Quarterly Report • May 20, 2022
Quarterly Report
Open in ViewerOpens in native device viewer
31 March 2022
REN – Redes Energéticas Nacionais, SGPS, S.A.
| 1. FINANCIAL PERFORMANCE | 2 | |
|---|---|---|
| 1.1 RESULTS FOR THE 1ST QUARTER OF 2022 1.2 AVERAGE RAB AND CAPEX |
2 6 |
|
| 2. CONSOLIDATED FINANCIAL STATEMENTS | 7 | |
| 3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2022 | 12 | |
| 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 |
GENERAL INFORMATION BASIS OF PRESENTATION MAIN ACCOUNTING POLICIES SEGMENT REPORTING TANGIBLE AND INTANGIBLE ASSETS GOODWILL INVESTMENTS IN ASSOCIATES AND JOIN VENTURES INCOME TAX FINANCIAL ASSETS AND LIABILITIES INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME TRADE AND OTHER RECEIVABLES DERIVATIVE FINANCIAL INSTRUMENTS CASH AND CASH EQUIVALENTS EQUITY INSTRUMENTS RESERVES AND RETAINED EARNINGS BORROWINGS POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS PROVISIONS FOR OTHER RISKS AND CHARGES TRADE AND OTHER PAYABLES SALES AND SERVICES RENDERED REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES OTHER OPERATING INCOME EXTERNAL SUPPLIES AND SERVICES PERSONNEL COSTS OTHER OPERATING COSTS FINANCIAL COSTS AND FINANCIAL INCOME EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR EARNINGS PER SHARE DIVIDENDS PER SHARE CONTINGENT ASSETS AND LIABILITIES RELATED PARTIES SUBSEQUENT EVENTS EXPLANATION ADDED FOR TRANSLATION |
12 15 16 18 20 23 24 26 30 32 34 35 41 41 42 42 44 45 46 47 47 48 48 49 49 50 50 51 51 51 52 55 55 |
In the first 3 months of 2022, net income reached 6.0 million Euros, a 1.5 million Euros increase (+32.6%) over the same period of the previous year. Net income increased reflecting mainly the following effects: (i) increase of 4.0 million Euros in the Group EBITDA (+2.0 million Euros in EBIT), and (ii) the increase of 1.3 million Euros in financial results (+12.2%), partially offset by (iii) the increase of 0.9 million Euros in the Extraordinary Levy on the Energy Sector.
The following events are also worth of note:
Investment was 27.3 million Euros, a 14.1% y.o.y decrease (-4.5 million Euros) and transfers to RAB decreased 3.7 million Euros to 4.0 million Euros. Average RAB increased by 118.9 million Euros (+3.4%), to 3,660.1 million Euros.
The average cost of debt was 1.6%, unchanged over the previous year, and net debt reached 2,098.7 million Euros, a 17.6% decrease (-449.3 million Euros) over the same period of the previous year.
| MAIN INDICATORS (MILLIONS OF EUROS) |
March 2022 |
March 2021 |
VAR.% |
|---|---|---|---|
| EBITDA | 118.4 | 114.4 | 3.5% |
| Financial results2 | -9.4 | -10.8 | 12.2% |
| Net income1 | 6.0 | 4.5 | 32.6% |
| Recurrent net income | 34.0 | 31.6 | 7.6% |
| Total Capex | 27.3 | 31.8 | -14.1% |
| Transfers to RAB3 (at historic costs) | 4.0 | 7.7 | -47.8% |
| Average RAB (at reference costs) | 3 660.1 | 3 541.2 | 3.4% |
| Net debt | 2 098.7 | 2 547.9 | -17.6% |
| Average cost of debt | 1.6% | 1.6% | 0.0p.p. |
_____________________________________
1 The full amount of the levy was recorded in the 1st quarter of 2022 and 2021, according to the Portuguese Securities Market Commission (CMVM) recommendations.
2 The net costs of 0.2 million Euros in March 2022 and March 2021 from electricity interconnection capacity auctions between Spain and Portugal – referred to as FTR (Financial Transaction Rights) were reclassified from financial income to Revenue.
3 Includes direct acquisitions (RAB related).
EBITDA for the domestic business reached 113.6 million Euros in the first 3 months of 2022, a 1.7% (+1.9 million Euros) increase over the same period of the previous year.
| EBITDA - TRANSMISSION | March | March | |
|---|---|---|---|
| (MILLIONS OF EUROS) | 2022 | 2021 | VAR.% |
| 1) Revenues from assets | 47.1 | 50.3 | -6.4% |
| RAB remuneration1 | 17.1 | 16.3 | 4.6% |
| Lease revenues from hydro protection zone | 0.2 | 0.2 | -1.3% |
| Incentive for improvement of the TSO's technical performance2 |
1.9 | 6.3 | -70.0% |
| Recovery of amortizations (net of investment subsidies)1 |
23.5 | 22.9 | 2.5% |
| Amortization of investment subsidies | 4.5 | 4.7 | -3.3% |
| 2) Revenues from Totex1 | 66.6 | 61.5 | 8.3% |
| 3) Revenues from Opex1 | 28.8 | 27.1 | 6.0% |
| 4) Other revenues | 3.5 | 3.3 | 8.1% |
| 5) Own works (capitalised in investment) | 4.8 | 4.6 | 3.7% |
| 6) Earnings on Construction (excl. own works) – Concession assets |
22.3 | 25.8 | -13.8% |
| 7) OPEX | 37.1 | 34.9 | 6.1% |
| Personnel costs3 | 13.9 | 13.6 | 1.7% |
| External costs | 23.2 | 21.3 | 8.8% |
| 8) Construction costs – Concession assets | 22.3 | 25.8 | -13.8% |
| 9) Provisions/ (reversal) | 0.0 | 0.0 | n.m. |
| 10) Impairments | 0.1 | 0.1 | 0.0% |
| 11) EBITDA (1+2+3+4+5+6-7-8-9-10) | 113.6 | 111.8 | 1.7% |
1 In 2022, a new regulatory period entered in force in the Electricity Sector, introducing a remuneration model based on Totex for the Electricity Transmission activity. Therefore, for comparability purposes, the 2021 values of the regulated revenue items of "RAB Remuneration", "Recovery of amortizations (net of investment subsidies)" and "Revenues from Opex " of the Electricity Transmission activity were reclassified to the item "Revenues from Totex".
2 The values presented in 2021 correspond to the Incentive for rationalization of economic investments, which was the incentive in force until December 31, 2021, having been replaced in 2022 by the Incentive for improvement of the TSO's technical performance with the new regulatory period for 2022-2025 for the electricity sector.
3 Includes training and seminars costs.
The increase in EBITDA resulted mainly from:
These effects were partially offset by:
With respect to domestic business, it is also important to note that the natural gas distribution business contributed with EBITDA of 12.1 million Euros.
The EBITDA for international businesses reached 4.7 million Euros in the first 3 months of 2022, a 2.1 million Euros (+81.0%) increase over the same period of the previous year, resulting mainly from:
| EBITDA - INTERNATIONAL (MILLIONS OF EUROS) |
March 2022 |
March 2021 |
VAR.% |
|---|---|---|---|
| 1) Revenues from the Transmission of Electrical Power | 3.0 | 2.3 | 32.8% |
| 2) Other revenues | 2.3 | 1.4 | 67.3% |
| 3) Own works (capitalized in investment) | 0.1 | 0.0 | n.m. |
| 4) OPEX | 0.7 | 1.1 | -33.3% |
| Personnel costs2 | 0.2 | 0.1 | n.m. |
| External costs | 0.5 | 1.0 | -44.9% |
| 5) EBITDA (1+2+3-4) | 4.7 | 2.6 | 81.0% |
1Excludes Electricity Transmission activity
2 Includes costs with training.
Overall, the Group's net income for the first 3 months of 2022 reached 6.0 million Euros, a 1.5 million Euros y.o.y. increase (+32.6%).
This increase reflect mostly the following effects:
Excluding non-recurring items, Net Income for the first 3 months of 2022 increased 2.4 million Euros (+7.6%). Non-recurring items considered in the first 3 months of 2022 and 2021 are as follows:
| NET INCOME (MILLIONS OF EUROS) |
March 2022 |
March 2021 |
VAR.% |
|---|---|---|---|
| EBITDA | 118.4 | 114.4 | 3.5% |
| Depreciations and amortizations | 62.1 | 60.1 | 3.3% |
| Financial results | -9.4 | -10.8 | 12.2% |
| Income tax expenses | 12.9 | 11.9 | 7.7% |
| Extraordinary levy on the energy sector 1 | 28.0 | 27.1 | 3.4% |
| Net income | 6.0 | 4.5 | 32.6% |
| Non-recurring items | 28.0 | 27.1 | 3.4% |
| Recurrent net income | 34.0 | 31.6 | 7.6% |
1 The full amount of the levy was recorded in the 1st quarter of 2022 and 2021, according to the Portuguese securities market commission (CMVM) recommendations.
In the first 3 months of 2022, Capex reached 27.3 million Euros, a 14.1% y.o.y. decrease (-4.5 million Euros), and transfers to RAB decreased 3.7 million Euros to 4.0 million Euros.
In electricity, investment was 22.0 million Euros, a 9.4% decrease (-2.3 million Euros) over the same period of 2021, and Transfers to RAB were 0.4 million Euros, a y.o.y. increase of 2.5 million Euros.
In natural gas transmission, investment reached 1.2 million Euros, a reduction of 1.4 million Euros and there were no transfers to RAB.
In natural gas distribution, investment was 3.9 million Euros, 34% for new supply points and 61% with the expansion of the distribution network, and transfers to RAB increased 0.4 million Euros (+13.4%) to 3.6 million Euros.
Average RAB was 3,660.1 million Euros, a 118.9 million Euros (+3.4%) y.o.y decrease. In electricity, the average RAB (excluding lands) reached 2,095.7 million Euros (+155.3 million Euros, +8.0%), of which 981.0 million Euros in assets remunerated at a premium rate of return, while lands reached 197.9 million Euros (-12.3 million Euros, -5.8%). In natural gas transmission, the average RAB was 890.4 million Euros (-27.4 million Euros, -3.0%), while in natural gas distribution the average RAB reached 476.1 million Euros (+3.3 million Euros, +0.7%).
It should be noted that in the electricity sector, the average RAB of the Electricity Transmission activity corresponds to a fixed average value defined by the regulator for the 2022-2025 regulatory period, upon which the regulated revenue of the new Totex model is defined.
(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of financial position originally issued in Portuguese - Note 33) Notes Mar 2022 Dec 2021 ASSETS Non-current assets Property, plant and equipment 5 132,516 119,551 Intangible assets 5 4,095,278 4,123,069 Goodwill 6 4,894 4,757 Investments in associates and joint ventures 7 175,052 169,283 Investments in equity instruments at fair value through other comprehensive income 9 and 10 161,095 162,724 Derivative financial instruments 9 and 12 24,981 19,347 Other financial assets 9 146 137 Trade and other receivables 9 and 11 39,429 37,026 Deferred tax assets 8 92,526 96,673 4,725,918 4,732,567 Current assets Inventories 8,601 8,545 Trade and other receivables 9 and 11 493,700 448,171 Derivative financial instruments 9 and 12 125 474 Cash and cash equivalents 9 and 13 555,013 398,759 1,057,438 855,949 Total assets 4 5,783,356 5,588,516 EQUITY Shareholders' equity Share capital 14 667,191 667,191 Own shares 14 (10,728) (10,728) Share premium 116,809 116,809 Reserves 15 357,526 311,988 Retained earnings 329,660 232,978 Other changes in equity (5,561) (5,561) Net profit for the period 5,957 97,153 Total equity 1,460,855 1,409,830 LIABILITIES Non-current liabilities Borrowings 9 and 16 2,362,740 2,390,852 Liability for retirement benefits and others 17 94,230 94,109 Derivative financial instruments 9 and 12 26,758 23,112 Provisions 18 8,872 8,872 Trade and other payables 9 and 19 683,864 507,606 Deferred tax liabilities 8 107,330 107,569 3,283,793 3,132,120 Current liabilities Borrowings 9 and 16 266,169 375,221 Trade and other payables 9 and 19 731,048 644,701 Income tax payable 8 and 9 41,491 26,644 1,038,708 1,046,566 Total liabilities 4 4,322,501 4,178,686 Total equity and liabilities 5,783,356 5,588,516
The accompanying notes form an integral part of the consolidated statement of financial position as of 31 March 2022.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||
|---|---|---|---|
| CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE | |||
| THREE-MONTH PERIODS ENDED 31 MARCH 2022 AND 2021 | |||
| (Amounts expressed in thousands of Euros – tEuros) (Translation of statements of profit and loss originally issued in Portuguese - Note 33) |
|||
| Notes | Mar 2022 | Mar 2021 | |
| Sales Services rendered |
4 and 20 4 and 20 |
42 140,456 |
31 137,220 |
| Revenue from construction of concession assets | 4 and 21 | 27,080 | 30,476 |
| Gains / (losses) from associates and joint ventures | 7 | 2,604 | 1,473 |
| Other operating income | 22 | 8,546 | 7,323 |
| Operating income | 178,727 | 176,523 | |
| Cost of goods sold | (216) | (195) | |
| Costs with construction of concession assets | 21 | (22,276) | (25,844) |
| External supplies and services | 23 | (17,512) | (17,568) |
| Personnel costs | 24 | (13,982) | (13,664) |
| Depreciation and amortizations Impairments |
5 6 |
(62,086) (94) |
(60,087) (94) |
| Other expenses | 25 | (6,069) | (4,584) |
| Operating costs | (122,236) | (122,038) | |
| Operating results | 56,491 | 54,485 | |
| Financial costs | 26 | (13,625) | (12,152) |
| Financial income | 26 | 3,970 | 1,193 |
| Financial results | (9,655) | (10,959) | |
| Profit before income tax and ESEC | 46,836 | 43,526 | |
| Income tax expense | 8 | (12,861) | (11,940) |
| Energy sector extraordinary contribution (ESEC) | 27 | (28,018) | (27,095) |
| Consolidated profit for the period | 5,957 | 4,491 | |
| Attributable to: Equity holders of the Company |
5,957 | 4,491 | |
| Non-controlled interest | - | - | |
| Consolidated profit for the period | 5,957 | 4,491 | |
| Earnings per share (expressed in euro per share) | 28 | 0.01 | 0.01 |
The accompanying notes form an integral part of the consolidated statement of profit and loss for the three-month period ended 31 March 2022.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||
|---|---|---|---|
| CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2022 AND 2021 |
|||
| (Amounts expressed in thousands of Euros – tEuros) (Translation of statements of other comprehensive income originally issued in Portuguese - Note 33) |
|||
| Notes | Mar 2022 | Mar 2021 | |
| Consolidated Profit for the period | 5,957 | 4,491 | |
| Items that will not be reclassified subsequently to profit or loss: | |||
| Actuarial gains / (losses) - gross of tax | (672) | 67 | |
| Tax effect on actuarial gains / (losses) | 11 | 201 | (20) |
| Items that may be reclassified subsequently to profit or loss: | |||
| Exchange differences on translating foreign operations | 21,206 | 11,767 | |
| Increase / (decrease) in hedging reserves - cash flow derivatives | 12 | 33,180 | 1,734 |
| Tax effect on hedging reserves | 8 and 12 | (7,631) | (434) |
| Gain/(loss) in fair value reserve - Investments in equity instruments at fair | |||
| value through other comprehensive income | 10 | (1,629) | (9,070) |
| Tax effect on items recorded directly in equity | 8 and 10 | 412 | 2,041 |
| - | 90 | ||
| Other changes in equity | 7 | ||
| Comprehensive income for the period | 51,024 | 10,666 | |
| Attributable to: | |||
| Equity holders of the company Non-controlled interest |
51,024 - |
10,666 - |
The accompanying notes form an integral part of the consolidated statement of comprehensive income for the three-month period ended 31 March 2022.
| CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2022 AND 2021 (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 Hedging Other Share Share Legal Other Retained Profit for Own shares reserve reserve changes in capital premium Reserve reserves earnings the year Changes in the year Notes (Note 10) (Note 12) equity |
Total |
| At 1 January 2021 667,191 (10,728) 116,809 125,075 48,905 (25,545) 141,452 (5,561) 240,853 109,249 |
1,407,700 |
| Net profit of the period and other comprehensive income - - - - (7,029) 1,300 11,857 - 47 4,491 |
10,666 |
| Transfer to other reserves - - - - - - - - 109,249 (109,249) |
- |
| At 31 March 2021 667,191 (10,728) 116,809 125,075 41,876 (24,245) 153,308 (5,561) 350,148 4,491 |
1,418,365 |
| At 1 January 2022 667,191 (10,728) 116,809 130,662 57,758 (12,126) 135,694 (5,561) 232,978 97,153 |
1,409,830 |
| Net profit of the period and other | |
| comprehensive income - - - - (1,217) 25,549 21,206 - (471) 5,957 |
51,024 |
| Transfer to other reserves - - - - - - - - 97,153 (97,153) At 31 March 2022 667,191 (10,728) 116,809 130,662 56,541 13,423 156,900 (5,561) 329,660 5,957 1,460,855 |
- |
The accompanying notes form an integral part of the consolidated statement of changes in equity for the three-month period ended 31 March 2022.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||
|---|---|---|---|
| CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2022 AND 2021 |
|||
| (Amounts expressed in thousands of Euros – tEuros) (Translation of statements of cash flow originally issued in Portuguese - Note 33) |
|||
| Notes | Mar 2022 | Mar 2021 | |
| Cash flow from operating activities: | |||
| Cash receipts from customers | 897,920 a) |
595,208 a) |
|
| Cash paid to suppliers | (569,797) a) |
(348,498) a) |
|
| Cash paid to employees Income tax received/paid |
(14,892) (2,440) |
(15,798) (2,109) |
|
| Other receipts / (payments) relating to operating activities | (28,634) | 19,587 | |
| Net cash flows from operating activities (1) | 282,158 | 248,391 | |
| Cash flow from investing activities: | |||
| Receipts related to: | |||
| Investment grants | 34,277 | 1,286 | |
| Dividends | 7 and 10 | 4,263 | 1,477 |
| Payments related to: | |||
| Property, plant and equipment | (2,668) | - | |
| Intangible assets Net cash flow used in investing activities (2) |
(44,886) (9,014) |
(47,242) (44,480) |
|
| Cash flow from financing activities: | |||
| Receipts related to: | |||
| Borrowings | 200,000 | 465,000 | |
| Payments related to: | |||
| Borrowings | (299,769) | (485,769) | |
| Interests and other similar expense | (17,538) | (16,835) | |
| Leasings | (753) | (696) | |
| Interests of Leasings Net cash from / (used in) financing activities (3) |
(7) (118,067) |
(8) (38,308) |
|
| Net (decrease) / increase in cash and cash equivalents (1)+(2)+(3) | 155,077 | 165,603 | |
| Effect of exchange rates | 1,177 | 264 | |
| Cash and cash equivalents at the beginning of the year | 13 | 398,759 | 61,169 |
| Cash and cash equivalents at the end of the period | 13 | 555,013 | 227,037 |
| Detail of cash and cash equivalents | |||
| Cash | 13 | 23 | 24 |
| Bank overdrafts | 13 | - | (9,185) |
| 555,013 | 227,037 | ||
| Bank deposits | 13 | 554,990 | 236,197 |
The accompanying notes form an integral part of the consolidated statement of cash flow for the three-month period ended 31 March 2022.
(Translation of notes originally issued in Portuguese - Note 33)
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, Portugal, 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 gas business, the Group went through a significant change with the purchase of assets and financial participations relating to the transport, storage and regasification of 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 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 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 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 31 March 2022, REN also holds:
a) 42.5% interest in the share capital of Electrogas, S.A., a provider of 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%.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||
|---|---|---|---|---|---|---|
| 1.1. Consolidation perimeter |
||||||
| The following companies were included in the consolidation perimeter as of 31 March 2022 and 31 December 2021: | ||||||
| Mar 2022 | Dec 2021 | |||||
| Designation / adress | Country | Activity | % Owned | % Owned | ||
| Group | Individual | Group | Individual | |||
| Parent company: REN - Redes Energéticas Nacionais, SGPS, S.A. |
Portugal | Holding company | - | - | - | - |
| Subsidiaries: REN - Rede Eléctrica Nacional, S.A. |
National electricity transmission network operator (high and very | |||||
| Av. Estados Unidos da América, 55 - Lisboa | Portugal | high tension) | 100% | 100% | 100% | 100% |
| REN Trading, S.A. Praça de Alvalade, nº7 - 12º Dto, Lisboa |
Portugal | 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 |
Portugal | 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 |
Portugal | Telecommunications network operation | 100% | 100% | 100% | 100% |
| REN - Serviços, S.A. Av. Estados Unidos da América, 55 - Lisboa |
Portugal | Back office and management of participations | 100% | 100% | 100% | 100% |
| REN Finance, B.V. De Cuserstraat, 93, 1081 CN Amsterdam, The Netherlands |
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 |
Portugal | 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 |
Portugal | 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 | Portugal | Management of projects and ventures in the natural gas sector | 100% | - | 100% | - |
| Aério Chile SPA Santiago do Chile |
Chile | Investments in assets, shares, companies and associations | 100% | - | 100% | - |
| Apolo Chile SPA Santiago do Chile |
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 |
Portugal | Underground storage developement, maintenance and operation | 100% | - | 100% | - |
| REN - Gasodutos, S.A. Estrada Nacional 116, km 32,25 - Vila de Rei - Bucelas |
Portugal | National Natural Gas Transport operator and natural gas overall manager |
100% | - | 100% | - |
| REN Portgás Distribuição, S.A. Rua Linhas de Torres, 41 - Porto |
Portugal | 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 |
Chile | Transmission and transformation of electricity, allowing free access to different players in the electricity market in Chile |
100% | - | 100% | - |
There were no changes to the consolidation perimeter in 2022 compared to that reported on 31 December 2021.
There were no changes to the consolidation perimeter in 2021 compared to that reported on 31 December 2020.
These interim consolidated financial statements were approved by the Board of Directors at a meeting held on 20 May 2022. 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).
The consolidated financial statements for the three-month period ended 31 March 2022 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 2021.
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.
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 large-scale military invasion that Russia carried out against Ukraine, on February 24, 2022, 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, as well as the pandemic caused by the COVID-19 virus, has activated all the necessary plans and, despite the situation being 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 Russian invasion of Ukraine as well as the pandemic.
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 2021 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, Impairment of Goodwill and Tariff deviations.
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 2022.
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 2021, as explained in the notes to the consolidated financial statements for 2021, except for the adoption of new effective standards for periods beginning on or after 1 January 2022.
On 15 December 2021, ERSE published the document "Tariffs and prices for electricity and other services in 2022 and parameters for the 2022-2025 regulation period" to be in force in Portugal. In accordance with this new Tariff Regulation applicable to REN Eléctrica's Electricity Transmission Activity, the REN Group calculates, on each reporting date and in accordance with the criteria defined by ERSE, the tariff deviations between the revenue allowed published by ERSE, recalculated based on the real values of the cost drivers, and the revenue invoiced.
The total amount of revenue recognised in the income statement will correspond to the annual value defined by ERSE for the 2022-2025 period, updated according to the application of the real values of the drivers and the annual efficiency factor.
In accordance with the tariff regulation, since 2022, a mechanism for sharing gains and losses between companies and consumers has been applied to this activity. This sharing of gains or losses is only calculated one year after the end of the regulation period to which it applies. In this way, contingent assets or liabilities may be recognized in cases where it is possible to assess with some degree of certainty the future materialization of these gains or losses, regardless of the moment of their final calculation only taking place in the future.
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 three-month period ended on 31 March 2022 and compared to the year ended on 31 December 2021.
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 2022:
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. The adoption of this standard does not result in significant impacts on REN's consolidated financial statements.
The following standards, interpretations, amendments and revisions have been endorsed by the European Union with mandatory application in future economic exercises:
IFRS 17 replaces IFRS 4 – "Insurance contracts", the standard that has been in force on an interim basis since 2004. IFRS 17 is applicable to all entities that issue insurance contracts, reinsurance contracts and investment contracts with participation characteristics discretionary. The amendments to IFRS 17 are intended to assist companies in implementing the Standard and to facilitate the explanation of their financial performance. The future adoption of this standard is not expected to have significant impacts on REN's consolidated financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting policies (new standard to be applied for periods beginning on or after 1 January 2023)
These amendments aim to change the requirements in IAS 1 with regard to disclosure of accounting policies. An entity discloses its material accounting policies, instead of its significant accounting policies, so there are examples and explanations to identify a material accounting policy. The materiality concept is demonstrated in IFRS Practice Statement 2 through the "four-step materiality process". The future adoption of this standard is not expected to have significant impacts on REN's consolidated financial statements.
These amendments clarify the definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. A change in accounting estimate that results from new information or new developments is not the correction of an error. In addition, the effects of a change of this type used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors. The future adoption of this standard is not expected to have significant impacts on REN's consolidated financial statements.
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:
| Applicable for | ||
|---|---|---|
| Standard | financial years beginning |
Resume |
| Amendments to IAS 1 - Presentation of Financial Statements: Classification of Liabilities as Current or Non-current |
01/jan/23 | 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 IAS 12 - Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
01/jan/23 | The main change in these amendments is an exemption from the initial recognition exemption. Accordingly, the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. |
| Amendments to IFRS 17 - Insurance Contracts: Initial Application of IFRS 17 and Amendments to IFRS 9 – Comparative Information |
01/jan/23 | The amendment is a transition option relating to comparative information about financial assets presented on initial application of IFRS 17. The amendment is aimed at helping entities to avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and therefore improve the usefulness of comparative information for users of financial statements. |
These standards and interpretations were not yet endorsed by the European Union and consequently REN has not adopted them on the 31 March 2022 consolidated financial statements.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||||
|---|---|---|---|---|---|---|---|
| 4 | SEGMENT REPORTING | ||||||
| The REN Group is organised 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. | |||||||
| The results by segment for the three-month period ended 31 March 2022 were as follows: | |||||||
| Electricity | Gas | Telecommunications | Others | Eliminations | Consolidated | ||
| Sales and services provided | 87,185 | 52,184 | 1,829 | 10,074 | (10,774) | 140,498 | |
| Inter-segments | 304 | 1,098 | - | 9,372 | (10,774) | - | |
| Revenues from external customers | 86,881 | 51,086 | 1,829 | 702 | - | 140,498 | |
| Revenue from construction of concession assets | 22,028 | 5,052 | - | - | - | 27,080 | |
| Cost with construction of concession assets Gains / (losses) from associates and joint ventures |
(18,584) - |
(3,693) - |
- - |
- 2,604 |
- - |
(22,276) 2,604 |
|
| Personnel costs | (12,476) | (13,988) | (697) | (2,608) | 12,257 | (17,512) | |
| Employee compensation and benefit expense | (4,501) | (2,895) | (77) | (6,510) | - | (13,982) | |
| Other expenses and operating income | 4,268 | (391) | (18) | (115) | (1,483) | 2,261 | |
| Operating cash flow | 77,920 | 36,270 | 1,037 | 3,444 | - | 118,671 | |
| Non reimbursursable expenses | |||||||
| Depreciation and amortizations Impairments |
(41,040) - |
(21,000) - |
(4) - |
(41) (94) |
- - |
(62,086) (94) |
|
| Financial results | |||||||
| Financial income Financial costs |
423 (5,923) |
1,098 (4,328) |
4 (2) |
30,668 (31,595) |
(28,223) 28,223 |
3,970 (13,625) |
|
| Profit before income tax and ESEC | 31,380 | 12,039 | 1,035 | 2,382 | - | 46,836 | |
| Income tax expense | (8,921) | (3,819) | (240) | 120 | - | (12,861) | |
| Energy sector extraordinary contribution (ESEC) Profit for the period |
(17,590) 4,869 |
(10,428) (2,209) |
- 795 |
- 2,502 |
- - |
(28,018) 5,957 |
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||||
|---|---|---|---|---|---|---|---|
| The results by segment for the three-month period ended 31 March 2021 were as follows: | |||||||
| Electricity | Gas | Telecommunications | Others | Eliminations | Consolidated | ||
| Sales and services provided | 87,795 | 49,707 | 1,777 | 8,826 | (10,854) | 137,251 | |
| Inter-segments Revenues from external customers |
440 87,355 |
1,707 48,000 |
- 1,777 |
8,707 119 |
(10,854) - |
- 137,251 |
|
| Revenue from construction of concession assets | 24,316 | 6,160 | - | - | - | 30,476 | |
| Cost with construction of concession assets | (20,858) | (4,986) | - | - | - | (25,844) | |
| Gains / (losses) from associates and joint ventures | - | - | - | 1,473 | - | 1,473 | |
| Personnel costs | (16,192) | (10,475) | (714) | (2,612) | 12,424 | (17,568) | |
| Employee compensation and benefit expense | (4,354) | (3,125) | (75) | (6,110) | - | (13,664) | |
| Other expenses and operating income Operating cash flow |
4,175 74,882 |
(8) 37,273 |
4 993 |
(57) 1,519 |
(1,570) - |
2,544 114,666 |
|
| Non reimbursursable expenses | |||||||
| Depreciation and amortizations | (39,333) | (20,706) | (1) | (47) | - | (60,087) | |
| Impairments | - | - | - | (94) | - | (94) | |
| Financial results Financial income |
173 | 1,153 | 2 | 28,521 | (28,656) | 1,193 | |
| Financial costs | (5,881) | (4,611) | - | (30,317) | 28,656 | (12,152) | |
| Profit before income tax and ESEC | 29,842 | 13,108 | 994 | (418) | - | 43,526 | |
| Income tax expense | (7,984) | (3,680) | (238) | (39) | - | (11,940) | |
| Energy sector extraordinary contribution (ESEC) | (16,605) | (10,490) | - | - | - | (27,095) | |
| 5,253 | (1,061) | 755 | (456) | - | 4,491 | ||
| Profit for the period | |||||||
| 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 three-month period ended 31 March 2022 were as | |||||||
| follows: | |||||||
| Electricity | Gas | Telecommunications | Others | Eliminations | Consolidated | ||
| Segment assets | |||||||
| Operating cash flow | 74,882 | 37,273 | 993 | 1,519 | - | 114,666 |
|---|---|---|---|---|---|---|
| Non reimbursursable expenses | ||||||
| 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 three-month period ended 31 March 2022 were as follows: |
||||||
| Group investments held | - | 887,052 | - | 2,276,759 | (3,163,811) | - |
| Segment assets Property, plant and equipment and intangible assets |
2,710,555 | 1,516,855 | 38 | 346 | - | 4,227,794 |
| Other assets | 982,638 | 390,144 | 18,330 | 6,369,250 | (6,204,800) | 1,555,562 |
| 3,693,194 | 2,794,051 | 18,368 | 8,646,355 | (9,368,611) | 5,783,356 | |
| 2,781,400 | 1,254,478 | 12,443 | 6,478,981 | (6,204,800) | ||
| 4,322,501 | ||||||
| 22,231 | 5,052 | - | 29 | - | 27,312 | |
| Capital expenditure - property, plant and equipment (Note 5) Capital expenditure - intangible assets (Note 5) |
203 22,028 |
- 5,052 |
- - |
29 - |
- - |
232 27,080 |
| Total assets Total liabilities Capital expenditure - total Investments in associates (Note 7) |
- | - | - | 172,170 | - | 172,170 |
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||
|---|---|---|---|---|---|---|
| Assets and liabilities by segment at 31 December 2021 as well as investments on tangible assets and intangible assets were | ||||||
| as follows: | ||||||
| Electricity | Gas | Telecommunications | Others | Eliminations | Consolidated | |
| Segment assets | ||||||
| Group investments held | - | 887,687 | - | 2,214,266 | (3,101,954) | - |
| Property, plant and equipment and intangible assets | 2,709,388 | 1,532,803 | 42 | 388 | - | 4,242,620 |
| Other assets | 724,340 | 381,446 | 15,379 | 6,397,121 | (6,172,391) | 1,345,895 |
| Total assets | 3,433,728 | 2,801,936 | 15,421 | 8,611,775 | (9,274,345) | 5,588,516 |
| Total liabilities | 2,544,143 | 1,259,519 | 10,291 | 6,537,123 | (6,172,391) | 4,178,686 |
| Capital expenditure - total | 190,505 | 56,410 | - | 196 | - | 247,110 |
| Capital expenditure - property, plant and equipment (Note 5) | 8,354 | - | - | 196 | - | 8,550 |
| Capital expenditure - intangible assets (Note 5) | 181,287 | 56,410 | - | - | - | 237,696 |
| Investments in associates (Note 7) | - | - | - | 166,541 | - | 166,541 |
| Investments in joint ventures (Note 7) | - | - | - | 2,742 | - | 2,742 |
| 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 three-month period ended 31 March 2022, the changes in tangible and intangible assets were as follows: | ||||||
| Property, plant and equipment | Intangible assets | |||||
| Transmission and electronic | Property, plant and equipment in Office equipment |
Assets in progress Total |
Concession assets | Concession assets | Intangible assets | Total Total |
| Transport equipment equipment |
progress | Other intangible assets in progress |
in progress | |||
| Investments in associates (Note 7) | - | - | - | 166,541 | - | 166,541 | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Investments in joint ventures (Note 7) | - | - | - | 2,742 | - | 2,742 | ||||
| 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 three-month period ended 31 March 2022, the changes in tangible and intangible assets were as follows: | ||||||||||
| Property, plant and equipment | Intangible assets | |||||||||
| Transmission and electronic | Office equipment | Property, plant and equipment in | Assets in progress Total |
Concession assets | Concession assets | Intangible assets Total |
Total | |||
| equipment | Transport equipment | progress | in progress | Other intangible assets | in progress | |||||
| Cost: | ||||||||||
| At 1 January 2022 | 92,949 | 782 | 903 | 1,212 | 29,947 125,793 | 8,631,076 | 121,959 | 55,268 | - 8,808,304 | 8,934,097 |
| Additions | - | 44 | - | - | 188 232 |
302 | 26,778 | - | - 27,080 |
27,312 |
| Disposals, write-offs and impairments | - | (45) | - | - | - (45) |
(138) | - | (1) | - (139) |
(184) |
| Transfers | - | - | - | - | - - |
4,402 | (4,402) | - | - - |
- |
| Regularizations | - | - | - | - | - - |
(390) | 390 | - | - - |
- |
| Exchange rate differences | 12,435 | 1 | 27 | 19 | 3,437 15,919 | - | - | 6,344 | - 6,344 |
22,263 |
| At 31 March 2022 | 105,384 | 782 | 930 | 1,231 | 33,572 141,899 | 8,635,253 | 144,725 | 61,611 | - 8,841,589 | 8,983,488 |
| Accumulated depreciation: | ||||||||||
| At 1 January 2022 | (5,236) | (466) | (527) | (13) | - (6,241) |
(4,685,010) | - | (225) | - (4,685,235) | (4,691,477) |
| Depreciation charge | (845) | (40) | (16) | - | - (901) |
(61,092) | - | (93) | - (61,185) |
(62,086) |
| Depreciation of disposals and write-offs | ||||||||||
| and other reclassifications | - | 45 | - | - | - 45 |
138 | - | - | - 138 |
183 |
| Exchange rate differences | (2,243) | (1) | (23) | (19) | - (2,286) |
- | - | (29) | - (29) |
(2,315) |
| At 31 March 2022 | (8,324) | (462) | (566) | (32) | - (9,383) |
(4,745,964) | - | (347) | - (4,746,311) | (4,755,695) |
| Net book value: | ||||||||||
| At 1 January 2022 At 31 March 2022 |
87,713 97,060 |
316 320 |
377 365 |
1,199 1,199 |
29,947 119,551 33,572 132,516 |
3,946,067 3,889,289 |
121,959 144,725 |
55,043 61,264 |
- 4,123,069 - 4,095,278 |
4,242,620 4,227,794 |
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| The changes in tangible and intangible assets in the in the year ended 31 December 2021 were as follows: | ||||||||||
| Property, plant and equipment | Intangible assets | |||||||||
| Transmission and electronic equipment |
Transport equipment | Office equipment | Property, plant and equipment in progress |
Assets in progress Total |
Concession assets | Concession assets in progress |
Other intangible assets | Intangible assets Total in progress |
Total | |
| Cost: At 1 January 2021 |
97,396 | 958 | 712 | 1,231 | 32,260 132,557 | 8,377,108 | 176,374 | 60,587 | - 8,614,069 | 8,746,626 |
| Additions | 145 113 |
98 | - | 8,194 8,550 |
5,090 | 232,606 | - | 864 238,560 |
247,110 | |
| Disposals, write-offs and impairments | (125) | (288) | (11) | - | - (424) |
(38,142) | - | - | - (38,142) |
(38,566) |
| Transfers Exchange rate differences |
7,196 (11,663) |
- (1) |
- 104 |
- (19) |
(7,196) - (3,311) (14,890) |
287,021 - |
(287,021) - |
864 (6,183) |
(864) - - (6,183) |
- (21,073) |
| At 31 December 2021 | 92,949 | 782 | 903 | 1,212 | 29,947 125,793 | 8,631,076 | 121,959 | 55,268 | - 8,808,304 | 8,934,097 |
| Accumulated depreciation: At 1 January 2021 |
(4,047) | (516) | (582) | (32) | (261) (5,437) |
(4,483,720) | - | 212 | - (4,483,508) | (4,488,946) |
| Depreciation charge | (3,185) | (199) | (49) | - | - (3,433) |
(238,416) | - | (91) | - (238,507) |
(241,940) |
| Depreciation of disposals and write-offs and other reclassifications |
73 248 |
11 | - | - 332 |
37,126 | - | - | - 37,126 |
37,458 | |
| Exchange rate differences | 1,923 | 1 | 93 | 19 | 261 2,297 |
- | - | (346) | - (346) |
1,951 |
| At 31 December 2021 Net book value: |
(5,236) | (466) | (527) | (13) | - (6,241) |
(4,685,010) | - | (225) | - (4,685,235) | (4,691,477) |
| At 1 January 2021 | 93,349 | 442 | 131 | 1,199 | 31,999 127,119 | 3,893,388 | 176,374 | 60,799 | - 4,130,562 | 4,257,681 |
| At 31 December 2021 | 87,713 | 316 | 377 | 1,199 | 29,947 119,551 | 3,946,067 | 121,959 | 55,043 | - 4,123,069 | 4,242,620 |
| The main additions verified in the periods ended 31 March 2022 and 31 December 2021 are made up as follows: | ||||||
|---|---|---|---|---|---|---|
| Electricity segment: | ||||||
| Power line construction (220 KV, 150 KV and others) | 3,477 | 25,955 | ||||
| Power line construction (400 KV) | 9,559 | 54,145 | ||||
| Construction of new substations | 173 | 39,085 | ||||
| Substation Expansion | 6,053 | 37,368 | ||||
| Other renovations in substations | 1,034 | 6,818 | ||||
| Telecommunications and information system | 990 | 8,883 | ||||
| Pilot zone construction - wave energy | 42 | 186 | ||||
| Buildings related to concession | 476 | 3,033 | ||||
| Transmission and transformation of electricity in Chile | 188 | 9,218 | ||||
| Other assets | 224 | 5,812 | ||||
| Gas segment: Expansion and improvements to gas transmission network |
988 | 21,719 | ||||
| Construction project of cavity underground storage of natural gas in Pombal | 117 | 3,983 | ||||
| Construction project and operating upgrade - LNG facilities | 49 | 3,803 | ||||
| 3,898 | 26,904 | |||||
| Natural gas distribution projects | ||||||
| Others segments: | ||||||
| Other assets | 44 | 195 |
The main transfers that were concluded and began activity during the periods ended 31 March 2022 and 31 December 2021 are made up as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| The main transfers that were concluded and began activity during the periods ended 31 March 2022 and 31 December 2021 | ||
| Mar 2022 | Dec 2021 | |
| Electricity segment: | ||
| Power line construction (220 KV, 150 KV and others) | - | 22,031 |
| Power line construction (400 KV) | - | 87,642 |
| Substation Expansion | 199 | 104,080 |
| Other renovations in substations | 490 | 6,934 |
| Telecommunications and information system Buildings related to concession |
37 - |
8,996 283 |
| Transmission and transformation of electricity in Chile | - | - |
| Other assets under concession | - | 2,942 |
| Gas segment: | ||
| Expansion and improvements to natural gas transmission network | - | 20,259 |
| Construction project of cavity underground storage of natural gas in Pombal | - | 4,864 |
| Construction project and operating upgrade - LNG facilities | - | 3,464 |
| Natural gas distribution and transmission projects | 3,676 | 25,526 |
| Total of transfers | 4,402 | 294,217 |
| The tangible and intangible assets in progress at 31 March 2022 and 31 December 2021 are as follows: | ||
| Mar 2022 | Dec 2021 | |
| Electricity segment: Power line construction (400 KV, 220 KV, 150 KV and others) |
87,511 | 74,475 |
| Substation Expansion | 28,789 | 22,188 |
| New substations projects | 2,386 | 2,213 |
| Buildings related to concession | 4,642 | 4,165 |
| Transmission and transformation of electricity in Chile | 33,572 | 29,947 |
| Other projects | 3,018 | 1,909 |
| Gas segment: Expansion and improvements to natural gas transmission network |
9,060 | 8,160 |
The tangible and intangible assets in progress at 31 March 2022 and 31 December 2021 are as follows:
| The tangible and intangible assets in progress at 31 March 2022 and 31 December 2021 are as follows: | ||
|---|---|---|
| Electricity segment: | ||
| Power line construction (400 KV, 220 KV, 150 KV and others) | 87,511 | 74,475 |
| Substation Expansion | 28,789 | 22,188 |
| New substations projects | 2,386 | 2,213 |
| Buildings related to concession | 4,642 | 4,165 |
| Transmission and transformation of electricity in Chile | 33,572 | 29,947 |
| Other projects | 3,018 | 1,909 |
| Gas segment: | ||
| Expansion and improvements to natural gas transmission network | 9,060 | 8,160 |
| Construction project of cavity underground storage of natural gas in Pombal | 3,107 | 2,864 |
| Construction project and operating upgrade - LNG facilities | 744 | 695 |
| Natural gas distribution projects | 5,469 | 5,290 |
| Total of assets in progress | 178,297 | 151,906 |
| Borrowing costs capitalized on intangible assets in progress in the three-month period ended 31 March 2022 amounted to | REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||
|---|---|---|---|---|---|---|
| 493 thousand Euros (3,534 thousand Euros as of 31 December 2021), while overhead, management and other costs capitalized amounted to 4,310 thousand Euros (18,909 thousand Euros as of 31 December 2021) (Note 21). |
||||||
| The net book value of the intangible assets acquired through finance lease contracts at 31 March 2022 and 31 December 2021 was as follows: |
||||||
| Mar 2022 | Dec 2021 | |||||
| Accumulated | Accumulated | |||||
| Cost | depreciation and | Net book value | Cost | depreciation and | Net book value | |
| amortization | amortization | |||||
| Initial value | 9,309 | (4,453) | 4,856 | 8,337 | (3,735) | 4,602 |
| Additions | 941 | - | 941 | 1,494 | - | 1,494 |
| Disposals and write-offs | (1,850) | 1,030 | (820) | (522) | 1,298 | 776 |
| Depreciation charge | - | (520) | (520) | - | (2,016) | (2,016) |
| Final value | 8,400 | (3,943) | 4,457 | 9,309 | (4,453) | 4,856 |
| amortization | amortization | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 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 31 March 2022 and 31 December 2021 is detailed as follows: REN Atlântico, Terminal de GNL, S.A. |
Subsidiaries | Year of acquisition 2006 |
32,580 | 100% | 1,416 | 1,510 | |||
| REN Portgás Distribuição, S.A. | 2017 | 503,015 | 100% | 1,235 | 1,235 | ||||
| Empresa de Transmisión Eléctrica Transemel, S.A. | 2019 | 155,482 | 100% | 2,244 | 2,013 | ||||
| 4,894 | 4,757 | ||||||||
| The movement in the Goodwill caption for the periods ended 31 March 2022 and 31 December 2021 was: | |||||||||
| Subsidiaries | At 1 January 2021 | Increases | Decreases | Exchange rate differences | At 31 December 2021 | Increases | Decreases | Exchange rate differences | At 31 March 2022 |
| REN Atlântico, Terminal de GNL, S.A. | 1,887 | - | (377) | - | 1,510 | - | (94) | - | 1,416 |
| REN Portgás Distribuição, S.A. Empresa de Transmisión Eléctrica Transemel, S.A. |
1,235 2,245 |
- - |
- - |
- (232) |
1,235 2,013 |
- - |
- - |
- 231 |
1,235 2,244 |
| Subsidiaries | At 1 January 2021 | ||||
|---|---|---|---|---|---|
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 7 INVESTMENTS IN ASSOCIATES AND JOIN VENTURES |
||||||||||||||
| At 31 March 2022 and 31 December 2021, the financial information regarding the financial interest held is as follows: | ||||||||||||||
| 31 March 2022 | ||||||||||||||
| 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 | 669 | 29,292 | 172 | - 446 |
339 | 29,788 | 40 | 11,708 | 133 | ||
| Electrogas, S.A. | Gas Transportation | Chile | 19,157 | 13,084 | 32,564 | 3,103 | 6,916 | 9,320 | 5,485 | 35,629 | 42.5 | 160,462 | 2,331 | |
| 172,170 | 2,464 | |||||||||||||
| Joint venture: Centro de Investigação em Energia |
||||||||||||||
| REN - STATE GRID, S.A. | Research & Development | Lisbon | 3,000 | 6,430 | 103 | 762 | - 637 |
280 | 5,770 | 50 | 2,882 | 140 | ||
| 175,052 | 2,604 | |||||||||||||
| 31 December 2021 | ||||||||||||||
| Activity | Head office | Share capital | Current assets | Non-current assets | Current | Non-current | Revenues | Net profit/(loss) | Share capital | % | Carrying amount | Group share of profit / (loss) | ||
| Equity method: | liabilities | liabilities | ||||||||||||
| Associate: | ||||||||||||||
| OMIP - Operador do Mercado Ibérico (Portugal), SGPS, S.A. |
Holding company | Lisbon | 2,610 | 732 | 28,883 | 166 | - 1,526 |
1,028 | 29,449 | 40 | 11,576 | 394 | ||
| Electrogas, S.A. | Gas Transportation | Chile | 18,776 | 7,316 | 32,734 | 3,473 | 7,087 | 28,166 | 13,996 | 29,490 | 42.5 | 154,965 166,541 |
5,949 6,343 |
|
| Joint venture: | ||||||||||||||
| Centro de Investigação em Energia | Research & Development | 3,000 | 6,488 | 117 | 1,116 | - 1,644 |
176 | 5,490 | 50 | 2,742 | 88 | |||
| REN - STATE GRID, S.A. | Lisbon | |||||||||||||
| 169,283 | 6,431 | |||||||||||||
| Associates | ||||||||||||||
| The changes in the caption "Investments in associates" during the periods ended at 31 March 2022 and 31 December 2021 |
| Joint venture: | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 31 December 2021 | Current | Non-current | ||||||||||
| Share capital | Current assets | Non-current assets | liabilities | liabilities | Revenues | Net profit/(loss) | Share capital | % | Carrying amount | Group share of profit / (loss) | ||
| Equity method: | ||||||||||||
| Associate: OMIP - Operador do Mercado |
||||||||||||
| Joint venture: | ||||||||||||
| Associates | ||||||||||||
| The changes in the caption "Investments in associates" during the periods ended at 31 March 2022 and 31 December 2021 was as follows: |
||||||||||||
| Investments in associates | ||||||||||||
| At 1 de january de 2021 | 156,183 | |||||||||||
| Effect of applying the equity method - Net Profit | 6,343 | |||||||||||
| Currency Translation Reserves | 12,165 | |||||||||||
| Dividends of Electrogas | (8,109) | |||||||||||
| Receipt of Supplementary Obligations of OMIP | (199) | |||||||||||
| Other changes in equity | 159 | |||||||||||
| At 31 December 2021 | 166,541 | |||||||||||
| Effect of applying the equity method - Net Profit | 2,464 | |||||||||||
| Currency Translation Reserves | 3,165 |
| The changes in the caption "Investments in associates" during the periods ended at 31 March 2022 and 31 December 2021 | |||||||
|---|---|---|---|---|---|---|---|
| Investments in associates | |||||||
| Effect of applying the equity method - Net Profit | 6,343 | ||||||
| Currency Translation Reserves | 12,165 | ||||||
| Dividends of Electrogas | (8,109) | ||||||
| Receipt of Supplementary Obligations of OMIP | (199) | ||||||
| Other changes in equity | 159 | ||||||
| At 31 December 2021 | 166,541 | ||||||
| Effect of applying the equity method - Net Profit | 2,464 | ||||||
| Currency Translation Reserves | 3,165 |
The amount of 2,787 thousand Euros relating to the provision of dividends registered in 2021 was 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.
The movement in the caption "Investments in joint ventures" during the periods ended 31 March 2022 and 31 December 2021 was as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |
|---|---|
| Investments in joint ventures | |
| At 1 January 2021 | 2,662 |
| Effect of applying the equity method | 88 |
| Dividends distribution | (8) |
| At 31 December 2021 | 2,742 |
| Effect of applying the equity method | 140 |
| Dividends distribution | - |
| 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 31 March 2022 and 31 December 2021, the financial information of the joint venture was as follows: 31 March 2022 Cash and cash Current financial Non-current financial Depreciations and Income tax- (cost) / Financial costs equivalents liabilities liabilities amortizations income Centro de Investigação em Energia REN - STATE GRID, S.A. 5,794 - - (15) (1) - 31 December 2021 Cash and cash Current financial Non-current financial Depreciations and Income tax- (cost) / Financial costs equivalents liabilities liabilities amortizations income Centro de Investigação em Energia REN - STATE GRID, S.A. 6,010 2 - (53) (2) (5) |
||||
|---|---|---|---|---|
| Joint venture: Joint venture: |
||||
| liabilities | Non-current financial liabilities |
Depreciations and amortizations |
Financial costs | Income tax- (cost) / income |
|
|---|---|---|---|---|---|
| Joint venture: | |||||
| Centro de Investigação em Energia | |||||
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 2018 to 2021 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 31 March 2022 and 31 December 2021.
In 2022, 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%. Mar 2022 Mar 2021
The tax rate used in the valuation of temporary taxable and deductible differences as of 31 March 2022, 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 31 March 2022 and 2021 was as follows:
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 MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| Reconciliation between tax calculated at the nominal tax rate and tax recorded in the consolidated statement of profit and loss | ||
| Mar 2022 | Mar 2021 | |
| Consolidated profit before income tax | 46,836 | 43,526 |
| Permanent differences: | ||
| Non deductible/taxable Costs/Income | 2,143 | 1,624 |
| Timing differences: Tariff deviations |
11,710 | 108,816 |
| Provisions and impairment | (23) | (33) |
| Revaluations | (812) | (815) |
| Pension, helthcare assistence and life insurance plans | (629) | (1,099) |
| Derivative financial instruments | (33) | - |
| Others | 404 | 441 |
| Taxable income | 59,595 | 152,460 |
| Income tax | 11,764 | 32,027 |
| State surcharge tax | 4,395 | 4,589 |
| Municipal surcharge | 971 | 2,290 |
| Autonomous taxation | 212 | 186 |
| Current income tax | 17,343 | 39,092 |
| Deferred income tax | (4,482) | (27,152) |
| Income tax | 12,861 | 11,940 |
| Effective tax rate | 27.5% | 27.4% |
| The caption "Income tax" payable and/or receivable at 31 March 2022 and 31 December 2021 is made up as follows: | ||
| Income tax: | Mar 2022 | Dec 2021 |
| Corporate income tax - estimated tax | (17,343) | (64,267) |
| Corporate income tax - payments on account | 2,219 | 35,853 |
| Income withholding tax by third parties | 302 | 1,552 |
| Income recoverable / (payable) | (26,669) (41,491) |
219 (26,644) |
| Income tax recoverable |
The caption "Income tax" payable and/or receivable at 31 March 2022 and 31 December 2021 is made up as follows:
| Income tax: | |
|---|---|
| (549) 9,230 5,031 38,866 4,482 48,096 (3,599) (5,133) (4,791) (1,466) (8,390) (6,599) (3,907) 41,497 Provisions and Derivative financial Pensions Tariff deviations Impairments |
|---|
| 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 |
| Mar 2022 Dec 2021 |
| Deferred taxes | |||||||
|---|---|---|---|---|---|---|---|
| The effect of the changes in the deferred tax captions in the years presented was as follows: | |||||||
| Impact on the statement of profit and loss: | |||||||
| 4,482 | 48,096 | ||||||
| Impact on equity: | |||||||
| The changes in deferred tax by nature were as follows: | |||||||
| Change in deferred tax assets – March 2022 | |||||||
| Impairments | Pensions | Tariff deviations | Derivative financial instruments |
Revalued assets | Others | Total | |
| At 1 January 2022 | 2,834 | 28,200 | 46,433 | 1,542 | 15,054 | 2,607 | 96,673 |
| Increase/decrease through reserves | - | 201 | - | (1,501) | - | (2,299) | (3,599) |
| Reversal through profit and loss | - | (162) | - | (41) | (515) | (43) | (761) |
| Increase through profit and loss Change in the period |
- - |
- 40 |
212 212 |
- (1,542) |
- (515) |
- (2,342) |
212 (4,147) |
| At 31 March 2022 | 2,834 | 28,240 | 46,645 | - | 14,539 | 265 | 92,526 |
| Change in deferred tax assets – December 2021 | Provisions and | Pensions | Tariff deviations | Derivative financial | Revalued assets | Others | Total |
| Impairments | instruments | ||||||
| At 1 January 2021 | 2,759 | 30,117 | 34,027 | 6,391 | 16,898 | 2,380 | 92,575 |
| Increase/decrease through reserves | - | (731) | - | (4,678) | - | 276 | (5,133) |
| Reversal through profit and loss | (45) | (1,186) | - | (171) | (1,844) | (49) | (3,295) |
| Increase through profit and loss Change in the period |
120 75 |
- (1,917) |
12,406 12,406 |
- (4,850) |
- (1,844) |
- 227 |
12,526 4,098 |
| At 31 December 2021 | 2,834 | 28,200 | 46,433 | 1,542 | 15,054 | 2,607 | 96,673 |
| Change in deferred tax assets – December 2021 | |||||||
|---|---|---|---|---|---|---|---|
| Impairments | Pensions | Tariff deviations | Derivative financial instruments |
Revalued assets | Others | Total | |
| At 1 January 2021 | 2,759 | 30,117 | 34,027 | 6,391 | 16,898 | 2,380 | 92,575 |
| Increase/decrease through reserves Reversal through profit and loss |
- (45) |
(731) (1,186) |
- - |
(4,678) (171) |
- (1,844) |
276 (49) |
(5,133) (3,295) |
| Increase through profit and loss | 120 | - | 12,406 | - | - | - | 12,526 |
| Change in the period | 75 | (1,917) | 12,406 | (4,850) | (1,844) | 227 | 4,098 |
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||||
|---|---|---|---|---|---|---|---|
| Evolution of deferred tax liabilities – March 2022 | |||||||
| Tariff deviations | Revaluations | Fair value | Investments in equity instruments at fair value through other comprehensive income |
Derivative financial instruments |
Others | Total | |
| At 1 January 2022 | 29,765 | 17,274 | 48,685 | 13,037 | - | (1,190) | 107,569 |
| Increase/decrease through equity | - | - | 1,379 | (411) | 3,794 | 3 | 4,764 |
| (3,803) - |
(331) - |
(458) - |
- - |
- - |
(439) 27 |
(5,031) 27 |
|
| Reversal trough profit and loss Exchange rate differences |
921 | (411) | 3,794 | (410) | (240) | ||
| Change in the period | (3,803) | (331) | |||||
| 25,962 | 16,942 | 49,606 | 12,626 | 3,794 | (1,599) | 107,330 | |
| At 31 March 2022 Evolution of deferred tax liabilities – December 2021 |
Investments in equity instruments at fair value |
||||||
| Tariff deviations | Revaluations | Fair value through other comprehensive income |
Others | Total | |||
| At 1 January 2021 | 63,909 | 18,623 | 50,521 | 10,030 | 1,887 | 144,969 |
| Investments in equity instruments at fair value through other comprehensive income |
Derivative financial |
||||||
|---|---|---|---|---|---|---|---|
| Tariff deviations | Revaluations | Fair value | Investments in equity instruments at fair value through other comprehensive income |
Others | Total | ||
| At 1 January 2021 | 63,909 | 18,623 | 50,521 | 10,030 | 1,887 | 144,969 | |
| Increase/decrease through equity | - | - | - | 3,007 | 9 | 3,016 | |
| Reversal trough profit and loss | (34,144) | (1,350) | (1,836) | - | (1,535) | (38,865) | |
| Increase through profit and loss | - | - | - | - | - | - | |
| Exchange rate differences | - | - | - | - | (1,550) | (1,550) | |
| Change in the period | (34,144) | (1,350) | (1,836) | 3,007 | (3,076) | (37,399) | |
| At 31 December 2021 | 29,765 | 17,274 | 48,685 | 13,037 | (1,190) | 107,569 | |
| 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 |
| Legislation (Revaluation) | |
|---|---|
| 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 |
| REPORT & ACCOUNTS MARCH'22 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: - March 2022 |
||||||||
| Notes | Financial assets at amortized cost | 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 |
- 533,129 |
- - |
- - |
- - |
555,013 - |
555,013 533,129 |
555,013 533,129 |
| Other financial assets | - | - | - | - | 146 | 146 | 146 | |
| Investments in equity instruments at fair value through other comprehensive income |
10 | - | 161,095 | - | - | - | 161,095 | 161,095 |
| Derivative financial instruments | 12 | - | 25,106 | - | - | - | 25,106 | 25,106 |
| 533,129 | 186,201 | - | - | 555,159 | 1,274,489 | 1,274,489 | ||
| Liabilities | ||||||||
| Borrowings Trade and other payables |
16 19 |
- - |
- - |
- - |
2,628,909 1,145,126 |
- - |
2,628,909 1,145,126 |
2,685,302 1,145,126 |
| Income tax payable | 8 | - | - | - | 41,491 | - | 41,491 | 41,491 |
| Drivative financial instruments | 12 | - - |
26,014 26,014 |
744 744 |
- 3,815,526 |
- - |
26,758 3,842,284 |
26,758 3,898,677 |
| - December 2021 | ||||||||
| Notes | Financial assets at amortized cost | 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 | - | - | - | - | 398,759 | 398,759 | 398,759 |
| Trade and other receivables Other financial assets |
11 | 485,196 - |
- - |
- - |
- - |
- 137 |
485,196 137 |
485,196 137 |
| Investments in equity instruments at fair | ||||||||
| value through other comprehensive income | 10 | - | 162,724 | - | - | - | 162,724 | 162,724 |
| Derivative financial instruments | 12 | - | 19,821 | - | - | - | 19,821 | 19,821 |
| 485,196 | 182,545 | - | - | 398,896 | 1,066,637 | 1,066,637 | ||
| Liabilities | ||||||||
| Borrowings | 16 | - | - | - | 2,766,073 | - | 2,766,073 | 2,862,725 |
| Trade and other payables Income tax payable |
19 8 |
- - |
- - |
- - |
881,313 26,644 |
- - |
881,313 26,644 |
881,313 26,644 |
| Notes | Financial assets at amortized cost | 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 | ||||||||
| - | 26,014 | 744 | 3,815,526 | - | 3,842,284 | 3,898,677 | ||
| - December 2021 | Notes | Financial assets at amortized cost | 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 | - | - | - - |
398,759 | 398,759 | 398,759 | |
| Trade and other receivables Other financial assets |
11 | 485,196 - |
- - |
- - - - |
- 137 |
485,196 137 |
485,196 137 |
|
| Investments in equity instruments at fair | 10 | - | 162,724 | - - |
- | 162,724 | 162,724 | |
| value through other comprehensive income | ||||||||
| Derivative financial instruments | 12 | - | 19,821 | - - |
- | 19,821 | 19,821 | |
| 485,196 | 182,545 | - - |
398,896 | 1,066,637 | 1,066,637 | |||
| Liabilities Borrowings |
16 | - | - | - 2,766,073 |
- | 2,766,073 | 2,862,725 | |
| Trade and other payables | 19 | - | - | - 881,313 |
- | 881,313 | 881,313 | |
| Income tax payable | 8 | - | - | - 26,644 |
- | 26,644 | 26,644 | |
| Drivative financial instruments | 12 | - | 21,283 | 1,828 | - | - | 23,112 | 23,112 |
Loans obtained, as referred to in Note 3.6 to the annual consolidated financial statements for the period ended December 31, 2021, 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 -0.579% and -0.073% (maturities of one week and ten years, respectively).
The fair value of borrowings contracted by the Group at 31 March 2022 is 2,685,302 thousand Euros (at 31 December 2021 was 2,862,725 thousand Euros), of which 574,146 thousand Euros are partially recorded at amortized cost and includes an element of fair value resulting from movements in interest rates (at 31 December 2021 was 601,546 thousand Euros).
| REPORT & ACCOUNTS MARCH'22 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 31 March 2022 in accordance with the following hierarchy levels of 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 finantial 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. |
|||||||||
| During the three-month period ended 31 March 2022, there was no transfer of financial assets and liabilities between fair value hierarchy levels. |
||||||||||
| Mar 2022 | Dec 2021 | |||||||||
| Assets: Financial assets at fair value Financial assets at fair value |
Investments in equity instruments at fair value through other comprehensive income | Shares Cash flow hedge derivatives Fair value hedge derivatives |
Level 1 100,769 - - |
Level 2 - 25,106 - |
Level 3 56,730 - - |
Total 157,499 25,106 - |
Level 1 103,017 - - |
Level 2 - 10,511 9,310 |
Level 3 56,111 - - |
Total 159,128 10,511 9,310 |
| 100,769 | 25,106 | 56,730 | 182,605 | 103,017 | 19,821 | 56,111 | 178,949 | |||
| Liabilities: | ||||||||||
| Financial liabilities at fair value Financial liabilities at fair value |
Loans Cash flow hedge derivatives |
- - |
574,146 1,067 |
- - |
574,146 1,067 |
- - |
601,546 15,917 |
- - |
601,546 15,917 |
|
| Financial liabilities at fair value | Fair value hedge derivatives | - | 24,947 | - | 24,947 | - | 5,366 | - | 5,366 | |
| Financial liabilities at fair value through profit and loss | Trading derivatives | - - |
744 600,904 |
- - |
744 600,904 |
- - |
1,828 624,657 |
- - |
1,828 624,657 |
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 56,730 thousand Euros for the three-month period ended on 31 March 2022.
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.
From the last annual report period until 31 March 2022, 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 2021. A description of the risks can be found in Section 4 - Financial Risk Management of the consolidated financial statements for the year ended 2021.
| 10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME |
REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||
|---|---|---|---|---|---|---|---|
| The assets recognised in this caption at 31 March 2022 and 31 December 2021 corresponds to equity interests held on | |||||||
| strategic entities for the Group, which can be detailed as follows: | |||||||
| Head office | Book value | ||||||
| City | Country | % owned | Mar 2022 | Dec 2021 | |||
| 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% | 100,769 | 103,017 | ||
| Hidroeléctrica de Cahora Bassa ("HCB") | Maputo | Mozambique | 7.50% | 56,730 | 56,111 | ||
| Brussels | Belgium | 7.90% | 164 | 164 | |||
| Coreso, S.A. | |||||||
| MIBGAS, S.A. | Madrid | Spain | 6.67% | 202 | 202 | ||
| MIBGÁS Derivatives, S.A. | Madrid | Spain | 9.70% | 48 | 48 | ||
| Association HyLab - Green Hydrogen Collaborative Laboratory | Sines | Portugal | 15.00% | 15 | 15 | ||
| 161,095 | 162,724 | ||||||
| The changes in this caption were as follows: | |||||||
| OMEL | HCB | REE | Coreso MIBGÁS |
MIBGÁS Derivatives HyLab |
Total | ||
| At 1 January 2020 | 3,167 | 56,435 | 90,833 | 164 202 |
48 - |
150,850 | |
| Acquisitions | - | - | - | - - |
- 15 |
15 | |
| Fair value adjustments | - | (323) | 12,183 | - - |
- - |
11,860 | |
| At 31 December 2020 | 3,167 | 56,111 | 103,017 | 164 202 |
48 15 |
162,724 | |
| At 1 January 2021 | 3,167 | 56,111 | 103,017 | 164 202 |
48 15 |
162,724 | |
| Acquisitions | - | - | - | - - |
- - |
- | |
| Fair value adjustments At 31 March 2022 |
- 3,167 |
618 56,730 |
(2,247) 100,769 |
- - 164 202 |
- - 48 15 |
(1,629) 161,095 |
| OMEL | HCB | REE | Coreso | MIBGÁS | MIBGÁS Derivatives | HyLab | Total | |
|---|---|---|---|---|---|---|---|---|
| At 1 January 2020 | 3,167 | 56,435 | 90,833 | 164 | 202 | 48 | 150,850 | |
| Acquisitions | $\sim$ | $\sim$ | $\sim$ | $\overline{\phantom{a}}$ | $\sim$ | 15 | 15 | |
| Fair value adjustments | $\overline{\phantom{a}}$ | (323) | 12,183 | $\sim$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | 11,860 |
| At 31 December 2020 | 3,167 | 56.111 | 103,017 | 164 | 202 | 48 | 15 | 162,724 |
| At 1 January 2021 | 3,167 | 56,111 | 103,017 | 164 | 202 | 48 | 15 | 162,724 |
| Acquisitions | $\overline{\phantom{a}}$ | $\sim$ | $\sim$ | $\sim$ | $\sim$ | $\sim$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ |
| Fair value adjustments | $\overline{\phantom{a}}$ | 618 | (2, 247) | $\overline{\phantom{a}}$ | ٠ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | (1,629) |
| At 31 March 2022 | 3,167 | 56,730 | 100,769 | 164 | 202 | 48 | 15 | 161,095 |
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 31 March 2022, 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 31 March 2022, 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.
On 31 March 2022, REN also holds 15 Founder Participation Units in the HyLab – Green Hydrogen Collaborative Laboratory Association, acquired for the amount of 15 thousand Euros. This is a non-profit association governed by private law, whose object is the scientific and technological development of Green Hydrogen, covering the various components of the value chain, namely production, transport, distribution, storage and end uses.
These investments (OMEL, MIBGÁS, MIBGÁS Derivatives, Coreso and HyLab) are recognised at fair value through other comprehensive income, however, as there are no available market price for these investments 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 2021.
REN understands that there is no evidence of impairment loss regarding the investments of OMEL, Coreso, MIBGÁS, MIBGÁS Derivatives and HyLab at 31 March 2022.
REN Portgás holds other financial interests, which are recorded at the acquisition cost in the amount of 14 thousand Euros, deducted of impairment losses, with a net value of zero thousand Euros.
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 31 March 2022 and 31 December 2021 is made up as follows:
| Name | ||
|---|---|---|
| AMPORTO - Área Metropolitana do Porto | ||
| AREA ALTO MINHO - Ag. Reg. Energia e Amb. Alto Minho | ||
| ADEPORTO - Agência de Energia do Porto | ||
| Fair value reserve (Note 15) |
||
| 1 January 2021 | 48,905 | |
| Changes in fair value | 11,860 | |
| Tax effect | (3,007) | |
| 31 December 2021 | 57,758 | |
| 1 January 2022 | 57,758 | |
| Changes in fair value | (1,629) | |
| Tax effect | 412 | |
| 31 March 2022 | 56,541 | |
In the three-month period ended 31 March 2022, the is no amount recognized in the consolidated statement of profit and loss relative to associated companies' dividends. However, the amount of 1,477 thousand Euros was received relative to dividends recognized during the year ended 31 December 2021. This amount was included in the cash flows statement.
| 11 TRADE AND OTHER RECEIVABLES | REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||
|---|---|---|---|---|---|---|
| Trade and other receivables at 31 March 2022 and 31 December 2021 are made up as follows: | ||||||
| Mar 2022 | Dec 2021 | |||||
| Current | Non-current | Total | Current | Non-current | Total | |
| Trade receivables | 403,845 | 1,775 | 405,620 | 357,212 | 1,775 | 358,987 |
| Impairment of trade receivables | (2,947) | - | (2,947) | (2,947) | - | (2,947) |
| Trade receivables net | 400,898 | 1,775 | 402,673 | 354,265 | 1,775 | 356,040 |
| Tariff deviations | 56,760 | 37,654 | 94,415 | 73,647 | 35,251 | 108,898 |
| State and Other Public Entities Trade and other receivables |
36,042 493,700 |
- 39,429 |
36,042 533,129 |
20,259 448,171 |
- 37,026 |
20,259 485,197 |
| The most relevant balances included in the trade and other receivables caption as of 31 March 2022 are: (i) the receivable of | ||||||
| EDP – Distribuição de Energia, SA in the amount of 49,965 thousand Euros (97,091 thousand Euros at 31 December 2021), | ||||||
| (ii) the receivable of Galp Gás Natural, S.A., in the amount of 4,923 thousand Euros (8,878 thousand Euros at 31 December | ||||||
| 2021), (iii) the receivable of EDP – Gestão da Produção de Energia, S.A., in the amount of 6,945 thousand Euros (9,185 thousand Euros at 31 December 2021), (iv) the receivable of Sunshining, S.A., in the amount of 16,157 thousand Euros |
||||||
| (16,157 thousand Euros at 31 December 2021) and (v) the receivable of Endesa Generación, S.A., in the amount of 9,622 thousand Euros (8,893 thousand Euros at 31 December 2021). 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 149,137 thousand Euros (116,941 thousand Euros at 31 December 2021) and the amount to invoice to EDP – Distribuição de Energia, S.A., of 6,052 thousand Euros (6,379 thousand Euros at 31 December 2021) 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: |
||||||
| Mar 2022 | Dec 2021 | |||||
| Begining balance | (2,947) | (2,951) | ||||
| Increases | - | - | ||||
| Reversing | - | 4 |
The most relevant balances included in the trade and other receivables caption as of 31 March 2022 are: (i) the receivable of EDP – Distribuição de Energia, SA in the amount of 49,965 thousand Euros (97,091 thousand Euros at 31 December 2021), (ii) the receivable of Galp Gás Natural, S.A., in the amount of 4,923 thousand Euros (8,878 thousand Euros at 31 December 2021), (iii) the receivable of EDP – Gestão da Produção de Energia, S.A., in the amount of 6,945 thousand Euros (9,185 thousand Euros at 31 December 2021), (iv) the receivable of Sunshining, S.A., in the amount of 16,157 thousand Euros (16,157 thousand Euros at 31 December 2021) and (v) the receivable of Endesa Generación, S.A., in the amount of 9,622 thousand Euros (8,893 thousand Euros at 31 December 2021). Begining balance (2,947) (2,951) Increases - - Reversing - 4 Ending balance (2,947) (2,947)
| Mar 2022 | Dec 2021 | |
|---|---|---|
| Begining balance | (2,947) | (2,951) |
| Increases | ۰ | |
| Reversing | ۰ | |
| Ending balance | (2,947) | (2,947) |
At 31 March 2022 and 31 December 2021, the REN Group had the following derivative financial instruments contracted:
| 31 March 2022 | |||||
|---|---|---|---|---|---|
| Assets | Liabilities | ||||
| Notional | Current | Non-current | Current | Non-current | |
| Derivatives designated as cash flow hedges | |||||
| Interest rate swaps | 900,000 TEUR | - | 21,787 | - | 1,067 |
| Currency and interest rate swaps | 10,000,000 TJPY | - | 3,008 | - | - |
| Non-Deliverable Forward | 5,565,000 TEUR | 125 | 186 | - | - |
| 125 | 24,981 | - | 1,067 | ||
| Derivatives designated as fair value hedges | |||||
| Interest rate swaps | 600,000 TEUR | - | - | - | 24,947 |
| - | - | - | 24,947 | ||
| Trading derivatives | |||||
| Trading derivatives | 60,000 TEUR | - | - | - | 744 |
| - | - | - | 744 | ||
| Derivative financial instruments | 125 | 24,981 | - | 26,758 |
| 31 December 2021 | |||||
|---|---|---|---|---|---|
| Assets | Liabilities | ||||
| Notional | Current | Non-current | Current | Non-current | |
| Derivatives designated as cash flow hedges | |||||
| Interest rate swaps | 900,000 TEUR | - | 4,108 | - | 15,917 |
| Currency and interest rate swaps | 10,000,000 TJPY | - | 5,342 | - | - |
| Non-Deliverable Forward | 6,360,000 TEUR | 474 | 587 | - | - |
| 474 | 10,037 | - | 15,917 | ||
| Derivatives designated as fair value hedges | |||||
| Interest rate swaps | 600,000 TEUR | - | 9,310 | - | 5,366 |
| - | 9,310 | - | 5,366 | ||
| Trading derivatives | |||||
| Trading derivatives | 60,000 TEUR | - | - | - | 1,828 |
| - | - | - | 1,828 | ||
| Derivative financial instruments | 474 | 19,347 | - | 23,112 |
The valuation of the derivative financial instruments portfolio is based on fair value valuations performed by specialized external entities.
The amount recognized in this item refers to:
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.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||||
|---|---|---|---|---|---|---|---|
| The disclosed amount includes receivable or payable accrued interest, at 31 March 2022 related to these financial instruments, in the net amount receivable of 712 thousand Euros (at 31 December 2021 it was 2,199 thousand Euros receivable). |
|||||||
| The characteristics of the derivative financial instruments negotiated at 31 March 2022 and 31 December 2021 were as follows: |
|||||||
| Notional | Currency | REN pays | REN receives | Maturity | Fair value at | Fair value at | |
| Cash flow hedge: | 31 March 2022 | 31 December 2021 | |||||
| Interest rate swaps Currency ans interest rate swaps |
900,000 TEuros 10,000,000 TJPY |
EUR EUR/JPY |
[0.75%;1.266%] [Euribor 6m; + 1.9%] |
[Euribor 3m; Euribor 6m] [2.71%] |
[dec-2024;feb-2025] [jun-2024] |
20,720 3,008 |
(11,809) 5,342 |
| Non-Deliverable Forward | 5,565,000 TCLP | EUR/CLP | [854,4 to 893,1 CLP] | [854,4 to 893,1 EUR] | [jul-2021;dec-2023] | 311 | 1,061 |
| Fair value hedge: | 24,039 | (5,406) | |||||
| Interest rate swaps | 300,000 TEuros | EUR | [Euribor 6m] | [0.611%; 0.6285%] | [feb-2025] | (908) | 9,310 |
| Interest rate swaps | 300,000 TEuros | EUR | [Euribor 6m] | [-0.095%] | [apr-2029] | (24,039) (24,947) |
(5,366) 3,944 |
| Trading: Interest rate swaps |
60,000 Teuros | EUR | [0.99%] | [Euribor 6m] | [jun-2024] | (744) | (1,828) |
| (744) | (1,828) | ||||||
| Total | (1,652) | (3,291) | |||||
| The periodicity of the cash flows, paid and received, from the derivative financial instruments portfolio is monthly, 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 31 March 2022 is presented in the following table: | 2022 | 2023 2024 |
2025 | Following 2026 years |
Total | ||
| - | - 300,000 |
300,000 | - | 300,000 900,000 |
|||
| Interest rate swap (cash flow hedge) | - | - | - 72,899 |
||||
| Currency and interest rate swap (cash flow hedge) | - | - 72,899 |
|||||
| Non Deliverable Forward (cash flow hedge) | 2,756 | 3,605 | - - |
- | - 6,361 |
||
| Interest rate swap (fair value hedge) | - | - | - 300,000 |
- | 300,000 600,000 |
||
| Interest rate swap (trading) | - Total 2,756 |
- 60,000 3,605 432,899 |
- 600,000 |
- - |
- 60,000 600,000 1,639,260 |
| The periodicity of the cash flows, paid and received, from the derivative financial instruments portfolio is monthly, 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 31 March 2022 is presented in the following table: | ||||||||
| Following years |
Total | |||||||
| Total | 2,756 | 3,605 | 432,899 | 600,000 | - | 600,000 | 1,639,260 | |
| The breakdown of the notional of derivatives at 31 December 2021 is presented in the following table: | 2022 | 2023 | 2024 | 2025 | 2026 | Following years |
Total | |
| Interest rate swap (cash flow hedge) | - | - | 300,000 | 300,000 | - | 300,000 | 900,000 | |
| Currency and interest rate swap (cash flow hedge) | - | - | 72,899 | - | - | - | 72,899 | |
| Non Deliverable Forward (cash flow hedge) | 3,682 | 3,605 | - | - | - | - | 7,286 | |
| Interest rate swap (fair value hedge) | - | - | - | 300,000 | - | 300,000 | 600,000 | |
| Interest rate swap (trading) | - | - | 60,000 | - | - | - | 60,000 |
| Following years |
Total | ||||||
|---|---|---|---|---|---|---|---|
| The breakdown of the notional of derivatives at 31 December 2021 is presented in the following table: | |||||||
| Following years |
Total | ||||||
| Interest rate swap (cash flow hedge) | - | - | 300,000 | 300,000 | - 300,000 |
900,000 | |
| Currency and interest rate swap (cash flow hedge) | - | - | 72,899 | - | - - |
72,899 | |
| Non Deliverable Forward (cash flow hedge) | 3,682 | 3,605 | - | - | - - |
7,286 | |
| Interest rate swap (fair value hedge) | - | - | - | 300,000 | - 300,000 |
600,000 | |
| Interest rate swap (trading) | Total | - 3,682 |
- 3,605 |
60,000 432,899 |
- 600,000 |
- - - 600,000 |
60,000 1,640,185 |
| 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 31 March 2022, the Group has a total of six cash flow hedging interest rate swap contracts for a total amount of 900,000 thousand Euros (as of 31 December 2021 it was 900,000 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 31 March 2022, is positive 20,720 thousand Euros (at 31 December 2021 it was negative 11,809 thousand Euros). |
|||||
| Of the derivatives described above, four contracts in a total amount of 600,000 thousand Euros (at 31 December 2021 it was 600,000 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 20,898 thousand Euros (at 31 December 2021 it was 11,617 thousand Euros). |
|||||
| The hedged instruments of cash flow hedging relationships present the following conditions: | |||||
| Maturity | Hedged notional | Interest rate | Hedged Carrying Amount |
Note | |
| Cash Flow Hedging Instruments | |||||
| European Investment Bank (EIB) Loan | 16/12/2024 | 300,000 TEuros | Euribor 3m | 299,436 | 16 |
| Bond Issue (Euro Medium Term Notes)1 | 12/02/2025 | 300,000 TEuros | 2.5% | 299,014 | 16 |
| Bond Issue (Euro Medium Term Notes)2 | 16/04/2029 | 300,000 TEuros | 0.50% | 298,562 | 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. |
|||||
| 2 This hedged instrument is designated jointly with derivatives of fair value hedging amounting to 300,000 thousand Euros (see conditions on the table above) |
2 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 2029 and, as such, eligible for cash flow hedge.
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 fair value of the cross currency swap at 31 March 2022 is positive 3,008 thousand Euros (at 31 December 2021 it was positive 5,342 thousand Euros).
Changes in the fair value of the hedging instrument are also being recognized in equity hedging reserves, with exception of:
During the second quarter of 2021, the Group hedged the exchange risk of sales denominated in Chilean Pesos by Transemel, in a total amount of 7,950,000 thousand Chilean Pesos (CLP), by contracting a structure of thirty monthly non deliverable forwards on the monthly average of the EUR/CLP exchange with maturity between 2021 and 2023.
| Cash Flow Hedging Instruments Swaps of interest rate Swaps of exchange rate and interest rate Non-Deliverable Forward |
Change in the Fair Value of Hedging Instruments 32,515 (2,585) 311 |
Of which: Effective amount recorded in Hedge Reserves 32,515 1,399 (324) |
Hedging inefficiency recorded in Profit for the Year - (1,266) - |
Coverage Reserve reclassifications to Results for the Year - (2,718) - |
|---|---|---|---|---|
| The movements recorded in the statement of comprehensive income through the application of cash flow hedges were as follows: - March 2022 |
||||
| Integral Income: | ||||
| The instrument covered by the cash flow hedge ratio corresponds to a proportion of total sales denominated in CLP, corresponding to a monthly sales amount of 265,000 thousand Chilean Pesos. |
||||
| The amount recognised in reserves, relating to the cash flow hedges referred to above, as at 31 March 2022, is 324 thousand Euros. Additionally, an amount of 16 thousand Euros was recorded in the income statement as a cost of hedging, corresponding to the forward points of the hedging instruments that are not designated as part of the hedging relationship. |
||||
| The fair value of the non-deliverable forward at 31 March 2022 is positive 311 thousand Euros (at 31 December 2021 was positive 1,061 thousand Euros). |
||||
| As of 31 March 2022, the Group has a total of twenty-one active non-deliverable forward contracts denominated as cash flow hedge instruments in the global amount of 6,361 thousand Euros. The hedged risk is the foreign exchange exposure of sales made in CLP upon consolidation of the Group's entity, Transemel. Credit risk is not being hedged. |
1 The currency effect of the underlying (loan), in the period ended 31 March 2022, was favorable in the amount of 2,718 thousand Euros, and was offset, in the same amount, by the unfavourable effect of the hedging instrument in the income statement for the year (as of 31 March 2021 was favorable in 2,081 thousand Euros).
2 The ineffective cash flow hedge component of the exchange rate risk recognised in the income statement, was negative 1,266 thousand Euros which was offset by the effect of the trading derivative negotiated in positive 1,313 thousand Euros (as of 31 March 2021 it was negative 121 thousand Euros against positive 335 thousand Euros of the effect of the trading derivative). Therefore, the net effect on the income statement for the three-month period ended on 31 March 2022 amounted to positive 47 thousand Euros (as of 31 March 2021 was positive 214 thousand Euros).
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||
|---|---|---|---|---|
| Change in the Fair | Of which: Effective | Hedging inefficiency | Coverage Reserve | |
| Cash Flow Hedging Instruments | Value of Hedging | amount recorded in Hedge | recorded in Profit for | reclassifications to |
| Instruments | Reserves | the Year | Results for the Year | |
| - March 2021 Swaps of interest rate |
2,422 | 2,422 | - | - |
| Swaps of exchange rate and interest rate | (2,890) | (688) | (121) | (2,081) |
The movements recognised in the hedging reserve (Note 15) were as follows:
| 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 |
|---|---|---|---|---|
| (468) | 1,734 | (121) | (2,081) | |
| The movements recognised in the hedging reserve (Note 15) were as follows: | ||||
| Fair value | Deferred taxes impact |
Hedging reserves (Note 15) |
||
| 1 January 2021 | (34,059) | 8,515 | (25,545) | |
| Changes in fair value and ineffectiveness | 1,734 | (434) | 1,300 | |
| 31 March 2021 | (32,325) | 8,081 | (24,245) | |
| 1 January 2022 Changes in fair value and ineffectiveness |
(15,962) 33,180 |
3,837 (7,631) |
(12,126) 25,549 |
| 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 31 March 2022, the Group has a total of four fair value hedging derivative contracts amounting to 600,000 thousand Euros (as of 31 December 2021 it was 600,000 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 31 March 2022, the fair value of interest rate swaps designated as fair value hedging instruments was negative 24,947 thousand Euros (as of 31 December 2021 it was positive 3,944 thousand Euros). |
|||||||
| Changes in the fair value of hedged items arising from interest rate risk are recognised in the income statement in order to offset changes in the fair value of the hedging instrument, which are also recognised in the income statement. |
|||||||
| The hedged items of fair value hedging relationships have the following conditions: | |||||||
| - March 2022 | |||||||
| Maturity | Hedged notional |
Interest rate |
Carrying amount | Accumulated Fair value adjustment |
Variation of the year-end 2022 |
Note | |
| Fair value hedging instruments | |||||||
| Bond Issue (Euro Medium Term Notes) | 12/02/2025 | 300,000 TEuros | 2.50% | 290,610 | 1,357 | 8,403 | 16 |
| Bond Issue (Euro Medium Term Notes) | 16/04/2029 | 300,000 TEuros | 0.50% | 279,566 | 24,496 25,854 |
18,996 27,399 |
16 |
| - March 2021 |
|---|
| Fair value hedging instruments Bond Issue (Euro Medium Term Notes) |
| Maturity | Hedged notional |
Interest rate |
Carrying amount | Accumulated Fair value adjustment |
Variation of the year-end 2021 |
Note | |
|---|---|---|---|---|---|---|---|
| Fair value hedging instruments | |||||||
| At 31 March 2022, the change in fair value of the debt related to interest rate risk recognized in the income statement was positive 27,399 thousand Euros (at 31 March 2021 it was positive 1,796 thousand Euros), resulting in an ineffective component, after considering the effect of the hedged items in the income statement, of approximately positive 33 thousand Euros positive (at 31 March 2021 it was positive 55 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: |
|||||||
| - March 2022 | |||||||
| Hedging inefficiency | |||||||
| Fair value Hedging instruments | recorded in Profit for | ||||||
| the Year | |||||||
| Swaps of interest rate | 33 | ||||||
| - March 2021 | |||||||
| Hedging inefficiency | |||||||
| Fair value Hedging instruments | recorded in Profit for | ||||||
| the Year | |||||||
| Swaps of interest rate | 55 | ||||||
| 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 – Interest and Exchange Rate Swaps).
The notional amount of this trading derivative is 60,000 thousand Euros as of 31 March 2022 (at 31 December 2021 it was 60,000 thousand Euros). Credit risk is not being hedged. The fair value of the trading derivative, on 31 March 2022, is negative 744 thousand Euros (on 31 December 2021 it was negative 1,828 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 31 March 2022, related to the effect of the fair value of the trading derivative was positive 1,313 thousand Euros (as of 31 March 2021 it was 335 thousand Euros positive).
The amounts considered as cash and cash equivalents in the consolidated statements of cash flows for the periods ended 31 March 2022 and 31 December 2021 are made up as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||
|---|---|---|---|---|
| 13 CASH AND CASH EQUIVALENTS | ||||
| March 2022 and 31 December 2021 are made up as follows: | The amounts considered as cash and cash equivalents in the consolidated statements of cash flows for the periods ended 31 | |||
| Mar 2022 | Dec 2021 | |||
| Cash | 23 | - | ||
| Bank deposits | 554,990 | 398,759 | ||
| Cash and cash equivalents in the statement of financial position | 555,013 | 398,759 | ||
| Bank overdrafts (Note 16) | - | - | ||
| Cash and cash equivalents in cash flow statement | 555,013 | 398,759 | ||
| In the periods ended 31 March 2022 and 31 December 2021, there are no cash and cash equivalents that are not available | ||||
| 14 EQUITY INSTRUMENTS | ||||
| As of 31 March 2022 and 31 December 2021, REN's subscribed and paid up share capital is made up of 667,191,262 shares | ||||
| Dec 2021 | ||||
| Mar 2022 | ||||
| Number of shares | Share Capital | Number of shares Share Capital |
||
| Share Capital | 667,191,262 | 667,191 | 667,191,262 | 667,191 |
| At 31 March 2022 and 31 December 2021, REN SGPS had the following own shares: | ||||
| Number of Proportion |
Amount |
In the periods ended 31 March 2022 and 31 December 2021, there are no cash and cash equivalents that are not available for the group to use.
As of 31 March 2022 and 31 December 2021, REN's subscribed and paid up share capital is made up of 667,191,262 shares of 1 euro each.
| In the periods ended 31 March 2022 and 31 December 2021, there are no cash and cash equivalents that are not available | ||||||
|---|---|---|---|---|---|---|
| As of 31 March 2022 and 31 December 2021, 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 31 March 2022 and 31 December 2021, REN SGPS had the following own shares: | ||||||
| Number of | ||||||
| shares | Proportion | Amount |
At 31 March 2022 and 31 December 2021, REN SGPS had the following own shares:
| Number of | |
|---|---|
No own shares were acquired or sold in the three-month period ended 31 March 2022.
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.
The caption "Reserves" in the amount of 357,526 thousand Euros includes:
| | Fair value reserve: includes changes in the fair value of available for sale financial assets (56,541 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 (positive 13,423 thousand Euros) as detailed in Note 12; and |
|||||||
| | 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 (Note 14), (ii) exchange rate changes associated to the financial investment whose functional currency is Dollar; (iii) exchange variation of assets and liabilities of financial investments in subsidiaries, namely the exchange rate effect of converting Chilean Peso to Euro and (iv) changes in equity of associates recorded under the equity method. On 31 March 2022, this caption amounts to 156,900 thousand Euros. |
|||||||
| 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 |
||||||||
| The segregation of borrowings between current and non-current and by nature, at 31 March 2022 and 31 December 2021 | ||||||||
| was as follows: | ||||||||
| Mar 2022 | Dec 2021 | |||||||
| Current | Non-current | Total | Current | Non-current | Total | |||
| Bonds | - | 1,696,307 | 1,696,307 | - | 1,726,240 | 1,726,240 | ||
| Bank Borrowings | 58,544 | 416,583 | 475,127 | 158,313 | 416,583 | 574,897 | ||
| Commercial Paper | 200,000 | 250,000 | 450,000 | 200,000 | 250,000 | 450,000 | ||
| Bank overdrafts (Note 13) | - | - | - | - | - | - | ||
| Leases | 1,576 | 2,867 | 4,443 | 1,481 | 2,731 | 4,212 | ||
| 260,120 | 2,365,758 | 2,625,878 | 359,794 | 2,395,554 | 2,755,348 | |||
| Accrued interest Prepaid interest |
13,748 (7,699) |
- (3,018) |
13,748 (10,717) |
23,803 (8,377) |
(4,702) | - | 23,803 (13,079) |
|
| Borrowings | 266,169 | 2,362,740 | 2,628,909 | 375,221 | 2,390,852 | 2,766,073 | ||
| Debt - Non current | The borrowings settlement plan was as follows: 2022 - |
2023 878 |
2024 594,592 |
2025 | 2026 312,469 |
569,548 | Following years 888,270 |
Total 2,365,758 |
| Debt - Current | 260,120 | - | - | - | - | - | 260,120 |
| 260,120 | 878 | 594,592 | 312,469 | 569,548 | 888,270 | 2,625,878 |
|---|---|---|---|---|---|---|
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||||
|---|---|---|---|---|---|
| Detailed information regarding bond issues as of 31 March 2022 is as follows: | |||||
| 31 March 2022 | |||||
| Outstanding | Periodicity of | ||||
| Issue date | Maturity | Inicial amount | amount | Interest rate | interest payment |
| 'Euro Medium Term Notes' programme emissions | |||||
| 26/06/2009 | 26/06/2024 | TJPY 10,000,000 (i) (ii) | TJPY 10,000,000 | Fixed rate | Semi-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 16/04/2021 |
18/01/2028 16/04/2029 |
TEUR 300,000 TEUR 300,000 (ii) |
TEUR 300,000 TEUR 300,000 |
Fixed rate EUR 1.75% Fixed rate EUR 0.50% |
Annual Annual |
As of 31 March 2022, the Group has nine commercial paper programs in the amount of 1,925,000 thousand Euros, of which 1,475,000 thousand Euros are available for utilization. Of the total amount 500,000 thousand Euros have a guaranteed placement, of which 250,000 thousand Euros are available for utilization at 31 March 2022.
Bank loans are mostly composed of loans contracted with the European Investment Bank (EIB), which at 31 March 2022 amounted to 430,127 thousand Euros (at 31 December 2021 it was 430,897 thousand Euros).
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 5,749 thousand Euros (6,953 thousand Euros in 31 December 2021) 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 600,000 thousand Euros, fair value changes concerning interest rate risk were recognized directly in statement of profit and loss, in an amount of 27,399 thousand Euros (positive) (at 31 March 2021 was 1,796 thousand Euros (positive)) (Note 12).
The Company's financial liabilities have the following main types of covenants: Cross default, Pari Passu, Negative Pledge 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 31 March 2022, 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 1.62% in 31 March 2022 and 1.57% in 31 December 2021.
Minimal payments regarding lease contacts and the carrying amount of the finance lease liabilities as of 31 March 2022 and 31 December 2021 are made up as follows:
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 long service award is applicable to all Group companies.
At 31 March 2022 and 31 December 2021, the Group had the following amounts recorded relating to liabilities for retirement and other benefits:
| Liability on statement of financial position | ||
|---|---|---|
| 94,230 | 94,109 |
The reconciliation of the remeasurement of the net benefit liability 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 long service award is applicable to all Group companies. |
|||
| At 31 March 2022 and 31 December 2021, the Group had the following amounts recorded relating to liabilities for retirement | |||
| Liability on statement of financial position | |||
| Healthcare plan and other benefits | 44,444 | 44,490 | |
| 94,230 | 94,109 | ||
| The reconciliation of the remeasurement of the net benefit liability is as follows: | |||
| Mar 2022 | Dec 2021 | ||
| Initial balance | 94,109 | 100,507 | |
| Current service costs and Net interest on net defined benefit liability | 879 | 3,447 | |
| Actuarial gains/(losses) Benefits paid |
671 (1,428) |
(2,455) (7,390) |
|
| Final balance | 94,230 | 94,109 | |
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | |||
|---|---|---|---|
| Mar 2022 | Mar 2021 | ||
| Charges to the statement of profit and loss (Note 24) | |||
| Pension plan | 661 | 655 | |
| During the three-month periods ended 31 March 2022 and 2021, the following operating expenses were recorded regarding Healthcare plan and other benefits |
224 | 207 |
| During the three-month periods ended 31 March 2022 and 2021, the following operating expenses were recorded regarding | ||||
|---|---|---|---|---|
| benefit plans with employees: | ||||
| Charges to the statement of profit and loss (Note 24) | ||||
| 885 | 862 | |||
| for 2022 and 2021, respectively. | The amounts reported to 31 March 2022 and 2021 result from the projection of the actuarial valuation as of 31 December 2021 and 2020, for the three-month period ended 31 March 2022 and 2021, considering the estimated increase in salaries 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 2021 | Dec 2020 | |||
| Annual discount rate | Full Yield Curve | Full Yield Curve | ||
| Expected percentage of serving employees elegíble for early retirement | 20.00% | 20.00% | ||
| (more than 60 years of age and 36 years in service) - by Collective work agreement | ||||
| Expected percentage of serving employees elegible for early retirement - by Management act | 10.00% | 10.00% | ||
| Rate of salary increase | 2.80% | 2.50% | ||
| Pension increase | 1.80% | 1.50% | ||
| Future increases of Social Security Pension amount | 1.80% | 1.30% | ||
| Inflation rate | 1.80% | 1.50% | ||
| Medical trend | 1.80% | 1.50% | ||
| Management costs (per employee/year) | €289 | €297 | ||
| Expenses medical trend | 1.80% | 1.50% | ||
| Retirement age (number of years) | 66 | 66 | ||
| Mortality table | TV 88/90 | TV 88/90 | ||
| 18 PROVISIONS FOR OTHER RISKS AND CHARGES | ||||
| The changes in provisions for other risks and charges in the periods ended 31 March 2022 and 31 December 2021 were as | ||||
| Mar 2022 | Dec 2021 | |||
| Begining balance | 8,872 | 8,508 | ||
| Increases | - | 521 | ||
| Reversing | - | (156) | ||
| Ending balance | 8,872 | 8,872 | ||
| Non-current provision | 8,872 | 8,872 |
| 8,872 | 8,872 |
|---|---|
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||
|---|---|---|---|---|---|---|
| 19 TRADE AND OTHER PAYABLES | ||||||
| The caption "Trade and other payables" at 31 March 2022 and 31 December 2021 was made up as follows: | ||||||
| Mar 2022 | Dec 2021 | |||||
| Current | Non current | Total | Current | Non current | Total | |
| Trade payables | ||||||
| Current suppliers (Note 9) | 372,332 | - | 372,332 | 252,043 | - | 252,043 |
| Other creditors | ||||||
| 79,232 | 37,399 | 116,631 | 59,547 | 37,304 | 96,851 | |
| Other creditors (Note 9) | 308,886 | 480,627 | 208,575 | 166,901 | 375,476 | |
| Tariff deviations (Note 9) | 171,741 | 72,658 | - | 72,658 | ||
| Fixed assets suppliers (Note 9) | 52,025 | - | 52,025 | |||
| Tax payables (Note 9) (i) | 29,584 | - | 29,584 | 26,608 | - | 26,608 |
| Deferred income | ||||||
| Grants related to assets | 19,173 | 250,612 | 269,785 | 19,773 | 251,221 | 270,993 |
| Bilateral agreements - Grants | - | 86,967 | 86,967 | - | 52,180 | 52,180 |
| Accrued costs | ||||||
| Holidays and holidays subsidies (Note 9) | 6,959 | - | 6,959 | 5,498 | - | 5,498 |
| Trade and other payables | 731,048 | 683,864 | 1,414,912 | 644,701 | 507,606 | 1,152,307 |
The caption "Trade and other payables" includes: (i) the amount of 75,113 thousand Euros, regarding the management of CAEs from Turbogás and Tejo Energia (31,783 thousand Euros at 31 December 2021); (ii) the amount of 21,011 thousand Euros of investment projects not yet invoiced (30,013 thousand Euros at 31 December 2021); (iii) the amount of 149,137 thousand Euros (116,941 thousand Euros at 31 December 2021) from the activity of the Market Manager (MIBEL – Mercado Ibérico de Electricidade); and (iv) the amount of 6,052 thousand Euros of "CMEC – Custo para a Manutenção do Equilíbrio Contratual" to be invoiced by EDP – Gestão da Produção de Energia, S.A. (6,379 thousand Euros at 31 December 2021), also reflected in the caption "Trade receivables" (Note 11).
This transaction related to "CMEC" sets a pass-through in the consolidated income statement of REN, fact for which it is compensated in that statement.
The caption "Other creditors" includes: (i) the amount of 4,694 thousand Euros (5,857 thousand Euros at 31 December 2021) 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 28,018 thousand Euros (Note 27) (at 31 March 2021 was 27,095 thousand Euros).
Sales and services rendered recognized in the consolidated statement of profit and loss for the nine-month periods ended 31 March 2022 and 2021 is made up as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| Sales and services rendered recognized in the consolidated statement of profit and loss for the nine-month periods ended 31 | ||
| Mar 2022 | Mar 2021 | |
| Goods: | ||
| Domestic market | 42 | 31 |
| 42 | 31 | |
| Services - Domestic market: | ||
| Electricity transmission and overall systems management | 83,650 | 84,553 |
| Natural gas transmission | 21,656 | 19,564 |
| Natural gas distribution | 14,047 | 14,059 |
| Regasification | 11,029 | 8,858 |
| Underground gas storage | 4,353 | 5,519 |
| Telecommunications network | 1,787 | 1,746 |
| Trading | 198 | 521 |
| Others | 715 | 121 |
| Services - External market (Chile): | ||
| Transmission and transformation of electricity | 3,021 | 2,278 |
| 140,456 | 137,220 | |
| Total sales and services rendered | 140,498 | 137,251 |
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 three-month periods ended 31 March 2022 and 2021 were made up as follows:
| Services - External market (Chile): | ||
|---|---|---|
| Transmission and transformation of electricity | 3,021 | 2,278 |
| 140,456 | 137,220 | |
| 21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES | ||
| Mar 2022 | Mar 2021 | |
| Revenue from construction of concession assets | ||
| Acquisitions | 22,276 | 25,844 |
| 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 three-month periods ended 31 March 2022 and 2021 were made up as follows: Own work capitalised : |
||
| Financial expenses (Note 5) | 493 | 683 |
| Overhead and management costs (Note 5) | 4,310 | 3,948 |
| 27,080 | 30,476 | |
| Cost of construction of concession assets | ||
| Acquisitions | 22,276 | 25,844 |
The caption "Other operating income" loss for the three-month periods ended 31 March 2022 and 2021 is made up as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| The caption "Other operating income" loss for the three-month periods ended 31 March 2022 and 2021 is made up as follows: | ||
| Recognition of investment subsidies in profit and loss | Mar 2022 4,521 |
Mar 2021 4,678 |
| Underground occupancy tax | 3,283 | 1,700 |
| Supplementary income | 312 | 357 |
| Disposal of unused materials | 162 | 349 |
| Others | 268 | 239 |
| 8,546 | 7,323 | |
| The caption "External supplies and services" for the three-month periods ended 31 March 2022 and 2021 is made up as | ||
| Mar 2022 | Mar 2021 | |
| Electric energy costs | 4,494 | 2,068 |
| Maintenance costs | 3,274 | 5,038 |
| Fees relating to external entities i) | 2,224 | 2,198 |
The caption "External supplies and services" for the three-month periods ended 31 March 2022 and 2021 is made up as follows:
| 8,546 | 7,323 | |
|---|---|---|
| The caption "External supplies and services" for the three-month periods ended 31 March 2022 and 2021 is made up as | ||
| Mar 2022 | Mar 2021 | |
| Electric energy costs | 4,494 | 2,068 |
| Maintenance costs | 3,274 | 5,038 |
| Fees relating to external entities i) | 2,224 | 2,198 |
| Gas transport subcontracts | 1,748 | 1,721 |
| Cross border interconnection costs ii) | 1,531 | 3,304 |
| Insurance costs | 1,177 | 1,568 |
| Gas operation - Pass through iii) | 1,035 | - |
| Security and surveillance | 532 | 466 |
| Travel and transportation costs | 187 | 103 |
| Advertising and communication costs | 165 | 167 |
| Other External supplies and services |
1,146 17,512 |
936 17,568 |
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.
iii) Acquisition related to the extension of the operating gas, complying with the provisions of Directive no. 6/2021 published by ERSE.
Personnel costs for the three-month periods ended 31 March 2022 and 2021 are made up as follows:
| Social charges and other expenses: | |||
|---|---|---|---|
| Social security costs | 2,049 | 2,021 | |
| Post-employement and other benefits cost (Note 17) | 885 | 862 | |
| Social support costs | 501 | 481 49 |
|
| Other | 68 3,503 |
3,413 | |
| Total personnel costs | 13,982 | 13,664 | |
| The Corporate bodies' remuneration includes remunerations paid to the Board of Directors as well as the General Other operating costs for the three-month periods ended 31 March 2022 and 2021 are made up as follows: |
|||
| Mar 2022 | Mar 2021 | ||
| ERSE operating costs i) | 1,677 | 1,977 | |
| 3,283 | 1,700 | ||
| Underground occupancy tax | 451 | ||
| Donations and quotizations | 602 | ||
| Others | 507 6,069 |
456 4,584 |
The Corporate bodies' remuneration includes remunerations paid to the Board of Directors as well as the General Shareholders meeting attendance.
Other operating costs for the three-month periods ended 31 March 2022 and 2021 are made up as follows:
| 6,069 | 4,584 |
|---|---|
i) The caption "ERSE operating costs" corresponds to ERSE's operating costs, to be recovered through electricity and gas tariffs.
Financial costs and financial income for the three-month periods ended 31 March 2022 and 2021 are made up as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| Financial costs and financial income for the three-month periods ended 31 March 2022 and 2021 are made up as follows: | ||
| Mar 2022 | Mar 2021 | |
| Financial costs | ||
| Interest on bonds issued | 8,250 | 7,764 |
| Other borrowing interests | 2,454 | 2,724 |
| Interest on commercial paper issued Derivative financial instruments |
1,012 1,283 |
1,039 121 |
| Exchange rate differences | - | 1 |
| Other financing expenditure | 626 | 504 |
| 13,625 | 12,152 | |
| Financial income | ||
| Exchange rate differences | 2,056 | 328 |
| Other financial investments | 1,582 | 688 |
| Derivative financial instruments | 332 | 173 |
| Interest income | - | 5 |
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, 31 December, Law 2/2020, of 31 March, Law 75- B/2020, of 31 December and Law 99/2021, of 31 December.
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 2022 (1 January 2022) 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 2022) 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 28,018 thousand Euros (Note 19) (for the three-month period ended 31 March 2021 was 27,095 thousand Euros) against a cost in the statement of profit and loss.
Earnings per share were calculated as follows:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| Mar 2022 | Mar 2021 | |
| 4,491 | ||
| 667,191,262 | ||
| Number of ordinary shares outstanding during the period (note 14) (2) |
667,191,262 3,881,374 |
3,881,374 |
| (3) 663,309,888 |
663,309,888 | |
| (1) | 5,957 |
The basic earnings per share are the same as the diluted earnings as there are no situations that could origin dilution effects.
During the Shareholders General Assembly meeting held on 23 April 2021, the Shareholders approved the distribution of dividends, with respect to the Net profit of 2020, 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.
Tejo Energia - Produção e Distribuição de Energia Eléctrica, SA ("Tejo Energia") and Turbogás – Produtora Energética S.A. ("Turbogás") have 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. Also, these two entities stated its intention to renegotiate the CAE, in order to reflect in the amounts payable the costs incurred with the financing of ECES.
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 31 March 2022 amounts to, approximately, 66 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 were brought by Tejo Energia and Turbogás and contested by REN Eléctrica and REN Trading, and the outcome is pending resolution.
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||||||
|---|---|---|---|---|---|---|
| 30.2. Guarantees given |
||||||
| At 31 March 2022 and 31 December 2021, the REN Group had given the following bank guarantees: | ||||||
| Beneficiary | Scope | Mar 2022 | Dec 2021 | |||
| European Investment Bank (EIB) | To guarantee loans | 241,774 | 242,548 | |||
| General Directorate of Energy and Geology Tax Authority and Customs |
To guarantee compliance with the contract relating to the public service concession Ensure the suspension of tax enforcement proceedings |
24,028 22,566 |
23,788 22,571 |
|||
| Judge of District Court | Guarantee for expropriation processes | 5,549 | 5,549 | |||
| Mibgás | To guarantee the liabilities incurred from the participation in the natural gas organized market | 4,000 | 4,000 | |||
| Municipal Council of Seixal | Guarantee for litigation | 3,133 | 3,133 | |||
| Portuguese State Municipal Council of Maia |
Guarantee for litigation Guarantee for litigation |
2,232 1,564 |
2,232 1,564 |
|||
| Municipal Council of Odivelas | Guarantee for litigation | 1,119 | 1,119 | |||
| EP - Estradas de Portugal | Guarantee for litigation | 514 | 502 | |||
| Municipal Council of Porto Municipal Council of Silves |
Guarantee for litigation Guarantee for expropriation processes |
368 352 |
368 352 |
|||
| NORSCUT - Concessionária de Auto-estradas | To guarantee prompt payment of liabilities assumed by REN in the contract ceding utilization | 200 | 200 | |||
| EDP - Gestão da Produção de Energia | Guarantee for litigation | 123 | - | |||
| Others (loss then 100 thousand Euros) | Guarantee for litigation | 266 | 204 | |||
| 307,789 | 308,131 | |||||
| 31 RELATED PARTIES | ||||||
| Main shareholders and shares held by corporate bodies | ||||||
| At 31 March 2022 and 31 December 2021, the shareholder structure of Group REN was as follows: | ||||||
| Mar 2022 | Dec 2021 | |||||
| Number of | ||||||
| Number of shares |
% | shares | % | |||
| State Grid Europe Limited (Group State Grid) | 166,797,815 | 25.0% | 166,797,815 | 25.0% | ||
| Pontegadea Inversiones S.L. | 80,100,000 | 12.0% | 80,100,000 | 12.0% | ||
| Lazard Asset Management LLC | 41,067,351 | 6.2% | 41,067,351 | 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% | ||
| Great-West Lifeco, Inc. | 27,859,279 | 4.2% | 27,666,567 | 4.1% |
| Main shareholders and shares held by corporate bodies At 31 March 2022 and 31 December 2021, the shareholder structure of Group REN was as follows: |
|||||
|---|---|---|---|---|---|
| Number of | Number of | ||||
| shares | % | ||||
| State Grid Europe Limited (Group State Grid) | 166,797,815 | 25.0% | 166,797,815 | 25.0% | |
| Pontegadea Inversiones S.L. | 80,100,000 | 12.0% | 80,100,000 | 12.0% | |
| Lazard Asset Management LLC | 41,067,351 | 6.2% | 41,067,351 | 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% | |
| Great-West Lifeco, Inc. | 27,859,279 | 4.2% | 27,666,567 | 4.1% | |
| Own shares | 3,881,374 | 0.6% | 3,881,374 | 0.6% | |
| Others | 278,629,456 667,191,262 |
41.8% 100% |
278,822,168 667,191,262 |
41.8% 100% |
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 three-month period ended 31 March 2022 amounted to 803 thousand Euros (776 thousand Euros in 31 March 2021), as shown in the following table:
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| Remuneration of the Board of Directors of REN, SGPS in the three-month period ended 31 March 2022 amounted to 803 | ||
| Mar 2022 | Mar 2021 | |
| Remuneration and other short term benefits Management bonuses (estimate) |
420 383 |
393 383 |
During the three-month period ended 31 March 2022, there were no transactions carried out by members of the corporate bodies.
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.
During the three-month periods ended 31 March 2022 and 2021, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties:
| Transaction of shares by the members of the Board of Directors | |||
|---|---|---|---|
| During the three-month period ended 31 March 2022, there were no transactions carried out by members of the corporate | |||
| 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 three-month periods ended 31 March 2022 and 2021, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties: |
|||
| Mar 2022 | Mar 2021 | ||
| Sales and services provided | |||
| Invoicing issued - REE | 321 | - | |
| Invoicing issued - Centro de Investigação em Energia REN - State Grid | 35 | 108 | |
| REPORT & ACCOUNTS MARCH'22 CONSOLIDATED FINANCIAL STATEMENTS | ||
|---|---|---|
| Mar 2022 | Mar 2021 | |
| External supplies and services | ||
| Invoicing received - REE | - | 17 |
| Invoicing received - Centro de Investigação em Energia REN - State Grid | 26 | - |
| 20 | 33 | |
| 46 | 50 | |
| Invoicing received - CMS Rui Pena & Arnaut1 | ||
| Mar 2022 | Dec 2021 | |
| Trade and other receivables | ||
| The balances at 31 March 2022 and 31 December 2021 resulting from transactions with related parties were as follows: REE - Dividends |
- | 1,477 |
| Electrogás - Dividends | - | 3,002 |
The balances at 31 March 2022 and 31 December 2021 resulting from transactions with related parties were as follows:
| External supplies and services | ||
|---|---|---|
| Invoicing received - CMS Rui Pena & Arnaut1 | 20 | 33 |
| 46 | 50 | |
| Mar 2022 | Dec 2021 | |
| Trade and other receivables | ||
| REE - Dividends Electrogás - Dividends |
- - |
1,477 3,002 |
| The balances at 31 March 2022 and 31 December 2021 resulting from transactions with related parties were as follows: Centro de Investigação em Energia REN - State Grid - Other receivables |
75 | 74 |
| REE - Trade receivables | 88 | - |
| 163 | 4,553 | |
| Trade and other payables | ||
| Centro de Investigação em Energia REN - State Grid - Other payables | 130 | 104 |
| REE - Trade payables | 4 | - |
| CMS - Rui Pena & Arnaut - Trade payables 1 SPECO - Shandong Power Equipment CO - Trade payables 2 |
19 403 |
30 1,415 |
1 Entity related to the Administrator José Luís Arnaut. During 2021, the contract for the provision of legal advisory services in the area of law and public procurement, approved by the board of directors of the company REN Serviços, SA and awarded to the law firm CMS Rui Pena and Arnaut, an entity related to the Director José Luís Arnaut, remained in force. The contract was signed in 2020, for a period of three years.
2 Subsidiary entity of the shareholder State Grid Europe Limited. The operations with this entity are related to acquisitions of concession assets in progress. Also, this entity presents guarantees amounting to 223 thousand Euros.
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 31 March 2022.
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.
Pedro Mateus
| Rodrigo Costa | Ana da Cunha Barros | |
|---|---|---|
| (Chairman of the Board of Directors and Chief Executive Officer) |
(Member of the Board of Directors) | |
| João Faria Conceição | Jorge Magalhães Correia | |
| (Member of the Board of Directors and Chief Operational Officer) |
(Member of the Board of Directors) | |
| Gonçalo Morais Soares | Maria Estela Barbot | |
| (Member of the Board of Directors and Chief Financial Officer) |
(Member of the Board of Directors) | |
| Guangchao Zhu | José Luis Arnaut | |
| (Vice-President of the Board of Directors designated by State Grid International Development Limited) |
(Member of the Board of Directors) | |
| Mengrong Cheng | Manuel Sebastião | |
| (Member of the Board of Directors) | (Member of the Board of Directors and Chairman of the Audit Committee) |
|
| Li Lequan | Rosa Freitas Soares | |
| (Member of the Board of Directors) | (Member of the Board of Directors and of the Audit Committee) | |
| Ana Pinho | Gonçalo Gil Mata |
(Member of the Board of Directors)
(Member of the Board of Directors and of the Audit Committee)
Note – The remaining pages of this Report & Accounts were initialled by the members of the Executive Committee and by the Certified Accountant, Pedro Mateus.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.