Financial Highlights
- Snam’s total revenue in the first half of 2015 was €1,837 million, an increase of €55 million (+3.1%) on the first half of 2014. The increase was due mainly to higher revenue from regulated activities (+€48 million; +2.7%) in the distribution segment, which benefited from the contribution of newly consolidated companies, and in the natural gas transportation segment, offset partly by a decline in revenue from the storage segment. Total revenue net of items offset in costs4 came to €1,763 million, an increase of €48 million (+2.8%) compared with the first half of 2014. The increase was due to higher revenue from regulated (+€41 million; +2.4%) and non-regulated (+€7 million; +20.6%) activities, brought about mainly by income from the sale of natural gas.
- In the first half of 2015, EBIT5 totalled €1,012 million, down by €32 million (-3.1%) compared with the first half of 2014. Higher revenue (+€48 million; +2.8%) was more than offset by higher operating costs (-€42 million; -14.6%), owing mainly to withdrawals from storage in order to sell natural gas in the transportation segment and to a lower portion of expense absorbed by investment activities in the distribution segment, as well as by higher amortisation and depreciation (-€38 million; -9.9%). The reduction in EBIT was attributable to the natural gas storage (-€29 million; -14.6%) and distribution segment (-€9 million; -3.5%). The reduction in EBIT in the storage segment was mainly due to lower regulated revenues, due to a different timing profile over the year, compared with 2014, and a reduction in non-regulated revenues. EBIT in the transportation segment was unchanged compared with the first half of 2014.
- Net profit in the first half of 2015 totalled €612 million, an increase of €51 million (9.1%) on the first half of 2014. The increase was mainly due to lower income taxes (+€45 million) after the additional corporate income tax known as the Robin Hood Tax was declared to be unconstitutional, and to higher net income from equity investments (+€20 million) thanks to the contribution from recently acquired assets. Net profit was also boosted by lower net financial expense (+€18 million) due mainly to a reduction in the average cost of borrowing. These effects were partially offset by the reduction in EBIT (-€32 million).
- The net cash flow from operating activities (€1,146 million) allowed us to fully cover the financial requirements associated with net investments for the period (€559 million) and to generate a free cash flow of €587 million. The net financial debt of €13,936 million, after the payment to shareholders of the 2014 dividend of €875 million, increased by €284 million compared with 31 December 2014.
- Technical investments in the first half of 2015 amounted to €487 million6 (compared with €526 million in the first half of 2014) and referred essentially to the natural gas transportation (€278 million), distribution (€142 million) and storage (€62 million) segments.
- The Snam stock ended the first half of 2015 with an official share price of €4.30, up by 4.6% compared with 31 December 2014. After a period of almost uninterrupted growth in the first quarter, Snam’s share price reached a record high of €4.86 on 27 April; it subsequently declined gradually in line with the market. Driven by the ECB’s government bond purchase programme, European equity markets rose considerably in the first half of the year, albeit with some profit-taking in the second quarter caused mainly by the deteriorating financial situation in Greece and the resulting concerns about the country possibly leaving the Eurozone. Owing to its notoriously defensive and anti-cyclical nature, the utilities sector underperformed in the general European index, with the STOXX Europe 600 Utilities down by -1.4% compared with an +11.3% gain for the STOXX Europe 600.
4 The main items offset in costs relate to the sale of natural gas for the purpose of balancing the gas system and to interconnection.
5 EBIT is analysed by considering only those components that have changed it, since the application of the gas sector tariff rules generates revenue and cost items that offset each other.
6 Notes on technical investments by business segment are provided in the “Business segment operating performance” section.