REN-Redes Energeticas Nacionais

Interim / Quarterly Report • Aug 5, 2020

Consolidated Financial Statements

30 June 2020

REN – Redes Energéticas Nacionais, SGPS, S.A.

INDEX

1. FINANCIAL PERFORMANCE	2
1.1 RESULTS FOR THE 1ST HALF OF 2020 1.2 AVERAGE RAB AND CAPEX 1.3 MAIN REN GROUP EVENTS 1.4 QUARTERLY STATEMENTS OF PROFIT AND LOSS AND COMPREHENSIVE INCOME FOR THE PERIODS FROM 1 APRIL TO 30 JUNE 2020 AND 2019	2 5 6 7
2. CONSOLIDATED FINANCIAL STATEMENTS	9
3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2020	14
1 GENERAL INFORMATION 2 BASIS OF PRESENTATION 3 MAIN ACCOUNTING POLICIES 4 SEGMENT REPORTING 5 TANGIBLE AND INTANGIBLE ASSETS 6 GOODWILL 7 INVESTMENTS IN ASSOCIATES AND JOIN VENTURES 8 INCOME TAX 9 FINANCIAL ASSETS AND LIABILITIES 10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 11 TRADE AND OTHER RECEIVABLES 12 DERIVATIVE FINANCIAL INSTRUMENTS 13 CASH AND CASH EQUIVALENTS 14 EQUITY INSTRUMENTS 15 RESERVES AND RETAINED EARNINGS 16 BORROWINGS 17 POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS 18 PROVISIONS FOR OTHER RISKS AND CHARGES 19 TRADE AND OTHER PAYABLES 20 SALES AND SERVICES RENDERED 21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES 22 OTHER OPERATING INCOME 23 EXTERNAL SUPPLIES AND SERVICES 24 PERSONNEL COSTS 25 OTHER OPERATING COSTS 26 FINANCIAL COSTS AND FINANCIAL INCOME 27 EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR 28 EARNINGS PER SHARE 29 DIVIDENDS PER SHARE 30 CONTINGENT ASSETS AND LIABILITIES 31 RELATED PARTIES 32 SUBSEQUENT EVENTS 33 EXPLANATION ADDED FOR TRANSLATION	14 17 18 20 23 27 28 30 34 36 38 39 44 44 44 45 47 48 49 50 50 51 51 52 52 53 53 54 54 54 55 58 58

1. FINANCIAL PERFORMANCE

1.1 RESULTS FOR THE 1ST HALF OF 2020

In the first half of 2020, net income reached 46.1 million euros, a 5.0 million euros drop (-9.8%) over the same period of the previous year. Net income reduction reflected mainly the drop of 13.8 million euros in the domestic business EBITDA (-14.6 million euros in EBIT), following the decrease in Portugal's sovereign bond yields which negatively impacts asset remuneration, and the increase of 3.8 million euros (+15.5%) in the Extraordinary Levy on the Energy Sector, reflecting the inclusion of Portgás' levy. On the other hand, the EBITDA from international businesses increased 3.5 million euros (+93.1%) when compared to the same period of the previous year, reflecting Transemel's acquisition in October of 2019, and financial results increased 5.4 million euros (+20.2%).

Similarly to the previous years, the results for 2020 reflect the continuation of the Extraordinary Levy on the Energy Sector (28.2 million euros in 2020 and 24.4 million euros in 2019¹ ).

Investment increased 21.5% y.o.y (+10.7 million euros) to 60.6 million euros and transfers to RAB decreased 40.3 million euros to 9.6 million euros. Average RAB dropped by 56.9 million euros (-1.5%), to 3,681.4 million euros.

The average cost of debt was 1.9%, a 0.4p.p. y.o.y. decrease, and net debt reached 2,839.9 million euros, a 7.6% increase (+201.3 million euros) over the same period of the previous year.

MAIN INDICATORS (MILLIONS OF Euros)	June 2020	June 2019	Var.%
EBITDA	237.0	247.4	-4.2%
Financial results2	-21.4	-26.9	20.2%
Net income1	46.1	51.1	-9.8%
Recurrent net income	69.6	75.5	-7.8%
Total Capex	60.6	49.9	21.5%
Transfers to RAB3 (at historic costs)	9.6	49.9	-80.8%
Average RAB (at reference costs)	3 681.4	3 738.2	-1.5%
Net debt	2 839.9	2 638.7	7.6%
Average cost of debt	1.9%	2.2%	-0.4p.p.

¹ The full amount of the levy was recorded in the 1st quarter of 2020 and 2019, according to the Portuguese Securities Market Commission (CMVM) recommendations.

² The net financial cost of 0.1 million euros in June 2019 and revenue of 0.1 million euros in June 2020 from electricity interconnection capacity auctions between Spain and Portugal – referred to as FTR (Financial Transaction Rights) was reclassified from financial income to Revenue. 3 Includes direct acquisitions (RAB related).

Operational results – EBITDA

Domestic Power Transmission and Distribution Business

EBITDA for the domestic business reached 229.6 million euros in the first 6 months of 2020, a 5.7% (-13.8 million euros) drop over the same period of the previous year.

EBITDA - TRANSMISSION	June	June
(MILLIONS OF EUROS)	2020	2019	VAR.%
1) Revenues from assets	212.9	223.1	-4.6%
RAB remuneration	84.5	95.4	-11.5%
Lease revenues from hydro protection zone	0.3	0.3	-1.2%
Economic efficiency of investments	12.5	12.5	0.0%
Recovery of amortizations (net of investment subsidies)	106.7	105.9	0.7%
Amortização dos subsídios ao Investimento	8.9	8.9	0.2%
2) Revenues from opex	65.8	64.0	2.8%
3) Other revenues	9.1	8.3	8.6%
4) Own works (capitalised in investment)	8.7	9.6	-8.7%
5) Earnings on Construction (excl. own works capitalised in investment) – Concession assets	45.3	40.3	12.3%
6) OPEX	66.6	61.2	8.7%
Personnel costs4	27.8	28.6	-2.6%
External costs	38.7	32.7	18.6%
7) Construction costs – Concession assets	45.3	40.3	12.3%
8) Provisions	0.0	0.0	n.m.
9) Impairments	0.2	0.2	0.0%
10) EBITDA (1+2+3+4+5-6-7-8-9)	229.6	243.6	-5.7%

The decrease in EBITDA resulted mainly from:

• The decrease of 10.9 million euros in RAB remuneration (-11.5%) arising from:
• o The 4.1 million euros drop in the remuneration of electricity transmission regulated assets, reflecting (i) the reduction in the base rate of return (RoR) from 5.0% in June 2019 to 4.6% in June 2020 – as a result of the negative evolution of the yields of the Portuguese Republic 10Y Treasury Bills, and (ii) the decrease of 1.5 million euros (-0.1%) in electricity transmission average RAB;
• o Reduction of 4.8 million euros in the remuneration of natural gas transmission regulated assets, reflecting (i) the reduction in the rate of return from 5.4% in June 2019 to 4.6% in June 2020 – as a result of the negative evolution of the yields of the Portuguese Republic 10Y Treasury Bills; and (ii) the reduction of 43.2 million euros (-4.3%) in natural gas transmission average RAB;
• o Reduction of 2.0 million euros in the remuneration of natural gas transmission regulated assets, reflecting the reduction in the rate of return from 5.7% in June 2019 to 4.8% in June 2020 – as a result of the negative evolution of the yields of the Portuguese Republic 10Y Treasury Bills, despite the increase of 0.4 million euros (+0.1%) in natural gas distribution average RAB.

4 Includes training and seminars costs

Increase of 5.3 million euros in Opex (+8.7%), despite the decrease of 0.7 million euros in personnel costs, which was more than compensated by the increase of 6.1 million euros in external costs. The increase in external costs reflects mostly the 4.2 million euros increase in pass-through costs (costs accepted in the tariff), of which +2.8 million euros correspond to costs with cross-border and system services costs, and the 3,6 million euros increase in forest clearing costs, partially offset by the increase in the Group's operational efficiency.

With respect to domestic business it is also important to note that the natural gas distribution business contributed with EBITDA of 22.2 million euros.

International Business

The EBITDA for international businesses reached 7.3 million euros in the first 6 months of 2020, a 3.5 million euros (+93.1%) increase over the same period of the previous year, resulting mainly from:

• EBITDA of Transemel an electrical power transmission company in Chile which was 3.3 million euros. It should be noted that the results for the first half of 2019 doesn't include results of Transemel, as the company was acquired only in October of 2019;
• The increase of 0.1 million euros (+2.5%) in recognized income from the 42.5% stake held by REN in the Chilean company Electrogas.

EBITDA - INTERNATIONAL (MILLIONS OF EUROS)	June 2020	June 2019	VAR.%
1) Revenues from the Transmission of Electrical Power	5.1	-
2) Other revenues	4.0	3.9	2.5%
3) OPEX	1.8	0.1
Personnel costs5	0.0	0.0
External costs	1.7	0.1
4) EBITDA (1+2-3)	7.3	3.8	93.1%

Net income

Overall, the Group's net income for the first half of 2020 reached 46.1 million euros, a 5.0 million euros y.o.y. decrease (- 9.8%). This decrease resulted mostly from (i) the 12.9 million euros drop in the Group's EBIT (-10.3 million euros in EBITDA) reflecting the decrease in Domestic Power Transmission and Distribution business (-13.8 million euros in EBITDA and -14.6 million euros in EBIT), despite the increase in the contribution of international businesses (+3.5 million euros in EBITDA and +1.8 million euros in EBIT), and (ii) the increase of 3.8 million euros (+15.5%) in the Extraordinary Levy on the Energy Sector, reflecting the inclusion of Portgás' levy. On the other hand, financial results increased 5.4 million euros (+20.2%) reflecting higher gains from associated companies (+2.0 million euros) due to dividends recorded earlier than in the previous year and the decrease in the average cost of debt to 1.9% (-0.4p.p.), despite the increase in net debt to 2,839.9 million euros (+201.3 million euros; +7.6%) reflecting the acquisition of Transemel (155.5 million euros) and the consolidation of the new subsidiary's debt (7.2 million euros).

5 Includes training and seminars costs

Excluding non-recurring items, Net Income for the first 6 months of 2020 dropped 5.9 million euros (-7.8%). Non-recurring items considered in the first 6 months of 2020 and 2019 are as follows:

• i) In 2020: i) Extraordinary Levy on the Energy Sector laid down in the State Budget for 2020 (28.2 million euros); and ii) gains with the recovery of previous years taxes (4.7 million euros);
• ii) In 2019: i) Extraordinary Levy on the Energy Sector laid down in the State Budget for 2019 (24.4 million euros).

NET INCOME (MILLIONS OF EUROS)	June 2020	June 2019	VAR.%
EBITDA	237.0	247.4	-4.2%
Depreciations and amortizations	119.7	117.2	2.2%
Financial results	-21.4	-26.9	20.2%
Income tax expenses	21.7	27.9	-22.2%
Extraordinary levy on the energy sector 6	28.2	24.4	15.5%
Net income	46.1	51.1	-9.8%
Non-recurring items	23.5	24.4	-3.7%
Recurrent net income	69.6	75.5	-7.8%

1.2 AVERAGE RAB AND CAPEX

In the first 6 months of 2020, Capex reached 60.6 million euros, a 21.5% y.o.y. increase (+10.7 million euros), and transfers to RAB reached 9.6 million euros, a 38.3 million euros decrease (-80.8%).

In electricity, investment was 45.3 million euros, a 24.0% increase (8.8 million euros) over the same period of 2019, of which should be highlighted the projects of the connection at 400kV between Fundão and Falagueira (9.8 million euros), the new axis at 400Kv between the regions of Porto and Minho (7.4 million euros), the connection at 220kV between Vila Pouca de Aguiar and Carrapatelo (5.6 million euros) and the connection at 400kV between Ribeira de Pena and Feira (4.0 million euros). Transfers to RAB were 1.5 million euros, a y.o.y. decrease of 38.3 million euros (-96.2%).

In natural gas transmission, investment reached 2.5 million euros and transfers to RAB were 0.7 million euros, a decrease of 40.3% (-1.7 million euros) and 45.5% (-0.6 million euros) respectively.

In natural gas distribution, investment was 6.3 million euros, 40% for new supply points and 56% with the expansion of the distribution network, and transfers to RAB decreased 1.4 million euros (-16.3%) to 7.4 million euros.

Average RAB was 3,681.4 million euros, a 56.9 million euros (-1.5%) y.o.y decrease. In electricity, the average RAB (excluding lands) reached 2,036.3 million euros (-1.3 million euros, -0.1%), of which 1,069.5 million euros in assets remunerated at a premium rate of return, while lands reached 221.0 million euros (-12.5 million euros, -5.4%). In natural gas transmission, the average RAB was 953.5 million euros (-43.2 million euros, -4.3%), while in natural gas distribution the average RAB reached 469.0 million euros (+0.4 million euros, +0.1%).

⁶ The full amount of the levy was recorded in the 1st quarter of 2020 and 2019, according to the Portuguese securities market commission (CMVM) recommendations

1.3 MAIN REN GROUP EVENTS

January		REN registered, on 8 January, a new all-time high in gas transported by the national network, reaching 276.8 GWh and surpassing the previous maximum of 275.3 GWh reached in 5 December 2017
		The EllaLink Group has closed an agreement with RENTELECOM, a Portuguese public telecommunications network operator, to use dark fibers in Portugal and Spain for data center interconnection.
February		REN, in partnership with the Portuguese Foundation for Science and Technology (FCT) and the University of Porto (UP), marked the five years of REN's Chair on Biodiversity this Friday, in Lisbon, by hosting its 3rd Symposium.
March		REN, in its capacity as Issuing Body for Guarantees of Origin (EEGO - Entidade Emissora de Garantias de Origem), received approval by the competent authorities to start the activity of issuing and managing Guarantees and Certificates of Origin (GO and CO).
April		REN, EDP, Fundação Calouste Gulbenkian and La Caixa / BPI are the first entities to support the Portuguese lung ventilator project, developed at CEiiA with the medical and scientific community in response to the national and global health emergency caused by Covid-19.
May		The ERSE, Energy Services Regulatory Authority (ERSE) approved Regulation the extraordinary extension of the regulation period 2018-2020 of the electricity sector until 2021, thus applying in 2021 the regulatory parameters approved for the regulation period 2018-2020.
June		REN has handed over seven vehicles to seven volunteer fire brigades, in line with its policy of support for local communities and prevention of rural wildfires.
		REN carried out the first issuance of guarantees of origin (GOs), which certify electricity produced in Portugal from renewable energy sources.
		Fitch Ratings affirms REN's rating at 'BBB' and revises outlook from stable to negative.

1.4 QUARTERLY STATEMENTS OF PROFIT AND LOSS AND COMPREHENSIVE INCOME FOR THE PERIODS FROM 1 APRIL TO 30 JUNE 2020 AND 2019

Consolidated statements of profit and loss (unaudited information)

JUNE 2020 AND 2019
(unaudited information)	Consolidated statements of profit and loss
(Amounts expressed in thousands of euros – tEuros)	01.04.2020 to	01.04.2019 to
	30.06.2020	30.06.2019
Sales	-	17
Services rendered Revenue from construction of concession assets	140,672 28,733	141,350 33,086
Gains from associates and joint ventures	2,091	2,787
Other operating income	6,409	3,690
Operating income	177,905	180,931
Cost of goods sold Cost with construction of concession assets	(83) (24,260)	(207) (27,994)
External supplies and services	(16,672)	(13,570)
Employee compensation and benefit expense	(14,271)	(14,820)
Depreciation and amortizations	(59,797)	(58,634)
Impairments	(94)	(94)
Other expenses	(4,448)	(2,218)
Operating costs	(119,626)	(117,537)
Operating results	58,279	63,394
Financial costs	(15,425)	(17,130)
Financial income	1,747	1,819
Investment income - dividends	5,932	3,934
Financial results	(7,746)	(11,378)
Profit before income taxes and ESEC	50,534	52,016
Income tax expense	(8,768)	(14,182)
Extraordinary contribution on energy sector (ESEC) Net profit for the period	- 41,766	- 37,834
Attributable to:
Equity holders of the Company Non-controlled interest	41,766 -	37,834 -
Consolidated profit for the period	41,766	37,834

Consolidated statements of comprehensive income (unaudited information)

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statements of comprehensive income (unaudited information)
(Amounts expressed in thousands of euros – tEuros)
	01.04.2020 to 30.06.2020	01.04.2019 to 30.06.2019
Net Profit for the year	41,766	37,834
Items that will not be reclassified subsequently to profit or loss:
Actuarial gains / (losses)	1,891	640
Tax effect on actuarial gains / (losses)	(567)	(192)
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations	(2,845)	(2,003)
Increase/(decrease) in hedging reserves - cash flow derivatives	(4,685)	(6,592)
Tax effect on hedging reserves	1,171	1,483
Gain/(loss) in fair value reserve - Investments in equity instruments at
fair value through other comprehensive income	1,157	(2,150)
Tax effect on items recorded directly in equity	(257)	484
Other changes in equity	(12)	(12)
Comprehensive income for the year	37,619	29,493
Attributable to:
Shareholders of the company Non-controlling interests	37,619 -	29,493 -

2. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF 30 JUNE 2020 AND 31 DECEMBER 2019

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
2. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF 30 JUNE 2020 AND 31 DECEMBER 2019
(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of financial position originally issued in Portuguese - Note 33)
	Notes	Jun 2020	Dec 2019
ASSETS
Non-current assets
Property, plant and equipment Intangible assets	5 5	124,590 4,150,919	125,649 4,214,916
Goodwill	6	5,781	5,969
Investments in associates and joint ventures	7	171,663	172,278
Investments in equity instruments at fair value through other comprehensive income Derivative financial instruments	9 and 10 9 and 12	148,386 29,032	155,676 27,229
Other financial assets	9	85	71
Trade and other receivables	9 and 11	185,362	114,509
Deferred tax assets	8	89,389 4,905,209	93,666 4,909,964
Current assets
Inventories		4,038	3,919
Trade and other receivables Current income tax recoverable	9 and 11 8 and 9	276,491 7,457	353,725 14,921
Derivative financial instruments	9 and 12	1,656	1,732
Cash and cash equivalents	9 and 13	23,450	21,044
		313,091	395,341
Total assets	4	5,218,301	5,305,305
EQUITY
Shareholders' equity
Share capital	14	667,191	667,191
Own shares Share premium	14	(10,728) 116,809	(10,728) 116,809
Reserves	15	307,245	316,681
Retained earnings		241,769	242,853
Other changes in equity Net profit for the period		(5,561) 46,068	(5,561) 118,899
Total equity		1,362,794	1,446,144
LIABILITIES
Non-current liabilities Borrowings	9 and 16	2,314,819	2,112,296
Liability for retirement benefits and others	17	101,682	103,309
Derivative financial instruments	9 and 12	29,765	24,848
Provisions	18	8,356	8,416
Trade and other payables Deferred tax liabilities	19 8	341,531 150,840	340,627 141,774
		2,946,993	2,731,269
Current liabilities
Borrowings	9 and 16	572,647	757,158
		908,514	1,127,891
Total liabilities	4	3,855,507	3,859,160
Total equity and liabilities		5,218,301	5,305,305
Trade and other payables	19	335,868	370,733

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of profit and loss originally issued in Portuguese - Note 33)
	Notes	Jun 2020	Jun 2019
Sales	4 and 20	-	17
Services rendered	4 and 20	278,751	280,434
Revenue from construction of concession assets	4 and 21	54,021	49,889
Gains / (losses) from associates and joint ventures	7	4,137	5,589
Other operating income	22	13,849	13,343
Operating income		350,759	349,272
Cost of goods sold		(248)	(367)
Costs with construction of concession assets	21	(45,292)	(40,332)
External supplies and services	23	(29,884)	(23,070)
Personnel costs	24	(27,764)	(28,357)
Depreciation and amortizations	5	(119,717)	(117,183)
Provisions	18	-	1
Impairments	6	(189)	(189)
Other expenses Operating costs	25	(10,418) (233,510)	(9,531) (219,028)
Operating results		117,249	130,244
Financial costs	26	(30,378)	(34,656)
Financial income Investment income - dividends	26 10	3,089 5,932	3,800 3,934
Financial results		(21,357)	(26,923)
Profit before income tax and ESEC		95,892	103,322
Income tax expense Energy sector extraordinary contribution (ESEC)	8 27	(21,659) (28,165)	(27,854) (24,390)
Net profit for the year		46,068	51,078
Attributable to:
Equity holders of the Company		46,068	51,078
Non-controlled interest		-	-
Consolidated profit for the year		46,068	51,078
	28	0.07

The accompanying notes form an integral part of the consolidated statement of profit and loss for the six-month period ended 30 June 2020.

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019
(Amounts expressed in thousands of Euros – tEuros)
(Translation of statements of other comprehensive income originally issued in Portuguese - Note 33)
	Notes	Jun 2020	Jun 2019
Consolidated Net Profit for the period		46,068	51,078
Items that will not be reclassified subsequently to profit or loss:
Actuarial gains / (losses) - gross of tax		(444)	1,883
Tax effect on actuarial gains / (losses)	8	133	(565)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations	15	(4,977)	961
Increase / (decrease) in hedging reserves - cash flow derivatives Tax effect on hedging reserves	12 8 and 12	(6,730) 1,683	(14,437) 3,248
Gain/(loss) in fair value reserve - Investments in equity instruments at fair	10	(7,290)	(4,830)
value through other comprehensive income
Tax effect on items recorded directly in equity	8 and 10	1,644	1,087
Other changes in equity	7	(12)	(29)
Comprehensive income for the period		30,075	38,396
Attributable to:		30,075	38,396
Equity holders of the company Non-controlled interest		-	-

The accompanying notes form an integral part of the consolidated statement of comprehensive income for the six-month period ended 30 June 2020.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019 (Amounts expressed in thousands of Euros – tEuros) (Translation of statements of changes in equity originally issued in Portuguese - Note 33) Attributable to shareholders
Fair Value reserve Hedging reserve Own shares Share premium Legal Reserve Other reserves Other changes Retained earnings Profit for the year Share capital in equity
Changes in the year Notes (Note 10) (Note 12)
At 1 January 2019 667,191 (10,728) 116,809 113,152 57,711 (10,577) 166,620 (5,561) 253,505 115,715
Net profit of the period and other comprehensive income - - - - (3,743) (11,189) 932 - 1,318 51,078
Transfer to other reserves - - - 5,676 - - - - 110,039 (115,715)
Distribution of dividends 29 - - - - - - - - (113,426) -
At 30 June 2019 667,191 (10,728) 116,809 118,828 53,968 (21,765) 167,552 (5,561) 251,435 51,078
At 1 January 2020 667,191 (10,728) 116,809 118,828 51,966 (19,901) 165,787 (5,561) 242,853 118,899
Net profit of the period and other comprehensive income - - - - (5,646) (5,047) (4,989) - (311) 46,068
Transfer to other reserves - - - 6,247 - - - - 112,652 (118,899) Distribution of dividends 29 - - - - - - - - (113,426) -

The accompanying notes form an integral part of the consolidated statement of changes in equity for the six-month period ended 30 June 2020.

CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2020 AND 2019

(Amounts expressed in thousands of Euros – tEuros)

(Translation of statements of cash flow originally issued in Portuguese - Note 33)

	Notes	Jun 2020	Jun 2019
Cash flow from operating activities:
Cash receipts from customers		$1,131,120$ al	1,195,206 a)
Cash paid to suppliers		$(904, 298)$ a)	$(921,067)$ a)
Cash paid to employees		(35, 910)	(37, 673)
Income tax received/paid		725	(3,905)
Other receipts / (payments) relating to operating activities		3,972	(16, 461)
Net cash flows from operating activities (1)		195,609	216,100
Cash flow from investing activities:
Receipts related to:
Investment grants		3,934	4,829
Interests and other similar income			17
Dividends	7 and 10	4,665	4,223
Payments related to:
Property, plant and equipment		(7,634)	(20)
Intangible assets - Concession assets		(68, 934)	(64, 016)
Net cash flow used in investing activities (2)		(67, 969)	(54, 966)
Cash flow from financing activities:
Receipts related to:
Borrowings		1,407,500	2,651,500
Payments related to:
Borrowings		(1, 386, 655)	(2,670,817)
Interests and other similar expense		(34, 479)	(38, 681)
Dividends	29	(113, 426)	(113, 426)
Net cash from / (used in) financing activities (3)		(127,060)	(171, 424)
Net (decrease) / increase in cash and cash equivalents $(1)+(2)+(3)$		580	(10, 290)
Effect of exchange rates		(623)	(30)
Cash and cash equivalents at the beginning of the year	13	20,521	34,096
Cash and cash equivalents at the end of the period	13	20,478	23,777
Detail of cash and cash equivalents
Cash	13	24	25
Bank overdrafts	13	(2,972)	(1, 582)
Bank deposits	13	23,426	25,334
		20,478	23,777

a) These amounts include payments and receipts relating to activities in which the Group acts as agent, income and costs being reversed in the consolidated statement of profit and loss.

The accompanying notes form an integral part of the consolidated statement of cash flow for the six-month period ended 30 June 2020.

3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2020

(Translation of notes originally issued in Portuguese - Note 33)

1 GENERAL INFORMATION

REN – Redes Energéticas Nacionais, SGPS, S.A. (referred to in this document as "REN" or "the Company" together with its subsidiaries, referred to as "the Group" or "the REN Group"), with head office in Avenida Estados Unidos da América, 55 – Lisbon, resulted from the spin-off of the EDP Group, in accordance with Decree-Laws 7/91 of 8 January and 131/94 of 19 May, approved by the Shareholders' General Meeting held on 18 August 1994, with the objective of ensuring the overall management of the Public Electric Supply System (PES).

Up to 26 September 2006 the REN Group's operations were concentrated on the electricity business through REN – Rede Eléctrica Nacional, S.A. On 26 September 2006, as a result of the unbundling transaction of the natural gas business, the Group went through a significant change with the purchase of assets and financial participations relating to the transport, storage and re-gasification of natural gas activities, comprising a new business.

In the beginning of 2007, the Company was transformed into a holding company and, after the transfer of the electricity business to a new company incorporated on 26 September 2006, renamed REN – Serviços de Rede, S.A., changed its name to REN – Rede Eléctrica Nacional, S.A..

The Group presently has two main business segments, Electricity and Gas, and a secondary business of Telecommunications.

The Electricity business includes the following companies:

a) REN – Rede Eléctrica Nacional, S.A., incorporated on 26 September 2006, whose activities are carried out under a concession contract for a period of 50 years as from 2007 which establishes the overall management of the Public Electricity Supply System (Sistema Eléctrico de Abastecimento Público - SEP);

b) REN Trading, S.A., was incorporated on 13 June 2007, whose main function is the management of Power Purchase Agreements ("PPA") from Turbogás, S.A. and Tejo Energia, S.A., which did not terminate on 30 June 2007, date of the entry into force of the new Contracts for the Maintenance of the Contractual Equilibrium (Contratos para a Manutenção do Equilíbrio Contratual – CMEC). The operations of this company include the trading of electricity produced and of the installed production capacity, to domestic and international distributors;

c) Enondas, Energia das Ondas, S.A. was incorporated on 14 October 2010, its capital being fully owned by REN - Redes Energéticas Nacionais, SGPS, S.A., with the main activity being management of the concession to operate a pilot area for the production of electric energy from sea waves;

d) Empresa de Transmisión Eléctrica Transemel, S.A. ("Transemel"), was incorporated on 1 October 2019, following the expansion of the electricity business in Chile. The company's activity consists of providing electricity transmission and transformation services and the development, operation and commercialization of transmission systems, allowing free access to the different players in the electricity market in Chile.

The Gas business includes the following companies:

a) REN Gás, S.A. was incorporated on 29 March 2011, with the corporate purpose of promoting, developing and carrying out projects and developments in the natural gas sector, as well as defining the overall strategy and coordination of the companies in which it has direct interests;

b) REN Gasodutos, S.A., was incorporated on 26 September 2006, the capital of which was paid up through carve-in of the gas transport infrastructures (network, connections and compression);

c) REN Armazenagem, S.A., was incorporated on 26 September 2006, the capital of which was paid up through integration into the company of the gas underground storage assets;

d) REN Atlântico, Terminal de GNL, S.A., acquired under the acquisition of the gas business, previously designated "SGNL – Sociedade Portuguesa de Gás Natural Liquefeito". The operations of this company comprise the supply, reception, storage and re-gasification of natural liquefied gas through the GNL marine terminal, being responsible for the construction, utilization and maintenance of the necessary infrastructures;

e) REN Portgás Distribuição, S.A. ("REN Portgás"), acquired as part of the expansion of the gas business on 4 October 2017. The operations of this company comprise the distribution of natural gas in low and medium pressure, as well as production and distribution of other channelled fuel gases and other activities related, namely the production and sale of flaring equipment.

The operations of the companies indicated in b) to d) above are developed in accordance with the three concession contracts separately granted for periods of 40 years starting 2006. The company indicated in e) above develops its activities in accordance with one concession contract granted for 40 years starting 2008.

The telecommunications business is managed by RENTELECOM – Comunicações, S.A. whose activity is the establishment, management and operation of telecommunications infrastructures and systems, the rendering of telecommunications services and optimizing the optical fibre excess capacity of the installations owned by REN Group.

REN SGPS fully owns REN Serviços, S.A., a company whose purpose is the rendering of services in the energetic area and the general services of business development support to group companies and third parties, receiving a fee for the services rendered, as well as the management of financial participations in other companies.

On 10 May 2013 REN Finance, B.V., a company based in Netherlands and fully owned by REN SGPS, whose purpose is to participate, finance, collaborate and lead the management of group companies, was incorporated.

Additionally, on 24 May 2013, together with China Electric Power Research Institute, a State Grid Group company, Centro de Investigação em Energia REN – State Grid, S.A. ("Centro de Investigação") was incorporated under a Joint Venture Agreement on which REN holds 1,500,000 shares representing 50% of the total share capital.

The purpose of this company is to implement a Research and Development centre in Portugal, dedicated to the research, development, innovation and demonstration in the areas of electricity transmission and systems management, the rendering of advisory services and education and training services as part of these activities, as well as performing all related activities and complementary services to its object.

On 14 December 2016, Aério Chile SPA was incorporated, a company fully owned by REN Serviços, S.A., headquartered in Santiago, Chile, whose purpose is to realize investments in assets, shares and rights of companies and associations.

In addition, on November 21, 2018, REN PRO, S.A. was incorporated, a company fully owned by REN, headquartered in Lisbon, whose purpose is to provide support services, namely administrative, logistical, communication and development support of the business, as well as business consulting, in a remunerated manner, either to companies that are in a group relation or to any third party, and IT consulting.

On 17 July 2019, Apolo Chile SPA was incorporated, a company fully owned by REN Serviços, S.A., headquartered in Santiago, Chile, whose purpose is to realize investments in assets, shares and rights of companies and associations of entities essentially related to the electric transmission sector.

As of 30 June 2020, REN also holds:

a) 42.5% interest in the share capital of Electrogas, S.A., a provider of natural gas and other fuels transportation. The participation was acquired on 7 February 2017;

b) 40% interest in the share capital of OMIP - Operador do Mercado Ibérico (Portugal), SGPS, S.A. ("OMIP SGPS"), being its purpose the management of participations in other companies as an indirect way of exercising economic activities;

c) 10% interest in the share capital of OMEL - Operador do Mercado Ibérico de Energia, S.A., the Spanish pole of the Sole Operator;

d) 1% interest in the share capital of Red Eléctrica Corporación, S.A. ("REE"), entity in charge of the electricity network management in Spain;

e) 7.9% interest in the share capital of Coreso, S.A. ("Coreso"), entity that assists the European transmission system operators ("TSO"), in coordination and safety activities to ensure the reliability of Europe's electricity supply;

f) Participations in the share capital of: (i) Hidroeléctrica de Cahora Bassa, S.A. ("HCB"), participation of 7.5%; (ii) MIBGÁS, S.A., participation of 6.67%; and (iii) MIBGÁS Derivatives, S.A., participation of 9.7%.

1.1 Consolidation perimeter

The following companies were included in the consolidation perimeter as of 30 June 2020 and 31 December 2019:

		Jun 2020		Dec 2019
Designation / adress	Activity	% Owned		% Owned
		Group	Individual	Group	Individual
Parent company: REN - Redes Energéticas Nacionais, SGPS, S.A.	Holding company	-	-	-	-
Subsidiaries: REN - Rede Eléctrica Nacional, S.A. Av. Estados Unidos da América, 55 - Lisboa	National electricity transmission network operator (high and very high tension)	100%	100%	100%	100%
REN Trading, S.A. Praça de Alvalade, nº7 - 12º Dto, Lisboa	Purchase and sale, import and export of electricity and natural gas	100%	100%	100%	100%
Enondas-Energia das Ondas, S.A. Mata do Urso - Guarda Norte - Carriço- Pombal	Management of the concession to operate a pilot area for the production of electric energy from ocean waves	100%	100%	100%	100%
RENTELECOM - Comunicações S.A. Av. Estados Unidos da América, 55 - Lisboa	Telecommunications network operation	100%	100%	100%	100%
REN - Serviços, S.A. Av. Estados Unidos da América, 55 - Lisboa	Back office and management of participations	100%	100%	100%	100%
REN Finance, B.V. De Cuserstraat, 93, 1081 CN Amsterdam, The Netherlands	Participate, finance, collaborate, conduct management of companies related to REN Group	100%	100%	100%	100%
REN PRO, S.A. Av. Estados Unidos da América, 55 - Lisboa	Communication and Sustainability, Marketing, Business Management, Business Development and Consulting and IT Projects	100%	100%	100%	100%
REN Atlântico , Terminal de GNL, S.A. Terminal de GNL - Sines	Liquified Natural Gas Terminal maintenance and regasification operation	100%	100%	100%	100%
Owned by REN Serviços, S.A.: REN Gás, S.A. Av. Estados Unidos da América, 55 -12º - Lisboa	Management of projects and ventures in the natural gas sector	100%	-	100%	-
Aério Chile SPA Santiago do Chile	Investments in assets, shares, companies and associations	100%	-	100%	-
Apolo Chile SPA Santiago do Chile	Investments in assets, shares, companies and associations	100%	-	100%	-
Owned by REN Gás, S.A.: REN - Armazenagem, S.A. Mata do Urso - Guarda Norte - Carriço- Pombal	Underground storage developement, maintenance and operation	100%	-	100%	-
REN - Gasodutos, S.A. Estrada Nacional 116, km 32,25 - Vila de Rei - Bucelas	National Natural Gas Transport operator and natural gas overall manager	100%	-	100%	-
REN Portgás Distribuição, S.A. Rua Linhas de Torres, 41 - Porto	Distribution of natural gas	100%	-	100%	-
Owned by Apolo Chile SPA (99.99%) and Aerio Chile SPA (<0.001%): Empresa de Transmisión Eléctrica Transemel, S.A. Santiago do Chile	Transmission and transformation of electricity, allowing free access to different players in the electricity market in Chile	100%	-	100%	-

Changes in the consolidation perimeter

- 2020

There were no changes to the consolidation perimeter in 2020 compared to that reported on 31 December 2019.

- 2019

On January 22, 2019, a merger of the entities REN Gás, S.A. and REN Gás Distribuição SGPS, S.A. was effected by means of the global transfer of the assets of REN Gás Distribuição SGPS, S.A. to REN Gás, S.A..

Additionally, on 17 July 2019, Apolo Chile SPA was incorporated, a company fully owned by REN Serviços, S.A., headquartered in Chile.

Finally, on 1 October 2019, Empresa de Transmisión Eléctrica Transemel, SA ("Transemel"), headquartered in Chile, was held by Apolo Chile SPA (99.99%) and Aerio Chile SPA (<0.001 %). The REN Group, taking into account the change in the perimeter, appropriated the results of the company acquired since the acquisition date.

1.2 Approval of the consolidated financial statements

These interim consolidated financial statements were approved by the Board of Directors at a meeting held on 29 July 2020. The Board of Directors believes that the consolidated financial statements fairly present the financial position of the companies included in the consolidation, the consolidated results of their operations, their consolidated comprehensive income, the consolidated changes in their equity and their consolidated cash flows in accordance with the International Financial Reporting Standards for interim financial statements as endorsed by the European Union (IAS 34).

2 BASIS OF PRESENTATION

The consolidated financial statements for the six-month period ended 30 June 2020 were prepared in accordance with IAS 34 - Interim Financial Reporting Standards, therefore do not include all information required for annual financial statements so should be read in conjunction with the annual financial statements issued for the year ended 31 December 2019.

The Board of Directors evaluated the Group's going concern capability, based on all the relevant information, facts and circumstances, of financial, commercial and other natures, including subsequent events occurred after the financial statement report date. Particularly, as of 30 June 2020, current liabilities in the amount of 908,514 thousand Euros are greater than current assets, which total 313,091 thousand Euros.

However, in addition to the consolidated results and cash flows estimated for the following twelve months, the Group has, as of 30 June 2020, credit lines in the form of commercial paper available for use in the amount of 941,000 thousands Euros, with a substantial part with guaranteed placement (Note 16). Additionally, the Group has, as of 30 June 2020, 80,000 thousand Euros in credit lines contracted and not used (Note 16).

In result of this assessment, the Board concludes that the Group has the adequate resources to proceed its activity, not intending to cease its operations in short term, and therefore considers adequate the use of a going concern basis in the preparation of the financial statements.

The consolidated financial statements are presented in thousands of Euros – tEuros, rounded to the thousand closer.

As a result of the pandemic corona virus (COVID-19), there was a general worsening of the global climate of uncertainty, with negative effects on the prospects for the world economy evolution and financial markets.

The REN Group is actively monitoring this situation, has activated all the necessary plans and, although the situation is unpredictable, REN Group does not have or estimate to have, as of this date, significant effects on its operability and regulatory duties. It should be noted that the REN Group operates, essentially, in two business areas, Electricity and Gas, according to concession contracts attributed to the Group. These concession contracts are regulated, which in a certain way minimizes the possible impacts of the pandemic.

Additionally, it should be noted, and although there are no significant impacts as mentioned, there was some delay in the execution of some investment projects, in the period from March to April 2020, coinciding with the moment of general confinement in the country, but we estimate a partial recovery of these delays until the end of the year 2020. Regarding electricity consumption, there was a decrease compared to the same period last year, but the impact will be reduced at REN, with no impact on the revenue recognized in the income statement and only circumscribed in one time lag in terms of cash flows, in compliance with the tariff regulation.

There were no significant changes in the long-term expectation of recovery of the Group's investments and financial holdings.

On the present date, and taking into account the above and Note 5 - Main Estimates and Judgments, disclosed in the annex to the 2019 consolidated financial statements, the Group does not foresee any changes in the most relevant estimates, in the case of Provisions, Assumptions Actuarial, Tangible and Intangible Fixed Assets, Impairment, Fair Value of Financial Instruments and Impairment of Goodwill.

3 MAIN ACCOUNTING POLICIES

The consolidated financial statements were prepared for interim financial reporting purposes (IAS 34), on a going concern basis from the books and accounting records of the companies included in the consolidation, maintained in accordance with the accounting standards in force in Portugal, adjusted in the consolidation process so that the financial statements are presented in accordance with interim Financial Reporting Standards as endorsed by the European Union in force for the years beginning as from 1 January 2020.

Such Financial Reporting standards include International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board ("IASB"), International Accounting Standards (IAS), issued by the International Accounting Standards Committee ("IASC") and respective IFRIC and SIC interpretations, issued by the International Financial Reporting Interpretation Committee ("IFRIC") and Standard Interpretation Committee ("SIC"), that have been endorsed by the European Union. The standards and interpretations are hereinafter referred generically to as IFRS.

The accounting policies used to prepare these consolidated financial statements are consistent, in all material respects, with the policies used to prepare the consolidated financial statements for the year ended 31 December 2019, as explained in the notes to the consolidated financial statements for 2019, except for the adoption of new effective standards for periods beginning on or after 1 January 2020. The Group has not previously adopted any standard, interpretation or amendment that is not yet in force.

The estimates and assumptions with impact on REN's consolidated financial statements are continuously evaluated, representing at each reporting date the Board of Directors best estimates, considering historical performance, past accumulated experience and expectations about future events that, under the circumstances, are believed to be reasonable. There were no changes in the main estimates and judgments presented in relation to the six-month period ended on 30 June 2020 and compared to the year ended on 31 December 2019.

Adoption of new standards, interpretations, amendments and revisions

The following standards, interpretations, amendments and revisions have been endorsed by the European Union with mandatory application in effective for annual periods beginning on or after 1 January 2020:

Amendments to References to the Conceptual Framework in IFRS

The revised Conceptual Framework includes: a new chapter on measurement; guidance on reporting financial performance; improved definitions of an asset and a liability, and guidance supporting these definitions; and clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in financial reporting. The adoption of these amendments does not result in significant impacts on REN's consolidated financial statements.

Amendments to IAS 1 and IAS 8: Definition of Material

The changes in Definition of Material all relate to a revised definition of 'material' which is "Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity". The adoption of these amendments does not result in significant impacts on REN's consolidated financial statements.

Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform

These amendments provide certain reliefs in connection with interest rate benchmark reform. The reliefs relate to hedge accounting and have the effect that IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be recorded in the income statement. Given the pervasive nature of hedges involving IBOR-based contracts, the reliefs will affect companies in all industries. The adoption of these amendments does not result in significant impacts on REN's consolidated financial statements.

Amendment to IFRS 3 - Business Combinations

These amendments: (i) clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs; (ii) narrow the definitions of a business and of outputs by focusing on goods and services provided to customers and by removing the reference to an ability to reduce costs; (iii) add guidance and illustrative examples to help entities assess whether a substantive process has been acquired. The adoption of these amendments does not result in significant impacts on REN's consolidated financial statements.

There are no standards, interpretations, amendments and revisions endorsed by the European Union with mandatory application in future economic exercises at the date of 30 June 2020.

Standards and interpretations, amended or revised, not endorsed by the European Union

The following standards, interpretations, amendments and revisions, with mandatory application in future years, have not, until the date of preparation of these consolidated financial statements, been endorsed by the European Union:

Standard	Applicable for financial years	Resume
IFRS 17 - Insurance Contracts	beginning 01/jan/23	This standard is intended to replace IFRS 4 and requires that all insurance contracts to be accounted for consistently.
Amendments to IAS 1 - Presentation of Financial Statements: Classification of Liabilities as Current or Non-current	01/jan/22	These amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The amendments clarify, not change, existing requirements, and so are not expected to affect companies' financial statements significantly. However, they could result in companies reclassifying some liabilities from current to non-current, and vice versa.
Amendments to IFRS 3, IAS 16, IAS 37 and Annual Improvements 2018-2020	01/jan/22	These amendments clarify the wording or correct minor consequences, oversights or conflits between requirements in the Standards. Amendments to IFRS 3 update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. Amendments to IAS 16 prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss. Amendments to IAS 37 specify which costs a company includes when assessing whether a contract will be loss-making. Annual Improvements make minor amendments to IFRS 1 - First-time Adoption of International Financial Reporting Standards, IFRS 9 - Financial Instruments, IAS 41 - Agriculture and the illustrative examples accompanying IFRS 16 - Leases.
Amendment to IFRS 16 - Leases: Covid 19 - Related Rent Concessions	01/jun/20	These amendments change IFRS 16 to: provide lessees with an exemption from assessing whether a Covid 19 - Related rent concession is a lease modification; require lessees that apply the exemption to account for Covid 19 - Related rent concessions as if they were not lease modifications; require lessees that apply the exemption to disclose that fact and require lessees to apply the exemption retrospectively in accordance with IAS 8, but not require them to restate prior period figures.
Amendments to IFRS 4 - Insurance Contracts: Deferral of IFRS 9	01/jan/21	These amendments are related to the previous insurance contracts Standard (IFRS 4), so that eligible insurers can still apply IFRS 9 - Financial Instruments alongside IFRS 17. The amendment provides some entities with a temporary exemption from application of IFRS 9 and gives all entities with insurance contracts the option, following full adoption of IFRS 9, to present changes in fair value on qualifying designated financial assets in other comprehensive income (OCI) instead of profit or loss (referred to as the "overlay approach").

These standards and interpretations were not yet endorsed by the European Union and consequently REN has not adopted them on the 30 June 2020 consolidated financial statements.

4 SEGMENT REPORTING

The REN Group is organized in two main business segments, Electricity and Gas and one secondary segment. The electricity segment includes the transmission of electricity in very high voltage, overall management of the public electricity system and management of the power purchase agreements (PPA) not terminated at 30 June 2007, the pilot zone for electricity production from sea wave and the transmission and transportation of electricity in Chile. The gas segment includes high pressure gas transmission and overall management of the national natural gas supply system, as well as the operation of regasification at the LNG Terminal, the distribution of natural gas in low and medium pressure and the underground storage of natural gas.

Although the activities of the LNG Terminal and underground storage can be seen as separate from the transport of gas and overall management of the national natural gas supply system, since these operations provide services to the same users and they are complementary services, it was considered that it is subject to the same risks and benefits.

The telecommunications segment is presented separately although it does not qualify for disclosure.

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Management of external loans are centrally managed by REN SGPS, S.A. for which the Company choose to present the
assets and liabilities separate from its eliminations that are undertaken in the consolidation process, as used by the main
responsible operating decision maker.
The results by segment for the six-month period ended 30 June 2020 were as follows:
	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Sales and services provided	179,494	99,685	3,393	17,247	(21,067)	278,751
Inter-segments	989	2,994	-	17,084	(21,067)	-
Revenues from external customers	178,505	96,691	3,393	163	-	278,751
Revenue from construction of concession assets	45,299	8,722	-	-	-	54,021
Cost with construction of concession assets	(38,765)	(6,527)	-	-	-	(45,292)
Gains / (losses) from associates and joint ventures	-	-	-	4,137	-	4,137
Personnel costs	(29,445)	(17,459)	(1,376)	(5,603)	24,000	(29,884)
Employee compensation and benefit expense	(9,188)	(6,339)	(148)	(12,088)	-	(27,764)
Other expenses and operating income	5,876	236	(6)	11	(2,932)	3,184
Operating cash flow	153,269	78,318	1,863	3,704	-	237,154
Investment income - dividends	-	-	-	5,932	-	5,932
Non reimbursursable expenses
Depreciation and amortizations	(78,810)	(40,807)	(8)	(92)	-	(119,717)
Impairments	-	-	-	(189)	-	(189)
Financial results
Financial income	468	2,377	11	74,599	(74,366)	3,089
Financial costs	(20,715)	(9,588)	-	(74,442)	74,366	(30,378)
Profit before income tax and ESEC	54,213	30,300	1,866	9,513	-	95,892
Income tax expense	(15,253)	(8,131)	(448)	2,173	-	(21,659)
Energy sector extraordinary contribution (ESEC)	(17,392)	(10,773)	-	-	-	(28,165)
Profit for the year	21,568	11,396	1,419	11,685	-	46,068
The results by segment for the six-month period ended 30 June 2019 were as follows:
	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Sales and services provided	174,892	106,170	3,194	18,748	(22,552)	280,451
Inter-segments Revenues from external customers	285 174,606	3,941 102,229	- 3,194	18,326 422	(22,552) -	- 280,451
						49,889
Revenue from construction of concession assets	36,521	13,368	-	-	-

Sales and services provided	174,892	106,170	3,194	18,748	(22,552)	280,451
Inter-segments	285	3,941	-	18,326	(22,552)	-
Revenues from external customers	174,606	102,229	3,194	422	-	280,451
Revenue from construction of concession assets	36,521	13,368	-	-	-	49,889
Cost with construction of concession assets	(29,227)	(11,105)	-	-	-	(40,332)
Gains / (losses) from associates and joint ventures	-	-	-	5,589	-	5,589
Personnel costs	(21,605)	(20,198)	(971)	(5,849)	25,553	(23,070)
Employee compensation and benefit expense	(9,473)	(6,371)	(145)	(12,367)	-	(28,357)
Other expenses and operating income	6,431	154	(13)	(126)	(3,000)	3,445
Operating cash flow	157,538	82,017	2,065	5,995	-	247,616
Investment income - dividends	-	-	-	3,934	-	3,934
Non reimbursursable expenses
Depreciation and amortizations	(77,156)	(39,919)	(16)	(92)	-	(117,183)
Provisions	-	-	-	1	-	1
Impairments	-	-	-	(189)	-	(189)
Financial results
Financial income	665	3,291	15	75,617	(75,789)	3,800
Financial costs	(21,767)	(11,141)	-	(77,538)	75,789	(34,656)
Profit before income tax and ESEC	59,280	34,249	2,065	7,728	-	103,322
Income tax expense	(16,747)	(10,080)	(485)	(543)	-	(27,854)
Energy sector extraordinary contribution (ESEC)	(17,434)	(6,955)	-	-	-	(24,390)
Profit for the year	25,099	17,214	1,579	7,185	-	51,078

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS Inter-segment transactions are carried out under normal market conditions, equivalent to transactions with third parties. Revenue included in the segment "Others" is essentially related to the services provided by the management and back office to Group entities as well as third parties.
Assets and liabilities by segment as well as capital expenditures for the six-month period ended 30 June 2020 were as follows:
	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Segment assets
Group investments held	-	873,401	-	2,157,380	(3,030,781)	-
Property, plant and equipment and intangible assets	2,699,795	1,575,284	8	423	-	4,275,510
Other assets Total assets	509,209 3,209,004	367,976 2,816,662	7,008 7,015	6,264,335 8,422,138	(6,205,738) (9,236,518)	942,791 5,218,301
Total liabilities	2,354,398	1,301,030	3,631	6,402,185	(6,205,738)	3,855,507
Capital expenditure - total	51,715	8,721	-	170	-	60,606
Capital expenditure - property, plant and equipment (Note 5) Capital expenditure - other intangible assets (Note 5)	6,415 -	- -	- -	170 -	- -	6,585 -
Capital expenditure - intangible assets (Note 5)	45,300	8,721	-	-	-	54,021
Investments in associates (Note 7)	-	-	-	169,019	-	169,019
Investments in joint ventures (Note 7)	-	-	-	2,644	-	2,644
Assets and liabilities by segment at 31 December 2019 as well as investments on tangible assets and intangible assets were
as follows:
		Gas	Telecommunications	Others	Eliminations	Consolidated
	Electricity
Segment assets						-
Group investments held	-	794,895	-	2,240,687	(3,035,581)
Property, plant and equipment and intangible assets Other assets	2,732,838 516,262	1,607,368 410,651	15 7,474	344 6,341,104	- (6,310,752)	4,340,565 964,739
Total assets	3,249,099	2,812,914	7,490	8,582,135	(9,346,333)	5,305,305
Total liabilities	2,373,095	1,342,211	3,015	6,451,071	(6,310,232)	3,859,160
Capital expenditure - total Capital expenditure - property, plant and equipment (Note 5)	145,431 4,396	43,075 -	- -	171 171	- -	188,678 4,567
Capital expenditure - other intangible assets (Note 5)	167	-	-	-	-	167
Capital expenditure - intangible assets (Note 5)	140,868	43,075	-	-	-	183,944
Investments in associates (Note 7)	-	-	-	169,642	-	169,642

Segment assets
Investments in associates (Note 7)	-	-	-	169,642	-	169,642
Investments in joint ventures (Note 7)	-	-	-	2,636	-	2,636

The liabilities included in the segment "Others" are essentially related to external borrowings obtained directly by REN SGPS, S.A. and REN Finance, BV for financing the several activities of the Group.

The captions of the statement of financial position and profit and loss for each segment result of the amounts considered directly in the individual financial statements of each company that belongs to the Group included in the perimeter of each segment, corrected with the eliminations of the inter-segment transactions.

5 TANGIBLE AND INTANGIBLE ASSETS

	During the six-month period ended 30 June 2020, the changes in tangible and intangible assets were as follows:
		1 January 2020					Changes	Depreciation of			30 June 2020
	Cost	Accumulated depreciation	Net book value	Additions	Disposals, write-offs and impairments	Transfers	Depreciation charge	disposals and write- offs and other reclassifications	Exchange rate differences	Cost	Accumulated depreciation	Net book value
Property, plant and equipment: Transmission and electronic equipment	103,937	(1,000)	102,937	-	-		- (1,733)	-	(3,896)	100,041	(2,733)	97,308
Transport equipment	944	(567)	377	168	-		- (81)	-	-	1,112	(648)	464
Office equipment	685	(333)	353	2	-		- (23)	-	(23)	664	(356)	309
Property, plant and equipment in progress	1,270	(30)	1,240	-	-		- (7)	-	(106)	1,164	(37)	1,127
Assets in progress	20,743	-	20,743	6,415	-		- -	-	(1,776)	25,382	-	25,382
	127,579	(1,929)	125,649	6,585	-		- (1,844)	-	(5,801)	128,363	(3,773)	124,590
		1 January 2020					Changes				30 June 2020
	Cost	Accumulated	Net book value	Additions	Disposals, write-offs	Transfers	Depreciation charge	Depreciation of disposals and write-	Exchange rate differences	Cost	Accumulated depreciation	Net book value
		depreciation			and impairments			offs and other reclassifications
Intangible assets: Other intangible assets	66,581	(2)	66,579	-	-		- (39)	-	(102)	66,479	(41)	66,438
Concession assets	8,356,669	(4,305,938)	4,050,731	325	(777)	9,438	(117,834)	734	-	8,365,655	(4,423,038)	3,942,617
Concession assets in progress	97,606	-	97,606	53,696	-	(9,438)	-	-	-	141,864	-	141,864
	8,520,856	(4,305,940)	4,214,916	54,021	(777)		- (117,873)	734	(102)	8,573,998	(4,423,079)	4,150,919

The changes in tangible and intangible assets in the in the year ended 31 December 2019 were as follows:
		1 January 2019					Changes		Depreciation of			31 December 2019
	Cost	Accumulated depreciation	Net book value	Changes in the perimeter	Additions	Disposals, write-offs and impairments	Transfers	Depreciation charge	disposals and write- offs and other reclassifications	Exchange rate differences	Cost	Accumulated depreciation	Net book value
Property, plant and equipment: Transmission and electronic equipment	107	(107)	-	107,051		- -	-	(893)	-	(3,221)	103,937	(1,000)	102,937
Transport equipment	1,008	(572)	437	3	159	(226)	-	(208)	213	-	944	(567)	377
Office equipment	404	(288)	116	316	13	(27)	-	(51)	6	(21)	685	(333)	353
Property, plant and equipment in progress	27	(19)	8	1,330		- -	-	(11)	-	(87)	1,270	(30)	1,240
Assets in progress	-	-	-	17,489	4,396	-	-	-	-	(1,142)	20,743	-	20,743
	1,546	(985)	561	126,189	4,567	(253)	-	(1,163)	219	(4,470)	127,579	(1,929)	125,649
		1 January 2019					Changes					31 December 2019
	Cost	Accumulated depreciation	Net book value	Changes in the perimeter	Additions	Disposals, write-offs and impairments	Transfers	Depreciation charge	Depreciation of disposals and write- offs and other reclassifications	Exchange rate differences	Cost	Accumulated depreciation	Net book value
Intangible assets: Other intangible assets	-	-	-	66,503	167	(17)	-	(2)	-	(72)	66,581	(2)	66,579
Concession assets	8,161,166	(4,073,426)	4,087,740	-	4,352	4,285	186,866	(234,461)	1,949	-	8,356,669	(4,305,938)	4,050,731
Concession assets in progress	104,880	-	104,880	-	179,592	-	(186,866)	-	-	-	97,606	-	97,606
	8,266,046	(4,073,426)	4,192,619	66,503	184,111	4,268	-	(234,463)	1,949	(72)	8,520,856	(4,305,940)	4,214,916
						4,015	-	(235,626)	2,168	(4,542)	8,648,435	(4,307,869)	4,340,564

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
The main additions verified in the periods ended 30 June 2020 and 31 December 2019 are made up as follows:
	Jun 2020	Dec 2019
Electricity segment:
Power line construction (150 KV, 220 KV and others)	4,292	61,597
Power line construction (400 KV)	21,220	33,007
Construction of new substations	7,102	3,990
Substation Expansion	7,584	21,252
Other renovations in substations Telecommunications and information system	1,584 2,443	7,296 7,129
Pilot zone construction - wave energy	85	170
Buildings related to concession	360	1,191
Transmission and transformation of electricity in Chile	6,415	4,563
Other assets	630	5,235
Gas segment:
Expansion and improvements to gas transmission network	1,354	7,749
Construction project of cavity underground storage of natural gas in Pombal	371	1,091
Construction project and operating upgrade - LNG facilities Natural gas distribution projects	725 6,271	7,342 26,894
Others segments:
Other assets	170	171
Total of additions	60,606	188,678
The main transfers that were concluded and began activity during the periods ended 30 June 2020 and 31 December 2019
	Jun 2020	Dec 2019
Electricity segment:
Power line construction (150 KV, 220 KV and others)	85	73,829
Power line construction (400 KV)	32	19,895
Substation Expansion	519	40,082
Other renovations in substations	576	4,829
Telecommunications and information system	72	7,299
Buildings related to concession Other assets under concession	- 25	695 2,345

The main additions verified in the periods ended 30 June 2020 and 31 December 2019 are made up as follows:

The main transfers that were concluded and began activity during the periods ended 30 June 2020 and 31 December 2019 are made up as follows:

The main transfers that were concluded and began activity during the periods ended 30 June 2020 and 31 December 2019
Electricity segment:
Power line construction (150 KV, 220 KV and others)	85	73,829
Power line construction (400 KV)	32	19,895
Substation Expansion Other renovations in substations	519 576	40,082 4,829
Telecommunications and information system	72	7,299
Buildings related to concession	-	695
Other assets under concession	25	2,345
Gas segment:
Expansion and improvements to natural gas transmission network	584	6,808
Construction project of cavity underground storage of natural gas in Pombal	20	604
Construction project and operating upgrade - LNG facilities	-	4,576
Natural gas distribution and transmission projects	7,527	25,904

Jun 2020 76,723 24,639 16,432 2,719 25,382 3,870 8,030 3,101 3,522 2,826 Total of assets in progress 167,246 Jun 2020 Dec 2019 Cost 7,163 7,066	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Electricity segment: Power line construction (150KV/220KV e 400KV) Substation Expansion New substations projects Buildings related to concession Transmission and transformation of electricity in Chile Other projects Gas segment: Expansion and improvements to natural gas transmission network Construction project of cavity underground storage of natural gas in Pombal Construction project and operating upgrade - LNG facilities Natural gas distribution projects amounted to 7,714 thousand Euros (16,745 thousand Euros as of 31 December 2019) (Note 21).
Dec 2019 The net book value of the intangible assets acquired through finance lease contracts at 30 June 2020 and 31 December 2019
51,179 16,566 9,331 2,359 20,743 1,800 7,310 2,820 2,758 3,483 118,349 Borrowing costs capitalized on intangible assets in progress in the six-month period ended 30 June 2020 amounted to 1,016 thousand Euros (2,562 thousand Euros as of 31 December 2019), while overhead, management and other costs capitalized
		The intangible assets in progress at 30 June 2020 and 31 December 2019 are as follows:

The intangible assets in progress at 30 June 2020 and 31 December 2019 are as follows:

Net book value	3,436	4,030

6 GOODWILL

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
6 GOODWILL
Goodwill represents the difference between the amount paid for the acquisition and the net assets fair value of the companies
acquired, with reference to the acquisition date, and at 30 June 2020 and 31 December 2019 is detailed as follows:
		Year of	Acquisition
Subsidiaries		acquisition	cost	%	Jun 2020	Dec 2019
REN Atlântico, Terminal de GNL, S.A.		2006	32,580	100%	2,077	2,264
REN Portgás Distribuição, S.A.		2017	503,015	100%	1,235	1,235
Empresa de Transmisión Eléctrica Transemel, S.A.		2019	155,482	100%	2,470	2,470
					5,781	5,969
The movement in the Goodwill caption for the periods ended 30 June 2020 and 31 December 2019 was:
Subsidiaries	At 1 January	Increases	Decreases	At 31 December 2019	Increases	Decreases	At 30 June 2020
	2019
REN Atlântico, Terminal de GNL, S.A. REN Portgás Distribuição, S.A.	2,642 1,235	- -	(377) -	2,264 1,235	- -	(189) -	2,077 1,235
Empresa de Transmisión Eléctrica Transemel, S.A.	-	2,470	-	2,470	-	-	2,470
	3,877	2,470	(377)	5,969	-	(189)	5,781
On 1 October 2019, the REN Group acquired, through its subsidiaries Apolo Chile SpA and Aerio Chile SPA, the entire share capital of Empresa de Transmisión Eléctrica Transemel, SA The defined acquisition value, with reference to 1 October 2019,
amounted to 155,482 thousand Euros. The purchase price allocation process (PPA - Purchase Price Allocation) was provisionally recorded on 31 December 2019,
resulting in the recognition of Goodwill as follows:
	Acquisition value				155,482
	Fair value of assets acquired and liabilities assumed				153,012

The movement in the Goodwill caption for the periods ended 30 June 2020 and 31 December 2019 was:
Subsidiaries	At 1 January 2019
On 1 October 2019, the REN Group acquired, through its subsidiaries Apolo Chile SpA and Aerio Chile SPA, the entire share
capital of Empresa de Transmisión Eléctrica Transemel, SA The defined acquisition value, with reference to 1 October 2019, amounted to 155,482 thousand Euros. The purchase price allocation process (PPA - Purchase Price Allocation) was provisionally recorded on 31 December 2019, resulting in the recognition of Goodwill as follows:	Acquisition value		155,482
	Fair value of assets acquired and liabilities assumed		153,012

Goodwill	(2,470)

7 INVESTMENTS IN ASSOCIATES AND JOIN VENTURES

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
7	INVESTMENTS IN ASSOCIATES AND JOIN VENTURES
	At 30 June 2020 and 31 December 2019, the financial information regarding the financial interest held is as follows:
					30 June 2020
	Activity	Head office	Share	Current	Non-current	Current	Non-current	Revenues	Net	Share	%	Carrying	Group share of
Equity method:			capital	assets	assets	liabilities	liabilities		profit/(loss)	capital		amount	profit / (loss)
Associate:
OMIP - Operador do Mercado Ibérico (Portugal), SGPS, S.A. i)	Holding company	Lisbon	2,610	810	28,770	296	-	570	352	29,284	40	11,511	151
Electrogas, S.A.	Gas Transportation	Chile	18,991	10,798	39,341	8,733	9,765	16,570	9,213	31,641	42.5	157,508	3,978
Joint venture:												169,019	4,129
Centro de Investigação em Energia REN - STATE GRID, S.A.	Research & Development	Lisbon	3,000	6,180	109	989	6	762	16	5,294	50	2,644	8
												171,663	4,137
(i) Financial Statements at 31 May 2020.
					31 December 2019
	Activity	Head office	Share capital	Current assets	Non-current assets	Current liabilities	Non-current liabilities	Revenues	Net profit/(loss)	Share capital	%	Carrying amount	Group share of profit / (loss)
Equity method: Associate:
OMIP - Operador do Mercado Ibérico (Portugal), SGPS, S.A.	Holding company	Lisbon	2,610	1,033	28,210	278	-	988	578	28,965	40	11,360	1,835
Electrogas, S.A.	Gas Transportation	Chile	18,930	7,666	41,495	4,346	10,268	32,292	16,760	34,548	42.5	158,282	7,148
												169,642	8,983
Joint venture: Centro de Investigação em Energia	Research &		3,000	6,405	64	1,182	8	1,656	2	5,278	50	2,636	1
REN - STATE GRID, S.A.	Development	Lisbon

					30 June 2020
			Share capital	Current assets	Non-current assets	Current liabilities	Non-current liabilities	Revenues	Net profit/(loss)	Share capital	%	Carrying amount	Group share of profit / (loss)
Equity method:
Associate:
OMIP - Operador do Mercado
Joint venture:
Centro de Investigação em Energia
												171,663	4,137
(i) Financial Statements at 31 May 2020.
					31 December 2019
			Share	Current	Non-current	Current	Non-current	Revenues	Net	Share	%	Carrying	Group share of
Equity method:			capital	assets	assets	liabilities	liabilities		profit/(loss)	capital		amount	profit / (loss)
Associate:
OMIP - Operador do Mercado			2,610	1,033	28,210	278	-	988	578	28,965	40	11,360	1,835
Ibérico (Portugal), SGPS, S.A.	Holding company	Lisbon
Electrogas, S.A.	Gas Transportation	Chile	18,930	7,666	41,495	4,346	10,268	32,292	16,760	34,548	42.5	158,282	7,148
												169,642	8,983
Joint venture:
Centro de Investigação em Energia	Research &		3,000	6,405	64	1,182	8	1,656	2	5,278	50	2,636	1
REN - STATE GRID, S.A.	Development	Lisbon
												172,278	8,984
Associates
	The changes in the caption "Investments in associates" during the periods ended at 30 June 2020 and 31 December 2019
was as follows:
		Investments in associates
		At 1 de january de 2019							165,207
					Effect of applying the equity method - Net Profit					8,983
		Currency Translation Reserves								2,952
		Dividends of Electrogas								(7,168)
					Receipt of Supplementary Obligations of OMIP					(292)
		Other changes in equity								(40)
		At 31 December 2019							169,642
					Effect of applying the equity method - Net Profit					4,129
		Currency Translation Reserves								585
		Dividends of Electrogas								(5,325)

Associates

						172,278	8,984
Investments in associates
At 1 de january de 2019				165,207
		Effect of applying the equity method - Net Profit		8,983
Dividends of Electrogas	Currency Translation Reserves			2,952 (7,168)
		Receipt of Supplementary Obligations of OMIP			(292)
Other changes in equity					(40)
At 31 December 2019				169,642
		Effect of applying the equity method - Net Profit		4,129
	Currency Translation Reserves				585
				(5,325)
Dividends of Electrogas					(12)
Other changes in equity				169,019

The total amount of dividends recognized as associates during the six-month period ended 30 June 2020 was 5,325 thousand Euros, related to the distribution of results 2019, of which 3,107 thousand Euros were received and included in the cash flow statement.

The proportional value of the OMIP, SGPS includes the effect of the adjustment resulting of changes to the Financial Statement of the previous year, made after the equity method application.

Joint ventures

The movement in the caption "Investments in joint ventures" during the periods ended 30 June 2020 and 31 December 2019 was as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Investments in joint ventures
At 1 January 2019	2,635
Effect of applying the equity method	1
At 31 December 2019	2,636
Effect of applying the equity method	8
At 30 June 2020	2,644

Following a joint agreement of technology partnership between REN – Redes Energéticas Nacionais and the State Grid International Development (SGID), in May 2013 an R&D centre in Portugal dedicated to power systems designed – Centro de Investigação em Energia REN – STATE GRID, S.A. ("Centro de Investigação") was incorporated, being jointly controlled by the above mentioned two entities.

The Research Centre aims to become a platform for international knowledge, a catalyst for innovative solutions and tools, applied to the planning and operation of transmission power.

At 30 June 2020 and 31 December 2019, the financial information of the joint venture was as follows:

			30 June 2020
	Cash and cash equivalents	Current financial liabilities	Non-current financial liabilities	Depreciations and amortizations	Financial costs	Income tax- (cost) / income
Joint venture:
Centro de Investigação em Energia
REN - STATE GRID, S.A.	5,368	5	6	(19)	(1)	(4)
			31 December 2019
	Cash and cash	Current financial	Non-current financial	Depreciations and		Income tax- (cost) /
	equivalents	liabilities	liabilities	amortizations	Financial costs	income
Joint venture:
Centro de Investigação em Energia
REN - STATE GRID, S.A.	5,658	7	8	(62)	(2)	(7)

8 INCOME TAX

REN is taxed based on the special regime for the taxation of group companies ("RETGS"), which includes all companies located in Portugal that REN detains directly or indirectly ate least 75% of the share capital, which should give at more than 50% of the voting rights, and comply with the conditions of the article 69º of the Corporate Income Tax law.

In accordance with current legislation, tax returns are subject to review and correction by the tax authorities for a period of four years (five years for social security), except when there are tax losses, tax benefits granted or tax inspections, claims or appeals in progress, in which case the period can be extended or suspended, depending on the circumstances. Consequently, the Company's tax returns for the years from 2017 to 2020 are still subject to review.

The Company's Board of Directors understands that possible corrections to the tax returns resulting from tax reviews /inspections carried out by the tax authorities will not have a significant effect on the financial statements as of 30 June 2020 and 31 December 2019.

In 2020, the Group is taxed in Corporate Income Tax rate of 21%, increased by a municipal surcharge up the maximum of 1.5% over the taxable profit; and a State surcharge of an additional (i) 3% of taxable profit between 1,500 thousand Euros and 7,500 thousand Euros; (ii) of 5% over the taxable profit in excess of 7,500 thousand Euros and up to 35,000 thousand Euros; and (iii) 9% for taxable profits in excess of 35,000 thousand Euros, which results in a maximum aggregate tax rate of 31.5%.

The tax rate used in the valuation of temporary taxable and deductible differences as of 30 June 2020, was updated for each Company included in the consolidation perimeter, using the average tax rate expected in accordance with future perspective of taxable profits of each company recoverable in the next periods.

Income tax registered in the periods ended 30 June 2020 and 2019 was as follows:

The amount of 5,495 thousand Euros, on 30 June 2020, relates essentially to the recovery of corporate income tax from previous years regarding the deductibility of financial interests and tax benefits.

Reconciliation between tax calculated at the nominal tax rate and tax recorded in the consolidated statement of profit and loss is as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation between tax calculated at the nominal tax rate and tax recorded in the consolidated statement of profit and loss
	Jun 2020	Jun 2019
Consolidated profit before income tax	95,892	103,322
Permanent differences:
Non deductible/taxable Costs/Income	4,408	(527)
Timing differences:
Tariff deviations	(66,342)	(7,503)
Provisions and impairment Revaluations	(66) (1,619)	(38) (972)
Pension, helthcare assistence and life insurance plans	(2,060)	(2,478)
Derivative financial instruments	-
Others	20	(24)
Taxable income	30,234	91,781
Income tax	6,186	18,989
State surcharge tax	2,721	3,178
Municipal surcharge Autonomous taxation	895 378	1,347 418
Current income tax	10,180	23,932
Deferred income tax	16,974	4,008
Adjustments of income tax from previous years	(5,495)	(87)
Income tax	21,659	27,854
Effective tax rate	22.6%	27.0%
The caption "Income tax" payable and receivable at 30 June 2020 and 31 December 2019 is made up as follows:
	Jun 2020	Dec 2019
Income tax:
Corporate income tax - estimated tax	(10,180)	(35,559)
Corporate income tax - payments on account	1,676	49,255
Income withholding tax by third parties	803	845
Income recoverable / (payable)	15,158	380

Income tax

The caption "Income tax" payable and receivable at 30 June 2020 and 31 December 2019 is made up as follows:

Income tax:

Deferred taxes

(6,167) (5,518) (10,807) (12,161) (16,974) (17,679) 1,890 6,689 1,650 808 3,539 7,497 (13,435) (10,182) Provisions and Derivative financial Pensions Tariff deviations	Jun 2020 Dec 2019
Impact on the statement of profit and loss: Deferred tax assets Deferred tax liabilities Impact on equity: Deferred tax assets Deferred tax liabilities Net impact of deferred taxes		REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS

Change in deferred tax assets – June 2020

	Impact on the statement of profit and loss:
Impact on equity:
				3,539	7,497
The changes in deferred tax by nature were as follows:
Change in deferred tax assets – June 2020
	Provisions and Impairments	Pensions	Tariff deviations	Derivative financial instruments	Revalued assets	Others	Total
At 1 January 2020	2,705	30,953	33,967	4,659	19,264	2,116	93,666
Increase/decrease through reserves	-	133	-	1,683	-	75	1,890
Reversal through profit and loss	(16)	(620)	(4,366)	(80)	(1,090)	(1)	(6,173)
Increase through profit and loss Change in the period	- (16)	- (487)	6 (4,360)	- 1,602	- (1,090)	- 74	6 (4,277)
At 30 June 2020	2,690	30,466	29,607	6,262	18,174	2,189	89,389
Change in deferred tax assets – December 2019
	Provisions and Impairments	Pensions	Tariff deviations	Derivative financial instruments	Revalued assets	Others	Total
At 1 January 2019	2,818	29,403	38,621	1,259	18,360	2,034	92,495
	-	2,964	-	3,563	-	162	6,689
Increase/decrease through reserves	(113)	(1,414)	(4,654)	(162)	-	(80)	(6,423)
Reversal through profit and loss	-	- 1,550	- (4,654)	- 3,401	904 904	- 82	904 1,171
Increase through profit and loss
Change in the period	(113)

Change in deferred tax assets – December 2019

	Provisions and Impairments	Pensions	Tariff deviations	Derivative financial instruments	Revalued assets	Others	Total
At 1 January 2019	2,818	29,403	38,621	1,259	18,360	2,034	92,495
Increase/decrease through reserves		2,964	$\overline{\phantom{a}}$	3,563	$\overline{\phantom{a}}$	162	6,689
Reversal through profit and loss	(113)	(1, 414)	(4,654)	(162)	$\overline{\phantom{a}}$	(80)	(6, 423)
Increase through profit and loss	$\overline{\phantom{a}}$	$\sim$	$\overline{\phantom{a}}$	٠	904		904
Change in the period	(113)	1,550	(4, 654)	3,401	904	82	1,171
At 31 December 2019	2,705	30,953	33,967	4,659	19,264	2,116	93,666

Evolution of deferred tax liabilities – June 2020

		REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Evolution of deferred tax liabilities – June 2020
	Tariff deviations	Revaluations	Fair value	Investments in equity instruments at fair value through other comprehensive income	Others	Total
At 1 January 2020	53,526	19,981	52,357	11,795	4,115	141,774
Increase/decrease through equity	-	-	-	(1,644)	(6)	(1,650)
Reversal trough profit and loss	-	(678)	(951)	-	(289)	(1,919)
Increase through profit and loss	12,726	-	-	-	-	12,726
Exchange rate differences Change in the period	- 12,726	- (678)	- (951)	- (1,644)	(91) (386)	(91) 9,066
At 30 June 2020	66,252	19,303	51,405	10,151	3,730	150,840
Evolution of deferred tax liabilities – December 2019
	Tariff deviations	Revaluations	Fair value	Investments in equity instruments at fair value through other comprehensive income	Others	Total
At 1 January 2019	37,784	21,398	37,855	12,926	3,682	113,644
Changes in the perimeter	-	-	16,004	-	780	16,784
Increase/decrease through equity	-	-	-	(1,131)	323	(808)
Reversal trough profit and loss	-	(1,416)	(1,502)	-	(662)	(3,581)
Increase through profit and loss	15,742	-	-	-	-	15,742

Evolution of deferred tax liabilities – December 2019

				comprehensive income
Evolution of deferred tax liabilities – December 2019	Tariff deviations	Revaluations	Fair value	Investments in equity instruments at fair value through other comprehensive income	Others	Total
At 1 January 2019	37,784	21,398	37,855	12,926	3,682	113,644
Changes in the perimeter	-	-	16,004	-	780	16,784
Increase/decrease through equity	-	-	-	(1,131)	323	(808)
Reversal trough profit and loss Increase through profit and loss	- 15,742	(1,416) -	(1,502) -	- -	(662) -	(3,581) 15,742
Exchange rate differences Change in the period	- 15,742	- (1,416)	- 14,502	- (1,131)	(7) 434	(7) 28,130

Deferred tax liabilities relating to revaluations result from revaluations made in preceding years under legislation. The effect of these deferred taxes reflects the non-tax deductibility of 40% of future depreciation of the revaluation component (included in the assets considered cost at the time of the transition to IFRS).

The legal documents that establish these revaluations were the following:

	Legislation (Revaluation)
Electricity segment	Natural gas segment
Decree-Law nº 430/78	Decree-Law nº 140/2006
Decree-Law nº 399-G/81	Decree-Law nº 66/2016
Decree-Law nº 219/82
Decree-Law nº 171/85
Decree-Law nº 118-B/86
Decree-Law nº 111/88
Decree-Law nº 7/91
Decree-Law nº 49/91
Decree-Law nº 264/92

9 FINANCIAL ASSETS AND LIABILITIES

- June 2020

			REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
9			FINANCIAL ASSETS AND LIABILITIES
The accounting policies for financial instruments in accordance with the IFRS 9 categories have been applied to the following financial assets and liabilities:
- June 2020
	Notes	Financial assets at amortized cost - Debt instruments	Financial assets at fair value - Equity instruments through other comprehensive income	Financial assets/liabilities at fair value - Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Assets
Cash and cash equivalents Trade and other receivables	13 11	- 461,854	- -	- -	- -	23,450 -	23,450 461,854	23,450 461,854
Other financial assets		-	-	-	-	85	85	85
Investments in equity instruments at fair	10	-	148,386	-	-	-	148,386	148,386
value through other comprehensive income Income tax receivable	8	7,457	-	-	-	-	7,457	7,457
Derivative financial instruments	12	-	30,688	-	-	-	30,688	30,688
		469,311	179,075	-	-	23,535	671,920	671,920
Liabilities
Borrowings Trade and other payables	16 19	- -	- -	- -	2,887,465 420,009	- -	2,887,465 420,009	2,987,249 420,009
Drivative financial instruments	12	-	26,394	3,371	-	-	29,765	29,765
		-	26,394	3,371	3,307,474	-	3,337,239	3,437,023
- December 2019
	Notes	Financial assets at amortized cost - Debt instruments	Financial assets at fair value - Equity instruments through other comprehensive income	Financial assets/liabilities at fair value - Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Assets
Cash and cash equivalents	13	-	-	-	-	21,044	21,044	21,044
Trade and other receivables Other financial assets	11	468,234 -	- -	- -	- -	- 71	468,234 71	468,234 71
Investments in equity instruments at fair	10	-	155,676	-	-	-	155,676	155,676
value through other comprehensive income
Income tax receivable Derivative financial instruments	8 12	14,921 -	- 28,961	- -	- -	- -	14,921 28,961	14,921 28,961
		483,155	184,638	-	-	21,115	688,908	688,908
Liabilities
Borrowings	16	-	-	-	2,869,454	-	2,869,454	3,004,161
Trade and other payables	19	-	-	-	451,044	-	451,044	451,044

- December 2019

	Notes	Financial assets at amortized cost - Debt instruments	Financial assets at fair value - Equity instruments through other comprehensive income	Financial assets/liabilities at fair value - Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Investments in equity instruments at fair value through other comprehensive income
			26,394	3,371	3,307,474
		-				-	3,337,239	3,437,023
- December 2019	Notes	Financial assets at amortized cost - Debt instruments	Financial assets at fair value - Equity instruments through other comprehensive income	Financial assets/liabilities at fair value - Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Assets
Cash and cash equivalents	13	-	-	-	-	21,044	21,044	21,044
Trade and other receivables	11	468,234	-	-	-	-	468,234	468,234
Other financial assets Investments in equity instruments at fair	10	- -	- 155,676	- -	- -	71 -	71 155,676	71 155,676
value through other comprehensive income
Income tax receivable	8	14,921	-	-	-	-	14,921	14,921
Derivative financial instruments	12	- 483,155	28,961 184,638	- -	- -	- 21,115	28,961 688,908	28,961 688,908
Liabilities
Borrowings	16	-	-	-	2,869,454	-	2,869,454	3,004,161
Trade and other payables	19	-	-	-	451,044	-	451,044	451,044
Drivative financial instruments	12	-	21,670	3,177	-	-	24,848	24,848

Loans obtained, as referred to in Note 3.6 to the annual consolidated financial statements for the period ended December 31, 2019, are measured, initially at fair value and subsequently at amortized cost, except for those which it has been contracted derivative fair value hedges (Note 12) which are measured at fair value. Nevertheless, REN proceeds to the disclosure of the fair value of the caption Borrowings, based on a set of relevant observable data, which fall within Level 2 of the fair value hierarchy.

The fair value of borrowings and derivatives are calculated by the method of discounted cash flows, using the curve of interest rate on the date of the statement of financial position in accordance with the characteristics of each loan.

The range of market rates used to calculate the fair value ranges between -0.470% and -0.093% (maturities of one day and twelve years, respectively).

The fair value of borrowings contracted by the Group at 30 June 2020 is 2,987,249 thousand Euros (at 31 December 2019 was 3,004,161 thousand Euros), of which 413,352 thousand Euros are recorded partly at amortized cost and includes an element of fair value resulting from movements in interest rates (at 31 December 2019 was 411,262 thousand Euros).

Estimated fair value – assets measured at fair value

• Level 1: the fair value of financial instruments is based on net market prices as of the date of the statement of financial position;
• Level 2: the fair value of financial instruments is not determined based on active market quotes but using valuation models. The main inputs of the models are observable in the market, in relation to derivative financial instruments;
• Level 3: the fair value of financial instruments is not determined based on active market quotes, but using valuation models, whose main inputs are not observable in the market.

				REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	Estimated fair value – assets measured at fair value
	The following table presents the Group's assets and liabilities measured at fair value at 30 June 2020 in accordance with the following hierarchy levels of fair value:
 position;	Level 1: the fair value of financial instruments is based on net market prices as of the date of the statement of financial
	Level 2: the fair value of financial instruments is not determined based on active market quotes but using valuation models. The main inputs of the models are observable in the market, in relation to derivative financial instruments;
	Level 3: the fair value of financial instruments is not determined based on active market quotes, but using valuation
	models, whose main inputs are not observable in the market.
hierarchy levels.	During the six-month period ended 30 June 2020, there was no transfer of financial assets and liabilities between fair value
				Jun 2020				Dec 2019
			Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Assets: Investments in equity instruments at fair value through other comprehensive income		Shares	89,913	-	54,892	144,805	97,060	-	55,035	152,095
Financial assets at fair value		Cash flow hedge derivatives	-	13,889	-	13,889	-	13,712	-	13,712
Financial assets at fair value		Fair value hedge derivatives	-	16,800	-	16,800	-	15,249	-	15,249
			89,913	30,688	54,892	175,493	97,060	83,996	-	181,056
Liabilities:
Financial liabilities at fair value		Loans	-	413,352	-	413,352	-	411,262	-	411,262
Financial liabilities at fair value		Cash flow hedge derivatives	-	26,394	-	26,394	-	21,670	-	21,670
Financial liabilities at fair value through profit and loss		Trading derivatives	-	3,371	-	3,371	-	3,177	-	3,177
			-	443,117	-	443,117	-	436,109	-	436,109
	During the six-month period ended 30 June 2020, REN proceeded to a valuation of the financial interests held Hidroeléctrica

During the six-month period ended 30 June 2020, REN proceeded to a valuation of the financial interests held Hidroeléctrica de Cahora Bassa, S.A., which is classified as Investments in equity instruments at fair value through other comprehensive income (Note 10). The fair value of this asset reflects the price at which the asset would be sold in an orderly transaction.

For this purpose, REN has opted for a revenue approach, which reflects current market expectations regarding future amounts. The fair value of the investment amounted to 54,892 thousand Euros for the six-month period ended on 30 June 2020.

With respect to the current receivables and payables balances, its carrying amount corresponds to a reasonable approximation of its fair value.

The non-current accounts receivable and accounts payable refers, essentially, to tariff deviations which amounts are communicated by ERSE, being its carrying amount a reasonable approximation of its fair value, given that they include the time value of money, being incorporated in the next two years tariffs.

Financial risk management

From the last annual report period until 30 June 2020, there were no significant changes in the financial risk management of the Company compared to the risks disclosed in the consolidated financial statements as of 31 December 2019. A description of the risks can be found in Section 4 - Financial Risk Management of the consolidated financial statements for the year ended 2019.

10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

		REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
	The assets recognised in this caption at 30 June 2020 and 31 December 2019 corresponds to equity interests held on strategic entities for the Group, which can be detailed as follows:
				Head office		Book value
			City	Country	% owned	Jun 2020	Dec 2019
	OMEL - Operador del Mercado Ibérico de Energia (Pólo Espanhol)		Madrid	Spain	10.00%	3,167	3,167
	Red Eléctrica Corporación, S.A. ("REE")		Madrid	Spain	1.00%	89,913	97,060
	Hidroeléctrica de Cahora Bassa ("HCB")		Maputo	Mozambique	7.50%	54,892	55,035
Coreso, S.A.			Brussels	Belgium	7.90%	164		164
MIBGAS, S.A.			Madrid	Spain	6.67%	202		202
MIBGÁS Derivatives, S.A.			Madrid	Spain	9.70%	48		48
						148,386	155,676
	The changes in this caption were as follows:
	OMEL	HCB	REE	Coreso	MIBGÁS	MIBGÁS Derivatives		Total

	10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
	The assets recognised in this caption at 30 June 2020 and 31 December 2019 corresponds to equity interests held on strategic entities for the Group, which can be detailed as follows:
	The changes in this caption were as follows:
At 1 January 2019	3,167	53,409	105,562	164	202		48	162,552
	-	1,626	(8,502)	-		-	-	(6,876)
	3,167	55,035	97,060	164	202		48	155,676
			97,060	164	202		48	155,676
Fair value adjustments At 31 December 2019 At 1 January 2020	3,167	55,035
Fair value adjustments	-	(143)	(7,147)	-		-	-	(7,290)

REN holds 2,060,661,943 shares representing 7.5% of the stock capital and voting rights of HCB, a company incorporated under Mozambican law, at the Hidroeléctrica de Cahora Bassa, SA ("HCB"), as a result of fulfilling the conditions of the contract entered into on April 9, 2012, between REN, Parpública - Participações Públicas, SGPS, SA, CEZA - Companhia Eléctrica do Zambeze, SA and EDM - Electricidade de Moçambique, EP. This participation was initially recorded at its acquisition cost (38,400 thousand Euros) and subsequently adjusted to its fair value (Note 9).

REN Company holds a financial stake in the Coreso's share capital, a Company which is also hold by other important European TSO's which, as initiative of the Coordination of Regional Security (CRS), assists the TSO's in the safely supply of electricity in Europe. In this context, Coreso develops and executes operational planning activities since several days before until near real time.

On 30 June 2020, REN also holds a 6.67% financial interest in the share capital of MIBGÁS, SA, acquired during the first half of 2016, a company in charge of the development of the natural gas wholesale market operator in the Iberian Peninsula.

As part of the process of creating the Single Operator of the Iberian Electricity Market (Operador Único do Mercado Ibérico de Eletricidade – OMI) in 2011 and in accordance with the provisions of the agreement between the Portuguese Republic and the Kingdom of Spain on the establishment of an Iberian electricity market, the Company acquired 10% of the capital stock of OMEL, Operador del Mercado Iberico de Energia, SA, a Spanish operator of the sole operator, for a total value of 3,167 thousand Euros.

On 30 June 2020, REN also holds a 9.7% financial interest, acquired for the amount of 48 thousand Euros, of the share capital of MIBGÁS Derivatives, SA, the management company of the organized futures market natural gas, spot products of liquefied natural gas and spot products in underground storage in the Iberian Peninsula.

As there are no available market price for these investments (OMEL, MIBGÁS, MIBGÁS Derivatives and Coreso) and as it is not possible to determine the fair value of the period using comparable transactions, these investments are recorded at acquisition deducted of impairment losses, as describe in Note 3.6 - Financial Assets and Liabilities of the consolidated financial statements for the year ended 2019.

REN understands that there is no evidence of impairment loss regarding the investments of OMEL, Coreso, MIBGÁS and MIBGÁS Derivatives at 30 June 2020.

REN Portgás holds other financial interests, which are recorded at the acquisition cost in the amount of 29 thousand Euros, deducted of impairment losses, with a net value of zero thousand Euros.

Name
PRIMUS MGV - Promoção e Desenv Regional, S.A.
ADRAVE - Ag. Desenv. Reg-do Vale do Alve, S.A.
AREALIMA - Ag. Reg. Energia e Amb. Vale Lima
ADEPORTO - Agência de Energia do Porto

The adjustments to investments in equity instruments at fair value through other comprehensive are recognised in the equity caption "Fair value reserve". This caption at 30 June 2020 and 31 December 2019 is made up as follows:

not possible to determine the fair value of the period using comparable transactions, these investments are recorded at acquisition deducted of impairment losses, as describe in Note 3.6 - Financial Assets and Liabilities of the consolidated
REN understands that there is no evidence of impairment loss regarding the investments of OMEL, Coreso, MIBGÁS and
REN Portgás holds other financial interests, which are recorded at the acquisition cost in the amount of 29 thousand Euros, deducted of impairment losses, with a net value of zero thousand Euros.
Name
PRIMUS MGV - Promoção e Desenv Regional, S.A.
ADRAVE - Ag. Desenv. Reg-do Vale do Alve, S.A.
AREALIMA - Ag. Reg. Energia e Amb. Vale Lima
ADEPORTO - Agência de Energia do Porto
The adjustments to investments in equity instruments at fair value through other comprehensive are recognised in the equity caption "Fair value reserve". This caption at 30 June 2020 and 31 December 2019 is made up as follows:	Fair value reserve
	(Note 15)
1 January 2019	57,711
Changes in fair value	(6,876)
Tax effect	1,131
31 December 2019	51,966
1 January 2020	51,966
Changes in fair value	(7,290)
Tax effect	1,644
30 June 2020	46,320
In the six-month period ended 30 June 2020, the total amount of 5,932 thousand Euros recognized in the consolidated statement of profit and loss is relative to associated companies' dividends, of which 81 thousand Euros were received during 2020. Additionally, the amount of 1,477 thousand Euros was received relative to dividends recognized during the year ended 31 December 2019. These amounts were included in the cash flows statement. In the six-month periods ended 30 June 2020 and 2019, the dividends attributable to the Group are as follows:
	Jun 2020	Jun 2019
Red Electrica Corporación, S.A. ("REE")	4,219	3,847
Hidroeléctrica de Cahora Bassa, S.A ("HCB")	1,632	-
OMEL - Operador del Mercado Ibérico de Energia (Pólo Espanhol)	81	87
	5,932	3,934

In the six-month period ended 30 June 2020, the total amount of 5,932 thousand Euros recognized in the consolidated statement of profit and loss is relative to associated companies' dividends, of which 81 thousand Euros were received during 2020. Additionally, the amount of 1,477 thousand Euros was received relative to dividends recognized during the year ended 31 December 2019. These amounts were included in the cash flows statement.

In the six-month periods ended 30 June 2020 and 2019, the dividends attributable to the Group are as follows:

	Fair value reserve
	(Note 15)
In the six-month period ended 30 June 2020, the total amount of 5,932 thousand Euros recognized in the consolidated statement of profit and loss is relative to associated companies' dividends, of which 81 thousand Euros were received during 2020. Additionally, the amount of 1,477 thousand Euros was received relative to dividends recognized during the year ended 31 December 2019. These amounts were included in the cash flows statement. In the six-month periods ended 30 June 2020 and 2019, the dividends attributable to the Group are as follows:
	Jun 2020	Jun 2019
Red Electrica Corporación, S.A. ("REE")	4,219	3,847
Hidroeléctrica de Cahora Bassa, S.A ("HCB") OMEL - Operador del Mercado Ibérico de Energia (Pólo Espanhol)	1,632 81	- 87

11 TRADE AND OTHER RECEIVABLES

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	11 TRADE AND OTHER RECEIVABLES
	Trade and other receivables at 30 June 2020 and 31 December 2019 are made up as follows:
		Jun 2020			Dec 2019
	Current	Non-current	Total	Current	Non-current	Total
Trade receivables Impairment of trade receivables	184,495 (2,964)	155 -	184,650 (2,964)	215,699 (2,964)	155 -	215,854 (2,964)
Trade receivables net	181,531	155	181,686	212,735	155	212,890
Tariff deviations	80,135	185,207	265,342	100,153	114,354	214,507
State and Other Public Entities	14,825	-	14,825	40,837	-	40,837
Trade and other receivables	276,491	185,362	461,854	353,725	114,509	468,234
					The most relevant balances included in the trade receivables caption as of 30 June 2020 are: (i) the receivable of EDP –
	Distribuição de Energia, SA in the amount of 74,972 thousand Euros (92,763 thousand Euros at 31 December 2019); (ii) the
	receivable of Galp Gás Natural, S.A., in the amount of 12,282 thousand Euros (12,973 thousand Euros at 31 December 2019); and (iii) the amount of 1,463 thousand Euros, as defined by the regulator ERSE in the context of sustainability measures of
	the National Electric System (4,388 thousand Euros at 31 December 2019).
	In the trade and other receivables also stands out the amounts not yet invoiced of the activity of the Market Manager (MIBEL
	– Mercado Ibérico de Electricidade), in the amount of 7,926 thousand Euros (19,006 thousand Euros at 31 December 2019) and the amount to invoice to EDP – Distribuição de Energia, S.A., of 50 thousand Euros (49 thousand Euros at 31 December
	2019) regarding the CMEC, also reflected in the caption "Suppliers and other accounts payable" (Note 19).
	This transaction is set up as an "Agent" transaction, being off set in the consolidated income statement.
	Changes to the impairment losses for trade receivable and other accounts receivable are made up as follows:
			Jun 2020	Dec 2019
	Begining balance		(2,964)		(2,942)
	Increases Ending balance		- (2,964)		(22) (2,964)

	Jun 2020	Dec 2019
Begining balance	(2,964)	(2,942)
Increases	٠	(22)
Ending balance	(2,964)	(2,964)

12 DERIVATIVE FINANCIAL INSTRUMENTS

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
12 DERIVATIVE FINANCIAL INSTRUMENTS
At 30 June 2020 and 31 December 2019, the REN Group had the following derivative financial instruments contracted:
			30 June 2020
		Assets		Liabilities
	Notional	Current	Non-current	Current	Non-current
Derivatives designated as cash flow hedges
Interest rate swaps	600,000 TEUR	-	-	-	26,394
Currency swaps	72,899 TEUR	-	13,889	-	-
		-	13,889	-	26,394
Derivatives designated as fair value hedges
Interest rate swaps	400,000 TEUR	1,656	15,144	-	-
		1,656	15,144	-	-
Trading derivatives
Trading derivatives	60,000 TEUR	-	-	-	3,371
		-	-	-	3,371
Derivative financial instruments		1,656	29,032	-	29,765
			31 December 2019
		Assets		Liabilities
	Notional	Current	Non-current	Current	Non-current
Derivatives designated as cash flow hedges
Interest rate swaps	600,000 TEUR	-	-	-	21,670
Currency swaps	72,899 TEUR	-	13,712	-	-
		-	13,712	-	21,670
Derivatives designated as fair value hedges
Interest rate swaps	400,000 TEUR	1,732	13,516	-	-
		1,732	13,516	-	-
Trading derivatives

Derivatives designated as cash flow hedges
Currency swaps	72,899 TEUR	-	13,889	-	-
		-	13,889	-	26,394
Derivatives designated as fair value hedges
Trading derivatives
		-	-	-	3,371
			31 December 2019
Derivatives designated as cash flow hedges
Interest rate swaps	600,000 TEUR	-	-	-	21,670
Currency swaps	72,899 TEUR	-	13,712	-	-
		-	13,712	-	21,670
Derivatives designated as fair value hedges
Interest rate swaps	400,000 TEUR	1,732	13,516	-	-
		1,732	13,516	-	-
Trading derivatives				-	3,177
Trading derivatives	60,000 TEUR	-	-
		-	-	-	3,177
Derivative financial instruments		1,732	27,229	-	24,848

The amount recognized in this item refers to:

• eight interest rate swap contracts negotiated by REN SGPS to hedge the interest rate fluctuation risk;
• a cross currency swap contract negotiated by REN SGPS to hedge the exchange rate fluctuation risk.

Counterparties to derivative contracts are international financial institutions with a solid credit rating and first-rate national institutions.

For the purpose of the effectiveness tests of the designated hedging relationships, REN applies the "Dollar offset method" and the linear regression statistical method as methodologies. The effectiveness ratio is given by comparing the changes in fair value of the hedging instrument with the changes in fair value of the hedged item (or hypothetical derivative instrument simulating the conditions of the hedged item).

For the purpose of calculating ineffectiveness, the total change in fair value of the hedging instruments is considered.

The disclosed amount includes receivable or payable accrued interest, at 30 June 2020 related to these financial instruments, in the net amount receivable of 2,162 thousand Euros (at 31 December 2019 it was 2,323 thousand Euros receivable).

The characteristics of the derivative financial instruments negotiated at 30 June 2020 and 31 December 2019 were as follows:

			REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	The characteristics of the derivative financial instruments negotiated at 30 June 2020 and 31 December 2019 were as follows:
		Notional	REN pays		REN receives	Maturity	Fair value at 30 June 2020		Fair value at 31 December 2019
Cash flow hedge: Interest rate swaps		600,000 TEuros	[0.75%;1.266%]		[Euribor 3m; Euribor 6m]	[dec-2024;feb-2025]		(26,394)	(21,670)
Currency swaps		72,899 Teuros	[Euribor 6m; + 1.9%]		2.71%	[jun-2024]		13,889 (12,505)	13,712 (7,958)
Fair value hedge: Interest rate swaps		300,000 TEuros	[Euribor 6m]		[0.611%; 0.6285%]	[feb-2025]		15,144	13,516
Interest rate swaps		100,000 TEuros	[Euribor 6m; +0.3332%]		[1.724%]	[oct-2020]		1,656	1,732
Trading:								16,800	15,249
Interest rate swaps		60,000 Teuros	[0.99%]		[Euribor 6m]	[jun-2024]		(3,371) (3,371)	(3,177) (3,177)
						Total		924	4,114
	The periodicity of the cash flows, paid and received, from the derivative financial instruments portfolio is quarterly, semiannual and annual for cash flow hedging contracts, semiannual and annual for fair value hedging contracts and semiannual for the trading derivative. The breakdown of the notional of derivatives at 30 June 2020 and 31 December 2019 is presented in the following table:
			2020	2021	2022	2023	2024	Following years	Total
	Interest rate swap (cash flow hedge)		-	-	-	-	300,000	300,000	600,000
Currency swap (cash flow hedge)			-	-	-	-	72,899	-	72,899
	Interest rate swap (fair value hedge)		100,000	-	-	-	-	300,000	400,000
Interest rate swap (trading)			- Total 100,000	- -	- -	- -	60,000 432,899	- 600,000	60,000 1,132,899
	Swaps:
	Cash Flow Hedge - Interest Rate Swaps

			Following	Total
			years

Swaps:

Cash Flow Hedge - Interest Rate Swaps

The Group hedges the interest rate risk associated with the fluctuation of the market interest rate index (Euribor) on a portion of future debt interest payments through the designation of interest rate swaps, in order to transform floating rate payments into fixed rate payments.

At 30 June 2020, the Group has a total of four cash flow hedging interest rate swap contracts for a total amount of 600,000 thousand Euros (as of 31 December 2019 it was 600,000 thousand Euros). The hedged risk is the variable rate index associated to the interest payments of the loans. Credit risk is not being hedged.

The fair value of the interest rate swaps, at 30 June 2020, is negative 26,394 thousand Euros (at 31 December 2019 it was negative 21,670 thousand Euros).

Of the derivatives described above, two contracts in a total amount of 300,000 thousand Euros (at 31 December 2019 it was 300,000 thousand Euros) are designated to hedge an aggregated exposure composed by the net effect of floating rate debt and interest rate swaps designated as fair value hedging instruments.

The amount recognised in reserves, relating to the cash flow hedges referred to above, was 26,246 thousand Euros (at 31 December 2019 it was 21,517 thousand Euros).

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
The hedged instruments of cash flow hedging relationships present the following conditions:
	Maturity	Hedged notional	Interest rate	Hedged Carrying	Note
				Amount
Cash Flow Hedging Instruments
European Investment Bank (EIB) Loan Bond Issue (Euro Medium Term Notes)1	16/12/2024 12/02/2025	300,000 TEuros 300,000 TEuros	Euribor 3m 2.5%	299,846 297,131	16 16
1 This hedged instrument is designated jointly with derivatives of fair value hedging amounting to 300,000 thousand Euros (see conditions on the table above)
in an aggregate exposure hedge to Euribor 6 months in the period from 2023 to 2025 and, as such, eligible for cash flow hedge.
Cash Flow Hedge – Exchange Rate Swaps

Cash Flow Hedge – Exchange Rate Swaps

The Group hedged the exchange rate risk of the 10,000 million yen bond issued through a cross currency swap with the main characteristics similar to the bond with regard to exchange rate risk. Credit risk is not hedged.

• the offsetting of the exchange rate effect of the spot revaluation of the hedged item (bond issue in yen) at each reference date, arising from the hedging of the exchange rate risk¹ ;
• the ineffective effect of the hedge arising from the accounting designation made (REN contracted a trading derivative to economically hedge this ineffectiveness - see Trading Derivative)² . This inefficiency is caused by the change in the interest profile of the hedging instrument, which pays a variable rate in the period from 2019 to 2024.

Integral Income:

- June 2020

	- June 2020 Cash Flow Hedging Instruments Swaps of interest rate Swaps of exchange rate - June 2019	Change in the Fair Value of Hedging Instruments (4,729) 173 (4,555)	Of which: Effective amount recorded in Hedge Reserves (4,729) (2,001) (6,730)	Hedging inefficiency recorded in Profit for the Year - 1,304 1,304	Coverage Reserve reclassifications to Results for the Year 870 870
					-
	The movements recorded in the statement of comprehensive income through the application of cash flow hedges were as follows:
	Integral Income:
	the ineffective effect of the hedge arising from the accounting designation made (REN contracted a trading derivative to economically hedge this ineffectiveness - see Trading Derivative)2 profile of the hedging instrument, which pays a variable rate in the period from 2019 to 2024.			. This inefficiency is caused by the change in the interest
	the offsetting of the exchange rate effect of the spot revaluation of the hedged item (bond issue in yen) at each reference date, arising from the hedging of the exchange rate risk1	;
	Changes in the fair value of the hedging instrument are also being recognized in equity hedging reserves, with exception of:
	The fair value of the cross currency swap at 30 June 2020 is positive 13,889 thousand Euros (at 31 December 2019 it was positive 13,712 thousand Euros).
	characteristics similar to the bond with regard to exchange rate risk. Credit risk is not hedged.

- June 2019

Swaps of exchange rate	3,286
		(634)	1,813	2,106
Swaps of interest rate	(13,803)	(13,803)	-	-
Cash Flow Hedging Instruments	Change in the Fair Value of Hedging Instruments	Of which: Effective amount recorded in Hedge Reserves	Hedging inefficiency recorded in Profit for the Year	Coverage Reserve reclassifications to Results for the Year
- June 2019
	(4,555)	(6,730)	1,304	870
Cash Flow Hedging Instruments	Change in the Fair Value of Hedging Instruments	Of which: Effective amount recorded in Hedge Reserves	Hedging inefficiency recorded in Profit for the Year	Coverage Reserve reclassifications to Results for the Year
- June 2020
The movements recorded in the statement of comprehensive income through the application of cash flow hedges were as follows:
Integral Income:

1 The currency effect of the underlying (loan), at 30 June 2020, was unfavorable in the amount of 870 thousand Euros, and was offset, in the same amount, by the favourable effect of the hedging instrument in the income statement for the year (as of 30 June 2019 was unfavorable in 2,106 thousand Euros).

² The ineffective cash flow hedge component of the exchange rate risk recognised in the income statement, was positive 1,304 thousand Euros which was offset by the effect of the trading derivative negotiated in negative 196 thousand Euros (as of 30 June 2019 it was positive 1,813 thousand Euros against negative 1,674 thousand Euros of the effect of the trading derivative). Therefore, the net effect on the income statement for the six-month period ended on 30 June 2020 amounted to positive 1,108 thousand Euros (as of 30 June 2019 was positive 139 thousand Euros).

Hedging Reserve:

The movements recognized in the hedging reserve (Note 15) were as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
The movements recognized in the hedging reserve (Note 15) were as follows:
	Fair value	Deferred taxes impact	Hedging reserves (Note 15)
1 January 2019 Changes in fair value and ineffectiveness	(13,647) (14,437)	3,071 3,248	(10,577) (11,189)
30 June 2019	(28,084)	6,320	(21,765)
1 January 2020	(26,534)	6,634	(19,901)
Changes in fair value and ineffectiveness 30 June 2020	(6,730) (33,264)	1,683 8,317	(5,047) (24,948)

Fair Value Hedge

- June 2020

Fair Value Hedge
The Group hedges the interest rate risk associated with the fluctuation of the market interest rate index (Euribor) on the fair value of interest payments on fixed-rate debt by negotiating interest rate swaps where it pays a variable rate and receives a fixed rate in order to convert fixed-rate debt payments into variable-rate payments.
At 30 June 2020, the Group has a total of three fair value hedging derivative contracts amounting to 400,000 thousand Euros (as of 31 December 2019 it was 400,000 thousand Euros). The hedged risk corresponds to the change in fair value of debt issues attributable to movements in the market interest rate index (Euribor). Credit risk is not being hedged. At 30 June 2020, the fair value of interest rate swaps designated as fair value hedging instruments was positive 16,800 thousand Euros (as of 31 December 2019 it was positive 15,249 thousand Euros).
Changes in the fair value of hedged items arising from interest rate risk are recognized in the income statement in order to offset changes in the fair value of the hedging instrument, which are also recognized in the income statement. The hedged items of fair value hedging relationships have the following conditions:
- June 2020
	Maturity	Hedged notional	Interest rate	Carrying amount	Accumulated Fair value adjustment	Variation of the year-end 2020	Note
Fair value hedging instruments
Bond Issue (Euro Medium Term Notes)	16/10/2020	100,000 TEuros	4.75%	91,620	621	484	16
Bond Issue (Euro Medium Term Notes)	12/02/2025	300,000 TEuros	2.50%	283,159	(13,972) (13,352)	(2,574) (2,090)	16
- June 2019
	Maturity	Hedged notional	Interest rate	Carrying amount	Accumulated Fair value adjustment	Variation of the year-end 2019	Note
Fair value hedging instruments
Bond Issue (Euro Medium Term Notes)	16/10/2020	100,000 TEuros	4.75%	90,239	(771)	639	16
Bond Issue (Euro Medium Term Notes)	12/02/2025	300,000 TEuros	2.50%	283,338	(13,806)	(8,880)	16
					(14,577)	(8,241)

	Maturity	Hedged notional	Interest rate	Carrying amount	Fair value adjustment	Variation of the year-end 2019	Note
Fair value hedging instruments

At 30 June 2020, the change in fair value of the debt related to interest rate risk recognized in the income statement was negative 2,090 thousand Euros (at 30 June 2019 it was negative 8,241 thousand Euros), resulting in an ineffective component, after considering the effect of the hedged items in the income statement, of approximately negative 368 thousand Euros (at 30 June 2019 it was positive 78 thousand Euros). The ineffectiveness recognized is related to the effect of the fixed leg spread of the hedging instruments that is not reflected in the hedged item.

Integral Income:

The movements recorded in the statement of comprehensive income through the application of fair value hedges were as follows:

- June 2020

• June 2019

At 30 June 2020, the change in fair value of the debt related to interest rate risk recognized in the income statement was negative 2,090 thousand Euros (at 30 June 2019 it was negative 8,241 thousand Euros), resulting in an ineffective component,
after considering the effect of the hedged items in the income statement, of approximately negative 368 thousand Euros (at 30 June 2019 it was positive 78 thousand Euros). The ineffectiveness recognized is related to the effect of the fixed leg spread
The movements recorded in the statement of comprehensive income through the application of fair value hedges were as
	Hedging inefficiency
Fair value Hedging instruments	recorded in Profit for
Swaps of interest rate	the Year (368)
	Hedging inefficiency recorded in Profit for
Fair value Hedging instruments	the Year

Trading Derivative

The Group negotiated an interest rate swap, with a starting date in 2019 and maturity in 2024, which pays fixed rate and receives variable rate. This instrument, although not designated as hedge accounting considering IFRS 9 criteria, is currently hedging the effect of the ineffectiveness of the cash flow hedge of the interest and exchange rate risks of the bond issue in Yen, relative to the fluctuation of interest rates for the hedging period (see Cash Flow Hedge – Exchange Rate Swaps).

The notional amount of this trading derivative is 60,000 thousand Euros as of 30 June 2020 (at 31 December 2019 it was 60,000 thousand Euros). Credit risk is not being hedged. The fair value of the trading derivative, on 30 June 2020, is negative 3,371 thousand Euros (on 31 December 2019 it was negative 3,177 thousand Euros).

Changes in the fair value of the trading derivative are recorded directly in the income statement. The impact in the income statement, as of 30 June 2020, related to the effect of the fair value of the trading derivative was negative 196 thousand Euros (as of 31 December 2019 it was 1,088 thousand Euros negative).

13 CASH AND CASH EQUIVALENTS

The amounts considered as cash and cash equivalents in the consolidated statements of cash flows for the periods ended 30 June 2020 and 31 December 2019 are made up as follows:

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	13 CASH AND CASH EQUIVALENTS
	The amounts considered as cash and cash equivalents in the consolidated statements of cash flows for the periods ended 30 June 2020 and 31 December 2019 are made up as follows:
			Jun 2020		Dec 2019
Cash				24	-
Bank deposits				23,426	21,044
	Cash and cash equivalents in the statement of financial position			23,450	21,044
Bank overdrafts (Note 16)				(2,972)	(523)
	Cash and cash equivalents in cash flow statement			20,478	20,521
	In the periods ended 30 June 2020 and 31 December 2019, there are no cash and cash equivalents that are not available for
14 EQUITY INSTRUMENTS
	As of 30 June 2020 and 31 December 2019, REN's subscribed and paid up share capital is made up of 667,191,262 shares
	Jun 2020		Dec 2019
	Number of shares	Share Capital	Number of shares	Share Capital
Share Capital	667,191,262	667,191	667,191,262		667,191
	At 30 June 2020 and 31 December 2019, REN SGPS had the following own shares:
	Number of	Proportion	Amount

In the periods ended 30 June 2020 and 31 December 2019, there are no cash and cash equivalents that are not available for the group to use.

14 EQUITY INSTRUMENTS

As of 30 June 2020 and 31 December 2019, REN's subscribed and paid up share capital is made up of 667,191,262 shares of 1 euro each.

	In the periods ended 30 June 2020 and 31 December 2019, there are no cash and cash equivalents that are not available for
	As of 30 June 2020 and 31 December 2019, REN's subscribed and paid up share capital is made up of 667,191,262 shares
Share Capital	667,191,262	667,191		667,191,262	667,191
	At 30 June 2020 and 31 December 2019, REN SGPS had the following own shares:	Number of shares	Proportion	Amount
	Own shares	3,881,374	0.6%	(10,728)
	No own shares were acquired or sold in the six-month period ended 30 June 2020. In accordance with the Commercial Company Code (Código das Sociedades Comerciais) REN SGPS must at all times ensure that there are sufficient Equity Reserves to cover the value of own shares, in order to limit the amount of reserves available

At 30 June 2020 and 31 December 2019, REN SGPS had the following own shares:

Number of

No own shares were acquired or sold in the six-month period ended 30 June 2020.

In accordance with the Commercial Company Code (Código das Sociedades Comerciais) REN SGPS must at all times ensure that there are sufficient Equity Reserves to cover the value of own shares, in order to limit the amount of reserves available for distribution.

15 RESERVES AND RETAINED EARNINGS

The caption "Reserves" in the amount of 307,245 thousand Euros includes:

• Legal reserve: The Commercial Company Code in place requires that at least 5% of the net profit must be transferred to this reserve until it has reached 20% of the share capital. This reserve can only be used to cover losses or to increase capital. At 30 June 2020 this caption amounts to 125,075 thousand Euros;
• Fair value reserve: includes changes in the fair value of available for sale financial assets (46,320 thousand Euros positive), as detailed in Note 10;
• Hedging reserve: includes changes in the fair value of hedging derivative financial instruments when cash flow hedge is effective (negative 24,948 thousand Euros) as detailed in Note 12; and

16 BORROWINGS


	thousand Euros.			Other reserves: This caption is changed by (i) application of the results of previous years, being available for distribution to shareholders; except for the limitation set by the Companies Code in respect of own shares, (ii) exchange rate changes associated to the financial investment whose functional currency is Dollar, (iii) exchange rate changes on assets and liabilities of financial investments in subsidiaries, namely the exchange effect of converting Chilean Peso to Euro and (iv) changes in equity of associates recorded under the equity method. On 30 June 2020, this caption amounts to 160,798
				In accordance with the Portuguese legislation: (i) increases in equity as a result of the incorporation of positive fair value (fair value reserves and hedging reserves) can only be distributed to shareholders when the correspondent assets have been sold, exercised, extinct, settled or used; and (ii) income and other positive equity changes recognized as a result of the equity method can only be distributed to shareholders when paid-up. Portuguese legislation establishes that the difference between the equity method income and the amount of paid or deliberated dividends is equivalent to legal reserve.
	16 BORROWINGS
as follows:				The segregation of borrowings between current and non-current and by nature, at 30 June 2020 and 31 December 2019 was
		Current	Jun 2020 Non-current	Total	Current	Dec 2019 Non-current	Total
Bonds		267,755	1,446,991	1,714,746	297,755	1,445,327	1,743,082
Bank Borrowings		82,928	629,404	712,333	75,736	581,675	657,411
Commercial Paper		209,000	250,000	459,000	364,000	100,000	464,000
	Bank overdrafts (Note 13)	2,972	-	2,972	523		-	523
Leases		1,262	2,074	3,336	1,488	2,386		3,874
		563,918	2,328,470	2,892,387	739,502	2,129,388	2,868,890
Accrued interest		17,542	-	17,542	25,396		-	25,396
Prepaid interest		(8,813)	(13,651)	(22,464)	(7,740)	(17,092)	(24,832)
Borrowings		572,647	2,314,819	2,887,465	757,158	2,112,296	2,869,454
	The borrowings settlement plan was as follows:
	2020	2021	2022	2023	2024		Following years	Total
Debt - Non current	-	69,187	108,231	637,777		353,795	1,159,479	2,328,470
Debt - Current	429,482	134,436	-	-		-	-	563,918
	429,482	203,623	108,231	637,777		353,795	1,159,479	2,892,387
			Detailed information regarding bond issues as of 30 June 2020 is as follows:
				30 June 2020
	Issue date	Maturity	Inicial amount	Outstanding amount	Interest rate		Periodicity of interest payment
	'Euro Medium Term Notes' programme emissions
	26/06/2009	26/06/2024	TEUR 72,899 (i) (ii)	TEUR 72,899	Fixed rate		Semi-Annual
	17/10/2013	16/10/2020	TEUR 400,000 (ii)	TEUR 267,755	Fixed rate EUR 4.75%		Annual
	12/02/2015	12/02/2025	TEUR 300,000 (ii)	TEUR 500,000	Fixed rate EUR 2.50%		Annual

429,482	203,623	108,231	637,777	353,795	1,159,479	2,892,387

	563,918	2,328,470	2,892,387
				739,502	2,129,388	2,868,890
The borrowings settlement plan was as follows:
429,482	203,623	108,231	637,777	353,795	1,159,479	2,892,387
Detailed information regarding bond issues as of 30 June 2020 is as follows:
			30 June 2020
Issue date	Maturity	Inicial amount	Outstanding amount	Interest rate	Periodicity of interest payment
'Euro Medium Term Notes' programme emissions
26/06/2009	26/06/2024	TEUR 72,899 (i) (ii)	TEUR 72,899	Fixed rate	Semi-Annual
17/10/2013	16/10/2020	TEUR 400,000 (ii)	TEUR 267,755	Fixed rate EUR 4.75%	Annual
12/02/2015	12/02/2025	TEUR 300,000 (ii)	TEUR 500,000	Fixed rate EUR 2.50%	Annual
01/06/2016	01/06/2023	TEUR 550,000	TEUR 550,000	Fixed rate EUR 1.75%	Annual
18/01/2018	18/01/2028	TEUR 300,000	TEUR 300,000	Fixed rate EUR 1.75%	Annual
(i) These issues correspond to private placements.

As of 30 June 2020, the Group has eight commercial paper programs in the amount of 1,400,000 thousand Euros, of which 941,000 thousand Euros are available for utilization. Of the total amount, 530,000 thousand Euros have a guaranteed placement and only the amount of 280,000 thousand Euros is available for utilization.

Bank loans are mostly composed of loans contracted with the European Investment Bank (EIB), which at 30 June 2020 amounted to 515,618 thousand Euros (at 31 December 2019 it was 440,329 thousand Euros).

In June 2020, were disbursed the second and the third tranches of 20,000 and 70,000 thousand Euros, contracted with the EIB in 2015 to finance projects in the electricity business.

The Group also has credit lines negotiated and not used in the amount of 80,000 thousand Euros, maturing up to one year, which are automatically renewable periodically (if they are not resigned in the contractually specified period for that purpose).

The balance of the caption Prepaid interest includes the amount of 14,298 thousand Euros (16,733 thousand Euros in 31 December 2019) related with the refinancing of bonds through an exchange offer completed in 2016.

As a result of the fair value hedge related to the debt emission in the amount of 400,000 thousand Euros, fair value changes concerning interest rate risk were recognized directly in statement of profit and loss, in an amount of 2,090 thousand Euros (negative) (at 30 June 2019 was 8,241 thousand Euros (negative)) (Note 12).

The Company's financial liabilities have the following main types of covenants: Cross default, Pari Passu, Negative Pledge, ratios of Leverage and Gearing.

The bank loans with BEI include also covenants related with rating and other financial ratios in which the Group may be called upon to present an acceptable guarantee in the event of rating and financial ratios below the established values.

As of 30 June 2020, the REN Group complies with all covenants to which it is contractually bound.

REN and its subsidiaries are a part of certain financing agreements and debt issues, which include change in control clauses typical in this type of transactions (including, though not so expressed, changes in control as a result of takeover bids) and essential to the realization of such transactions on the appropriate market context. In any case, the practical application of these clauses is limited to considering the legal ownership of shares of REN restrictions.

Following the legal standards and usual market practices, contractual terms and free market competition, establish that neither REN nor its counterparts in borrowing agreements are authorized to disclose further information regarding the content of these financing agreements.

The effect of the foreign exchange rate exposure was not considered as this exposure is totally covered by hedge derivate in place. The average interest rates for borrowings including commissions and other expenses were 1.86% at 30 June 2020 and 2.08% at 31 December 2019.

Leases

Minimal payments regarding lease contacts and the carrying amount of the finance lease liabilities as of 30 June 2020 and 31 December 2019 are made up as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Minimal payments regarding lease contacts and the carrying amount of the finance lease liabilities as of 30 June 2020 and
	Jun 2020	Dec 2019
Lease liabilities - minimum lease payments
No later than 1 year	1,284	1,515
Later than 1 year and no later than 5 years	2,094	2,413
	3,378	3,928
Future finance charges on leases	(42)	(54)
Present value of lease liabilities	3,336	3,874
	Jun 2020	Dec 2019
The present value of lease liabilities is as follows
No later than 1 year	1,262	1,488
Later than 1 year and no later than 5 years	2,074	2,386
	3,336	3,874
17 POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS
REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter
	Jun 2020	Dec 2019
referred to as Pension Plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service award, retirement award and a death subsidy (referred to as "Other benefits"). The Group also grants their employees life assurance plans. The long service award is applicable to all Group At 30 June 2020 and 31 December 2019, the Group had the following amounts recorded relating to liabilities for retirement Liability on statement of financial position
Pension plan	56,123	57,696
Healthcare plan and other benefits	45,559	45,613

17 POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS

REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter referred to as Pension Plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service award, retirement award and a death subsidy (referred to as "Other benefits"). The Group also grants their employees life assurance plans. The long service award is applicable to all Group companies.

At 30 June 2020 and 31 December 2019, the Group had the following amounts recorded relating to liabilities for retirement and other benefits:

The present value of lease liabilities is as follows
17 POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS
REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter referred to as Pension Plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service award, retirement award and a death subsidy (referred to as "Other benefits"). The Group also grants their employees life assurance plans. The long service award is applicable to all Group At 30 June 2020 and 31 December 2019, the Group had the following amounts recorded relating to liabilities for retirement
	Jun 2020	Dec 2019
Liability on statement of financial position
Pension plan	56,123	57,696
Healthcare plan and other benefits	45,559	45,613

The reconciliation of the remeasurement of liability net of benefits is as follows:

17 POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS
REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter referred to as Pension Plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service award, retirement award and a death subsidy (referred to as "Other benefits"). The Group also grants their employees life assurance plans. The long service award is applicable to all Group
At 30 June 2020 and 31 December 2019, the Group had the following amounts recorded relating to liabilities for retirement
Liability on statement of financial position
Healthcare plan and other benefits	45,559	45,613
	101,682	103,309
The reconciliation of the remeasurement of liability net of benefits is as follows:	Jun 2020	Dez 2019
Initial balance	103,309	98,288
Current service costs and Net interest on net defined benefit liability		2,006 4,411
Actuarial gains/(losses)		444 9,965
Benefits paid		(4,077) (9,356)
Final balance	101,682	103,309

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	Jun 2020	Jun 2019
Charges to the statement of profit and loss (Note 24)
During the six-month periods ended 30 June 2020 and 2019, the following operating expenses were recorded regarding Pension plan	1,487	1,585
Healthcare plan and other benefits	519	547

	Charges to the statement of profit and loss (Note 24)
		2,006	2,132
	The amounts reported to 30 June 2020 and 2019 result from the projection of the actuarial valuation as of 31 December 2019
	and 2018, for the six-month period ended 30 June 2020 and 2019, considering the estimated increase in salaries for 2020
and 2019, respectively.
	The actuarial assumptions used to calculate the post-employment benefits are considered by the REN Group and the entity
	specialized in the actuarial valuation reports to be those that best meet the commitments established in the Pension plan, and
	related retirement benefit liabilities, and are as follows:
			Dec 2019	Dec 2018
Annual discount rate			1.00%	1.80%
	Expected percentage of serving employees elegíble for early retirement
	(more than 60 years of age and 36 years in service) - by Collective work agreement		20.00%	20.00%
	Expected percentage of serving employees elegible for early retirement - by Management act		10.00%	10.00%
Rate of salary increase			2.50%	2.50%
Pension increase			1.50%	1.50%
	Future increases of Social Security Pension amount		1.30%	1.30%
Inflation rate			1.50%	1.50%
Medical trend			1.50%	1.50%
Management costs (per employee/year)			€297	€290
Expenses medical trend			1.50%	1.50%
Retirement age (number of years)			66	66
Mortality table			TV 88/90	TV 88/90

18 PROVISIONS FOR OTHER RISKS AND CHARGES

Begining balance	8,416	8,852
Increases	-	124
Reversing	-	(434)
Utilization Ending balance	(60) 8,356	(126) 8,416
Non-current provision	8,356	8,416

At 30 June 2020, the caption "Provisions" corresponds essentially to estimates of the payments to be made by REN resulting from legal processes in progress for damage caused to third parties and a restructuring provision amounting to 415 thousand Euros related to the on-going restructuring process.

19 TRADE AND OTHER PAYABLES

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	19 TRADE AND OTHER PAYABLES
	The caption "Trade and other payables" at 30 June 2020 and 31 December 2019 was made up as follows:
		Jun 2020			Dec 2019
	Current	Non current	Total	Current	Non current	Total
Trade payables
Current suppliers (Note 9)	143,154	-	143,154	149,388	-	149,388
Other creditors
Other creditors (Note 9)	80,843	56,928	137,771	62,236	59,051	121,287
Tariff deviations (Note 9)	42,504	46,273	88,778	66,595	37,688	104,283
Fixed assets suppliers (Note 9)	29,174	-	29,174	54,530	-	54,530
Tax payables (Note 9) (i)	15,082	-	15,082	16,367	-	16,367
Deferred income
Grants related to assets	19,060	238,329	257,389	16,428	243,888	260,316
Accrued costs Holidays and holidays subsidies (Note 9)	6,051	-	6,051	5,189	-	5,189
Trade and other payables	335,868	341,531	677,398	370,733	340,627	711,360

The caption "Trade and other payables" includes: (i) the amount of 49,396 thousand Euros, regarding the management of CAEs from Turbogás and Tejo Energia (40,507 thousand Euros at 31 December 2019); (ii) the amount of 9,751 thousand Euros of investment projects not yet invoiced (15,013 thousand Euros at 31 December 2019); (iii) the amount of 7,926 thousand Euros (19,006 thousand Euros at 31 December 2019) from the activity of the Market Manager (MIBEL – Mercado Ibérico de Electricidade); and (iv) the amount of 50 thousand Euros of "CMEC – Custo para a Manutenção do Equilíbrio Contratual" to be invoiced by EDP – Gestão da Produção de Energia, S.A. (49 thousand Euros at 31 December 2019), also reflected in the caption "Trade receivables" (Note 11).

This transaction related with "CMEC – Custo para a Manutenção do Equilíbrio Contratual" sets a pass-through in the consolidated income statement of REN.

The caption "Other creditors" includes: (i) the amount of 15,866 thousand Euros (19,326 thousand Euros at 31 December 2019) related with the Efficiency Promotion Plan on Energy Consumption ("PPEC"), which aims to financially support initiatives that promote efficiency and reduce electricity consumption, which should be used to finance energy efficiency projects, according to the evaluation metrics defined by ERSE and (ii) the responsibility for the extraordinary contribution on the energy sector in the amount of 28,347 thousand Euros (Note 27) (at 30 June 2019 was 24,390 thousand Euros).

20 SALES AND SERVICES RENDERED

Sales and services rendered recognized in the consolidated statement of profit and loss for the six-month periods ended 30 June 2020 and 2019 is made up as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
20 SALES AND SERVICES RENDERED
Sales and services rendered recognized in the consolidated statement of profit and loss for the six-month periods ended 30
	Jun 2020	Jun 2019
Goods:
Domestic market	-	17
	-	17
Services - Domestic market:
Electricity transmission and overall systems management Natural gas transmission	172,539 40,196	173,126 41,674
Natural gas distribution	26,801	29,356
Regasification	21,020	23,337
Underground gas storage	8,673	7,861
Telecommunications network	3,393	3,177
Trading	880	1,266
Others	164	636
Services - External market (Chile): Transmission and transformation of electricity (i)	5,085
	278,751	280,434
Total sales and services rendered	278,751	280,451
(i) The services in Chile are related to the operation of Transemel, acquired on 1 October 2019.
21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES
As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers.
Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets for the six-month periods ended 30 June 2020 and 2019 were made up as follows:
	Jun 2020	Jun 2019
Revenue from construction of concession assets
	45,292	40,332
Acquisitions Own work capitalised :

(i) The services in Chile are related to the operation of Transemel, acquired on 1 October 2019.

21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES

As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers. Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets for the six-month periods ended 30 June 2020 and 2019 were made up as follows:

Services - External market (Chile):
	278,751	280,434
(i) The services in Chile are related to the operation of Transemel, acquired on 1 October 2019.
21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers. Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets for the six-month periods ended 30 June 2020 and 2019 were made up as follows:	Jun 2020	Jun 2019
Revenue from construction of concession assets
Acquisitions	45,292	40,332
Own work capitalised : Financial expenses (Note 5)	1,016	1,183
Overhead and management costs (Note 5)	7,714	8,373
	54,021	49,889
Cost of construction of concession assets
Acquisitions	45,292	40,332

22 OTHER OPERATING INCOME

The caption "Other operating income" loss for the six-month periods ended 30 June 2020 and 2019 is made up as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Jun 2020	Jun 2019
8,927	8,910
2,891	2,348
638	596
124	840
1,269	649
13,849	13,343
	The caption "Other operating income" loss for the six-month periods ended 30 June 2020 and 2019 is made up as follows:

23 EXTERNAL SUPPLIES AND SERVICES

The caption "External supplies and services" for the six-month periods ended 30 June 2020 and 2019 is made up as follows:

	13,849	13,343
The caption "External supplies and services" for the six-month periods ended 30 June 2020 and 2019 is made up as follows:	Jun 2020	Jun 2019
Maintenance costs Fees relating to external entities i)	8,713 5,334	5,048 5,100
Cross border interconnection costs ii)	4,846	2,064
Electric energy costs	3,332	4,137
Gas transport subcontracts	1,972	1,702
Insurance costs	1,906	1,320
Security and surveillance	1,061	946
Advertising and communication costs	429	358
Travel and transportation costs	413	705
Other	1,876	1,689

i)The fees paid to external entities refer to specialized work and fees paid by REN for contracted services and specialized studies. ii)The cross border interconnection costs refer to the cost assumed on cross-border trade in electricity.

24 PERSONNEL COSTS

Personnel costs for the six-month periods ended 30 June 2020 and 2019 are made up as follows:

Remuneration:
	Board of directors		1,445	1,454
Personnel			19,209	19,487
			20,654	20,941
	Social charges and other expenses:
	Social security costs		4,000	4,065
	Post-employement and other benefits cost (Note 17)		2,006	2,132
	Social support costs		989	1,060
Other			114	159
			7,109	7,416
	Total personnel costs The Corporate bodies' remuneration includes remunerations paid to the Board of Directors of REN and other entities.		27,764	28,357
	Other operating costs for the six-month periods ended 30 June 2020 and 2019 are made up as follows:
		Jun 2020	Jun 2019
	ERSE operating costs i)	5,738	5,527
	Underground occupancy tax	2,891	2,348
	Donations and quotizations	1,247	744
	Taxes Others	489 53	592 319

The Corporate bodies' remuneration includes remunerations paid to the Board of Directors of REN and other entities.

25 OTHER OPERATING COSTS

Other operating costs for the six-month periods ended 30 June 2020 and 2019 are made up as follows:

10,418	9,531

i) The caption "ERSE operating costs" corresponds to ERSE's operating costs, to be recovered through electricity and gas tariffs.

26 FINANCIAL COSTS AND FINANCIAL INCOME

Financial costs and financial income for the six-month periods ended 30 June 2020 and 2019 are made up as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
Financial costs and financial income for the six-month periods ended 30 June 2020 and 2019 are made up as follows:	Jun 2020	Jun 2019
Financial costs
Interest on bonds issued	21,980	23,950
Other borrowing interests	6,161	6,698
Interest on commercial paper issued	1,088	1,456
Derivative financial instruments	276	1,768
Other financing expenditure	873	785
	30,378	34,656
Financial income
Derivative financial instruments	1,621	1,798
Other financial investments	1,468	2,002

27 EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR

Law No. 83-C / 2013 of 31 December introduced a specific contribution of entities operating in the energy sector, called Extraordinary Contribution over the Energy Sector ("ECES"), that was extended by Law 82-B / 2014, of 31 December, Law 7-A / 2016, of 30 March, Law 114/2017, of 29 December, Law 71/2018, of 31 December and Law 2/2020, of 31 March.

The regime introduced is aimed at financing mechanisms that promote systemic sustainability of the sector through the setting up of a fund with the main objective of reducing the tariff deficit. The entities subject to this regime are, among others, entities that are dealers of transport activities or distribution of electricity and natural gas.

The calculation of the ECES is levied on the value of the assets with reference to the first day of the financial year 2020 (1 January 2020) that include cumulatively, the tangible fixed assets, intangible assets, with the exception of industrial property elements, and financial assets related with regulated activities. In the case of regulated activities, the ECES is levied on the value of regulated assets (i.e. the amount recognized by ERSE in the calculation of the allowed income with reference to 1 January 2020) if it is greater than the value of those assets, over which the rate of 0.85% is applied.

To the extent that it is a present obligation whose facts originating already occurred, with timing and amounts certain or ascertainable, REN recorded liabilities in the amount of 28,347 thousand Euros (Note 19) (for the six-month period ended 30 June 2019 was 24,390 thousand Euros) against a cost in the statement of profit and loss.

The ECES line of the income statement, amounting to 28,165 thousand Euros (24,390 thousand Euros at 30 June 2019) for the six-month period ended 30 June 2020 includes the amount of 182 thousand Euros (negative), related to the regularization of CESE from previous years.

28 EARNINGS PER SHARE

Earnings per share were calculated as follows:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
28 EARNINGS PER SHARE
Earnings per share were calculated as follows:
		Jun 2020	Jun 2019
Consolidated net profit used to calculate earnings per share	(1)	46,068	51,078
Number of ordinary shares outstanding during the period (note 14)	(2)	667,191,262	667,191,262
Effect of treasury shares (note 14) (average number of shares)		3,881,374	3,881,374
Number of shares in the period	(3)	663,309,888	663,309,888
Basic earnings per share (euro per share)	(1)/(3)	0.07	0.08

29 DIVIDENDS PER SHARE

During the Shareholders General Assembly meeting held on 7 May 2020, the Shareholders approved the distribution of dividends, with respect to the Net profit of 2019, in the amount of 114,090 thousand Euros (0.171 Euros per share). The dividends attributable to own shares amounted to 664 thousand Euros, being paid to the shareholders a total amount of 113,426 thousand of Euros.

During the Shareholders General Assembly meeting held on 3 May 2019, the Shareholders approved the distribution of dividends, with respect to the Net profit of 2018, in the amount of 114,090 thousand Euros (0.171 Euros per share). The dividends attributable to own shares amounted to 664 thousand Euros, being paid to the shareholders a total amount of 113,426 thousand of Euros.

30 CONTINGENT ASSETS AND LIABILITIES

30.1. Contingent liabilities

Tejo Energia - Produção e Distribuição de Energia Eléctrica, SA ("Tejo Energia") has announced to REN - Rede Eléctrica Nacional, SA ("REN Eléctrica") and REN Trading SA ("REN Trading") its intention to renegotiate the Energy Acquisition Agreement (CAE), in order to reflect in the amounts payable to this producer the costs, which in its opinion would be due, incurred with (i) financing of the social tariff and (ii) with the tax on petroleum products and energy and with the rate of carbon. Turbogás - Produtora Energética S.A. ("Turbogás") also stated its intention to renegotiate the CAE, in order to reflect in the amounts payable the costs incurred with the financing of the social tariff.

According to the CAE, Tejo Energia and Turbogás act as producers and sellers and REN Trading as purchaser of the energy produced in power plants. REN Eléctrica is jointly and severally liable with REN Trading, regarding the execution of the CAE with Tejo Energia and Turbogás. According to the information received, the total costs incurred by these companies until 30 June 2020 amounts to, approximately, 65 million Euros.

REN Trading and REN Elétrica consider that, with the existing legal framework, this possibility depends on the recognition that the associated charges can be considered as general costs of the national electricity system, the only way to guarantee the economic neutrality of REN Trading's contractual position.

All of these disputes have already been dealt with by the financial panels provided for in the PPAs, which rejected the requests made by the plaintiffs. The two disputes with Tejo Energia and the dispute with Turbogás regarding the social tariff were subsequently the subject of arbitration requests submitted by it to the International Chamber of Commerce (ICC).

30.2. Guarantees given

	REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
30.2. Guarantees given
	At 30 June 2020 and 31 December 2019, the REN Group had given the following bank guarantees:
Beneficiary European Investment Bank (EIB)	To guarantee loans	Scope			Jun 2020 294,118	Dec 2019 212,924
General Directorate of Energy and Geology	To guarantee compliance with the contract relating to the public service concession				23,788	23,788
Tax Authority and Customs	Ensure the suspension of tax enforcement proceedings				8,413	8,416
Judge of District Court	Guarantee for expropriation processes				5,549	5,549
Municipal Council of Seixal	Guarantee for litigation				3,133	3,133
Portuguese State	Guarantee for litigation				2,242	2,185
Municipal Council of Maia	Guarantee for litigation				1,564	1,564
Municipal Council of Odivelas	Guarantee for litigation				1,119	1,119
Municipal Council of Porto Municipal Council of Silves	Guarantee for litigation Guarantee for expropriation processes				368 352	368 352
EP - Estradas de Portugal	Guarantee for litigation				440	195
NORSCUT - Concessionária de Auto-estradas	To guarantee prompt payment of liabilities assumed by REN in the contract ceding utilization				200	200
District Court of Lisbon	Guarantee for suspension of continuation of pending enforcement proceedings				140	10,707
Others (loss then 100 thousand Euros)	Guarantee for litigation				59	144
					341,485	270,646
31 RELATED PARTIES
	Main shareholders and shares held by corporate bodies
	At 30 June 2020 and 31 December 2019, the shareholder structure of Group REN was as follows:
		Jun 2020		Dec 2019
		Number of		Number of
		shares	%	shares	%
State Grid Europe Limited (Grupo State Grid)		166,797,815	25.0%	166,797,815		25.0%
	Mazoon B.V. (Grupo Oman Oil Company S.A.O.C.)	80,100,000	12.0%	80,100,000		12.0%
Lazard Asset Management LLC Fidelidade - Companhia de Seguros, S.A.		46,611,245 35,496,424	7.0% 5.3%	46,611,245 35,496,424		7.0% 5.3%

31 RELATED PARTIES

Main shareholders and shares held by corporate bodies

					341,485	270,646
31 RELATED PARTIES
	Main shareholders and shares held by corporate bodies At 30 June 2020 and 31 December 2019, the shareholder structure of Group REN was as follows:
		Jun 2020		Dec 2019
		Number of		Number of
		shares	%
State Grid Europe Limited (Grupo State Grid)		166,797,815	25.0%	166,797,815	25.0%
	Mazoon B.V. (Grupo Oman Oil Company S.A.O.C.)	80,100,000	12.0%	80,100,000	12.0%
Lazard Asset Management LLC		46,611,245	7.0%	46,611,245		7.0%
Fidelidade - Companhia de Seguros, S.A.		35,496,424	5.3%	35,496,424		5.3%
Red Eléctrica Internacional, S.A.U.		33,359,563	5.0%	33,359,563		5.0%
The Capital Group Companies, Inc. i)		-	-	25,365,000		3.8%
Great-West Lifeco, Inc. Own shares		18,225,165 3,881,374	2.7% 0.6%	18,225,165 3,881,374		2.7% 0.6%
Others		282,719,676	42.4%	257,354,676	38.6%
		667,191,262	100%	667,191,262	100%

i) On February 26, 2020, The Capital Group Companies, Inc. informed REN of the decrease in the stake held (indirectly), and from that date, it was charged with a stake of less than 2% in the REN Group's shareholder structure. In this sense, and no longer having a qualified participation in REN, The Capital Group Companies, Inc. no longer has the obligation to report changes in the participation held, so the number of shares held by The Capital Group Companies, Inc is included in the "Others" item in the six-month period ended 30 June 2020.

Management remuneration

The Board of Directors of REN, SGPS was considered, in accordance with IAS 24, to be the only key members in the Management of the Group.

REN has not established any specific retirement benefit system for the Board of Directors.

Remuneration of the Board of Directors of REN, SGPS in the six-month period ended 30 June 2020 amounted to 1,196 thousand Euros (1,205 thousand Euros in 30 June 2019), as shown in the following table:

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
The Board of Directors of REN, SGPS was considered, in accordance with IAS 24, to be the only key members in the
Remuneration of the Board of Directors of REN, SGPS in the six-month period ended 30 June 2020 amounted to 1,196
	Jun 2020	Jun 2019
Remuneration and other short term benefits	768	777
Management bonuses (estimate)	428 1,196	428 1,205

Transaction of shares by the members of the Board of Directors

During the six-month period ended 30 June 2020, there were no transactions carried out by members of the corporate bodies.

Transactions with group or dominated companies

In its activity, REN maintains transactions with Group entities or with dominated parties. The terms in which these transactions are held are substantially identical to those practiced between independent parties in similar operations.

In the consolidation process, the amounts related to such transactions or open balances are eliminated in the financial statements.

The main transactions held between Group companies were: (i) borrowings and shareholders loans; and (ii) shared services namely, legal services, administrative services and informatics.

Balances and transactions held with shareholders, associates and other related parties

During the six-month periods ended 30 June 2020 and 2019, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties:

Revenue

Transaction of shares by the members of the Board of Directors
During the six-month period ended 30 June 2020, there were no transactions carried out by members of the corporate bodies.
Transactions with group or dominated companies
In its activity, REN maintains transactions with Group entities or with dominated parties. The terms in which these transactions are held are substantially identical to those practiced between independent parties in similar operations.
In the consolidation process, the amounts related to such transactions or open balances are eliminated in the financial
The main transactions held between Group companies were: (i) borrowings and shareholders loans; and (ii) shared services namely, legal services, administrative services and informatics.
Balances and transactions held with shareholders, associates and other related parties
During the six-month periods ended 30 June 2020 and 2019, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties:
	Jun 2020	Jun 2019
Sales and services provided
Invoicing issued - REE	335	875
Invoicing issued - Centro de Investigação em Energia REN - State Grid	112	97
Dividends received REE (Note 10)	4,219	3,847

Expenses

REPORT & ACCOUNTS JUNE'20 CONSOLIDATED FINANCIAL STATEMENTS
	Jun 2020	Jun 2019
External supplies and services
Invoicing received - REE	1,639	3,001
Invoicing received - CMS Rui Pena & Arnaut1	38	70
	1,677	3,071
The balances at 30 June 2020 and 31 December 2019 resulting from transactions with related parties were as follows:
	Jun 2020	Dec 2019
Trade and other receivables
Centro de Investigação em Energia REN - State Grid - Other receivables REE - Trade receivables	10 19	31 154

Balance

The balances at 30 June 2020 and 31 December 2019 resulting from transactions with related parties were as follows:

External supplies and services
Invoicing received - CMS Rui Pena & Arnaut1	38	70
	1,677	3,071
The balances at 30 June 2020 and 31 December 2019 resulting from transactions with related parties were as follows:	Jun 2020	Dec 2019
Trade and other receivables
Centro de Investigação em Energia REN - State Grid - Other receivables	10	31
REE - Trade receivables	19 29	154 186

¹ Entity related to the Administrator José Luís Arnaut. During 2020, the contract for the provision of legal services in the area of law and public procurement, awarded in 2017 to the law firm CMS Rui Pena and Arnaut, an entity related to the Director José Luís Arnaut, remained in force. The contract, under a waiver regime, was signed in 2017, for a period of three years. The procedure for awarding this contract took place through consultation with five entities, on a competitive basis and under the terms of REN's Operational Purchasing Manual, which establishes the general principles and relationships with suppliers that are based, namely, on the respect for the competition, transparency, accountability, equality and impatience.

32 SUBSEQUENT EVENTS

After the date of the statement of financial position, there were no events that give rise to additional adjustments or disclosures in the consolidated financial statements of the Company for the six-month period ended in 30 June 2020.

33 EXPLANATION ADDED FOR TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese in accordance with IAS 34 – Interim Financial Reporting. In the event of discrepancies, the Portuguese language version prevails.

The Accountant

Pedro Mateus

The Board of Directors

Rodrigo Costa

(Chairman of the Board of Directors and Chief Executive Officer)

João Faria Conceição

(Member of the Board of Directors and Chief Operational Officer)

Gonçalo Morais Soares

(Member of the Board of Directors and Chief Financial Officer)

Guangchao Zhu

(Vice-President of the Board of Directors designated by State Grid International Development Limited)

Mengrong Cheng

(Member of the Board of Directors)

Li Lequan

(Member of the Board of Directors)

Ana Pinho

(Member of the Board of Directors)

Omar Al Wahaibi

(Member of the Board of Directors)

Jorge Magalhães Correia

(Member of the Board of Directors)

Manuel Sebastião

(Member of the Board of Directors and Chairman of the Audit Committee)

Gonçalo Gil Mata

(Member of the Board of Directors and of the Audit Committee)

Maria Estela Barbot (Member of the Board of Directors and of the Audit Committee)

José Luis Arnaut

(Member of the Board of Directors)

Note – The remaining pages of this Report & Accounts were initialled by the members of the Executive Committee and by the Certified Accountant, Pedro Mateus.

4. APPENDIX

4.1 Declaration of Conformity

DECLARATION PROVIDED IN THE ARTICLE 246 (1) (C) OF THE PORTUGUESE SECURITIES CODE

In accordance with and for the purposes of article 246 (1) (c) of the Portuguese Securities Code, each one of the members of the Board of Directors of REN – Redes Energéticas Nacionais, SGPS, S.A., nominally identified below, has underwritten the declaration transcribed hereafter ¹ :

"I hereby declare, pursuant to and for the purposes specified in Article 246, No. 1, paragraph c) of the Portuguese Securities Code, to the best of my knowledge, and serving as and in the scope of the functions assigned to me, based on the information made available to me, that the consolidated financial statements have been prepared in accordance with the applicable accounting standards, thus providing a true and fair view of the assets and liabilities, financial position and results of REN - Redes Energéticas Nacionais, SGPS, S.A. and of the companies included in its scope of consolidation, and that the management report relating to the first half of 2020 faithfully describes the evolution of the business, the performance and position of the Company and those companies, within such period, and the impact on the respective financial statements, also containing a description of the main future risks and uncertainties."

Lisbon, 29 th July 2020

Rodrigo Costa (Chaiman of the Board of Directors and Chief Executive Officer)

João Faria Conceição (Member of the Board of Directors and Chief Operational Officer)

Gonçalo Morais Soares (Member of the Board of Directors and Chief Financial Officer)

Guangchao Zhu (Vice-President of the Board of Directors designated by State Grid International Development Limited)

Mengrong Cheng (Member of the Board of Directors)

Li Lequan (Member of the Board of Directors)

Omar Al-Wahaibi (Member of the Board of Directors)

Jorge Magalhães Correia (Member of the Board of Directors)

Manuel Sebastião (Member of the Board of Directors and Chairman of the Audit Committee)

Gonçalo Gil Mata (Member of the Board of Directors of the Audit Committee)

Maria Estela Barbot (Member of the Board of Directors and of the Audit Committee)

José Luis Arnaut (Member of the Board of Directors)

Ana Pinho (Member of the Board of Directors)

¹ The original of the mentioned individual statements are available, for consultation, at the Company's head office.

4.2 List of qualified shareholdings [Item c) of no. 1 of Article 9 of CMVM'S Regulation no. 5/2008

Based on the communications submitted to the Company, in particular in accordance with Article 16 of the Securities Code and CMVM Regulation No 5/2008, with reference to 30 June 2020, shareholders having a qualifying holding (representing at least 2% of REN's share capital), calculated in accordance with Article 20 of the Securities Code, were as follows:

State Grid Corporation of China	No of shares	% Share capital with voting rights
Directly	0	0%
Through State Grid Europe Limited (SGEL), controlled by State Grid International Development Limited (SGID), which is controlled by State Grid Corporation of China	166 797 815	25,0%
Total attributable	166 797 815	25,0%

Oman Oil Company SAOC2	No of shares	% Share capital with voting rights
Directly	0	0%
Through Mazoon B.V. and Oman Oil Holding Europe, B.V., which are controlled by Oman Oil Company SAOC	80 100 000	12,006%
Total attributable	80 100 000	12,006%

Lazard Asset Management LLC	No of shares	% Share capital with voting rights
Directly	0	0
Indirectly3	46 611 245	6,986%
Total attributable	46 611 245	6.986%4

² On 13 December 2017, Oman Oil Company S.A.O.C. informed REN that it reduced its qualified indirect share holding from 15% to 12% of the share capital and voting rights of REN, under the terms described in:

http://web3.cmvm.pt/sdi/emitentes/docs/PQ66755.pdf.

³ This qualified shareholding, calculated under Article 20 of the Securities Code, is held by Lazard Asset Management LLC on behalf of Clients, and is attributable to it since it agreed with the Clients that it would exercise the voting rights. The qualified shareholding is also attributable to (i) Lazard Freres & Co, which holds the total share capital of the firstly mentioned company; (ii) Lazard Group LLC, which holds the total share capital of the secondly mentioned company; and (iii) Lazard Limited, company with shares admitted to trading in the NYSE market, as controlling entity of the abovementioned company.

⁴ According to the information provided by Lazard Asset Management LLC on 31 January 2019, with reference to 31 December 2018.

Fidelidade Companhia de Seguros, S.A.5	No of shares	% Share capital with voting rights
Directly	35 176 796	5,272%
Through Via Directa – Companhia de Seguros, S.A., which is controlled by Fidelidade	119 889	0,018%
Through Companhia Portuguesa de Resseguros, S.A., which is controlled by Fidelidade	37 537	0,006%
Through Fidelidade Assistência – Companhia de Seguros, S.A., which is controlled by the common shareholder Longrun6	98 732	0,015%
Through Multicare – Seguros de Saúde, S.A., which is controlled by the common shareholder Longrun7	63 470	0,010%
Total attributable	35 496 424	5,320%

Red Eléctrica Corporación, S.A.	No of shares	% Share capital with voting rights
Directly	0	0%
Through its branch Red Eléctrica Internacional, S.A.U.	33 359 563	5,0%
Total attributable	33 359 563	5,0%

⁵ This qualified shareholding, calculated under Article 20 of the Securities Code, is also attributable to LongRun Portugal, S.G.P.S., S.A., Millenium Gain Capital, Fosun Financial Holdings Limited, Fosun International Limited, Fosun Holdings Limited, Fosun International Holdings, Ltd. and to Mr. Guo Guangchang, as natural or legal persons who control directly or indirectly Fidelidade - Companhia de Seguros, S.A.

⁶ Longrun holds, also, 80% of the share capital of Fidelidade Assistência – Companhia de Seguros, S.A.

⁷ Longrun holds, also, 80% of the share capital of Multicare – Seguros de Saúde, S.A.

GreatWest Lifeco, Inc.8	No. of shares	% Share capital with voting rights
Directly	0	0%
Through the collective investment undertakings managed by Setanta Asset Management Limited9 , a company in a controlling relationship with Great-West Lifeco, Inc.	18 103 850	2,713%
Through three subfunds of Beresford Fund Plc, managed by Irish Life Investment Managers Limited10	121 315	0,018%
Total attributable11	18 225 165	2,731%

⁸ According to the communicaton received by the company on 9 January 2020, the ultimate controlling shareholders of Great-West Lifeco, Inc. are The Desmarais Trust and their trustees Sophie Desmarais, Paul Desmarais, Jr., André Desmarais, Michel Plessis-Bélair and Guy Fortin. The voting rights are also attributable to the following companies controlled by The Demarais Trust: Power Financial Corporation; 171263 Canada Inc.; Power Corporation of Canada; and Pansolo Holdings Inc. This qualified holding is the result of the aggregation of the holdings of various collective investment undertakings managed by entities that are in control or group relationship with Great-West Lifeco Inc.

⁹ The collective investment undertakings and respective shareholdings are hereby indicated: CF Canlife Global Equity Income Fund (251 398 shares corresponding to 0,038% of the share capital); Pier 21 Global Equity Fund (462 834 shares corresponding to 0,069% of the share capital); Setanta Global Equity Fund (41 151 shares corresponding to 0,006% of the share capital); Setanta Income Opportunities Fund (127 729 shares corresponding to 0,019% of the share capital); Setanta Reditus Income Fund (407 292 shares corresponding to 0,061% of the share capital); Setanta Reditus Global Equity Fund (208 539 shares corresponding to 0,031% of the share capital); Setanta Reditus Global Balanced Fund (31 284 shares corresponding to 0,005% of the share capital); Balanced Fund, subfund of Summit Investment Funds plc (63 625 shares corresponding to 0,010% of the share capital); Growth Fund, subfund of Summit Investment Funds plc (143 563 shares corresponding to 0,022% of the share capital); Balanced Fund, subfund of Summit Mutual plc (23 838 shares corresponding to 0,004% of the share capital); Growth Fund, subfund of Summit Mutual Funds plc (113 504 shares corresponding to 0,017% of the share capital); Quadras Global All Cap Equity Fund (34 689 shares corresponding to 0,005% of the share capital); Quadrus Global Equity Fund (198 523 shares corresponding to 0,030% of the share capital); Quadrus Global Dividend Fund (845 220 shares corresponding to 0,127% of the share capital); Quadras Global Dividend Class (1 015 893 shares corresponding to 0,152% of the share capital); Little Company of Mary (46 182 shares corresponding to 0,007% of the share capital); Irish Life Assurance Plc (5 685 759 shares corresponding to 0,852% of the share capital); The Canada Life Assurance Company (8 402 827 shares corresponding to 1,259% of the share capital).

¹⁰ The collective investment undertakings and respective shareholdings are hereby indicated: Indexed World Small Cap Equity, subfund of Beresford Fund Plc (24 205 shares corresponding to 0.004% of the share capital); Indexed Europe Equity, sub-fund of Beresford Fund Plc (11 246 shares corresponding to 0.002% of the share capital); Indexed Europe Small Cap Equity, sub-fund of Beresford Fund Plc (85 864 shares corresponding to 0,013% of the share capital).

¹¹ The voting rights ancillary to the abovementioned shares are also attributable, under Article 20(1)(b) of the Securities Code, to the following companies controlled by Great-West Lifeco, Inc.: The Canada Life Assurance Company; Canada Life Capital Corporation Inc; Canada Life International Holdings Limited; and The Canada Life Group (U.K.) Limited.

4.3 Securities held by the members of the corporate bodies

In accordance with and for the purposes of Article 19 of the Market Abuse Regulation¹², Article 447 of the Portuguese Companies Code, in particular paragraph 5 thereof, and Article 14 of CMVM Regulation No 5/2008, the number of shares held by the members of the REN management and supervisory bodies and by the persons related to them pursuant to paragraph 2 of the abovementioned article¹³, as well as all their acquisitions, encumbrances or disposals with reference to the 1 st semester of 2020, based on communications with the company, were as follows:

	Board of Directors	Acquisitions	Encumbrances	Disposals	Nr. of shares at 30.06.2019
	Rodrigo Costa	-	-	-	0 (zero)
Executive Committee	João Faria Conceição	-	-	-	500
	Gonçalo Morais Soares	-	-	-	0 (zero)
	Guangchao Zhu – designated by State Grid International Development Limited	-	-	-	0 (zero)
	Mengrong Cheng	-	-	-	0 (zero)
	Li Lequan	-	-	-	0 (zero)
	Omar Al-Wahaibi	-	-	-	0 (zero)
	Jorge Magalhães Correia	-	-	-	35,496,42414
	Manuel Sebastião	-	-	-	35,000
Committe Audit	Gonçalo Gil Mata e	-	-	-	0 (zero)
	Maria Estela Barbot	-	-	-	0 (zero)
	José Luís Arnaut	-	-	-	7,58715
	Ana Pinho	-	-	-	0 (zero)

¹² Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014.

¹³ This comprises the shares held by members of the REN management and supervisory bodies and also, if applicable,(i) by the spouse not judicially separated, regardless of the matrimonial property regime; (ii) by minor descendants; (iii) by persons in whose name shares are registered, in the event that they have been acquired on behalf of a member of the management or supervisory bodies and by persons referred to in (i) and (ii); and (iv) by companies of which a member of the management or supervisory bodies and the persons referred to in (i) and (ii) are shareholders with unlimited responsibility, are engaged in the management or exercise any management or supervisory duties or hold, individually or jointly with the persons referred to in (i) to (iii), at least half of the share capital or corresponding voting rights.

¹⁴ Corresponding to shares attributable to Fidelidade Companhia de Seguros, S.A., which are attributable to him pursuant to Article 447 of the Portuguese Companies Code, due to the exercising of the duties of Chairman of the Board of Directors and CEO of that company.

¹⁵ Helds 480 shares in his own name and 7,107 shares through the company Platinumdetail – Consultoria e Investimentos, Lda., company where he holds the majority of the capital and is a manager.

In accordance with and for the purposes of Article 447 of the Portuguese Companies Code, in particular paragraph 5 thereof, the number of bonds held by the members of the REN management and supervisory bodies and by the persons related to them pursuant to paragraph 2 of the abovementioned article¹⁶, as well as all their acquisitions, encumbrances or disposals with reference to the first semester of 2020, based on communications sent to the company, were as follows:

Board of Directors	Acquisitions	Encumbrances	Disposals	Nr. of bonds at 30.06.2019
Jorge Magalhães Correia	-	-	-	1,200,00017

During the 1st semester of 2020, REN was not informed of transactions performed during the period to which this report relates regarding REN's shares and bonds, which are relevant for the purposes of article 14 of CMVM's Regulation 5/2008 and of article 447 of the Portuguese Securities Code.

¹⁶ This comprises the shares held by members of the REN management and supervisory bodies and, if applicable,(i) of the spouse not judicially separated, regardless of the matrimonial property regime; (ii) of minor descendants; (iii) of persons in whose name shares are registered, in the event that they have been acquired on behalf of a member of the management or supervisory bodies and of persons referred to in (i) and (ii); and (iv) the shares held by companies of which a member of the management or supervisory bodies and the persons referred to in (i) and (ii) are shareholders with unlimited responsibility, are engaged in the management or exercise any management or supervisory duties or hold, alone or together with the persons referred to in (i) to (iii), at least half of the share capital or corresponding voting rights.

¹⁷ Corresponding to the bonds held by Fidelidade – Companhia de Seguros, S.A., due to the exercising of the duties of Chairman of the Board of Directors and CEO of that company.

4.4 Limited review Report prepared by an auditor registered at the stock exchange commission (Comissão do Mercado de Valores Mobiliários) on the half year consolidated information

4.5 Report and opinion of the Audit Committee in respect of the consolidated half year information (regarding the six month period ended 30th June 2020)

(Translation of a report originally issued in Portuguese)

Within the scope of the responsibilities attributed, the Audit Committee, during the first semester of 2020, accompanied the development of the activity of REN – REDES ENERGÉTICAS NACIONAIS, S.G.P.S., S.A. and its participated companies, ensured compliance with the law, regulations and articles of association, oversaw the fulfillment of the accounting policies and practices and supervised the process of preparation and disclosure of the financial information, the effectiveness of the internal control systems, the management of risk and also the independence and activity of the Statutory Auditor and the External Auditor.

The Audit Committee examined the consolidated financial information included in the section Financial Performance and the condensed consolidated financial statements for the half year ended June 30, 2020 of REN – REDES ENERGÉTICAS NACIONAIS, S.G.P.S., S.A., which comprise the Consolidated Statement of Financial Position (that reflects total assets of 5,218,301 thousand Euros and total equity of 1,362,794 thousand Euros, including a consolidated net profit of 46,068 thousand Euros), the Consolidated Statements of Profit and Loss, Comprehensive Income, Changes in Equity and Cash Flows for the half year then ended and the corresponding Notes.

The Audit Committee also examined and agreed with the Limited Review Report on the above mentioned consolidated half year information prepared by the Statutory Auditor and by the External Auditor.

In the light of the above, the Audit Committee is of the opinion that consolidated financial information for the half year ended on June 30, 2020, is in accordance with the applicable accounting, legal and articles of association provisions.

Lisbon, 29th July 2020

Manuel Ramos de Sousa Sebastião

Estela de Magalhães Barbot

Gonçalo Gil Mata

4.6 Contacts

At REN we are happy to pursue a policy of facilitating direct access to the Group's corporate bodies. Feel free to contact us at the following addresses/numbers/emails:

Investor Relations Office

Ana Fernandes – Head of Office ana.fernandes@ren.pt

Alexandra Martins alexandra.martins@ren.pt

Telma Mendes telma.mendes@ren.pt

REN - Redes Energéticas Nacionais, SGPS, S.A. Investor Relations Office Avenida dos Estados Unidos da América, 55 1749-061 LISBOA – Portugal Telephone: +351 21 001 35 46 Telefax: +351 21 001 31 50 E-mail: ir@ren.pt

Communication and Sustainability

Margarida Ferreirinha margarida.ferreirinha@ren.pt

REN - Redes Energéticas Nacionais, SGPS, S.A. Communication and Sustainability Avenida dos Estados Unidos da América, 55 1749-061 LISBOA - Portugal Telephone: +351 21 001 35 00 Telefax: +351 21 001 31 50 E-mail: comunicacao@ren.pt