Analysis of income statement items

Financial income and expense in 2019 (€845 million) rose by €108 million or 14.7% compared with the previous year.

Income from equity investments (€898 million) consists mainly of the dividends distributed by the subsidiaries Snam Rete Gas S.p.A. (€580 million) and Stogit S.p.A. (€185 million), by the company under joint control Trans Austria Gasleitung GmbH - TAG (€63 million), Terēga Holding (€13 million) and by the subsidiary Italgas S.p.A. (€26 million)³⁴.

Interest income and other financial income (€159 million) essentially refers to interest income from the intragroup loans granted by Snam S.p.A. to subsidiaries Snam Rete Gas S.p.A. and Stogit S.p.A. (€129 million in total) and the income from the direct recharging and treasury arrangements concluded between Snam S.p.A. and the companies, the expenses connected by the compulsory buy back transaction implemented by Snam in December 2019 (€20 million in total).

Interest expense and other financial expense (€211 million) refers to: (i) the expenses connected to the bond buy back transaction (€38 million), equal to the difference between the buy back price of the bonds on the market and the relative value at the amortised cost; (ii) expenses for bonds³⁵ (€155 million) and for loans provided by banks and other financial institutions (€18 million).

Revenue for the provision of services (€227 million) mainly involve charge backs for services provided by Snam to subsidiaries (€198 million in total). The services provided by Snam S.p.A. to subsidiaries are regulated through service agreements and involve the following areas: ICT, Personnel and Organisation, Planning, Administration Finance and Control, General Services, Property, Security, Legal and Corporate Affairs and Compliance, Health, Safety and Environment, External Relations and Communication, Internal Audit, Technical, Commercial, Regulation and Procurement. The services provided also include the revenue on projects of the Global Solution Business Unit (€25 million).

The increase of €14 million compared with the previous year is due to the greater charge backs to subsidiaries (+€23 million), for services mainly of an ICT nature and to the greater revenue from Global Solution Business Unit projects (+€10 million) essentially following the design services rendered to the subsidiary TAP. This change was partly offset by the lower revenue from services rendered at 31 December 2018.

Other income (€15 million) essentially refers to income from the leasing and maintenance of fibre optic telecommunications cables for third-parties (€13 million).

Costs for non financial services and other costs are composed of operating costs (€175 million) and depreciation and amortisation (€11 million). The increase of €40 million is mainly due to the greater costs for IT services subject to recharging to Group companies, as well as the dynamics of the provision for impairment, which did not change in 2019 compared with the net utilisations in 2018.

Personnel costs totalled €88 million a fall compared with the corresponding period of the previous year (€6 million) mainly as a result of the effects of the reorganisation of the Group and employment policies.

The number of employees as at 31 December 2019 (742 people) is analysed below by professional status:

Income tax

Income tax was positive by €4 million mainly on account of the share of non taxable dividends collected in the year.