Combined consolidated income

In order to meaningfully compare the results for 2010 and 2009 (the latter of which include the impact of consolidating Italgas and Stogit as of the third quarter), the consolidated data of Snam Rete Gas, GNL Italia, Italgas and Stogit for 2009 were aggregated, including Italgas and Stogit in the scope of consolidation for the whole of 2009; as a result, transactions between Snam Rete Gas and the companies, and between the companies themselves, were eliminated. The following notes therefore refer to changes in the main income statement data of 2010 compared with the combined fi gures for 2009.

Combined Consolidated Income Statement

  Combined   
(€ million)2009 2009 2010 Change Change %
Core business revenue (*) 2,438 3,006 3,475 469 15.6
Core business revenue net of IFRIC 12 2,438 3,006 3,126 120 4.0
Other revenues and income 30 44 33 (11) (25.0)
Total revenue 2,468 3,050 3,508 458 15.0
Operating costs (*) (581) (740) (968) (228) 30.8
Operating costs net of IFRIC 12 (581) (740) (619) 121 (16.4)
- of which controllable fixed costs (352) (480) (465) 15 (3.1)
EBITDA 1,887 2,310 2,540 230 10.0
Depreciation, amortisation and impairment losses (613) (719) (678) 41 (5.7)
EBIT 1,274 1,591 1,862 271 17.0
Net financial expense (217) (252) (271) (19) 7.5
Net income from equity investments 22 42 47 5 11.9
Profit before taxes 1,079 1,381 1,638 257 18.6
Income taxes (347) (454) (532) (78) 17.2
Net profit (**) 732 927 1,106 179 19.3

(*) The items for 2010 include the effects of applying international accounting standard IFRIC 12, “Service Concession Arrangements”. Applying this interpretation had no effect on the group’s results, except for the equal recognition of revenue and costs relating to building and upgrading distribution infrastructures (€349 million). For more information about the accounting effects caused by applying this interpretation, refer to the chapter “Basis of presentation and consolidation principles” of the Notes to the consolidated financial statements.
(**) Net profit is attributable to Snam Rete Gas.

EBIT for 2010 amounted to €1,862 million, an increase of €271 million, or 17%, on the combined fi gure for the previous year. The improved performance across all business segments was due to: (i) higher core business revenue (+€120 million, net of IFRIC 12); (ii) lower operating costs (+€121 million, net of IFRIC 12) as a result of effi ciency measures taken, which helped to restrict controllable fi xed costs to €465 million, a reduction of €15 million, or 3.1%, on the combined fi gure for 200919; (iii) lower depreciation and amortisation (+€41 million) due to the lower depreciation and amortisation recorded by the transportation business segment (+€69 million), partially offset by higher depreciation and amortisation in the natural gas distribution and storage business segments (-€28 million overall). These factors were partly offset by a reduction in other revenue and income (-€11 million), owing essentially to lower capital gains from the sale of property, plant and equipment and intangible assets (-€8 million).

Below is a breakdown of EBIT by business segment:

EBIT

Combined
(€ million) 2009 2009 2010 Change Change %
Business segments
Transportation 974 974 1,185 211 21.7
Regasification 5 5 7 2 40.0
Storage 92 214 218 4 1.9
Distribution 203 398 455 57 14.3
Elimination of internal profit (*) (3) (3)
1,274 1,591 1,862 271 17.0

(*) Profit relates to capital gains from the cross-segment transfer of property, plant and equipment.

The €271 million increase in EBIT related in particular to the following segments:

  • Transportation (+€211 million; +21.7%). The increase was attributable mainly to: (i) lower operating costs (+€133 million, net of components offset in revenue), owing essentially to the payment in kind of natural gas used for provision of the service and to the net use of provisions for risks and charges in relation to a provision made in 2009 (+€23 million); (ii) lower amortisation and depreciation (+€69 million) connected mainly to the extension of the useful life of pipelines (from 40 to 50 years); and (iii) higher transportation revenue (+€10 million, net of components offset in costs);
  • Distribution (+€57 million; +14.3%). This increase was attributable essentially to: (i) higher revenue from the distribution of natural gas (+€72 million, net of IFRIC 12), owing mainly to applying the ‘graduality’ mechanism introduced by Resolution no. 79/09 of the Electricity and Gas Authority, higher revenue from the return on investments made in the distribution network, and the meter-reading business, which was transferred to the distribution companies as of 1 July 2009; (ii) higher income from technical services (+€9 million). These factors were partly offset by higher amortisation, depreciation and impairment losses (-€22 million), owing to increased amortisation and depreciation (-€12 million) and the impairment losses on certain assets (-€10 million).

The natural gas storage business segment recorded EBIT of €218 million, broadly in line with the figure for 2009 (€214 million).

Net profit (€1,106 million) rose by €179 million, or 19.3%, compared with the combined figure for 2009. The increase was due essentially to higher EBIT (+€271 million), which was partly offset by higher income taxes (-€78 million) resulting primarily from higher pre-tax profits and by higher net financial expense (-€19 million) owing mainly to more average debt following the acquisition of Italgas and Stogit.

(19) The reduction was €33 million compared with the combined 2008 controllable fixed costs (€498 million).

Link to Adobe website - opens in a new window

Most computers will open PDF documents automatically, but you may need to download Adobe Reader.