital (€1,830 million) decreased by €691 million compared with the previous year, mainly as a result of: (i) the increase in other liabilities (-€552 million), due mainly to the allocation of the 2012 dividend balance of €0.15 per share (-€507 million) and to higher charges to the Cassa Conguaglio del Settore Elettrico (Electricity Equalisation Fund) for the repayment of additional tariff components for the natural gas distribution and transportation segments (-€136 million in total), which were partially offset by the payment of residual debt to eni to extinguish hedging derivatives ahead of schedule (+€141 million); (ii) the increase in trade payables (-€283 million) related to the natural gas transportation segment (-€183 million), due primarily to payables arising from the balancing service, and to the distribution segment (-€101 million), due to higher payables to the Electricity Equalisation Fund in connection with the greater amounts invoiced in relation to the restriction on revenue established by the Electricity and Gas Authority; (iii) higher tax payables (-€204 million) associated mainly with the recognition of taxes for the period.
These factors were partly offset by the increase in trade receivables (+€406 million) related to the natural gas transportation segment (+€193 million), due primarily to receivables arising from the balancing service, and the distribution segment (+€193 million), due primarily to seasonal trends.
 
 
Statement of comprehensive income
   
     
(€ million)
First quarter
 
2012
2013
Net profit
274
242
Other components of comprehensive income
 
 
Components that can be reclassified to the income statement:
 
 
Change in fair value of cash flow hedge derivatives (effective share)
(26)
 
Share of “Other comprehensive income” of associates
 
(6)
Tax effect
8
 
Total other components of comprehensive income, net of tax effect
(18)
(6)
Total comprehensive income
256
236
. attributable to:
   
 - Snam
256
236
 - Minority shareholders
   
 
256
236


 
Shareholders’ equity
 
(€ million)
   
Shareholders’ equity at 31 December 2012
 
5,916
Increases owing to:
   
- Comprehensive income for the first quarter of 2013
236
 
- 2012 dividend balance
(507)
 
   
(271)
   
 
Shareholders’ equity including minority interests at 31 March 2013
 
5,645
attributable to:
 
 
- Snam
 
5,644
- Minority shareholders
 
1
   
5,645


 
At 31 March 2013, Snam had a total of 2,723,350 treasury shares (compared with 2,906,550 at 31 December 2012), equivalent to 0.08% of its share capital. The market value at 31 March 2013 was around €10 million. [10]
 
 
 
Net financial debt
(€ million)
31.12.2012
31.03.2013
Change
Financial liabilities
12,413
12,141
(272)
Short-term financial liabilities
364
660
296
Current share of long-term financial liabilities
110
186
76
Long-term financial liabilities
11,939
11,295
(644)
Financial receivables and cash and cash equivalents
(15)
(3)
12
Cash and cash equivalents
(15)
(3)
12
 
12,398
12,138
(260)


Net financial debt was €12,138 million at 31 March 2013, compared with €12,398 million at 31 December 2012.
The net cash flow from operating activities (€602 million) allowed us to fully cover the financial requirements associated with net capital expenditure (€342 million) and to reduce net financial debt by €260 million.
Financial liabilities at 31 March 2013, which totalled €12,141 million, were denominated entirely in euro and consisted of bonds (€6,047 million, or 50%), payables to banks (€5,386 million, or 44%), and loan agreements related to European Investment Bank (EIB) funding (€701 million, or 6%).
Long-term financial liabilities of €11,481 million constitute approximately 95% of financial debt (97% at 31 December 2012) and have an average duration of five years (unchanged from 31 December 2012).
The breakdown of debt by type of interest rate at 31 March 2013 is as follows:
 
(€ million)
31.12.2012
%
31.03.2013
%
Change
Fixed rate
6,048
49
6,049
50
1
Floating rate
6,365
51
6,092
50
(273)
     
 
   
 
12,413
100
12,141
100
(272)


Floating-rate financial liabilities (€6,092 million) fell by €273 million compared with 31 December 2012, due essentially to the net balance between repayments of long-term revolving credit lines (-€546 million) and the increase in short-term debt (+€296 million). Fixed-rate financial liabilities (€6,049 million) were more or less unchanged compared with 31 December 2012 and consisted almost entirely of bonds.
There are no bonds due to mature in the 18 months after 31 March 2013.
 
 
Covenants
The main bilateral and syndicated loans in place with banks and other financial institutions as at 31 March 2013 included covenants, in line with international practice. These concern, inter alia, compliance with financial covenants and pari passu, negative pledge and change of control clauses. Some covenants are also provided for the bonds issued by Snam under the EMTN programme.
All the checks carried out on the financial covenants provided for under the contracts in place confirmed that the said covenants had been complied with.
  
Reclassified statement of cash flows and changes in net financial debt
The reclassified statement of cash flows set out below summarises the legally required format. It shows the connection between the opening and closing cash and cash equivalents and the change in net financial debt during the period. The two statements are reconciled through the free cash flow, i.e. the cash surplus or deficit left over after servicing capital expenditure. The free cash flow closes either: (i) with the change in cash for the period, after adding/deducting all cash flows related to financial liabilities/assets (taking out/repaying financial receivables/payables) and equity (payment of dividends/capital injections); or (ii) with the change in net financial debt for the period, after adding/deducting the debt flows related to equity (payment of dividends/capital injections).
 
RECLASSIFIED STATEMENT OF CASH FLOWS
 
(€ million)
First quarter
 
2012
2013
Net profit
 274
242
adjusted by:
   
- amortisation, depreciation and other non-monetary components
 156
172
- net capital gains on asset sales and eliminations
(2)
(5)
- interest and income taxes
 275
276
Change in working capital due to operating activities
(7)
16
Interest and income taxes collected (paid)
(80)
(99)
Net cash flow from operating activities
 616
602
Investments
(240)
(189)
Divestments
 26
11
Change in consolidation scope and business units
(23)
(10)
Other changes relating to investment activities
(125)
(154)
Free cash flow
 254
260
Change in short- and long-term financial debt   
(255)
(272)
Net cash flow for the period
(1)
(12)


  
CHANGE IN NET FINANCIAL DEBT
 
(€ million)
First quarter
 
2012
2013
Free cash flow
254
260
Equity cash flow
   
Change in net financial debt
254
260


   
                                                                  
IFRS financial statements
Balance sheet
01.01.2012
(€ million)
31.12.2012
31.03.2013
 
ASSETS
 
 
 
Current assets
 
 
2
Cash and cash equivalents        
15
3
1,545
Trade and other receivables             
2,048
2,479
235
Inventories
202
186
3
Current income tax assets                   
11
4
5
Other current tax assets                               
89
6
33
Other current assets
115
91
1,823
 
2,480
2,769
 
Non-current assets
 
 
14,053
Property, plant and equipment
14,522
14,504
405
Compulsory inventories
363
363
4,444
Intangible assets                               
4,593
4,609
319
Equity-accounted investments
473
482
81
Other non-current assets                        
130
159
19,302
 
20,081
20,117
25
Non-current assets held for sale
23
23
     
 
21,150
TOTAL ASSETS
22,584
22,909
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities
 
 
2,787
Short-term financial liabilities      
505
660
1,612
Short-term portion of long-term financial liabilities
110
186
1,344
Trade and other payables              
1,477
2,260
175
Current income tax liabilities                
46
236
16
Other current tax liabilities                
28
42
211
Other current liabilities                  
218
177
6,145
 
2,384
3,561
 
Non-current liabilities
 
 
6,800
Long-term financial liabilities     
11,939
11,295
527
Provisions for risks and charges                      
757
764
109
Provisions for employee benefits             
129
130
900
Deferred tax liabilities              
827
814
869
Other non-current liabilities               
624
692
9,205
 
14,276
13,695
9
Liabilities directly associated with assets held for sale
8
8
15,359
TOTAL LIABILITIES
16,668
17,264
 
SHAREHOLDERS’ EQUITY                    
 
 
 
Snam shareholders’ equity
 
 
3,571
Share capital
3,571
3,571
2,550
Reserves
1,915
1,843
790
Net profit
779
242
(783)
Treasury shares
(12)
(12)
(338)
Interim dividend
(338)
 
5,790
Total Snam shareholders’ equity
5,915
5,644
1
Capital and reserves attributable to minority interests
1
1
5,791
TOTAL SHAREHOLDERS’ EQUITY
5,916
5,645
21,150
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
22,584
22,909
 
 
 
 


 
Income statement
 
(€ million)
First quarter
 
2012
2013
REVENUE                                               
 
 
Core business revenue
916
937
Other revenue and income
53
20
Total revenue
969
957
OPERATING COSTS                          
 
 
Purchases, services and other costs
(168)
(146)
Personnel expense
(93)
(94)
DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES
(170)
(186)
EBIT
538
531
FINANCIAL INCOME (EXPENSE) 
 
 
Financial income
 
2
Financial expense
(66)
(127)
Derivatives
(19)
 
 
(85)
(125)
INCOME FROM EQUITY INVESTMENTS
 
 
Equity method valuation effect
13
15
 
13
15
PRE-TAX PROFIT
466
421
Income taxes                            
(192)
(179)
Net profit
274
242
- Snam 
274
242
- Minority shareholders
 
 
Earnings per share
 
 
- basic (€ per share)        
0.08
0.07
- diluted (€ per share)   
0.08
0.07
 
 
 


 
Statement of comprehensive income
     
(€ million)
First quarter
 
2012
2013
Net profit
274
242
Other components of comprehensive income
 
 
Components that can be reclassified to the income statement:
 
 
Change in fair value of cash flow hedge derivatives (effective share)
(26)
 
Share of “Other comprehensive income” of associates
 
(6)
Tax effect
8
 
Total other components of comprehensive income, net of tax effect
(18)
(6)
Total comprehensive income
256
236
. attributable to:
   
 - Snam
256
236
 - Minority shareholders
   
 
256
236


Statement of cash flows
 
(€ million)
First quarter
 
2012
2013
Net profit
274
242
Adjustments for reconciling profit for the period with cash flows from operating activities:
 
 
Amortisation and depreciation
170
186
Equity method valuation effect
(13)
(15)
Net capital gains on asset sales, cancellations and eliminations
(2)
(5)
Interest income
 
(2)
Interest expense
83
99
Income taxes
192
179
Changes in working capital:
 
 
- Inventories
50
11
- Trade receivables
(522)
(406)
- Trade payables
458
283
- Provisions for risks and charges
(8)
15
- Other assets and liabilities
15
254
Working capital cash flows
(7)
157
Change in provisions for employee benefits
(1)
1
Dividends collected
2
 
Interest paid
(82)
(99)
Income taxes paid net of reimbursed tax credits
 
 
Net cash flow from operating activities
616
743
Investments:
 
 
- Property, plant and equipment
(176)
(123)
- Intangible assets
(64)
(66)
- Change in scope of consolidation and business units
(23)
(10)
- Change in payables and receivables relating to investments
(134)
(149)
Cash flows from investment activities
(397)
(348)
Divestments:
 
 
- Property, plant and equipment
 
 
- Intangible assets
26
11
- Change in payables and receivables relating to divestments
9
(5)
Cash flows from divestments
35
6
Net cash flows from investment activities
(362)
(342)
Taking on long-term financial debt
31
68
Repaying long-term financial debt
(527)
(636)
Increase (decrease) in short-term financial debt
241
155
 
(255)
(413)
Net equity capital injections
 
 
Net cash flows from financing activities
(255)
(413)
Net cash flow for the period
(1)
(12)
Cash and cash equivalents at start of period
2
15
Cash and cash equivalents at end of period
1
3


 

[1]This press release constitutes the interim directors’ report pursuant to Article 154-ter of the Consolidated Law on Finance (TUF).
[2]Total revenue, including revenue from construction and upgrading of distribution infrastructures pursuant to IFRIC 12, amounted to €957 million (-1.2%).
[3]This reduction is connected to lower operating costs resulting from taking gas out of storage.
[4]Including investments in metering. Notes on investments in each business segment are provided in the section “Information by business segment”.
[5]Information on the breakdown of net financial debt can be found on page 27.
[6]A breakdown of EBIT by business segment can be found in the section “Information by business segment” below.
 
[7]Gas volumes are expressed in standard cubic metres (SCM) with a traditional higher heating value (HHV) of 38.1 MJ/SCM. The basic figure is measured in energy (MJ) and obtained by multiplying the physical cubic metres actually measured by the relative heating value.
 
[8] Capacity fees include revenue related to the regasification commitment for an annual volume of LNG and a share of revenue related to the activity of docking and unloading methane tankers. 
[9]This includes €2 million of fees added to storage revenue for the thermal year 1 April 2012 - 31 March 2013 in relation to contracts between Eni and Stogit pertaining to activities pursuant to Legislative Decree 130/2010.
[10]Calculated by multiplying the number of treasury shares by the period-end official price of €3.57 per share.
  
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05 August 2016 - 16:19 CEST