RESULTS PRESENTATION 2017
- In the full year of 2017, EBITDA rose to €487.5M (2.4%). Consistent with this trend, Net Profit amounted to €125.9M and Recurrent Net Profit was €154.8M, respectively 25.7% and 22.5% above 2016;
- EBITDA included the positive contributions of three months of consolidation of Portgás (€8.9M) and of Electrogas' results (€7.2M). Additionally, the Regulatory Asset Base improved 11.0%, standing at €3,924.7M. This resulted in an increase in revenues asset-related of €2.2M;
- Net Profit continued to be boosted by strong financial result that stood at -€61.2M (23.3%), on the back of the sustained lowering trend in the average cost of debt (2.5%, versus 3.2% in FY2016). Net Debt reached €2,756.2M (11.2%) impacted by the acquisitions of Electrogas (€169.3M) and Portgás (€530.3M), which was partly compensated by the €250.0M capital increase. Additionally, REN's results were penalized by the extraordinary levy on the energy sector. Since 2014, REN has paid more than €100M and in 2017 this payment brought the effective corporate tax rate to 38.4%;
- In 7 th December, REN accomplished a capital increase of €250M, through the issue of 133,191,262 new shares, at the unitary subscription price of 1.877 euros. These shares were admitted to trading in the Euronext Lisbon regulated market in 13th December;
- In 11th January 2018, REN issued €300M of bonds (through its EMTN programme) with a maturity of ten years. The proceeds were used to repay the bridge loan used on the recent REN Portgás acquisition.
RESULTS AT A GLANCE
| €M |
4Q17 |
2017 |
2016 |
Δ% |
Δ Abs. |
| EBITDA |
123.1 |
487.5 |
476.0 |
2.4% |
11.4 |
| Financial Result |
-16.7 |
-61.2 |
-79.9 |
23.3% |
18.6 |
| Net Profit |
37.1 |
125.9 |
100.2 |
25.7% |
25.7 |
| Recurrent Net Profit |
38.0 |
154.8 |
126.3 |
22.5% |
28.5 |
| Average RAB |
3 924.7 |
3 924.7 |
3 537.1 |
11.0% |
387.7 |
| CAPEX |
75.3 |
155.6 |
171.5 |
-9.3% |
-15.9 |
| Net Debt |
2 756.2 |
2 756.2 |
2 477.7 |
11.2% |
278.5 |
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PORTUGUESE PERCEVIED SOVEREIGN DEBT RISK
The rate levels have been recently coming down
TRANSMISSION RAB REMUNERATION DROPPED €6.3M
Despite the positive contribution of electricity
1) FY2017 values. Portgás contributed with €7.1M (last 3 months of 2017) for REN's RAB remuneration.
OPEX INCREASED BY €14.0M
Driven by non recurrent, non core and revenue related costs
Δ Personnel Costs -0.2 (-0.4%) 6.0 (n.m.) Δ External Supplies and Services(1) OPEX 2016 107.5 8.3 (14.6%) €14.0M (13.1%) OPEX 2017 121.5 Portgás OPERATIONAL COSTS (€M)
The External Supplies and Services evolution was mostly explained by: (1) €3.3M from the Portgás and Electrogas acquisitions; (2) €2.1M from electricity costs related to the increase in the LNG Terminal activity; and (3) Δ€1.9M from ITC mechanism costs(2) . Without these effects and on a like for like comparison, OPEX was roughly the same as in 2016 (+0.7%).
(1) ITC - Inter Transmission System Operator Compensation for Transits.
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(3) Includes €1.2M and €2.1M related to the one-off costs with Electrogas and EDPG acquisitions (respectively) and Δ€1.6M of OPEX own works.
Average cost of debt decreased consistently over the year (2.5% in 2017 vs 3.2% in 2016);
NET DEBT AMOUNTED TO €2,756.2M (11.2%)
- FFO/Net Debt ratio reached 11.7%.
-
(1) Includes Δ€144.4M of tariff deviations.
-
Over the last year, REN's underlying businesses showed a robust resilience, as a result of considerable efforts both at the operational and financial levels. However, REN's results continued to be constrained by the special levy on energy sector and lower natural gas asset remuneration;
- 2017 marked a new level of compliance with the existing strategic plan. With the purchase of 42.5% of Electrogas, REN stepped in the international market scene and with the acquisition of Portgás it streamlined the focus on Portugal;
- In the context of the acquisition of Portgás, REN proceeded with a capital increase and a bond issue, which were both well perceived by the market. The capital increase had a demand level 65.6% above supply, and in the debt issue demand was seven times greater than supply;
- REN is updating its strategy for the 2018-2021 period which will be presented to the market in May 2018, at the "Capital Markets Day" event;
- At the General Shareholders' Meeting, the Board of Directors will propose the payment of a dividend of 17.1 cents per share, in line with the previous year and with the announced dividend policy.
DISCLAIMER
This presentation and all materials, documents and information used therein or distributed to investors in the context of this presentation do not constitute, or form part of, a public offer, private placement or solicitation of any kind by REN, or by any of REN's shareholders, to sell or purchase any securities issued by REN and its purpose is merely of informative nature and this presentation and all materials, documents and information used therein or distributed to investors in the context of this presentation may not be used in the future in connection with any offer in relation to securities issued by REN without REN's prior consent.
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