Financial results

Revenue from storage of natural gas amounted to €372 million7, an increase of €23 million, equal to 6.6%, compared with 2010. The increase is essentially due to the contribution of investments made in 2009 (+€29 million) and the volumes of gas moved (+€6 million), whose effects were partly absorbed by the tariff updating (-€15 million). Storage revenue refers to modulation storage (€303 million; +7.4%) and strategic storage (€66 million; -1.5%).

EBIT in 2010 amounted to €255 million, an increase of €37 million, equal to 17.0%, compared with 2010. This increase was mainly due to increased storage revenue (+€23 million), the operating efficiency, and the reduction in depreciation and amortisation (+€20 million) on discounted estimated costs to be incurred when the storage sites are dismantled. These effects are partly absorbed by less income (-€3 million, net of the cost of gas sold) from the sale, in 2010, of some strategic gas no longer required for the provision of storage services.

The reduction in depreciation and amortisation is related to the adjustment, as of 1 January 2011, of the future timing of expenditure relating to the estimated charges for storage site dismantling and restoration, which increased by 20 years (corresponding to the duration of the two possible extensions of 10 years each8) in the estimated time required to extinguish the relevant obligations.

This adjustment is consistent with the remuneration paid for tariff purposes by the Electricity and Gas Authority, which, through Resolution ARG/gas 119/10, provided for a specific portion of revenue to be dedicated to the payment of storage site restoration costs, taking into account the maximum duration of the concession (40 years from the date the concession was granted, including the two possible extensions), so as to enable full recovery of costs.

7 Storage revenue for 2011 includes revenue from the User balance service – extra supply point fee – pursuant to the Electricity and Gas Authority Resolutions ARG/gas 165/09 and ARG/gas 119/10.

8 Pursuant to Article 11, paragraph 1 of Legislative Decree no. 164/2000, the storage of natural gas in fields or deep geological structures is carried out via concessions of no longer than 20 years. These concessions are granted by the Ministry of Economic Development, with the approval of the region concerned for onshore storage concessions. The concessionaire is entitled to a maximum of two ten-year extensions, provided it has carried out the storage programmes and fulfilled all other obligations arising from the concession.

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