REN-Redes Energeticas Nacionais

Quarterly Report • Jun 26, 2023

Consolidated Financial Statements

31 March 2023

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

INDEX

1.		FINANCIAL PERFORMANCE	3
	1.1 1.2	RESULTS FOR THE FIRST 3 MONTHS OF 2023 AVERAGE RAB AND CAPEX	3 7
2.		CONSOLIDATED FINANCIAL STATEMENTS	8
3.		NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2023	13
	1	GENERAL INFORMATION	13
	2	BASIS OF PRESENTATION	16
	3	MAIN ACCOUNTING POLICIES	16
	4	SEGMENT REPORTING	17
	5	TANGIBLE AND INTANGIBLE ASSETS	20
	6	GOODWILL	23
	7	INVESTMENTS IN ASSOCIATES AND JOIN VENTURES	23
	8	INCOME TAX	25
	9	FINANCIAL ASSETS AND LIABILITIES	29
	10	INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER
		COMPREHENSIVE INCOME	31
	11	TRADE AND OTHER RECEIVABLES	32
	12	DERIVATIVE FINANCIAL INSTRUMENTS	33
	13	CASH AND CASH EQUIVALENTS	38
	14	EQUITY INSTRUMENTS	39
	15	RESERVES AND RETAINED EARNINGS	39
	16 17	BORROWINGS POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS	40 42
	18	PROVISIONS FOR OTHER RISKS AND CHARGES	43
	19	TRADE AND OTHER PAYABLES	44
	20	SALES AND SERVICES RENDERED	45
	21	REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES	45
	22	OTHER OPERATING INCOME	46
	23	EXTERNAL SUPPLIES AND SERVICES	46
	24	PERSONNEL COSTS	46
	25	OTHER OPERATING COSTS	47
	26	FINANCIAL COSTS AND FINANCIAL INCOME	47
	27	EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR	47
	28	EARNINGS PER SHARE	48
	29	DIVIDENDS PER SHARE	48
	30	CONTINGENT ASSETS AND LIABILITIES	48
	31	RELATED PARTIES	49
	32	DECREE-LAW NO. 84-D/2022 – TRANSITORY GAS PRICE STABILIZATION REGIME51
	33	SUBSEQUENT EVENTS	52
	34	EXPLANATION ADDED FOR TRANSLATION	52

1. FINANCIAL PERFORMANCE

1.1RESULTS FOR THE FIRST 3 MONTHS OF 2023

In the first 3 months of 2023, net income reached 12.8 million Euros, a 6.8 million Euros increase (+114.6%) over the same period of the previous year. Net income increased reflecting mainly the increase of 13.5 million Euros in the Group EBITDA (+12.8 million Euros in EBIT), despite the decrease of 3.5 million Euros in financial results (-37.1%).

Similarly to the previous years, the results for 2023 reflect the continuation of the Extraordinary Levy on the Energy Sector (28.1 million Euros in 2022 and 28.0 million Euros in 2022¹ ).

Investment was 45.9 million Euros, a 68.0% y.o.y increase (+18.6 million Euros) and transfers to RAB increased 4.3 million Euros (+106.4%) to 8.3 million Euros. Average RAB decreased by 69.2 million Euros (-1.9%), to 3,549.4 million Euros.

The average cost of debt was 2.4%, an increase of 0.8 p.p. over the previous year, and net debt reached 2,191.5 million Euros, a 4.4% increase (+92.8 million Euros) over the same period of the previous year driven by the evolution of REN Trading's tariff deviations. Excluding the effect of tariff deviations, net debt decreased 2.1%.

MAIN INDICATORS (MILLIONS OF EUROS)	March 2023	March 2022	VAR.%
EBITDA	131.9	118.4	11.4%
Financial results2	-12.9	-9.4	-37.1%
Net income1	12.8	6.0	114.6%
Recurrent net income	40.9	34.0	20.3%
Total Capex	45.9	27.3	68.0%
Transfers to RAB3 (at historic costs)	8.3	4.0	106.4%
Average RAB (at reference costs)	3,549.4	3,618.6	-1.9%
Net debt	2,191.5	2,098.7	4.4%
Net debt (without tariff deviations)	2,432.1	2,484.9	-2.1%
Average cost of debt	2.4%	1.6%	0.8p.p.

2 The net costs of 0.1 million Euros in March 2023 and 0.2 million Euros in March 2022 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).

_____________________________________

¹ The full amount of the levy was recorded in the 1st quarter of 2023 and 2022, according to the Portuguese Securities Market Commission (CMVM) recommendations.

Operational results – EBITDA

Domestic Power Transmission and Distribution Business

EBITDA for the domestic business reached 125.5 million Euros in the first 3 months of 2023, a 10.4% (+11.8 million Euros) increase over the same period of the previous year.

EBITDA - TRANSMISSION (MILLIONS OF EUROS)	March 2023	March 2022	VAR.%
1) Revenues from assets	51.4	47.1	9.1%
RAB remuneration1	20.3	17.1	19.0%
Lease revenues from hydro protection zone	0.2	0.2	-1.4%
Incentive for improvement of the TSO's technical performance	2.5	1.9	33.3%
Recovery of amortizations (net of investment subsidies)1	23.9	23.5	1.7%
Amortization of investment subsidies	4.5	4.5	0.2%
2) Revenues from Totex	70.7	66.6	6.1%
3) Revenues from Opex	37.3	28.8	29.4%
4) Other revenues	3.4	3.5	-4.3%
5) Own works (capitalised in investment)	5.9	4.8	22.2%
6) Earnings on Construction (excl. own works) – Concession assets	39.5	22.3	77.5%
7) OPEX	43.0	37.1	15.9%
Personnel costs1	14.9	13.9	7.5%
External costs	28.1	23.2	20.9%
8) Construction costs – Concession assets	39.5	22.3	77.5%
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)	125.5	113.6	10.4%

1 Includes training and seminars costs.

The increase in EBITDA resulted mainly from:

• The increase in Electricity Transmission Activity regulated revenues (+4.1 million Euros), which is remunerated through a Totex model since 2022, reflecting the increase in the rate of return which was 5.3% in March of 2023, which compares to 4.5% in the same period of the previous year;
• The increase of 3.2 million Euros in RAB remuneration² (+19.0%) arising mostly from:
• o Increase of 1.3 million Euros in the remuneration of natural gas transmission regulated assets reflecting the increase in the rate of return from 4.8% in March 2022 to 5.7% in March 2023 – as a result of the positive evolution of the yields of the Portuguese Republic 10Y Treasury Bills; partially offset by the reduction of 45.5 million Euros (-5.1%) in natural gas transmission average RAB;
• o Increase of 1.2 million Euros in the remuneration of natural gas distribution regulated assets reflecting (i) the increase in the rate of return from 5.0% in March 2022 to 5.9% in March 2023 – as a result of the positive evolution of the yields of the Portuguese Republic 10Y Treasury Bills, and (ii) the increase of 11.9 million Euros in natural gas distribution average RAB (+2.5%);
• The increase in Revenues from Opex of 8.5 million Euros (+29.4%), reflecting the increase of 8.0 million Euros in passthrough costs, of which +7.2 million Euros in Cross Boarder and System Services cost.

These effects were partially offset by the increase of 5.9 million Euros in Opex, of which 8.0 million Euros in pass-through costs as previously mentioned (costs not controllable by REN and fully recovered in the regulated tariff). Excluding pass-through costs, the Group domestic Core Opex decreased 2.1 million Euros, driven by the decrease in electricity costs in the LNG Terminal.

With respect to domestic business, it is also important to note that the natural gas distribution business contributed with EBITDA of 13.0 million Euros.

International Business

The EBITDA for international businesses reached 6.4 million Euros in the first 3 months of 2023, a 1.7 million Euros (+35.8%) increase over the same period of the previous year, resulting mainly from:

• EBITDA of Transemel an electrical power transmission company in Chile was 2.7 million Euros, a y.o.y. increase of 0.3 million Euros (+12.1%) reflecting essentially the increase of 0.8 million Euros in revenues from the transmission of electricity (+25.9%);
• The increase of 1.4 million Euros (+61.0%) in the recognized income from the 42.5% stake held by REN in the Chilean company Electrogas.

EBITDA - INTERNATIONAL (MILLIONS OF EUROS)	March 2023	March 2022	VAR.%
1) Revenues from the Transmission of Electrical Power	3.8	3.0	25.9%
2) Other revenues	3.8	2.3	61.0%
3) Own works (capitalized in investment)	0.1	0.1	85.0%
4) OPEX	1.3	0.7	81.7%
Personnel costs3	0.2	0.2	39.9%
External costs	1.1	0.5	94.3%
5) EBITDA (1+2+3-4)	6.4	4.7	35.8%

² Excludes Electricity Transmission activity (TEE). Includes TEE assets accepted by the regulator as extra Totex model

³ Includes costs with training.

Net income

Overall, the Group's net income for the first 3 months of 2023 reached 12.8 million Euros, a 6.8 million Euros y.o.y. increase (+114.6%).

This increase reflect mostly the following effects:

• i) increase of 13.5 million Euros in the Group EBITDA (+12.8 million Euros in EBIT), impacted by the increase of 11.8 million Euros in the Domestic Power Transmission and Distribution business (+11.4 million Euros in EBIT) and +1.7 million Euros in the contribution of international businesses (+1.4 million Euros in EBIT);
• ii) decrease of 3.5 million Euros in financial results (-37.1%) reflecting the increase in the average cost of debt from 1.6% to 2.4%. Net debt reached 2,191.5 million Euros, a 4.4% increase (+92.8 million Euros), over the same period of the previous year driven by the evolution of REN Trading's tariff deviations. Excluding the effect of tariff deviations, net debt decreased 2.1%.

Excluding non-recurring items, Net Income for the first 3 months of 2023 increased 6.9 million Euros (+20.3%). Non-recurring items considered in the first 3 months of 2023 and 2022 are as follows:

• i) In 2023: Extraordinary Levy on the Energy Sector laid down in the State Budget for 2023 (28.1 million Euros);
• ii) In 2022: Extraordinary Levy on the Energy Sector laid down in the State Budget for 2022 (28.0 million Euros).

NET INCOME	March	March
(MILLIONS OF EUROS)	2023	2022	VAR.%
EBITDA	131.9	118.4	11.4%
Depreciations and amortizations	62.8	62.1	1.2%
Financial results	-12.9	-9.4	-37.1%
Income tax expenses	15.2	12.9	18.5%
Extraordinary levy on the energy sector 4	28.1	28.0	0.3%
Net income	12.8	6.0	114.6%
Non-recurring items	28.1	28.0	0.3%
Recurrent net income	40.9	34.0	20.3%

⁴ The full amount of the levy was recorded in the 1st quarter of 2023 and 2022, according to the Portuguese securities market commission (CMVM) recommendations.

1.2 AVERAGE RAB AND CAPEX

In the first 3 months of 2023, Capex reached 45.9 million Euros, a 68.0% y.o.y. increase (+18.6 million Euros), and transfers to RAB increased 4.3 million Euros (+106.4%) to 8.3 million Euros.

In electricity, investment was 35.3 million Euros, a 60.5% increase (13.3 million Euros) over the same period of 2022, and Transfers to RAB were 2.3 million Euros, a y.o.y. increase of 1.9 million Euros. It should be highlighted the investments in the 400kV Ourique - Tavira connection (6.6 million Euros), the opening of the 400/220/60 kV Sobrado substation (3.2 million Euros), and the 400kV Ferreira do Alentejo – Ourique connection (2.3 million Euros).

In natural gas transmission, investment reached 4.8 million Euros, an increase of 3.6 million Euros, and Transfers to RAB were 0.2 million Euros.

In natural gas distribution, investment was 5.3 million Euros, 34% for new supply points and 56% with the expansion of the distribution network, and transfers to RAB increased 2.1 million Euros (+58.3%) to 5.7 million Euros.

Average RAB was 3,549.4 million Euros, a 69.2 million Euros (-1.9%) y.o.y decrease. In electricity, the average RAB (excluding lands) reached 2,030.8 million Euros (-23.3 million Euros, -1.1%), of which 980.8 million Euros in assets remunerated at a premium rate of return, while lands reached 185.6 million Euros (-12.3 million Euros, -6.2%). In natural gas transmission, the average RAB was 844.9 million Euros (-45.5 million Euros, -5.1%), while in natural gas distribution the average RAB reached 488.0 million Euros (+11.9 million Euros, +2.5%).

2. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF 31 MARCH 2023 AND 31 DECEMBER 2022

(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of financial position originally issued in Portuguese - Note 34)

	Notes	Mar 2023	Dec 2022
ASSETS
Non-current assets
Property, plant and equipment	5	133,809	127,816
Intangible assets	5	4,064,225	4,077,471
Goodwill	6	4,533	4,515
Investments in associates and joint ventures	7	181,379	180,770
Investments in equity instruments at fair value through other comprehensive income	9 and 10	145,390	145,715
Derivative financial instruments	9 and 12	76,049	80,564
Other financial assets	9	192	179
Trade and other receivables	9 and 11	198,821	55,666
Deferred tax assets	8	63,221	69,803
		4,867,619	4,742,499
Current assets
Inventories		5,103	5,134
Trade and other receivables	9 and 11	400,753	327,764
Current income tax recoverable	8 and 9	4,150	10,671
Derivative financial instruments	9 and 12	-	236
Asset related to the transitional gas price stabilization regime - Decree-Law 84-D/2022	32	946,898	1,000,000
Cash and cash equivalents	9 and 13	201,320	365,292
		1,558,225	1,709,097
Total assets	4	6,425,844	6,451,596
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	397,210	396,065
Retained earnings		354,795	241,987
Other changes in equity		(5,561)	(5,561)
Net profit for the period		12,785	111,771
Total equity		1,532,502	1,517,534
LIABILITIES
Non-current liabilities
Borrowings	9 and 16	1,689,580	1,695,362
Liability for retirement benefits and others	17	63,718	64,939
Derivative financial instruments	9 and 12	73,291	73,464
Provisions	18	10,132	10,576
Trade and other payables	9 and 19	481,673	450,297
Deferred tax liabilities	8	113,338	115,064
		2,431,732	2,409,702
Current liabilities
Borrowings	9 and 16	632,840	638,944
Trade and other payables	9 and 19	881,849	885,416
Derivative financial instruments	9 and 12	24	-
Liability related to the transitional gas price stabilization regime - Decree-Law 84-D/2022	32	946,898	1,000,000
		2,461,611	2,524,360
Total liabilities	4	4,893,342	4,934,062
Total equity and liabilities		6,425,844	6,451,596

The accompanying notes form an integral part of the consolidated statement of financial position as of 31 March 2023.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2023 AND 2022

(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of profit and loss originally issued in Portuguese - Note 34)

	Notes	31.03.2023	31.03.2022
Sales	4 and 20	59	42
Services rendered	4 and 20	157,984	140,456
Revenue from construction of concession assets	4 and 21	45,404	27,080
Gains/(losses) from associates and joint ventures	7	3,862	2,604
Other operating income	22	8,597	8,546
Operating income		215,907	178,727
Cost of goods sold		(240)	(216)
Costs with construction of concession assets	21	(39,533)	(22,276)
External supplies and services	23	(21,611)	(17,512)
Personnel costs	24	(15,105)	(13,982)
Depreciation and amortizations	5	(62,815)	(62,086)
Impairments	6	(94)	(94)
Other expenses	25	(7,289)	(6,069)
Operating costs		(146,687)	(122,236)
Operating results		69,220	56,491
Financial costs	26	(17,183)	(13,625)
Financial income	26	4,088	3,970
Financial results		(13,096)	(9,655)
Profit before income tax and ESEC		56,124	46,836
Income tax expense	8	(15,237)	(12,861)
Energy sector extraordinary contribution (ESEC)	27	(28,101)	(28,018)
Consolidated profit for the period		12,785	5,957
Attributable to:
Equity holders of the Company		12,785	5,957
Non-controlled interest		-	-
Consolidated profit for the period		12,785	5,957
Earnings per share (expressed in euro per share)	28	0.02	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 2023.

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2023 AND 2022

(Amounts expressed in thousands of Euros – tEuros)

(Translation of statements of other comprehensive income originally issued in Portuguese - Note 34)

	Notes	Mar 2023	Mar 2022
Consolidated Profit for the period		12,785	5,957
Items that will not be reclassified subsequently to profit or loss:
Actuarial gains/(losses) - gross of tax		1,179	(672)
Tax effect on actuarial gains/(losses)	8	(354)	201
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations		5,700	21,206
Increase/(decrease) in hedging reserves - cash flow derivatives	12	(5,440)	33,180
Tax effect on hedging reserves	8 and 12	1,173	(7,631)
Gain/(loss) in fair value reserve - Investments in equity instruments at fair value through other comprehensive income	10	(325)	(1,629)
Tax effect on items recorded directly in equity	8 and 10	80	412
Other changes in equity	-	170	-
Comprehensive income for the period		14,968	51,024
Attributable to:
Equity holders of the company		14,968	51,024
Non-controlled interest		-	-
		14,968	51,024

The accompanying notes form an integral part of the consolidated statement of comprehensive income for the three-month period ended 31 March 2023.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2023 AND 2022

(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of changes in equity originally issued in Portuguese - Note 34)

		Attributable to shareholders
Changes in the year	Notes	Share capital	Own shares	Share premium	Legal Reserve	Fair Value reserve (Note 13)	Hedging reserve (Note 16)	Other reserves	Other changes in equity	Retained earnings	Profit for the year	Total
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 Marchr 2022		667,191	(10,728)	116,809	130,662	56,541	13,423	156,900	(5,561)	329,660	5,957	1,460,855
At 1 January 2023		667,191	(10,728)	116,809	135,702	45,117	59,518	155,729	(5,561)	241,987	111,771	1,517,534
Net profit of the period and other comprehensive income		-	-	-	-	(245)	(4,267)	5,657	-	1,038	12,785	14,968
Transfer to other reserves		-	-	-	-	-	-	-	-	111,771	(111,771)	-
At 31 March 2023		667,191	(10,728)	116,809	135,702	44,871	55,251	161,386	(5,561)	354,795	12,785	1,532,502

The accompanying notes form an integral part of the consolidated statement of changes in equity for the three-month period ended 31 March 2023.

CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2023 AND 2022

(Amounts expressed in thousands of Euros – tEuros) (Translation of statements of cash flow originally issued in Portuguese - Note 34)

	Notes	Mar 2023		Mar 2022
Cash flow from operating activities:
Cash receipts from customers		540,378	a)	897,920	a)
Cash paid to suppliers		(630,636) a)		(569,797) a)
Cash paid to employees		(16,121)		(14,892)
Income tax received/paid		(3,844)		(2,440)
Other receipts / (payments) relating to operating activities		23,103		(28,634)
Net cash flows from operating activities (1)		(87,120)		282,158
Cash flow from investing activities:
Receipts related to:
Investments in associates		-		-
Investment grants		2,053		34,277
Dividends	10	1,477		4,263
Payments related to:
Equity instruments through other comprehensive income		-		-
Property, plant and equipment		(516)		(2,668)
Intangible assets		(53,035)		(44,886)
Net cash flow used in investing activities (2)		(50,020)		(9,014)
Cash flow from financing activities:
Receipts related to:
Borrowings		-		200,000
Payments related to:
Borrowings		(10,000)		(299,769)
Interests and other similar expense		(16,960)		(17,538)
Leasings		(780)		(753)
Interests of Leasings		(18)		(7)
Net cash from / (used in) financing activities (3)		(27,757)		(118,067)
Net (decrease) / increase in cash and cash equivalents (1)+(2)+(3)		(164,899)		155,077
Effect of exchange rates		927		1,177
Cash and cash equivalents at the beginning of the year		365,292		398,759
Cash and cash equivalents at the end of the period		201,320		555,013
Detail of cash and cash equivalents
Cash	13	24		23
Bank deposits	13	201,296		554,990
The transitional gas price stabilization regime - Decree-Law 84-D/2022	13	-		-
		201,320		555,013

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

The accompanying notes form an integral part of the consolidated statement of cash flow for the three-month period ended 31 March 2023.

3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2023

(Translation of notes originally issued in Portuguese - Note 34)

1 GENERAL INFORMATION

REN – Redes Energéticas Nacionais, SGPS, S.A. (referred to in this document as "REN", "REN SGPS" 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-Law no. 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, renamed, after the transfer of the electricity business to a new company incorporated on 26 September 2006, REN – Serviços de Rede, S.A., which was simultaneously renamed 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., and has as its activity the management of the concession for the exploration of 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, whose the capital was paid up through the integration of the gas transport infrastructures (network, connections and compression);

c) REN Armazenagem, S.A., was incorporated on 26 September 2006, whose the capital 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 as "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 company's object is the public service operation of the regional distribution network for natural gas and its substitute gases in 29 municipalities in the northern coastal area of Portugal, in the districts of Porto, Braga, and Viana do Castelo, as well as the construction and maintenance of the respective infrastructures.

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. ("RENTELECOM") 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. was incorporated, a company wholly owned by REN SGPS, headquartered in the Netherlands, whose corporate purpose is to participate, finance, collaborate and conduct the management of related companies.

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 21 November 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 2023, REN also holds:

a) 42.5% interest in the share capital of the Chilean company, 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%.

1.1. Consolidation perimeter

The following companies were included in the consolidation perimeter as of 31 March 2023 and 31 December 2022:

				Mar 2023		Dec 2022
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. Av. Estados Unidos da América, 55 - Lisboa	Portugal	National electricity transmission network operator (high and very high tension)	100%	100%	100%	100%
REN Trading, S.A. Praça de Alvalade, nº7 - 12º Dto, Lisboa	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	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%	-

Changes in the consolidation perimeter

• 2023

There were no changes to the consolidation perimeter in 2023 compared to that reported on 31 December 2022.

• 2022

There were no changes to the consolidation perimeter in 2022 compared to that reported on 31 December 2021.

1.2. Approval of quarterly consolidated financial statements

These interim consolidated financial statements were approved by the Board of Directors at a meeting held on 27 April 2023. The Board of Directors believes that the consolidated financial statements fairly present the financial position of the companies included in the consolidation, the consolidated results of their operations, their consolidated comprehensive income, the consolidated changes in their equity and their consolidated cash flows in accordance with the International Financial Reporting Standards for interim financial statements as endorsed by the European Union (IAS 34).

2 BASIS OF PRESENTATION

The consolidated financial statements for the three-month period ended 31 March 2023 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 2022.

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.

On the present date, and taking into account the above and Note 5 - Main Estimates and Judgments, disclosed in the annex to the 2022 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.

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

3 MAIN ACCOUNTING POLICIES

The consolidated financial statements were prepared for interim financial reporting purposes (IAS 34), on a going concern basis from the books and accounting records of the companies included in the consolidation, maintained in accordance with the accounting standards in force in Portugal, adjusted in the consolidation process so that the financial statements are presented in accordance with interim Financial Reporting Standards as endorsed by the European Union in force for the years beginning as from 1 January 2023.

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 2022, as explained in the notes to the consolidated financial statements for 2022, except for the adoption of new effective standards for periods beginning on or after 1 January 2023.

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 tree-month period ended on 31 March 2023 and compared to the year ended on 31 December 2022.

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

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

Standard	Applicable for financial years beginning	Resume
Amendments to IAS 1 - Presentation of Financial Statements: Classification of Liabilities as Current or Non-current	01/jan/24	These amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The amendments clarify, not change, existing requirements, and so are not expected to affect companies' financial statements significantly. However, they could result in companies reclassifying some liabilities from current to non-current, and vice versa.
Amendments to IFRS 16 - Leases: Lease Liability in a Sale and Leaseback	01/01/2024	The proposed amendment specifies requirements for seller-lessees to measure the lease liability in a sale and leaseback transaction, after the date it takes place. The amendments establish that when the payments include variable lease payments there is a risk that a modification or change in the leaseback term could result in the seller-lessee recognising a gain on the right of use retained even though no transaction or event would have occurred to give rise to that gain.

These standards have not yet been endorsed by the European Union and, as such, have not been applied by the Group for the three-month period ended 31 March 2023.

4 SEGMENT REPORTING

The 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 on 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 2023 were as follows:

	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Sales and services provided	102,037	54,640	2,127	9,623	(10,384)	158,044
Inter-segments	281	539	-	9,564	(10,384)	-
Revenues from external customers	101,756	54,102	2,127	59	-	158,044
Revenue from construction of concession assets	35,344	10,060	-	-	-	45,404
Cost with construction of concession assets	(31,117)	(8,416)	-	-	-	(39,533)
Gains / (losses) from associates and joint ventures	-	-	-	3,862	-	3,862
Personnel costs	(19,566)	(10,410)	(624)	(2,795)	11,785	(21,611)
Employee compensation and benefit expense	(5,041)	(3,177)	(80)	(6,806)	-	(15,105)
Other expenses and operating income	2,874	(347)	(24)	(34)	(1,401)	1,068
Operating cash flow	84,531	42,349	1,399	3,850	-	132,129
Non reimbursursable expenses
Depreciation and amortizations	(41,718)	(21,047)	(0)	(50)	-	(62,815)
Impairments	-	-	-	(94)	-	(94)
Financial results
Financial income	4,520	1,588	79	35,969	(38,069)	4,088
Financial costs	(8,025)	(6,437)	(1)	(40,789)	38,069	(17,183)
Profit before income tax and ESEC	39,308	16,454	1,477	(1,114)	-	56,124
Income tax expense	(10,998)	(4,604)	(353)	718	-	(15,237)
Energy sector extraordinary contribution (ESEC)	(17,817)	(10,284)	-	-	-	(28,101)
Profit for the period	10,492	1,566	1,123	(396)	-	12,785

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	(18,584)	(3,693)	-	-	-	(22,276)
Gains / (losses) from associates and joint ventures	-	-	-	2,604	-	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	(41,040)	(21,000)	(4)	(41)	-	(62,086)
Impairments	-	-	-	(94)	-	(94)
Financial results
Financial income	423	1,098	4	30,668	(28,223)	3,970
Financial costs	(5,923)	(4,328)	(2)	(31,595)	28,223	(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)	(17,590)	(10,428)	-	-	-	(28,018)
Profit for the period	4,869	(2,209)	795	2,502	-	5,957

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 2023 were as follows:

	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Segment assets
Group investments held	-	896,364	-	2,316,199	(3,212,562)	-
Property, plant and equipment and intangible assets	2,717,169	1,480,470	2	393	-	4,198,033
Other assets	797,412	1,343,863	19,630	6,037,075	(5,970,170)	2,227,811
Total assets	3,514,581	3,720,697	19,632	8,353,667	(9,182,732)	6,425,844
Total liabilities	2,587,522	2,186,992	10,783	6,078,215	(5,970,170)	4,893,342
Capital expenditure - total	35,819	10,060	-	-	-	45,880
Capital expenditure - property, plant and equipment (Note 5)	475	-	-	-	-	475
Capital expenditure - intangible assets (Note 5)	35,344	10,060	-	-	-	45,404
Investments in associates (Note 7)	-	-	-	178,649	-	178,649
Investments in joint ventures (Note 7)	-	-	-	2,730	-	2,730

Assets and liabilities by segment at 31 December 2022 as well as investments on tangible assets and intangible assets were as follows:

	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Segment assets
Group investments held	-	895,643	-	2,274,773	(3,170,415)	-
Property, plant and equipment and intangible assets	2,713,459	1,491,461	2	365	-	4,205,287
Other assets	872,841	1,397,657	18,166	6,371,555	(6,413,910)	2,246,309
Total assets	3,586,300	3,784,761	18,168	8,646,692	(9,584,325)	6,451,596
Total liabilities	2,679,398	2,253,343	10,442	6,404,788	(6,413,910)	4,934,062
Capital expenditure - total	158,353	43,113	51	23	-	201,540
Capital expenditure - property, plant and equipment (Note 5)	4,046	-	51	22	-	4,120
Capital expenditure - intangible assets (Note 5)	154,307	43,113	-	-	-	197,420
Investments in associates (Note 7)	-	-	-	178,048	-	178,048
Investments in joint ventures (Note 7)	-	-	-	2,722	-	2,722

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 2023, the changes in tangible and intangible assets were as follows:

			Property, plant and equipment				Intangible assets
	Transmission and electronic equipment	Transport equipment	Office equipment	Property, plant and equipment	Assets in progress	Total	Concession assets	Concession assets in progress	Other intangible assets	Intangible assets in progress	Total
Cost:
At 1 January 2023	121,130	802	846	1,212		14,784 138,775	8,783,321	155,175	59,078	-	8,997,573
Additions	-	79	3	-	393	475	992	44,412	-	-	45,404
Disposals, write-offs, impairments and other reclassifications	-	(24)	(4)	-	-	(28)	(379)	-	-	-	(379)
Transfers	11	-	-	-	(11)	-	7,421	(7,421)	-	-	-
Exchange rate differences	7,161	1	14	-	774	7,950	-	-	3,110	-	3,110
At 31 March 2023	128,301	857	860	1,212		15,940 147,172	8,791,356	192,166	62,187	-	9,045,708
Accumulated depreciation:
At 1 January 2023	(9,939)	(516)	(488)	(13)		- (10,957)	(4,919,468)	-	(634)		- (4,920,103)
Depreciation charge Depreciation of disposals,	(1,084)	(45)	(15)	-	-	(1,145)	(61,565)	-	(105)	-	(61,670)
impairments, write-offs and other reclassifications	-	24	4	-	-	28	337	-	-	-	337
Exchange rate differences	(1,273)	-	(12)	-	-	(1,285)	-	-	(49)	-	(49)
At 31 March 2023	(12,297)	(537)	(511)	(13)		- (13,359)	(4,980,696)	-	(788)		- (4,981,485)
Net book value:
At 1 January 2023	111,190	286	358	1,199		14,784 127,816	3,863,853	155,175	58,443	-	4,077,471
At 31 March 2023	116,004	321	348	1,199		15,940 133,809	3,810,660	192,166	61,399	-	4,064,225

The changes in tangible and intangible assets in the in the year ended 31 December 2022 were as follows:

			Property, plant and equipment						Intangible assets
	Transmission and electronic equipment	Transport equipment	Office equipment	Property, plant and equipment	Assets in progress	Total	Concession assets	Concession assets in progress	Other intangible assets	Intangible assets in progress	Total
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
Additions	-	134	119	-	3,866	4,120	5,024	192,396	-	-	197,420
Disposals, write-offs, impairments and other reclassifications	(33)	(115)	(192)	-	-	(339)	(11,959)	-	-	-	(11,959)
Transfers	20,947	-	-	-	(21,035)	(87)	159,180	(159,180)	88	-	87
Exchange rate differences	7,266	1	16	-	2,006	9,289	-	-	3,722	-	3,722
At 31 December 2022	121,130	802	846	1,212		14,784 138,775	8,783,321	155,175	59,078	-	8,997,573
Accumulated depreciation:
At 1 January 2022	(5,236)	(466)	(527)	(13)	-	(6,241)	(4,685,010)	-	(225)		- (4,685,235)
Depreciation charge Depreciation of disposals,	(3,402)	(164)	(66)	-	-	(3,632)	(245,273)	-	(371)	-	(245,644)
impairments, write-offs and other reclassifications	33	114	117	-	-	264	10,815	-	-	-	10,815
Exchange rate differences	(1,334)	(1)	(13)	-	-	(1,348)	-	-	(38)	-	(38)
At 31 December 2022	(9,939)	(516)	(488)	(13)		- (10,957)	(4,919,468)	-	(634)		- (4,920,103)
Net book value:
At 1 January 2022	87,713	316	377	1,199		29,947 119,551	3,946,067	121,959	55,043	-	4,123,069
At 31 December 2022	111,190	286	358	1,199		14,784 127,816	3,863,853	155,175	58,443	-	4,077,471

		Mar 2023	Dec 2022
Electricity segment:
Power line construction (220 KV, 150 KV and others)		7,232	28,162
Power line construction (400 KV)		14,021	56,958
Construction of new substations		1,096	1,831
Substation Expansion		9,527	48,659
Other renovations in substations		828	4,247
Telecommunications and information system		946	7,014
Pilot zone construction - wave energy		48	179
Buildings related to concession		126	1,463
Transmission and transformation of electricity in Chile		397	3,881
Other assets		1,522	5,794
Gas segment:
Expansion and improvements to gas transmission network		2,034	10,041
Construction project of cavity underground storage of gas in Pombal		97	1,604
Construction project and operating upgrade - LNG facilities		2,659	2,838
Gas distribution projects		5,270	28,630
Others segments:
Other assets		79	239
	Total of additions	45,880	201,540

The main additions verified in the periods ended 31 March 2023 and 31 December 2022 are made up as follows:

The main transfers that were concluded and began activity during the periods ended 31 March 2023 and 31 December 2022 are made up as follows:

	Mar 2023	Dec 2022
Electricity segment:
Power line construction (220 KV, 150 KV and others)	-	55,083
Power line construction (400 KV)	-	18,033
Substation Expansion	1,076	35,321
Other renovations in substations	405	3,452
Telecommunications and information system	-	6,594
Buildings related to concession	268	887
Transmission and transformation of electricity in Chile	11	-
Other assets under concession	-	4,160
Gas segment:
Expansion and improvements to gas transmission network	-	7,422
Construction project of cavity underground storage of gas in Pombal	-	1,305
Construction project and operating upgrade - LNG facilities	-	2,022
Gas distribution and transmission projects	5,673	24,904
Total of transfers	7,432	180,215

	Mar 2023	Dec 2022
Electricity segment:
Power line construction (400 KV, 220 KV, 150 KV and others)	107,390	86,178
Substation Expansion	44,205	36,282
New substations projects	5,167	3,807
Buildings related to concession	4,875	4,749
Transmission and transformation of electricity in Chile	15,940	14,783
Other projects	4,920	2,648
Gas segment:
Expansion and improvements to natural gas transmission network	11,959	9,945
Construction project of cavity underground storage of gas in Pombal	3,206	3,141
Construction project and operating upgrade - LNG facilities	4,045	1,426
Gas distribution projects	6,399	6,997
Total of assets in progress	208,106	169,959

The tangible and intangible assets in progress at 31 March 2023 and 31 December 2022 are as follows:

Borrowing costs capitalized on intangible assets in progress in the period ended 31 March 2023 amounted to 936 thousand Euros (2,788 thousand Euros as of 31 December 2022), while overhead and management costs capitalized amounted to 4,935 thousand Euros (19,536 thousand Euros as of 31 December 2022) (Note 21). The average rate of the financial costs capitalized was of 0.22%.

The net book value of the property, plant and equipment and intangible assets, related with transport equipements, acquired through finance lease contracts at 31 March 2023 and 31 December 2022 was as follows:

		Mar 2023			Dec 2022
		Accumulated			Accumulated
	Cost	depreciation and	Net book value	Cost	depreciation and	Net book value
		amortization			amortization
Initial value	8,195	(4,519)	3,677	9,309	(4,453)	4,856
Additions (Note 20)	851	-	851	1,847	-	1,847
Disposals and write-offs	(1,098)	999	(99)	(2,961)	1,979	(982)
Depreciation charge	-	(463)	(463)	-	(2,045)	(2,045)
Final value	7,947	(3,982)	3,967	8,195	(4,519)	3,677

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 2023 and 31 December 2022 is detailed as follows:

Subsidiaries	Year of acquisition	Acquisition cost	%	Mar 2023	Dec 2022
REN Atlântico, Terminal de GNL, S.A.	2006	32,580	100%	1,038	1,133
REN Portgás Distribuição, S.A.	2017	503,015	100%	1,235	1,235
Empresa de Transmisión Eléctrica Transemel, S.A.	2019	155,482	100%	2,261	2,147
				4,533	4,515

The movement for the periods ended 31 March 2023 and 31 December 2022 was:

				Exchange	At 31			Exchange
Subsidiaries	At 1 January 2022	Increases	Decreases	rate differences	December 2022	Increases	Decreases	rate differences	At 31 March 2023
REN Atlântico, Terminal de GNL, S.A.	1,510		- (377)	-	1,133	-	(94)	-	1,038
REN Portgás Distribuição, S.A.	1,235	-	-	-	1,235	-	-	-	1,235
Empresa de Transmisión Eléctrica Transemel, S.A.	2,012	-	-	136	2,147	-	-	115	2,261
	4,757	-	(377)	136	4,515	-	(94)	115	4,533

7 INVESTMENTS IN ASSOCIATES AND JOIN VENTURES

At 31 March 2023 and 31 December 2022, the financial information regarding the financial interest held is as follows:

					31 March 2023
			Share	Current	Non-current	Current	Non-current		Net	Share		Carrying	Group share of
	Activity	Head office	capital	assets	assets	liabilities	liabilities	Revenues	profit/(loss)	capital	%	amount	profit / (loss)
Equity method:
Associate:
OMIP - Operador do Mercado
Ibérico (Portugal), SGPS, S.A. (i)	Holding company	Lisbon	2,610	321	29,288	241	-	281	229	29,368	40	11,540	100
Electrogas, S.A.	Gas Transportation	Chile	19,555	25,942	29,544	5,082	6,240	13,423	8,714	44,164 42.5		167,109	3,753
												178,649	3,853
Joint venture:
Centro de Investigação em Energia	Research &
REN - STATE GRID, S.A.	Development	Lisbon	3,000	6,150	90	755	20	426	16	5,466	50	2,730	8
(i) Financial Statements at 31 December 2022, subject to audit review.												181,379	3,862

					31 December 2022
			Share	Current	Non-current	Current	Non-current		Net	Share		Carrying	Group share of
	Activity	Head office	capital	assets	assets	liabilities	liabilities	Revenues	profit/(loss)	capital	%	amount	profit / (loss)
Equity method:
Associate:
OMIP - Operador do Mercado
Ibérico (Portugal), SGPS, S.A.	Holding company	Lisbon	2,610	331	29,017	230	-	1,314	645	29,118	40	11,440	255
Electrogas, S.A.	Gas Transportation	Chile	19,938	16,858	31,226	5,247	6,692	46,283	27,181	36,145	42.5	166,608	11,552
												178,048	11,807
Joint venture:
Centro de Investigação em Energia	Research &		3,000	6,201	96	827	20	1,740	10	5,450	50	2,722	5
REN - STATE GRID, S.A.	Development	Lisbon
												180,770	11,812

Associates

The changes in the caption "Investments in associates" during the periods ended 31 March 2023 and 31 December 2022 was as follows:

Investments in associates
At 1 de january de 2022	166,541
Effect of applying the equity method - Net Profit	11,807
Currency Translation Reserves	9,539
Dividends of Electrogas	(9,358)
Receipt of Supplementary Obligations of OMIP	(391)
Other changes in equity	(89)
At 31 December 2022	178,048
Effect of applying the equity method - Net Profit	3,853
Currency Translation Reserves	(3,251)
At 31 March 2023	178,649

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

Joint ventures

The movement in the caption "Investments in joint ventures" during the periods ended 31 March 2023 and 31 December 2022 was as follows:

Investments in joint ventures
At 1 January 2022	2,742
Effect of applying the equity method	5
Dividends distribution	(25)
At 31 December 2022	2,722
Effect of applying the equity method	8
At 31 March 2023	2,730

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 2023 and 31 December 2022, the financial information of the joint venture was as follows:

	31 March 2023
	Cash and cash equivalents	Current financial liabilities	Non-current financial liabilities	Depreciations and amortizations	Financial costs	Income tax- (cost) / income
Joint venture:
Centro de Investigação em Energia
REN - STATE GRID, S.A.	5,625	2	20	12	-	(2)
			31 December 2022
	Cash and cash	Current financial	Non-current financial	Depreciations and	Financial costs	Income tax- (cost) /
	equivalents	liabilities	liabilities	amortizations		income
Joint venture:
Centro de Investigação em Energia
REN - STATE GRID, S.A.	5,257	2	20	(65)	(3)	(2)

8 INCOME TAX

REN is taxed based on the special regime for the taxation of group companies, 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 2019 to 2022 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 2023 and 31 December 2022.

In the three-month period ended 31 March 2023, the Group is subject to Corporate Income Tax, at an average rate, taking into account the base rate of 21%, which will be increased by a municipal surcharge of up to a maximum of 1.5% on taxable income, and a state surcharge of (i) 3% of taxable profit between 1,500 thousand Euros and 7,500 thousand Euros; (ii) of 5% over the taxable profit in excess of 7,500 thousand Euros and up to 35,000 thousand Euros; and (iii) 9% for taxable profits in excess of 35,000 thousand Euros, which results in a maximum aggregate tax rate of 31.5%.

The tax rate used in the valuation of temporary taxable and deductible differences as of 31 March 2023, 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 2023 and 31 December 2022 was as follows:

	Mar 2023	Mar 2022
Current income tax	9,963	17,343
Adjustments of income tax from previous years	(5)	-
Deferred income tax	5,280	(4,482)
Income tax	15,237	12,861

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

	Mar 2023	Mar 2022
Consolidated profit before income tax	56,124	46,836
Permanent differences:
Non deductible/taxable costs/income	118	2,143
Timing differences:
Tariff deviations	(21,837)	11,710
Provisions and impairment	(25)	(23)
Revaluations	(1,431)	(812)
Pension, helthcare assistence and life insurance plans	182	(629)
Derivative financial instruments	4	(33)
Others	458	404
Taxable income	33,593	59,595
Income tax	6,608	11,764
State surcharge tax	3,017	4,395
Municipal surcharge	174	971
Autonomous taxation	164	212
Current income tax	9,963	17,343
Deferred income tax	5,280	(4,482)
Adjustments of income tax from previous years	(5)	-
Income tax	15,237	12,861
Effective tax rate	27.1%	27.5%

Income tax

The caption "Income tax" payable and receivable at 31 March 2023 and 31 December 2022 is made up as follows:

Mar 2023	Dec 2022
(9,963)	(48,447)
5,453	57,331
974	1,793
7,686	(7)
4,150	10,671

Deferred taxes

The effect of the changes in the deferred tax captions in the years presented was as follows:

	Mar 2023	Dec 2022
Impact on the statement of profit and loss:
Deferred tax assets	(6,330)	(15,001)
Deferred tax liabilities	1,049	6,108
	(5,280)	(8,892)
Impact on equity:
Deferred tax assets	(252)	(11,870)
Deferred tax liabilities	679	(13,601)
	427	(25,471)
Net impact of deferred taxes	(4,853)	(34,363)

The changes in deferred tax by nature were as follows:

Change in deferred tax assets – March 2023

	Provisions and Impairments	Pensions	Tariff deviations	Derivative financial instruments	Revalued assets	Others	Total
At 1 January 2023	3,130	19,454	32,587	(2,457)	12,986	4,100	69,803
Increase/decrease through reserves	-	(354)	-	-	-	102	(252)
Reversal through profit and loss	-	(10)	(4,620)	(40)	(409)	(1,388)	(6,467)
Increase through profit and loss	-	-	137	-	-	-	137
Change in the period	-	(364)	(4,483)	(40)	(409)	(1,286)	(6,582)
At 31 March 2023	3,130	19,091	28,105	(2,497)	12,577	2,815	63,221

Change in deferred tax assets – December 2022

	Provisions and 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	-	(8,175)	-	(3,837)	-	142	(11,870)
Reversal through profit and loss	-	(571)	(14,192)	(162)	(2,068)	(43)	(17,036)
Increase through profit and loss	296	-	346	-	-	1,394	2,036
Change in the period	296	(8,746)	(13,846)	(3,999)	(2,068)	1,493	(26,870)
At 31 December 2022	3,130	19,454	32,587	(2,457)	12,986	4,100	69,803

Deferred tax assets at 31 March 2023 correspond essentially to: (i) to liabilities for benefit plans granted to employees; (ii) tariff deviations liabilities to be settled in subsequent years; and (iii) revalued assets.

Evolution of deferred tax liabilities – March 2023

	Tariff deviations	Revaluations Fair value		Investments in equity instruments at fair value through other comprehensive income	Derivative financial instruments	Others	Total
At 1 January 2023	27,775	15,937	46,860	8,669	17,179	(1,355)	115,064
Increase/decrease through equity	-	-	648	(80)	(1,173)	(717)	(1,322)
Reversal trough profit and loss	-	(334)	(462)	-	-	(1,339)	(2,135)
Increase through profit and loss	1,055	32	-	-	-	-	1,087
Exchange rate differences	-	-	-	-	-	643	643
Change in the period	1,055	(302)	186	(80)	(1,173)	(1,413)	(1,727)
At 31 March 2023	28,830	15,635	47,046	8,589	16,006	(2,768)	113,338

Evolution of deferred tax liabilities – December 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	-	-	-	(4,368)	-	(13)	12,798
Reversal trough profit and loss	(1,990)	(1,337)	(1,825)	-	-	(1,044)	(6,196)
Exchange rate differences	-	-	-	-	-	803	803
Change in the period	(1,990)	(1,337)	(1,825)	(4,368)	-	(165)	7,494
At 31 December 2022	27,775	15,937	46,860	8,669	-	(1,355)	115,064

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	Gas segment
Decree-Law nº 430/78	Decree-Law nº 140/2006
Decree-Law nº 399-G/81	Decree-Law nº 66/2016
Decree-Law nº 219/82
Decree-Law nº 171/85
Decree-Law nº 118-B/86
Decree-Law nº 111/88
Decree-Law nº 7/91
Decree-Law nº 49/91
Decree-Law nº 264/92

9 FINANCIAL ASSETS AND LIABILITIES

The accounting policies for financial instruments in accordance with the IFRS 9 categories have been applied to the following financial assets and liabilities:

- March 2023

	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	Other financial assets/liabilities	Total carrying amount	Fair value
Assets
Cash and cash equivalents	13	-	-	-	201,320	201,320	201,320
Trade and other receivables	11	599,574	-	-	-	599,574	599,574
Other financial assets		-	-	-	192	192	192
Investments in equity instruments at fair value through other comprehensive income	10	-	145,390	-	-	145,390	145,390
Income tax receivable		4,150	-	-	-	4,150	4,150
Derivative financial instruments	12	-	-	76,049	-	76,049	76,049
Assets related to the transitional gas price
stabilization regime - Decree-Law 84-D/2022	32	-	-	-	946,898	946,898	946,898
		603,724	145,390	76,049	1,148,410	1,973,574	1,973,574
Liabilities
Borrowings	16	-	-	-	2,322,420	2,322,420	2,307,235
Trade and other payables	19	-	-	-	954,483	954,483	954,483
Income tax payable	8	-	-	-	-	-	-
Drivative financial instruments	12	-	-	73,315	-	73,315	73,315
Liability related to the transitional gas price
stabilization regime - Decree-Law 84-D/2022	32	-	-	-	946,898	946,898	946,898
		-	-	73,315	4,223,801	4,297,116	4,281,931

- December 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	Other financial assets/liabilities	Total carrying amount	Fair value
Assets
Cash and cash equivalents	13	-	-	-	365,292	365,292	365,292
Trade and other receivables	11	383,430	-	-	-	383,430	383,430
Other financial assets		-	-	-	179	179	179
Investments in equity instruments at fair value
through other comprehensive income	10	-	145,715	-	-	145,715	145,715
Income tax receivable		10,671	-	-	-	10,671	10,671
Derivative financial instruments	12	-	-	80,799	-	80,799	80,799
Assets related to the transitional gas price
stabilization regime - Decree-Law 84-D/2022	32	-	-	-	1,000,000	1,000,000	1,000,000
		394,101	145,715	80,799	1,365,472	1,986,087	1,986,087
Liabilities
Borrowings	16	-	-	-	2,334,306	2,334,306	2,289,200
Trade and other payables	19	-	-	-	964,968	964,968	964,968
Drivative financial instruments	12	-	-	73,464	-	73,464	73,464
Liability related to the transitional gas price
stabilization regime - Decree-Law 84-D/2022	32	-	-	-	1,000,000	1,000,000	1,000,000
		-	-	73,464	4,299,274	4,372,738	4,327,632

Loans obtained, as referred to in Note 3.6 of the annual consolidated financial statements, for the year ended 31 December 2022, are measured upon initial recognition at fair value and subsequently at amortized cost, except those for which a derivative has been contracted fair value coverage (Note 12), in which case they are revalued 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 2.8982% and 2.896% (maturities of one week and nine years, respectively).

The fair value of borrowings contracted by the Group at 31 March 2023 is 2,307,235 thousand Euros (at 31 December 2022 was 2,289,200 thousand Euros), of which 533,443 thousand Euros are partially recorded at amortized cost, and contains an element recorded at fair value resulting from movements in the interest rate (at 31 December 2022 the amount recorded was 527,116 thousand Euros).

Estimated fair value – assets and liabilities measured at fair value

The following table presents the Group's assets and liabilities measured at fair value at 31 March 2023 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 2023, there was no transfer of financial assets and liabilities between fair value hierarchy levels.

		Mar 2023				Dec 2022
		Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Assets:
Investments in equity instruments at fair value
through other comprehensive income	Shares	87,720	-	54,074	141,794	88,045	-	54,074	142,119
Financial assets at fair value	Cash flow hedge derivatives	-	74,012	-	74,012	-	78,735	-	78,735
Financial assets at fair value	Fair value hedge derivatives	-	-	-	-	-	-	-	-
Financial assets at fair value through profit and loss Negotiable derivatives		-	2,037	-	2,037	-	2,064	-	2,064
		87,720	76,049	54,074	217,843	88,045	80,799	54,074	222,918
Liabilities:
Financial liabilities at fair value	Loans	-	533,443	-	533,443	-	527,116	-	527,116
Financial liabilities at fair value	Cash flow hedge derivatives	-	3,199	-	3,199	-	901	-	901
Financial liabilities at fair value	Fair value hedge derivatives	-	70,116	-	70,116	-	72,563	-	72,563
		-	606,758	-	606,758	-	600,580	-	600,580

During the tree-month period ended 31 March 2023, REN proceeded to a valuation of the financial interests held Hidroeléctrica de Cahora Bassa, S.A., which is classified as Investments in equity instruments at fair value through other comprehensive income (Note 10). The fair value of this asset reflects the price at which the asset would be sold in an orderly transaction.

For this purpose, REN has opted for a revenue approach, which reflects current market expectations regarding future amounts. The fair value of the investment amounted to 54,074 thousand Euros for the three-month period ended on 31 March 2023.

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

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

Financial risk management

Up until 31 March 2023, there were no significant changes regarding the financial risk management of the Company compared to the risks disclosed in the consolidated financial statements as of 31 December 2022. A description of the risks can be found in Section 4 - Financial Risk Management of the consolidated financial statements for the year ended 31 December 2022.

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

The assets recognised in this caption at 31 March 2023 and 31 December 2022 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 2023	Dec 2022
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%	87,720	88,045
Hidroeléctrica de Cahora Bassa ("HCB")	Maputo	Mozambique	7.50%	54,074	54,074
Coreso, S.A.	Brussels	Belgium	7.90%	164	164
MIBGAS, S.A.	Madrid	Spain	6.67%	202	202
MIBGÁS Derivatives, S.A.	Madrid	Spain	9.70%	49	49
Association HyLab - Green Hydrogen Collaborative Laboratory	Sines	Portugal	15.00%	15	15
				145,390	145,715

The changes in this caption were as follows:

						MIBGÁS
	OMEL	HCB	REE	Coreso	MIBGÁS	Derivatives	HyLab	Total
At 1 January 2022	3,167	56,111	103,017	164	202	48	15	162,724
Fair value adjustments	-	(2,037)	(14,972)	-	-	-	-	(17,009)
At 31 December 2022	3,167	54,074	88,045	164	202	48	15	145,715
At 1 January 2023	3,167	54,074	88,045	164	202	48	15	145,715
Fair value adjustments	-	-	(325)	-	-	-	-	(325)
At 31 March 2023	3,167	54,074	87,720	164	202	48	15	145,390

Red Eléctrica Corporácion, S.A. ("REE") is the transmission system operator of electricity in Spain. The Group acquired 1% of equity interests in REE as part of the agreement signed by the Portuguese and Spanish Governments. REE is a listed company in Madrid`s index IBEX 35– Spain and the financial asset was recorded on the statement of financial position at the market price on 31 March 2023.

REN holds 2,060,661,943 shares representing 7.5% of the stock capital and voting rights of Hidroeléctrica de Cahora Bassa, SA, a company incorporated under Mozambican law, at the 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 that involve the analysis and coordination of the European regional electricity network, with a focus on the coordination of services, ranging from coordination several days in advance to close to real time.

On 31 March 2023, 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 2023, 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 2023, 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 value, and there is no indicator at this date that this value is not representative of the fair value, as describe in Note 3.6 - Financial Assets and Liabilities of the consolidated financial statements for the year ended 2022.

REN understands that there is no evidence of impairment loss regarding the investments of OMEL, Coreso, MIBGÁS, MIBGÁS Derivatives and HyLab at 31 March 2023.

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.

Name

AMPORTO - Área Metropolitana do Porto

AREA ALTO MINHO - Ag. Reg. Energia e Amb. Alto Minho

ADEPORTO - Agência de Energia do Porto

The adjustments to investments in equity instruments at fair value through other comprehensive are recognised in the equity caption "Fair value reserve". This caption at 31 March 2023 and 31 December 2022 is made up as follows:

	Fair value reserve
	(Note 15)
1 January 2022	57,758
Changes in fair value	(17,009)
Tax effect	4,368
31 December 2022	45,116
1 January 2023	45,116
Changes in fair value	(325)
Tax effect	80
31 March 2023	44,871

In the three-month period ended 31 March 2023, 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 2022. This amount was included in the cash flows statement.

11 TRADE AND OTHER RECEIVABLES

Trade and other receivables at 31 March 2023 and 31 December 2022 are made up as follows:

		Mar 2023			Dec 2022
	Current	Non-current	Total	Current	Non-current	Total
Trade receivables	284,978	3,275	288,253	229,678	3,275	232,952
Impairment of trade receivables	(2,905)	-	(2,905)	(2,905)	-	(2,905)
Trade receivables net	282,073	3,275	285,348	226,773	3,275	230,047
Tariff deviations	30,094	195,546	225,640	45,451	52,391	97,842
State and Other Public Entities	88,587	-	88,587	55,540	-	55,540
Trade and other receivables	400,753	198,821	599,574	327,764	55,666	383,430

The most relevant balances included in the trade and other receivables caption as of 31 March 2023 are: (i) the receivable of E-Redes Distribuição de Eletricidade, SA in the amount of 33,842 thousand Euros (32,125 thousand Euros at 31 December 2022), (ii) the receivable of Galp Gás Natural, S.A., in the amount of 5,402 thousand Euros (5,760 thousand Euros at 31 December 2022), (iii) the receivable of EDP – Gestão da Produção de Energia, S.A., in the amount of 147 thousand Euros (7,112 thousand Euros at 31 December 2022), (iv) the receivable of EDP – Energias de Portugal, S.A., in the amount of 751 thousand Euros (15,829 thousand Euros at 31 December 2022) and (v) the receivable of Endesa Generación, S.A., in the amount of 9,631 thousand Euros (10,295 thousand Euros at 31 December 2022).

In the trade and other receivables at 31 March 2023, also stands out the amounts not yet invoiced of the activity of the Market Manager (MIBEL – Mercado Ibérico de Electricidade), in the amount of 53,709 thousand Euros (54,758 thousand Euros at 31 December 2022), the amount to invoice to EDP – Distribuição de Energia, S.A., of 8,390 thousand Euros (5,885 thousand Euros at 31 December 2022) regarding the CMEC, also reflected in the caption "Suppliers and other accounts payable" (Note 19) and the amount of 42,452 thousand Euros related to the payment of dividends as advance on profits.

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 2023 Dec 2022
Begining balance	(2,905)	(2,947)
Reclassifications	-	123
Increases	-	(81)
Ending balance	(2,905)	(2,905)

12 DERIVATIVE FINANCIAL INSTRUMENTS

At 31 March 2023 and 31 December 2022, the REN Group had the following derivative financial instruments contracted:

			31 March 2023
			Assets		Liabilities
	Notional	Current	Non-current	Current	Non-current
Derivatives designated as cash flow hedges
Interest rate swaps	900,000 TEUR	-	74,012	-	-
Currency and interest rate swaps	10,000,000 TJPY	-	-	-	3,175
Non-Deliverable Forward	3,180,000 TEUR	-	-	24	-
		-	74,012	24	3,175
Derivatives designated as fair value hedges
Interest rate swaps	600,000 TEUR	-	-	-	70,116
		-	-	-	70,116
Trading derivatives
Trading derivatives	60,000 TEUR	-	2,037	-	-
		-	2,037	-	-
Derivative financial instruments		-	76,049	24	73,291
			31 December 2022
			Assets	Liabilities
	Notional	Current	Non-current	Current	Non-current
Derivatives designated as cash flow hedges
Interest rate swaps	900,000 TEUR	-	78,500	-	-
Currency and interest rate swaps	10,000,000 TJPY	-	-	-	901
Non-Deliverable Forward	3,180,000 TEUR	236	-	-	-
		236	78,500	-	901
Derivatives designated as fair value hedges
Interest rate swaps	600,000 TEUR	-	-	-	72,563
		-	-	-	72,563
Trading derivatives
Trading derivatives	60,000 TEUR	-	2,064	-	-
		-	2,064	-	-
Derivative financial instruments		236	80,564	-	73,464

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:

• eleven interest rate swap contracts negotiated by REN SGPS to hedge the interest rate fluctuation risk;
• a cross currency swap contract negotiated by REN SGPS to hedge the exchange rate fluctuation risk;
• a global non-deliverable forward contract negotiated by REN Serviços, with the objective of covering the exchange rate risk of exposure to the Chilean Peso of sales denominated in the same currency by Transemel.

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

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

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

The disclosed amount includes receivable or payable accrued interest, at 31 March 2023 related to these financial instruments, in the net amount payable of 3,112 thousand Euros (at 31 December 2022 it was 577 thousand Euros payable).

The characteristics of the derivative financial instruments negotiated at 31 March 2023 and 31 December 2022 were as follows:

						Fair value at
	Notional	Currency	REN pays	REN receives	Maturity	Mar 2023	Dec 2022
Cash flow hedge:
Interest rate swaps	900,000 TEuros	EUR	[0.75%;1.266%]	[Euribor 3m; Euribor 6m] [dec-2024;feb-2025]		74,012	78,500
Currency ans interest rate swaps			10,000,000 TJPY EUR/JPY [Euribor 6m; + 1.9%]	[2.71%]	[jun-2024]	(3,175)	(901)
Non-Deliverable Forward			3,180,000 TCLP EUR/CLP [854,4 to 893,1 CLP]	[854,4 to 893,1 EUR]	[jul-2021;dec-2023]	(24)	236
						70,813	77,835
Fair value hedge:
Interest rate swaps	300,000 TEuros	EUR	[Euribor 6m]	[0.611%; 0.6285%]	[feb-2025]	(16,042)	(15,582)
Interest rate swaps	300,000 TEuros	EUR	[Euribor 6m]	[-0.095%]	[apr-2029]	(54,074)	(56,981)
						(70,116)	(72,563)
Trading:
Interest rate swaps	60,000 Teuros	EUR	[0.99%]	[Euribor 6m]	[jun-2024]	2,037	2,064
						2,037	2,064
					Total	2,734	7,336

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 on 31 March 2023 is presented in the following table:

	2023	2024	2025	2026	2027	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)	2,695	-	-	-	-	-	2,695
Interest rate swap (fair value hedge)	-	-	300,000	-	-	300,000	600,000
Interest rate swap (trading)	-	60,000	-	-	-	-	60,000
Total	2,695	432,899	600,000	-	-	600,000	1,635,594

The breakdown of the notional of derivatives on 31 December 2022 is presented in the following table:

		2023	2024	2025	2026	2027	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)		3,604	-	-	-	-	-	3,604
Interest rate swap (fair value hedge)		-	-	300,000	-	-	300,000	600,000
Interest rate swap (trading)		-	60,000	-	-	-	-	60,000
	Total	3,604	432,899	600,000	-	-	600,000	1,636,503

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 2023, 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 2022 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 2023, is positive 74,012 thousand Euros (at 31 December 2022 it was positive 78,500 thousand Euros).

Of the derivatives described above, two contracts in a total amount of 600,000 thousand Euros (at 31 December 2022 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 72,957 thousand Euros (at 31 December 2022 it was 78,316 thousand Euros).

The hedged instruments of cash flow hedging relationships present the following conditions:

	Maturity	Hedged notional	Interest rate	Hedged carrying amount - Mar 2023	Hedged carrying amount - Dec 2022	Note
Cash flow hedging instruments
European Investment Bank (EIB) Loan	16/12/2024	300,000 TEuros	Euribor 3m	297,822	299,403	16
Bond Issue (Euro Medium Term Notes)1	12/02/2025	300,000 TEuros	2.5%	299,014	293,363	16
Bond Issue (Euro Medium Term Notes)2	16/04/2029	300,000 TEuros	0.50%	298,562	298,932	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) in an aggregate exposure hedge to Euribor 6 months in the period from 2023 to 2029 and, as such, eligible for cash flow hedge.

Cash Flow Hedge – Interest and Exchange Rate Swaps

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

The fair value of the cross currency swap at 31 March 2023 is negative 3,175 thousand Euros (at 31 December 2022 it was positive 901 thousand Euros).

Changes in the fair value of the hedging instrument are also being recognized in equity hedging reserves, with exception of:

• the offsetting of the exchange rate effect of the spot revaluation of the hedged item (bond issue in yen) at each reference date, arising from the hedging of the exchange rate risk⁵ ;
• the ineffective effect of the hedge arising from the accounting designation made (REN contracted a trading derivative to economically hedge this ineffectiveness - see Trading Derivative)⁶ . This inefficiency is caused by the change in the interest profile of the hedging instrument, which pays a variable rate in the period from 2019 to 2024.

Cash Flow Hedge – Non Deliverable forward

In May 2021, the Group hedged the exchange rate risk of sales denominated in Chilean Pesos by Transemel, in a total amount of 7,950,000 thousand Chilean Pesos (CLP), through the contracting of a structure of thirty monthly non deliverable forwards on the monthly average of the EUR/CLP exchange rate with maturity between 2021 and 2023.

As at 31 March 2023, the Group has a total of twelve active non-deliverable forwards contracts denominated as cash flow hedging instruments in the global amount of 2,695 thousand Euros. The hedged risk corresponds to the foreign exchange exposure of sales made in CLP at the time of the consolidation of the Group entity, Transemel. Credit risk is not covered.

The fair value of non deliverable forwards, as of 31 March 2023, is negative 24 thousand Euros (at 31 December 2022 it was positive 236 thousand Euros). The amount recorded in reserves, referring to the cash flow hedges mentioned above, as at 31 March 2023, is 157 thousand Euros (at 31 December 2022 it was 346 thousand Euros). Additionally, an amount of 33 thousand Euros was recorded as a hedging cost in the income statement, which corresponds to the forward points of the hedging instruments that are not designated as part of the hedging relationship (at 31 December 2022 it was 82 thousand Euros). The hedged instrument of the cash flow hedge corresponds to a proportion of total sales denominated in CLP, corresponding to a monthly sales amount of 265,000 thousand Chilean Pesos.

Integral Income:

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

- March 2023

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
Swaps of interest rate	(5,359)	(5,359)	-	-
Swaps of exchange rate and interest rate	(1,891)	146	10	(2,047)
Non-Deliverable Forward	(24)	157	-	(181)
	(7,274)	(5,056)	10	(2,228)

- March 2022

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
Swaps of interest rate	1,538	14,219	-	-
Swaps of exchange rate and interest rate	(4,413)	2,789	(4,843)	(2,359)
Non-Deliverable Forward	1,061	(1,089)	-	-
	30,240	33,590	(1,266)	(2,718)

⁵ The currency effect of the underlying (loan),as at 31 March 2021, was favorable in the amount of 2,047 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 December 2022 was favorable in 2,718 thousand Euros).

⁶ The ineffective cash flow hedge component of the exchange rate risk recognised in the income statement, was positive 10 thousand Euros which was offset by the effect of the trading derivative negotiated in negative 283 thousand Euros (as of 31 December 2022 it was negative 1,266 thousand Euros against positive 1,313 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 2023 amounted to negative 273 thousand Euros (as of 31 March 2022 was positive 47 thousand Euros).

Hedging Reserve:

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

	Fair value	Deferred taxes impact	Hedging reserves (Note 15)
1 January 2022	(15,962)	3,837	(12,126)
Changes in fair value and ineffectiveness	92,660	(21,016)	71,644
31 December 2022	76,698	(17,179)	59,518
1 January 2023	76,698	(17,179)	59,518
Changes in fair value and ineffectiveness	(5,440)	1,173	(4,267)
31 March 2023	71,258	(16,006)	55,252

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 2023, the Group has a total of four fair value hedging derivative contracts amounting to 600,000 thousand Euros (as of 31 December 2022 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 2023, the fair value of interest rate swaps designated as fair value hedging instruments was negative 70,116 thousand Euros (as of 31 December 2022 it was negative 72,563 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 2023

	Maturity	Hedged notional	Interest rate	Carrying amount	Accumulated Fair value adjustment	Variation of the year-end 2023	Note
Fair value hedging instruments
Bond Issue (Euro Medium Term Notes)	12/02/2025	300,000 TEuros	2.50%	300,653	15,345	(1,639)	16
Bond Issue (Euro Medium Term Notes)	16/04/2029	300,000 TEuros	0.50%	303,249	51,212	(4,687)	16
					66,557	(6,326)

- 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	18,996	16
					25,853	27,399

As of 31 March 2023, the change in fair value of the debt related to interest rate risk recognized in the income statement was negative 6,327 thousand Euros (at 31 March 2022 it was positive 27,399 thousand Euros), resulting in an ineffective component, after considering the effect of the hedged items in the income statement, of approximately negative 600 thousand Euros (at 31 March 2022 it was positive 33 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 2023

- March 2022

Fair value hedging instruments	Hedging inefficiency recorded in profit for the year
Swaps of interest rate	(600)
Fair value hedging instruments	Hedging inefficiency recorded in profit for
Swaps of interest rate	the year 33

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 2023 (at 31 December 2022 it was 60,000 thousand Euros). Credit risk is not being hedged. The fair value of the trading derivative, on 31 March 2023, is positive 2,037 thousand Euros (on 31 December 2022 it was positive 2,064 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 2023, related to the effect of the fair value of the trading derivative was negative 283 thousand Euros (as of 31 March 2022 it was 1,313 thousand Euros positive).

13 CASH AND CASH EQUIVALENTS

The amounts considered as cash and cash equivalents in the consolidated statements of cash flows for the periods ended 31 March 2023 and 31 December 2022 are made up as follows:

	Mar 2023	Dec 2022
Cash	24	1
Bank deposits	201,296	365,291
Cash and cash equivalents in the statement of financial position	201,320	365,292
The transitional gas price stabilization regime - Decree-Law 84-D/2022 (Note 32)	-	-
Cash and cash equivalents in cash flow statement	201,320	365,292

In the years ended 31 March 2023 and 31 December 2022, there are no cash and cash equivalents that are not available for the group to use.

14 EQUITY INSTRUMENTS

As of 31 March 2023 and 31 December 2022, REN's subscribed and paid up share capital is made up of 667,191,262 shares of 1 euro each.

		Mar 2023		Dec 2022
	Number of shares	Share capital	Number of shares	Share capital
Share Capital	667,191,262	667,191	667,191,262	667,191

The caption "Other changes in equity" in the period ended 31 March 2023 amounted to 5,561 thousand Euros.

Additionally, and following the share capital increase in 2017, the caption "Share Premium" in the period ended 31 March 2023 amounted to 116,809 thousand Euros.

At 31 March 2023 and 31 December 2022, REN SGPS had the following own shares:

	Number of shares	Proportion	Amount
Own shares	3,881,374	0.6%	(10,728)

No own shares were acquired or sold in the period ended 31 March 2023.

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

15 RESERVES AND RETAINED EARNINGS

The caption "Reserves" in the amount of 397,210 thousand Euros includes:

• Legal reserve: The Commercial Company Code in place requires that at least 5% of the net profit must be transferred to this reserve until it has reached 20% of the share capital. This reserve can only be used to cover losses or to increase capital. At 31 March 2023 this caption amounts to 135,702 thousand Euros;
• Fair value reserve: includes changes in the fair value of available for sale financial assets (44,871 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 55,251 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 2023, this caption amounts to 161,386 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 2023 and 31 December 2022 was as follows:

		Mar 2023			Dec 2022
	Current	Non-current	Total	Current	Non-current	Total
Bonds	550,000	1,101,519	1,651,519	550,000	1,097,002	1,647,002
Bank Borrowings	68,283	338,300	406,583	68,283	348,300	416,583
Commercial Paper	-	250,000	250,000	-	250,000	250,000
Leases	1,447	2,468	3,915	1,432	2,418	3,850
	619,730	1,692,288	2,312,018	619,715	1,697,720	2,317,436
Accrued interest	15,048	-	15,048	23,667	-	23,667
Prepaid interest	(1,938)	(2,708)	(4,646)	(4,438)	(2,359)	(6,797)
Borrowings	632,840	1,689,580	2,322,420	638,944	1,695,362	2,334,306

The borrowings settlement plan was as follows:

	2023	2024	2025	2026	2027	Following years	Total
Debt - Non current	-	138,660	570,436	290,217	69,460	623,515	1,692,288
Debt - Current	619,730	-	-	-	-	-	619,730
	619,730	138,660	570,436	290,217	69,460	623,515	2,312,018

Detailed information regarding bond issues as of 31 March 2023 is as follows:

31 March 2023
Issue date	Maturity	Inicial amount	Outstanding	Interest rate	Periodicity of
			amount		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	18/01/2028	TEUR 300,000	TEUR 300,000	Fixed rate EUR 1.75%	Annual
16/04/2021	16/04/2029	TEUR 300,000 (ii)	TEUR 300,000	Fixed rate EUR 0.50%	Annual

(i) These issues correspond to private placements.

(ii) These issues have interest currency rate swaps associated

As of 31 March 2023, the Group has eleven commercial paper programs in the amount of 2,125,000 thousand Euros, of which 1,875,000 thousand Euros are available for utilization. Of the total amount 850,000 thousand Euros have a guaranteed placement. As of March 31, 2023, an amount of 600,000 thousand Euros is available (600 thousand Euros were also available as of December 31, 2022).

In 2023, the Group renegotiated a Revolving Credit Facility with the Bank of China, for wich purpose 10,000 thousand Euros, which at that date had been issued, were disbursed. The new financing line, in the amount of 250,000 thousand Euros, was not disbursed.

REN SGPS signed, with the European Investment Bank (EIB), new long term financing in the amount of 150,000 thousand Euros, was not disbursed.

Bank loans are mostly composed of loans contracted with the European Investment Bank (EIB), which at 31 March 2023 amounted to 371,583 thousand Euros (at 31 December 2022 it was 371,583 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 865 thousand Euros (2,069 thousand Euros at 31 December 2022) 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 6,327 thousand Euros (negative) (at 31 March 2022 was 27,399 thousand Euros (positive)).

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 2023, the group complies with all the covenants to which it is contractually bound.

Group 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 2.42% in 31 March 2023 and 1.81% in 31 December 2022.

Leases

Minimal payments regarding lease contacts and the carrying amount of the finance lease liabilities as of 31 March 2023 and 31 December 2022 are made up as follows:

	Mar 2023	Dec 2022
Lease liabilities - minimum lease payments
No later than 1 year	1,504	1,450
Later than 1 year and no later than 5 years	2,555	2,435
	4,059	3,885
Future finance charges on leases	(173)	(35)
Present value of lease liabilities	3,886	3,850
	Mar 2023	Dec 2022
The present value of lease liabilities is as follows
No later than 1 year	1,447	1,432
Later than 1 year and no later than 5 years	2,468	2,418
	3,915	3,850

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 2023 and 31 December 2022, the Group had the following amounts recorded relating to liabilities for retirement and other benefits:

	Mar 2023	Dec 2022
Liability on statement of financial position
Pension plan	31,219	32,551
Healthcare plan and other benefits	32,499	32,388
	63,718	64,939

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

Mar 2023	Dec 2022
	94,109
	3,749
-	(157)
(1,178)	(27,254)
(1,098)	(5,508)
63,718	64,939
	64,939 Current service costs and Net interest on net defined benefit liability1,055

During the three-month periods ended 31 March 2023 and 2022, the following operating expenses were recorded regarding benefit plans with employees:

	Mar 2023	Mar 2022
Charges to the statement of profit and loss (Note 24)
Pension plan	680	661
Healthcare plan and other benefits	375	224
	1,055	885

The amounts reported at 31 March 2023 and 2022 result from the projection of the actuarial valuation made on 31 December 2022, for the three-month periods ending 31 March 2023 and 2022, considering the estimated salaries for 2023 and 2022, respectively.

The actuarial assumptions used to calculate the post-employment benefits are considered by the REN Group and the entity specialized in the actuarial valuation reports to be those that best meet the commitments established in the Pension plan, and related retirement benefit liabilities, and are as follows:

	2022	2021
	Full Yield Curve	Full Yield Curve
Annual discount rate	(single rate equivalent: 3,87%)	(single rate equivalent: 1,03%)
Expected percentage of serving employees elegíble for early retirement (more than 60 years of age and 36 years in service) - by Collective work agreement	20.00%	20.00%
Expected percentage of serving employees elegible for early retirement - by Management act	10.00%	10.00%
Rate of salary increase	4,50% para 2023 2,80% a partir de 2024	2.80%
Pension increase	3,50% para 2023 2,30% a partir de 2024	1.80%
Future increases of Social Security Pension amount Inflation rate	3,50% para 2023 2,30% a partir de 2024 2.30%	1.80% 1.80%
Medical trend	2.30%	1.80%
Management costs (per employee/year)	€282	€289
Expenses medical trend	2.30%	1.80%
Retirement age (number of years)	66	66
Mortality table	TV 99/01	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 2023 and 31 December 2022 were as follows:

	Mar 2023	Dec 2022
Begining balance	10,576	8,872
Increases	-	2,576
Reversing	-	(346)
Utilization	(444)	(526)
Ending balance	10,132	10,576

At 31 March 2023, the caption "Provisions" corresponds essentially to estimates of the payments to be made by REN resulting from legal processes in progress for damage caused to third parties and a provision for restructuring in the amount of 949 thousand Euros related to the ongoing restructuring process of the Group.

19 TRADE AND OTHER PAYABLES

The caption "Trade and other payables" at 31 March 2023 and 31 December 2022 was made up as follows:

		Mar 2023			Dec 2022
	Current	Non current	Total	Current	Non current	Total
Trade payables
Current suppliers (Note 9)	311,082	-	311,082	219,141	-	219,141
Other creditors
Other creditors (Note 9)	52,001	34,358	86,359	28,369	34,815	63,184
Tariff deviations (Note 9)	397,635	68,589	466,224	523,570	73,646	597,217
Fixed assets suppliers (Note 9)	45,741	-	45,741	59,887	-	59,887
Tax payables (Note 9) (i)	37,681	-	37,681	19,629	-	19,629
Deferred income
Grants related to assets	19,241	255,016	274,257	19,346	252,847	272,194
Bilateral agreements - Grants	-	121,754	121,754	-	86,967	86,967
Others	11,072	1,956	13,027	9,563	2,021	11,584
Accrued costs
Holidays and holidays subsidies (Note 9)	7,396	-	7,396	5,909	-	5,909
Trade and other payables	881,849	481,673	1,363,522	885,416	450,297	1,335,713

(i) Tax payables refer to VAT, personnel income taxes and other taxes

The caption "Trade and other payables" includes: (i) the amount of 65,676 thousand Euros, regarding the management of CAEs from Turbogás and Tejo Energia (40,521 thousand Euros at 31 December 2022); (ii) the amount of 19,971 thousand Euros of investment projects not yet invoiced (23,195 thousand Euros at 31 December 2022); (iii) the amount of 50,909 thousand Euros (54,758 thousand Euros at 31 December 2022) from the activity of the Market Manager (MIBEL – Mercado Ibérico de Electricidade); and (iv) the amount of 8,390 thousand Euros of "CMEC – Custo para a Manutenção do Equilíbrio Contratual" to be invoiced by EDP – Gestão da Produção de Energia, S.A. (5,885 thousand Euros at 31 December 2022), 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 2,285 thousand Euros (1,078 thousand Euros at 31 December 2022) 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 28,098 thousand Euros (Note 27) (at 31 March 2022 was 28,018 thousand Euros).

20 SALES AND SERVICES RENDERED

Sales and services rendered recognized in the consolidated statement of profit and loss for the three-month period ended 31 March 2023 and 2022 is made up as follows:

	Mar 2023	Mar 2022
Goods:
Domestic market	59	42
	59	42
Services - Domestic market:
Electricity transmission and overall systems management	97,750	83,650
Gas transmission	17,391	21,656
Regasification	15,459	11,029
Gas distribution	14,229	14,047
Underground gas storage	7,023	4,353
Telecommunications network	2,068	1,787
Trading	233	198
Others	22	715
Services - External market (Chile):
Transmission and transformation of electricity	3,810	3,021
	157,984	140,456
Total sales and services rendered	158,044	140,498

21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES

As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers. Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets as of 31 March 2023 and 2022 were made up as follows:

	Mar 2023	Mar 2022
Revenue from construction of concession assets
Acquisitions	39,533	22,276
Own work capitalised :
Financial expenses (Note 5)	936	493
Overhead and management costs (Note 5)	4,935	4,310
	45,404	27,080
Cost of construction of concession assets
Acquisitions	39,533	22,276
	39,533	22,276

22 OTHER OPERATING INCOME

The caption "Other operating income" loss for the three-month period ended 31 March 2023 and 2022 is made up as follows:

		Mar 2023 Mar 2022
Recognition of investment subsidies in profit and loss	4,532	4,521
Underground occupancy tax	2,823	3,283
Disposal of unused materials	650	162
Supplementary income	277	312
Others	315	268
	8,597	8,546

23 EXTERNAL SUPPLIES AND SERVICES

The caption "External supplies and services" for the three-month period ended 31 March 2023 and 2022 is made up as follows:

	Mar 2023	Mar 2022
Cross border interconnection costs i)	8,700	1,531
Fees relating to external entities ii)	3,041	2,224
Maintenance costs	2,464	3,274
Gas transport subcontracts	2,191	1,748
Electric energy costs	1,423	4,494
Insurance costs	1,308	1,177
Security and surveillance	573	532
Travel and transportation costs	328	187
Advertising and communication costs	172	165
Gas operation - Pass through iii)	-	1,035
Other	1,412	1,146
External supplies and services	21,611	17,512

i) The cross border interconnection costs refer to the cost assumed on cross-border trade in electricity.

ii) The fees paid to external entities refer to specialized work and fees paid by REN for contracted services and specialized studies.

iii) Acquisition referring to the extension of the operating gas complying with the provisions of Directive no. 6/2021 published by ERSE.

24 PERSONNEL COSTS

Personnel costs for the three-month period ended 31 March 2023 and 2022 are made up as follows:

	Mar 2023	Mar 2022
Remuneration:
Board of directors	765	893
Personnel	10,504	9,586
	11,269	10,480
Social charges and other expenses:
Social security costs	2,204	2,049
Post-employement and other benefits cost (Note 17)	1,055	885
Social support costs	503	501
Other	75	68
	3,836	3,503
Total personnel costs	15,105	13,982

The Corporate bodies' remuneration includes remunerations paid to the Board of Directors as well as the General Shareholders meeting attendance.

25 OTHER OPERATING COSTS

Other operating costs for the three-month period ended 31 March 2023 and 2022 are made up as follows:

	Mar 2023	Mar 2022
ERSE operating costs i)	3,127	1,677
Underground occupancy tax	2,845	3,283
Donations and quotizations	747	602
Others	570	507
	7,289	6,069

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

26 FINANCIAL COSTS AND FINANCIAL INCOME

Financial costs and financial income for the three-month period ended 31 March 2023 and 2022 are made up as follows:

	Mar 2023	Mar 2022
Financial costs
Interest on bonds issued	9,189	8,250
Other borrowing interests	3,640	2,454
Derivative financial instruments	1,820	1,283
Interest on commercial paper issued	1,152	1,012
Other financing expenditure	1,382	626
	17,183	13,625
Financial income
Interest income	2,301	-
Exchange rate differences	1,137	2,056
Other financial investments	643	1,582
Derivative financial instruments	7	332
	4,088	3,970

27 EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR

Law no. 83-C / 2013 of 31 December introduced a specific contribution of entities operating in the energy sector, called Extraordinary Contribution over the Energy Sector ("ECES"), that was extended by Law no. 82-B / 2014, of 31 December, Law no. 7-A / 2016, of 30 March, Law no. 114/2017, of 29 December, Law no. 71/2018, 31 December, Law no. 2/2020, of 31 March, Law no. 75-B/2020, of 31 December, and Law no. 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 28,101 thousand Euros (Note 19) (for the three-month period ended 31 March 2022 was 28,018 thousand Euros) against a cost in the statement of profit and loss.

28 EARNINGS PER SHARE

Earnings per share were calculated as follows:

		Mar 2023	Mar 2022
Consolidated net profit used to calculate earnings per share	(1)	12,785	5,957
Number of ordinary shares outstanding during the period (note 14)	(2)	667,191,262	667,191,262
Effect of treasury shares (note 14)		3,881,374	3,881,374
Number of shares in the period	(3)	663,309,888	663,309,888
Basic earnings per share (euro per share)	(1)/(3)	0.02	0.01

The basic earnings per share are the same as the diluted earnings as there are no situations that could origin dilution effects.

29 DIVIDENDS PER SHARE

On 28 April 2022, the General Meeting approved the distribution of dividends to shareholders, based on the result for the 2021 financial year, in the amount of 102,747 thousand Euros (0.154 Euros per share), including the dividend attributable to own shares in the amount of 597 thousand Euros, with the amount of 102,150 thousand Euros having been paid to shareholders.

The strategic plan announced by the Company on 14 May 2021, the Board of Directors of REN – Redes Energéticas Nacionais, SGPS, S.A. approved, on 30 November 2022, the payment of dividends, as an advance on profits, in the amount of 0.064 Euros per share, in the amount of 42,452 thousand Euros.

30 CONTINGENT ASSETS AND LIABILITIES

30.1. Contingent liabilities

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 2023 amounts to, approximately, 107 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.

30.2. Guarantees given

At 31 March 2023 and 31 December 2022, the REN Group had given the following bank guarantees:

Beneficiary	Scope	Mar 2023	Dec 2022
European Investment Bank (EIB)	To guarantee loans	217,090	216,338
	General Directorate of Energy and Geology To guarantee compliance with the contract relating to the public service concession	24,028	24,028
Tax Authority and Customs	Ensure the suspension of tax enforcement proceedings	30,446	25,881
Judge of District Court	Guarantee for expropriation processes	6,523	6,141
Mibgás	To guarantee the liabilities incurred from the participation in the gas organized market	4,000	4,000
Municipal Council of Seixal	Guarantee for litigation	3,133	3,133
Portuguese State	Guarantee for litigation	2,232	2,232
Municipal Council of Maia	Guarantee for litigation	1,564	1,564
Municipal Council of Odivelas	Guarantee for litigation	1,119	1,119
EP - Estradas de Portugal	Guarantee for litigation	629	603
Municipal Council of Porto	Guarantee for litigation	368	368
Municipal Council of Silves	Guarantee for expropriation processes	352	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, S.A.	Guarantee obligations assumed by the Payer in the contract for the Provision of Communications Services	123	123
Lisbon Maritime Customs	Constitution of possible customs debts	115	-
Others (loss then 100 thousand Euros)	Guarantee for litigation	270	270
		292,194	286,354

31 RELATED PARTIES

Main shareholders

At 31 March 2023 and 31 December 2022, the shareholder structure of Group REN was as follows:

Mar 2023		Dec 2022
Number of		Number of
shares	%	shares	%
166,797,815	25.0%	166,797,815	25.0%
80,100,000	12.0%	80,100,000	12.0%
49,835,065	7.5%	49,568,307	7.0%
35,496,424	5.3%	35,496,424	5.3%
33,359,563	5.0%	33,359,563	5.0%
3,881,374	0.6%	3,881,374	0.6%
297,721,021	44.6%	297,987,779	44.7%
667,191,262	100%	667,191,262	100%

Management remuneration

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

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

Remuneration of the Board of Directors of REN, SGPS in the three-month period ended 31 March 2023 amounted to 673 thousand Euros (803 thousand Euros at 31 March 2022), as shown in the following table:

	Mar 2023	Mar 2022
Remuneration and other short term benefits	420	420
Management bonuses (estimate)	254	383
	673	803

Transaction of shares by the members of the Board of Directors

During the three-month period ended 31 March 2023, there were no transactions carried out by members of the corporate bodies.

Transactions with group or dominated companies

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

In the consolidation process, the amounts related to such transactions or open balances are eliminated (Note 3.2) in the financial statements.

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

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

During the three-month periods ended 31 March 2023 and 2022, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties:

Revenue

	Mar 2023	Mar 2022
Sales and services provided
Invoicing issued - REE	18	321
Invoicing issued - Centro de Investigação em Energia REN - State Grid	31	35
Other operating income
Invoicing issued - OMIP	24	-
	72	356

Expenses

	Mar 2023	Mar 2022
External supplies and services
Invoicing received - REE	57	-
Invoicing received - Centro de Investigação em Energia REN - State Grid	25	26
Invoicing received - CMS Rui Pena & Arnaut1	20	20
	103	46

Balance

The balances at 31 March 2023 and 31 December 2022 resulting from transactions with related parties were as follows:

	Mar 2023	Dec 2022
Trade and other receivables
REE - Dividends	-	1,477
Centro de Investigação em Energia REN - State Grid - Other receivables	25	145
REE - Trade receivables	18	119
	42	1,740
Trade and other payables
Centro de Investigação em Energia REN - State Grid - Other payables	127	102
REE - Trade payables	57	-
CMS - Rui Pena & Arnaut - Trade payables 1	4	4
SPECO - Shandong Power Equipment CO - Trade payables 2	615	375
	804	480

32 DECREE-LAW NO. 84-D/2022 – TRANSITORY GAS PRICE STABILIZATION REGIME

The Portuguese State, through Decree-Law no. 84-D/2022, of 9 December 2022, established a transitional regime to stabilize the price of natural gas for consumption carried out in 2023, through the discount on the price of natural gas , equivalent to the difference between the price of the energy component, shown on the invoice, and its reference value, as provided for in article 3 of this decree-law.

The beneficiaries of the transitional price stabilization regime are legally constituted legal persons, consumers of high, medium and low pressure gas at delivery points with annual consumption greater than 10,000 m3, with the exception of the entities referred to in number 2 of article 2.th.

The discount is applied directly by the suppliers in the month following the billing of the respective consumption, once the invoice has been paid by the customer, and the discount must be expressly identified on the invoice in which it is reflected.

Suppliers inform, on the first working day of each week, the Global Technical Manager of the National Gas System ("GTG") regarding the quantities and discount values to be applied to the billing issued in the previous week, including the total consumption of their portfolio from clients. Based on the information transmitted, the GTG transfers, within 10 days to the suppliers, the amounts referring to the support to be granted for each identified billing cycle.

As mentioned in the aforementioned Decree-Law, more precisely in Article 7, it is the responsibility of REN Gasodutos, as Global Technical Manager of the National Gas System, to interact with suppliers in order to operationalize the application of this decree- law. It is REN Gasodutos' responsibility to transfer the funds provided by the Portuguese State for the purposes of this decree-law, and such amounts cannot be used for other purposes. The amount transferred by the Government is deposited in a dedicated bank account, with accounting separation in relation to other activities carried out by the Company.

¹ Entity related to the Administrator José Luís Arnaut. During 2023, 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.

On 29 December 2022, the Company received the amount of 1,000,000 thousand Euros, recorded under the caption Transitory gas price stabilization regime - Decree-Law no. 84-D/2022, both in assets and in liabilities, taking into account the need for accounting separation in relation to the other activities carried out by the Company, as mentioned above and mentioned in paragraph 3 of article 7 of the aforementioned decree-law.

Payments of the amounts corresponding to natural gas consumption billed in 2023 begin in February of the same year and can be settled by the end of January 2024. If the amount transferred under this decree-law is not exhausted, REN transfers the respective remainder in favor of the Portuguese State, as referred to in paragraph 5 of article 7 of the referred Decree-Law.

As of 31 March 2023, the Company has already made payments in accordance with the aforementioned Decree-Law, as such the amount recorded in "Transitional gas price stabilization regime - Decree-Law 84-D/2022", both in assets and in liabilities, is 946,898 thousand Euros.

33 SUBSEQUENT EVENTS

On 2 April 2023, following the Proposal for Tariffs and Prices for natural gas in the gas year 2023-2024 and parameters for the regulation period between 2024 and 2027 announced by ERSE, under the terms and for the purposes of Article 17.º of Regulation (EU) no. 596/2014 of the European Parliament and Council, of 16 April 2014, and other regulations in force, REN - Redes Energéticas Nacionais, SGPS, S.A. disclosed to the market and the general public the Technical Note sent by ERSE (also published in full for reference).

There were no other events that gave rise to adjustments or additional disclosures in the Company's consolidated financial statements for the three-month period ended 31 March 2023.

34 EXPLANATION ADDED FOR TRANSLATION

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

The Accountant

Pedro Mateus

The Board of Directors

Rodrigo Costa (Chairman of the Board of Directors and Chief Executive Officer) Ana da Cunha Barros (Member of the Board of Directors) João Faria Conceição (Member of the Board of Directors and Chief Operational Officer) Jorge Magalhães Correia (Member of the Board of Directors) Gonçalo Morais Soares (Member of the Board of Directors and Chief Financial Officer) Maria Estela Barbot (Member of the Board of Directors) Guangchao Zhu (Vice-President of the Board of Directors designated by State Grid International Development Limited) Shi Houyun (Member of the Board of Directors) José Luis Arnaut (Member of the Board of Directors) Manuel Sebastião (Member of the Board of Directors and Chairman of the Audit Committee) Yang Qu (Member of the Board of Directors) Rosa Freitas Soares (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.

ANNEX

Contacts

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

Investor Relations Office

Madalena Garrido – Head of Office

madalena.garrido@ren.pt

Alexandra Martins alexandra.martins@ren.pt

Mariana Asseiceiro mariana.asseiceiro@ren.pt

Telma Mendes telma.mendes@ren.pt

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

Communication and Sustainability

Margarida Ferreirinha margarida.ferreirinha@ren.pt

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