Snam.it

Revenue

TOTAL REVENUE

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(€ million)

2009

2010

2011

Change

Change %

Core business revenue

2,438

3,475

3,539

64

1.8

Business segments

 

 

 

 

 

Transportation

1,865

1,929

1,945

16

0.8

Regasification

36

35

34

(1)

(2.9)

Storage

161

355

372

17

4.8

Distribution

406

1,233

1,297

64

5.2

- of which effects of IFRIC 12

 

349

360

11

3.2

Consolidation adjustments

(30)

(77)

(109)

(32)

41.6

Other revenue and income

30

33

66

33

100.0

Total revenue

2,468

3,508

3,605

97

2.8

Core business revenue generated in 2011 (€3,539 million) rose by €64 million, 1.8% above the 2010 figure and by €53 million, or 1.7%, net of the effects of applying IFRIC 12 (€360 and €349 million, in 2011 and 2010 respectively). The increase is due to the greater revenue recorded in all of the primary segments of operation.

Revenue from transportation12 (€1,945 million) mainly includes payments for the natural gas transportation service (€1,867 million) and chargebacks to subsidiaries of the costs incurred for providing services carried out centrally by Snam Rete Gas S.p.A. (€62 million).

The increase by €16 million is due primarily to the greater chargebacks to subsidiaries of costs for services provided (+€23 million), deriving from the situation where, following the corporate restructuring of the previous period effective from 1 April 2010, the chargeback of costs for services conducted in 2010 refer to the period from 1 April to 31 December. This increase was partly offset by the reduction in revenue from transportation (-€6 million) due to the additional revenue (€55 million) recorded in the previous year, deriving from the recognition by the Electricity and Gas Authority of the additional expenses incurred for the acquisition of fuel gas in the period from 1 October 2008 to 31 December 2009 . Net of this effect, transportation revenue recorded an increase of €49 million, equal to 2.7%, essentially attributable to the contribution of investments made in 2009 (+€100 million), whose effects were partly absorbed by the tariff updating (-€52 million) and by lower volumes of gas transported (-€15 million) following a reduced demand for natural gas in Italy. Higher revenue from tariff components offset in costs (+€13 million) also contributed to the increase in transportation revenue.

Revenue from transportation (€1,867 million) is analysed below by user with indication of the primary users.

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(€ million)

2009

2010

2011

Change

Change %

(*)

Electricity and Gas Authority Resolutions ARG/com 93/10 and ARG/gas 177/10 introduced, with effect from 1 January 2011, the accessory tariff components GST and RET, intended to finance, respectively, the “Account to offset subsidised tariffs for disadvantaged gas customers” (GS Account) and the “Fund for calculating and implementing energy savings and developing renewable sources in the natural gas sector” (RE Account). Amounts collected from Snam Rete Gas are paid to the Electricity Equalisation Fund.

Eni

934

742

862

120

16.2

Enel Trade

245

256

275

19

7.4

Other

734

862

965

103

11.9

Adjustment of revenue and penalties

(47)

(17)

47

64

 

Additional fee to cover the greater charges for the purchase of gas

34

55

 

(55)

(100.0)

GST and RET fees as provided for by Resolutions ARG/com 93/10 and ARG/gas 177/10 (*)

 

 

(245)

(245)

 

Interruptibility fee as per Resolution 277/07

(42)

(23)

(35)

(12)

52.2

Regional network transportation fee as per Resolution 45/07 - Equalisation

(10)

(2)

(2)

 

 

 

1,848

1,873

1,867

(6)

(0.3)

Revenue from the regasification segment (€34 million) refers to LNG regasification service (€23 million; €24 million in 2010) done at the Panigaglia (SP) LNG terminal and to the chargebacks of expenses relating to the natural gas transportation service provided by Snam Rete Gas S.p.A. (€11 million; same amount in 2010).

Revenue from natural gas storage segment refers to storage services, (€372 million13, of which €303 million and €66 million relate to modulation storage and strategic storage respectively). The increase of €17 million for the 2010 period is essentially due to greater storage revenues (+€23 million) following the contribution of investments made in 2009 (+€29 million) and the volumes of gas transported (+€6 million), whose effects were partly absorbed by the tariff updating (-€15 million).

Revenue from the natural gas distribution segment of €1,297 million mainly relates to fees for the natural gas distribution service (€1,263 million) and revenue pursuant to IFRIC 12 generated by the construction and upgrading of distribution infrastructure associated with the concession agreements (€360 million). The increase by €53 million, net of the impact of IFRIC 12, is due primarily to the acknowledgement, by the Electricity and Gas Authority, of the greater natural gas distribution revenue for the thermal years 2005-2006 to 2007-200814 (€32 million) and the impact (20 million) of applying the ‘gradual’ mechanism introduced by the Electricity and Gas Authority through Resolution 79/09 of 1 June 200915.

REVENUE - REGULATED AND NON-REGULATED ACTIVITIES

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(€ million)

2009

2010

2011

Change

Change %

Regulated business revenue

2,423

3,442

3,522

80

2.3

Transportation

1,848

1,873

1,870

(3)

(0.2)

Regasification

21

24

23

(1)

(4.2)

Storage

147

326

338

12

3.7

Distribution

407

1,219

1,291

72

5.9

- of which effects of IFRIC 12

 

349

360

11

3.2

Revenue from non-regulated activities

45

66

83

17

25.8

 

2,468

3,508

3,605

97

2.8

Regulated business revenue (€3,522 million, net of consolidation adjustments) relates to transportation (€1,870 million), distribution (€1,291 million; €931 million net of the effects of IFRIC 12), storage (€338 million) and regasification (€23 million).

Revenue from non-regulated activities (€83 million, net of consolidation adjustments) mainly comprises: (i) technical services (€26 million) relating essentially to the natural gas distribution business segment; (ii) capital gains on transfers of assets (€17 million); (iii) income from the leasing and maintenance of fibre-optic telecommunications cables (€10 million); and (iv) income from resolving contractual disputes (€10 million)16 ; and (vi) income from property investments (€5 million).

12 Core business revenue by business segment is reported before consolidation adjustments.

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

14 For further information see the section “Regulation - Resolution ARG/gas 119/11” of this report, for the natural gas distribution business segment.

15 In particular, with this resolution which amended the tariff criteria in effect under prior Resolution 159/08, the Authority introduced a gradual increase in the amortised tariff component for the new regulatory period, which is in addition to that already provided for returns on invested capital.

16 For more information see Note 28 “Guarantees, commitments and risks”, in the Notes to the consolidated financial statements.

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