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Snam: 2013 consolidated financial statements and draft financial statements of the parent company

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San Donato Milanese, 28 February 2014 – The Snam Board of Directors, chaired by Lorenzo Bini Smaghi, met yesterday to approve the consolidated financial statements and the draft financial statements of the parent company for 2013, showing net profit of €917 million and €705 million respectively. The Board also decided to propose to the Shareholders’ Meeting a dividend of €0.25 per share, of which €0.10 was paid out in October 2013. 

Financial highlights

  • Total revenue: €3,529 million [1] (-2.5%)
  • EBITDA: €2,803 million (-0.5%)
  • EBIT: €2,034 million (-3.6%)
  • Net profit: €917 million (+17.7%)
  • Cash flow from operating activities: +€1,698 million (+76.7%)
  • Technical and equity investments: €1,889 million
 

Operating highlights

  • Gas injected into the transportation network: 69.01 billion cubic metres (-8.9%)
  • Number of active meters: 5.928 million (+0.4%)
  • Available storage capacity: 11.4 billion cubic metres (+1.8%)
 

Significant events

  • The acquisition from Total of TIGF (Transport et Infrastructures Gaz France), a company involved in the transportation and storage of natural gas in the south-west of France, was completed on 30 July 2013 for a total of €597 million 
  • The Electricity and Gas Authority set the tariff criteria for the fourth regulatory period for the regasification, transportation and distribution of natural gas
 

Proposed dividend of €0.25 per share, in line with 2012

Carlo Malacarne, Snam CEO, made the following comments on the results:

“A sound operating performance together with the efficient financial management allowed us to achieve remarkable results in 2013, notwithstanding the ongoing economic downturn and lower volume of gas injected into the network of approximately 9%. EBIT was higher than 2 billion euro and net profit exceeded 900 million euro, up approximately 18% versus previous year.

During 2013 we have continued our investment programme, reaching an overall level of 1.9 billion euro. In Italy, capital investment was approximately 1.3 billion euro, while 600 million euro were devoted to the acquisition of interests in TIGF in France, a significant achievement in the deployment of our development strategy abroad.

Our growth requirements were almost fully financed through operating cash flow, with a total net debt at year end 2013 of approximately 13.3 billion euro.

Our operating and financial performance along with our sound capital structure, enable us to   propose at the next AGM to distribute a 0.25 euro per share FY 2013 dividend, in line with the 2012 level.�?

The 2013 Annual Report has been submitted to the Board of Statutory Auditors and to the Independent Auditors. The Report will be made available to the public at Snam's registered office and on the Company’s website, www.snam.it, together with the reports of the Board of Statutory Auditors and the Independent Auditors, within the timeframes established by Legislative Decree 58/98 (the Consolidated Finance Act, or TUF).

The 2013 Report on Corporate Governance and Ownership Structure, the 2014 Remuneration Report, prepared pursuant to Article 123-terof the TUF,  and the 2013 Sustainability Report will be published at the same time as the 2013 Annual Report.

 

Financial highlights

 

(€ million)

 

2012

2013

Change

% change

Total revenue

 

3,946

3,848

(98)

(2.5)

Total revenue net of the effects of IFRIC 12

 

3,621

3,529

(92)

(2.5)

- of which revenue from regulated activities

 

3,477

3,491

14

0.4

Operating costs

 

1,129

1,045

(84)

(7.4)

Operating costs net of the effects of IFRIC 12

 

804

726

(78)

(9.7)

EBIT

 

2,111

2,034

(77)

(3.6)

Adjusted EBIT (a)

 

2,111

2,060

(51)

(2.4)

Net profit (b)

 

779

917

138

17.7

Adjusted net profit (a) (b)

 

992

934

(58)

(5.8)

EBIT per share (c)

(€)

0.625

0.602

(0.023)

(3.7)

Adjusted EBIT per share (c)

(€)

0.625

0.610

(0.015)

(2.4)

Net profit per share (c)

(€)

0.231

0.271

0.040

17.3

Adjusted net profit per share (c)

(€)

0.294

0.276

(0.018)

(6.1)

Technical investments

 

1,300

1,290

(10)

(0.8)

Number of shares outstanding on 31 December                

(millions)

3,378.7

3,380.0

1.3

 

Average number of shares outstanding during the year              

(millions)

3,378.7

3,379.5

0.8

 
     

 

   


 

(a)  Adjusted EBIT and adjusted net profit, which exclude special items, are described in the section “Reconciliation of EBIT and net profit with adjusted EBIT and adjusted net profit�? of this press release.

(b)  Net profit is attributable to Snam.

(c)  Calculated considering the average number of shares outstanding during the year.

  

Adjusted EBIT

Adjusted EBIT [2], which excludes special items [3], amounted to €2,060 million, down by €51 million (-2.4%) compared with 2012. The decrease was due essentially to lower revenue (-€58 million), which despite the positive trends witnessed in 2013 was significantly impacted by the recognition in 2012 of tariff adjustments for 2009-2011 [4] (€143 million) relating to the natural gas distribution segment, and to higher depreciation and amortisation charges (-€57 million), mainly as a result of the entry into service of new infrastructure. These factors were partly offset by lower operating costs (+€70 million), owing mainly to a change in the provisions for risks and charges. The strong performances by the natural gas transportation (+€93 million, or +8.2%, despite falling gas demand in Italy) and storage (+€48 million; +17.8%) segments were offset by a decline in the distribution segment [5] (-€181 million; -26.0%).

Net profit

Net profit totalled €917 million, up by €138 million (+17.7%) compared with 2012. The increase was due essentially to lower net financial expense (+€322 million), which was partly offset by higher income taxes (-€97 million) as a result of higher pre-tax profit. The reduction in financial expense reflects the recognition in the third quarter of 2012 of the costs associated with the early extinguishment of IRS hedging contracts between Snam and its Subsidiaries and eni (€213 million net of the related tax effect), giving rise to the contractual provisions in the event that eni loses control over Snam.

Adjusted net profit

Adjusted net profit, which excludes special items, amounted to €934 million, down by €58 million (-5.8%) on the figure for 2012. The decrease was due mainly to lower adjusted EBIT (-€51 million), offset in part by lower income taxes (+€16 million) largely as a result of lower pre-tax profit.

Technical investments

Technical investments totalled €1,290 million (€1,300 million in 2012). Around 67% of these investments have returns above the basic rate [6] .

Equity investments

Equity investments totalled €599 million, essentially comprising the acquisition of a stake in TIGF (€597 million).

Net financial debt

Net financial debt was €13,326 million at 31 December 2013 [7] , compared with €12,398 million at 31 December 2012.

The positive cash flow from operating activities (€1,698 million) almost fully covered the funding requirements for net technical investments and for acquiring the stake in TIGF (€1,790 million in total). Following the payment to shareholders of the dividend of €845 million, net financial debt amounted to €13,326 million, up by €928 million compared with 31 December 2012.

2013 dividend

Our sound results and solid business fundamentals allow us to propose a dividend of €0.25 per share (€0.25 per share in 2012) at the Shareholders’ Meeting, of which €0.10 per share was paid in October 2013 as an interim dividend and the balance of €0.15 per share will be paid from 22 May 2014 (record date 21 May 2014), confirming Snam’s commitment to an attractive and sustainable remuneration of its shareholders.

 

[1] Total revenue, including revenue from construction and upgrading of distribution infrastructure pursuant to IFRIC 12, amounted to €3,848 million (-2.5%).

[2] EBIT was analysed by isolating only the elements that determined a change therein. To this end, applying gas segment tariff regulations generates revenue components that are offset in costs.

[3] The income components excluded from adjusted EBIT are represented by charges for voluntary-redundancy incentives connected to the redundancy programme begun by Snam in November 2013, pursuant to Law 223/91 (€26 million; €17 million net of tax effect). Adjusted net profit is described in the section "Reconciliation of EBIT and net profit with adjusted EBIT and adjusted net profit�?.

[4] These adjustments were recognised following Electricity and Gas Authority Resolutions 315/2012/R/gas and 450/2012/R/gas, which adjusted the reference tariffs for the third regulatory period (2009-2012).

[5]In the 2012 consolidated financial statements, the EBIT for the natural gas distribution segment includes the positive effect of the consolidation adjustment relating to provisions for environmental expenses (€71 million) that eni repaid to Snam, net of tax effect, pursuant to contractual agreements entered into when completing the acquisition of Italgas.

[6] Including investments in metering. Notes on technical investments in each business segment are provided in the section “Information by business segment�?.

[7]More information on the net financial debt can be found on page 32.


 

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05 August 2016 - 16:19 CEST