Enagás reduced its profit by 4.4% in 2019, to 422.6 million

Enagás’ profit as of December 31, 2019 reached 422.6 million euros, which represents a reduction of 4.4% compared to the 441 million achieved in 2018, although the company highlights that it is higher than the target established for the year, set at 417 million.

According to , the dividend corresponding to last year, which will be proposed at the next General Shareholders’ Meeting, will be 1.60 euros gross per share, an annual increase of 5%, in accordance with the company’s strategy.

With a view to the coming years, the company foresees an increase in the dividend of 1% per year between 2021 and 2023 and a sustainable payment of 1.74 euros per share from 2024 to 2026. For 2020, it expects profit to grow by 4.1% , that the dividend do so by 5% -as planned-, and that the contribution of the subsidiaries go from 123 million to 235 million.

Enagás has announced that it will be carbon neutral in 2050, setting a CO2 emission reduction path of 25% by 2030 and 61% by 2040. Between 2014 and 2018, the company has already reduced its emissions by 47%.

Part of these reductions will be achieved with the commitment to hydrogen as an energy vector, to which an investment of 300 million will be allocated over the next five years, and with the promotion of the penetration of natural gas in mobility, replacing other more polluting fossil fuels.

‘Ebitda’ of 995 million

Considering the consolidation of the Chilean regasification company of Quintero, it reached a business volume of 1,151 million in 2019, 1.5% lower than the previous year, with a gross operating result (ebitda) of 994.8 million, 5, 4% older. The result of investee companies amounted to 162.1 million, 38.5% more than in 2018, thanks to Tallgrass Energy (USA) and Desfa (Greece).

The operating cash flow as of December 31, 2019 reached 877.2 million, 9.4% higher than that obtained in 2018. The investment amounted to 704.7 million, including .

Net debt at the end of the year amounted to 3,755 million euros, a total of 520 million less than in 2018. The reduction is influenced by the deconsolidation of GNL Quintero (left out 645 million), the accounting effect of IFRS 16 (increased the debt in 355 million) and the funds obtained from the capital increase for the operation of Tallgrass for an amount of 500 million.

The cash flow/net debt ratio as of December 31, 2019, including the two-month global consolidation of GNL Quintero, stood at 20.2%. In pro-forma terms, the ratio would stand at 20.1%. The average gross financial cost was 2.2%. In pro-forma terms, with GNL Quintero by the equity method, the average gross financial cost would be 2.1%.

Highlights

Among the relevant events of the year, the firm highlights the aforementioned operation of Tallgrass and the .

On December 16, Enagás together with Blackstone Infrastructure Partners, GIC (Singapore sovereign wealth fund) and other minority shareholders agreed to acquire all of Tallgrass’ free float. Once the operation is completed, it will entail a disbursement by Enagás of 836 million dollars, which will increase its indirect participation in the capital stock of Tallgrass from the current 12.6% to approximately 30%.

To finance the operation, Enagás launched a capital increase of 500 million, through the issuance of 23,255,814 shares (21.50 euros per share), which represents 8.88% of the share capital after its increase. , the maximum allowed by law.

Regarding the new regulation for the period 2021-2026, it was approved on December 12 by the CNMC and published in the BOE on December 23. According to the Regulator’s estimates, Enagás will receive a regulated remuneration of 5,920 million during the period, less than the 6,618 million it would receive under the current system, but better than the 5,175 million proposed in the first version of the new standard. Additionally, the financial remuneration rate has been set at 5.58%. The company accepts these values ​​for good and does not plan to appeal them in court.

The risk ratings established during the last two months by Fitch (BBB+, stable outlook) and Standard and Poor’s (BBB+, stable outlook), show the end of the uncertainty generated during the regulatory process, in the company’s opinion .

gas demand

The accumulated demand for natural gas as of December 31 was the highest in the last decade (398TWh), with an increase of 14% compared to the same period in 2018.

Enagás has defined a path to reduce emissions to achieve carbon neutrality by 2050, in line with the commitments of the European Union.

(There will be expansion)