Income statement
NET PROFIT
Net profit totalled €917 million in 2013, up by €138 million (17.7%) compared with 2012. The increase was due essentially to lower net financial expense (+€322 million) as a result of the recognition in the third quarter of 2012 of the costs associated with the early extinguishment of IRS hedging derivatives between Snam and its subsidiaries and Eni (€335 million; €213 million net of the related tax effect), giving rise to contractual provisions in the event of Eni losing control of Snam. This was partly offset by lower EBIT (-€77 million) and higher income taxes (-€97 million) as a result of higher pre-tax profit.
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Income statement |
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(€ million) |
2011 |
2012 |
2013 |
Change |
% Change |
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3,539 |
3,730 |
3,735 |
5 |
0.1 |
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Other revenue and income |
66 |
216 |
113 |
(103) |
(47.7) |
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Total revenue |
3,605 |
3,946 |
3,848 |
(98) |
(2.5) |
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Total revenue net of the effects of IFRIC 12 (*) |
3,245 |
3,621 |
3,529 |
(92) |
(2.5) |
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Operating costs (**) |
(993) |
(1,129) |
(1,045) |
84 |
(7.4) |
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Operating costs net of the effects of IFRIC 12 (*) (**) |
(633) |
(804) |
(726) |
78 |
(9.7) |
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2,612 |
2,817 |
2,803 |
(14) |
(0.5) |
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Amortisation, depreciation and impairment losses |
(654) |
(706) |
(769) |
(63) |
8.9 |
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EBIT |
1,958 |
2,111 |
2,034 |
(77) |
(3.6) |
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Adjusted EBIT |
1,958 |
2,111 |
2,060 |
(51) |
(2.4) |
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Net financial expense |
(313) |
(794) |
(472) |
322 |
(40.6) |
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Net income from equity investments |
51 |
55 |
45 |
(10) |
(18.2) |
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Pre-tax profit |
1,696 |
1,372 |
1,607 |
235 |
17.1 |
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Income taxes |
(906) |
(593) |
(690) |
(97) |
16.4 |
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Net profit (***) |
790 |
779 |
917 |
138 |
17.7 |
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Adjusted net profit (***) |
978 |
992 |
934 |
(58) |
(5.8) |
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Reconciliation of EBIT and net profit with adjusted EBIT and adjusted net profit
Snam’s management assesses Group performance on the basis of adjusted EBIT and adjusted net profit, which exclude special items from EBIT and net profit respectively.
Income entries are classified as special items, if material, when: (i) they result from non-recurring events or transactions or from transactions or events which do not occur frequently in the ordinary course of business; or (ii) they result from events or transactions which are not representative of the normal course of business.
The tax rate applied to the items excluded from the calculation of adjusted net profit is determined on the basis of the nature of each item subject to exclusion. Adjusted EBIT and adjusted net profit are not provided for by either IFRS or other standard setters. Management considers that these performance metrics allow for analysis of the business trends, making it easier to compare results.
The components of operating income classified as special items in 2013 were the charges for voluntary redundancy incentives connected to the redundancy programme launched by Snam in November 2013 pursuant to Law 223/91 (€26 million; €17 million net of the related tax effect). The one-year plan concerns around 300 people in the Snam Group.
The reconciliation of EBIT and net profit with adjusted EBIT and adjusted net profit is shown below.
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(€ million) |
2011 |
2012 |
2013 |
Change |
% Change |
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EBIT |
1,958 |
2,111 |
2,034 |
(77) |
(3.6) |
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- of which special items |
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(26) |
(26) |
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Adjusted EBIT |
1,958 |
2,111 |
2,060 |
(51) |
(2.4) |
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Net financial expense |
(313) |
(794) |
(472) |
322 |
(40.6) |
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- of which special items |
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(335) |
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335 |
(100.0) |
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Net income from equity investments |
51 |
55 |
45 |
(10) |
(18.2) |
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Income taxes |
(906) |
(593) |
(690) |
(97) |
16.4 |
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- of which special items |
(188) |
122 |
9 |
(113) |
(92.6) |
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Net profit |
790 |
779 |
917 |
138 |
17.7 |
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Excluding special items |
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- charges for voluntary redundancy incentives (*) |
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17 |
17 |
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- financial expense from early extinguishment of derivatives (*) |
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213 |
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(213) |
(100.0) |
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- one-off adjustment of deferred tax at 31 December 2010 (Robin Hood Tax) |
188 |
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Adjusted net profit |
978 |
992 |
934 |
(58) |
(5.8) |
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Adjusted net profit, which excludes special items, totalled €934 million in 2013, down by €58 million (-5.8%) compared with 2012. The decrease was due mainly to lower adjusted EBIT (-€51 million) and to the higher net financial expense (-€13 million) resulting essentially from higher average debt during the period. These factors were partly offset by lower income taxes (+€16 million), due essentially to the reduction in pre-tax profit.