RESULTS PRESENTATION 1Q19
1Q19 HIGHLIGHTS
- The first quarter of 2019 ended with EBITDA reaching €125.3M, a decrease of 2.4%. The main reason for this fall was lower assets' remuneration. Natural gas distribution business contributed with an additional €0.5M versus last year;
- Despite the decrease in EBITDA, Net Profit amounted to €13.2M, which was in line with what REN presented in 1Q18;
- For this stability in Net Profit, there were positive contributions from Financial Results, that improved by €1.1M, reaching -€15.5M, from the extraordinary levy (CESE), with a €0.9M decrease, and from taxes (-€1.0M). The effective tax rate, excluding the levy, was 26.6% while in 1Q18 it was 27.7%;
- Recurrent Net Profit got to €37.6M, -2.0% than last year;
- Net Debt decreased to €2,613.9M (-€29.8M) year on year. The average cost of debt remained mostly unchanged at 2.3%;
- CAPEX rose to €16.8M, €2.9M more than in 1Q18, with higher investments being deployed in the electricity business.
RESULTS AT A GLANCE
| €M |
1Q19 |
1Q18 |
Δ% |
Δ Abs. |
| EBITDA |
125.3 |
128.4 |
-2.4% |
-3.0 |
| Financial Results |
-15.5 |
-16.6 |
6.8% |
1.1 |
| Net Profit |
13.2 |
13.1 |
1.3% |
0.2 |
Recurrent
Net Profit |
37.6 |
38.4 |
-2.0% |
-0.8 |
| Average RAB |
3,743.0 |
3,877.8 |
-3.5% |
-134.7 |
| CAPEX |
16.8 |
13.9 |
21.1% |
2.9 |
| Net Debt |
2,613.9 |
2,643.7 |
-1.1% |
-29.8 |
|
|
|
|
|
PT 10Y Treasury Bond Yields
Source: Bloomberg, Bank of Portugal, REN.
EVOLUTION OF PORTUGUESE 10Y BOND YIELDS Kept rates of return at low levels in 2019
CAPEX INCREASED BY €2.9M TO €16.8M
In 1Q19, the electricity sector benefited from the construction of a submarine cable (€1.2M)
AVERAGE RAB WAS 3.5% BELOW 1Q18 Positive evolution of Portgás (€4.0M)
RAB REMUNERATION ELECTRICITY (ex. Lands) (€M) RAB REMUNERATION NATURAL GAST (€M) -1,44M€ Impact of the decrease in the asset base by €80.9M to €2,036.9M. Impact of the change in asset mix: assets with premium weight increased to 54.2% in 1Q19 from 53.7% in 1Q18. +€0.02M Impact of the change in the rate of return, to 5.84% from 5.95% in assets with premium, and to 5.09% from 5.20% in assets without premium. -€0.58M Impact of the €45.3M decrease in the asset base, to a total of €1,003.0M. -€0.61M Impact of the decrease in the rate of return, to 5.40% from 5.54%. -€0.37M -€1.11M +€0.06M 12.8 11.9 16.9 16.1 1Q18 1Q19 28.0 29.7 €-1.7M (-5.6%) 14.5 13.5 1Q18 1Q19 €-1.0M (-6.7%) Electricity with premium Electricity without premium
RAB REMUNERATION PORTGÁS (€M)
RAB REMUNERATION DECLINED BY 5.4% With lower RoR and RAB (Electricity and NGT )
OPERATIONAL COSTS (€M)
OPEX IMPROVED BY 3.1%, TO €30.5M On the back of a small reduction in ESS
8
(1) ITC - Inter Transmission System Operator Compensation for Transits; (2) Item related to Portgás.
CONTROLLABLE COSTS DECLINED BY 2.6% YOY Mainly driven by the favorable evolution of Portgás
EBITDA STOOD AT €125.3M (-2.4% YOY) The decrease in the transmission business (-€3.5M) was partially offset by the growth in Portgás (€0.5M)
EBITDA (€M) 0.5 0.5 EBITDA 1Q18 EBITDA Portgás Δ Asset remuneration Δ Recovery of amortizations Δ OPEX contribution (1) Δ Electrogas' Net Profit proportion Δ Other EBITDA -0.3 128.4 -2.7 -0.6 -0.4 €-3.0M (-2.4%)
- (1) The Average cost of debt remained stable at 2.3%;
- (2) In 1Q19, without taking into account the special levy on the energy sector, the effective tax rate reached 26.6%, versus 27.7% in the previous year, which led to a €1.0M decrease in taxes.
BELOW EBITDA
Better financials supported by a decline in Net Debt
NET PROFIT
NET PROFIT ROSE BY 1.3%, ACHIEVING €13.2M Financial Results contributed with €1.1M
- The first quarter of 2019 was uneventful in terms of results. EBITDA was slightly below that of the same period of 2018, given the decrease in asset remuneration;
- The slowdown in operational results was offset by lower financials and lower taxes;
- Financial Results benefited from a smaller stock of debt (Net Debt went down by €29.8M year-on-year) and a slightly lower cost of debt, it went down from 2.30% to 2.27%;
- Both Portgás and Electrogas contributed positively to results and are performing according to plan;
- All in all Net Profit stood flat in comparison to the same period of 2018;
- On April 1 st ERSE made public some parameters for the 2020-2023 gas regulatory framework. They propose that for an average ten-year bond yield of 1.5% the rate of return shall be 5%. The new rules will be set for four years instead of the former three;
- This morning REN's General Shareholders Meeting approved the payment of a dividend of €0.171 per share that will be paid within the next 30 days.
FINAL REMARKS
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.
DISCLAIMER
Visit our web site at www.ren.pt or contact us:
Ana Fernandes – Head of IR Alexandra Martins Telma Mendes
Av. EUA, 55 1749-061 Lisboa Phone number: +351 210 013 546 [email protected]