RESULTS PRESENTATION 1H19
1H19 HIGHLIGHTS
- EBITDA totalled €247.4M in the first half of the year, 2.0% (€5.1M) below the same period of 2018. Lower rates of return, a decreasing RAB and OPEX contribution significantly contributed to this outcome. This was partly offset by the favorable progression of Portgás (+€0.8M) and Electrogas, that contributed with €3.9M to EBITDA;
- Net Profit slightly decreased by 3.3% (€1.8M), standing at €51.1M. Below EBITDA, the result benefited from stronger Financial Results (€0.5M) and lower taxes (-€1.4M). The effective tax rate was 38.8%, including the extraordinary levy (CESE). Without extraordinary effects, Recurrent Net Profit amounted to €75.5M, a 3.8% decrease over the previous year;
- Net Debt improved by 1.8%, standing at €2,638.7M (-€48.0M). The average cost of debt continued to go down, reaching 2.2% (versus 2.3% in 1H18);
- CAPEX and Transfers to RAB amounted both to €49.9M, an year-on-year increase of €10.5M and €30.5M, respectively, benefiting from higher investments in the electricity business.
RESULTS AT A GLANCE
| €M |
2Q19 |
1H19 |
1H18 |
Δ% |
Δ Abs. |
| EBITDA |
122.0 |
247.4 |
252.4 |
-2.0% |
-5.1 |
| Financial Results |
-11.4 |
-26.9 |
-27.3 |
1.7% |
0.5 |
| Net Profit |
37.8 |
51.1 |
52.8 |
-3.3% |
-1.8 |
Recurrent
Net Profit |
37.8 |
75.5 |
78.4 |
-3.8% |
-3.0 |
| Average RAB |
3,738.2 |
3,738.2 |
3,855.2 |
-3.0% |
-117.0 |
| CAPEX |
33.1 |
49.9 |
39.4 |
26.5% |
10.5 |
| Net Debt |
2,638.7 |
2,638.7 |
2,686.7 |
-1.8% |
-48.0 |
|
|
|
|
|
|
Source: Bloomberg, Bank of Portugal, REN.
SOVEREIGN DEBT RISK OF PORTUGAL There was a significant reduction in yields in 2019
CAPITAL EXPENDITURES UP BY €10.5M TO €49.9M Transfers to RAB increased by €30.5M year-on-year
1) RoR is equal to the specific asset remuneration, divided by the average RAB.
AVERAGE RAB FELL DOWN BY 3.0%
RAB REMUNERATION PORTGÁS
(€M)
RAB REMUNERATION DOWN BY 5.6% Reflecting the reduction in RoR and RAB (excluding Portgás)
OPERATIONAL COSTS (€M)
OPEX IN LINE WITH PREVIOUS YEAR Portgás performance improved by €3.3M
8
(1) ITC - Inter Transmission System Operator Compensation for Transits; (2) Item related to Portgás.
OPEX CORE STOOD STEADY IN 1H19 Portgás had a €1.9M positive evolution
EBITDA WAS PENALIZED BY LOWER TRANSMISSION ASSETS' REMUNERATION
- (1) Average cost of debt dropped to 2.2% from 2.3% in 1H18;
- (2) In 1H19, without taking into account the special levy on the energy sector, the effective tax rate reached 27.0%, versus 27.2% in the previous year, which led to a €1.4M decrease in taxes.
BELOW EBITDA
NET DEBT DECLINED TO €2,638.7M (-0.5%)
NET PROFIT
NET PROFIT WAS SLIGHTLY LOWER YOY (-€1.8M) Financial Results strengthened Net Profit by €0.5M
- This semester, REN's operational performance was penalized by lower asset remuneration. However, higher Financial Results and the decrease in taxes partially mitigated this negative impact in Net Profit;
- A decrease in the stock of Debt allowed the company to have stronger Financial Results. Nevertheless, the special levy on energy companies continued to hurt REN's results, leading the effective tax rate to 38.8%;
- Both Portgás and Electrogas contributed positively to the results and are performing according to plan;
- On July 23rd , REN announced the acquisition of 100% of Transemel, for 167 million USD. Transemel is located mainly in northern Chile, operating 92 km of electricity transmission lines and 5 substations, with approximately 93% of its revenues coming from regulated activities owns. This will be the second acquisition that REN makes in Chile after the purchase of 42.5% of Electrogas, and is in line with REN's strategic plan, which is based on a conservative growth strategy. The transaction will be financed solely with debt and will take place in the beginning of October.
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]