Press office

Press office

23.02.2017

Profit of the Red Eléctrica Group increased 5.1% in 2016, reaching € 636.9 million

  • Investments of the Group totalled €643.1 million.
  • The dividend for the 2016 financial year proposed to the General Shareholders' Meeting will amount to €0.8587 per share, 7% more than in 2015.

 

In 2016, the Red Eléctrica Group made a profit for the year of €636.9 million euros compared to 606 million the previous year. Containment of operating costs, as a result of the efficiency strategies carried out by the Company, as well as the improvement in the financial results owing to a fall in financing costs, have allowed profit for the year to grow by 5.1%.

The Company’s results are in line with the Strategic Plan 2014-2019, as explained by the CEO, Juan Lasala, in the year-in-review speech he gave today during the presentation of the annual results to analysts and investors.

The Group's investments amounted to €643.1 million, of which €398.5 million was earmarked for the national transmission grid. Investment in 2016 is 43.6% higher than in the previous year, an increase mainly due to the inclusion in this financial year of €199.8 million corresponding to the acquisition of 50% of the share capital of the Chilean company Transmisora Eléctrica del Norte (TEN). For its part, 50% of the investment by TEN in the total of the project in Chile has amounted to €273 million.

Last December the company Transmisora Eléctrica del Norte (TEN) completed a financing operation to finance the project for the interconnection of the Chile’s North and Central electricity systems for a total of about $856 million in different tranches with maturities in 2034 and in 2042.

Revenue for 2016 increased to €1,932.3 million. This figure includes the regulated revenue for system operation and power transmission in Spain, and revenues associated to telecommunications services provided and those linked to international activity.

Gross operating result (EBITDA) reached €1,486 million, representing a growth of 1.9% year-on-year. This evolution is a consequence of a reduction of 1.1% in operating costs compared to the previous year, a decrease that reflects the efforts being carried out by the Company in efficiency matters.

Financial profit (loss) showed an improvement of €8 million, going from €-159.3 million in 2015 to €-151.3 million in 2016. The improvement seen is mainly due to paying less interest thanks to a fall in the Company's financing cost which in 2016 stood at 2.94%, compared to 3.20% in the previous year.

The net financial debt of the Red Eléctrica Group stood at €4,949.5 million, a figure similar to that recorded in 2015.

Income statement

 

January - December

(in thousands of euros)

2016

2015

D %

Net revenue

1,932,343

1,938,939

(0.3)

Gross operating result (EBITDA)

1,486,049

1,458,427

1.9

Net operating result (EBIT)

1,003,288

989,018

1.4

Profit before tax

850,788

829,722

2.5

Profit for the period

636,920

606,013

5.1

 

Progress in objectives of the Strategic Plan 2014-2019

During his speech, the CEO of Red Eléctrica explained the achievements of 2016 and previous years, which are indicative that the Group is on the path to achieving the objectives presented in the Strategic Plan 2014-2019.

This Plan is based on the Company's core business, grid management, with a strategy aimed at achieving solid growth in the consolidated activities of electricity transmission and system operation, as well as the management of fibre optic networks. In addition, such growth will be enhanced by investments in new tools for system operation, such as energy storage, and with new opportunities in the international arena.

At the end of 2016, investments in the development of the transmission grid in Spain and the management of fibre optic networks stand at 49% of what is foreseen in this Plan, while, for its part, over 60% of the investments foreseen in the area of diversification have already been carried out or are earmarked.

Also, although an important step has already been taken in terms of efficiency, the Company will continue to work in this line and the financial policy will continue to be an important lever in the achievement of this objective.

All of this has allowed the average growth in net profit in the 2014-2016 period to stand at 6.4%, which is above the target range of 5-6% set out in the Strategic Plan. Shareholder remuneration continues to be among the Company's key objectives, with a dividend per share of €0.8587 being proposed to the General Shareholders' Meeting, which represents an increase of 7% over the previous year, as contemplated in the Strategic Plan.

Lastly, the CEO highlighted the Company's challenges for the 2020-2030 horizon, which will be based on the European Union's climate and energy framework, which includes targets for reducing greenhouse gas emissions and increasing the use of renewable energies.

Mr. Lasala stressed that investments made in the transmission grid after 2019 will therefore be an essential tool for the decarbonisation of the economy at a more efficient cost. In addition, the Company will continue to move forward with the telecommunications development plan and with activities in the international arena. This data is confirmation that the Red Eléctrica Group is well on track to achieve the objectives put forward to the market for the 2014-2019 period.

Other relevant events

  • On 13 January, €200 million was drawn from financing from the European Investment Bank (EIB) that amounted to €450 million. The maturity of this tranche will be 13 January 2042 at a very competitive cost.
  • On 19 January the Red Eléctrica Group, through Red Eléctrica Internacional, acquired the remaining 45% of the shares of Redesur. With this transaction, the Red Eléctrica Group has now acquired the entire share capital of the company.
  • On January 25, Red Eléctrica obtained the ‘RobecoSAM Silver Class 2017’ distinction granted by the sustainability agency RobecoSAM. This distinction recognises Red Eléctrica's ability to permanently improve its sustainability performance, one of the Company's key strategic factors in all its processes.

 

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