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8 Trade and other receivables

Trade and other receivables of €2,081 million (€2,442 million at 31 December 2013) comprise:

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(€ million)

31.12.2013
Maturity

31.12.2014
Maturity

 

Within the year

Between 1 and 5 years

Beyond 5 years

Total

Within the year

Between 1 and 5 years

Beyond 5 years

Total

Trade receivables

2,169

99

 

2,268

1,620

108

 

1,728

Financial receivables:

2

 

 

2

216

 

 

216

- held for operations

2

 

 

2

 

 

 

 

- not held for operations

 

 

 

 

216

 

 

216

Receivables from investment/divestment activities

12

 

 

12

13

 

 

13

Other receivables

160

 

 

160

124

 

 

124

 

2,343

99

 

2,442

1,973

108

 

2,081

Trade receivables of €1,728 million (€2,268 million at 31 December 2013) mainly refer to the natural gas transportation (€1,068 million), distribution (€399 million) and storage (€242 million) segments.

Trade receivables in the transportation segment (€1,068 million) include those arising from the provision of natural gas balancing services (€506 million)9, which have been operational since 1 December 2011 pursuant to AEEGSI Resolution ARG/gas 45/11. Pursuant to this measure, the leading natural gas transportation company (Snam Rete Gas), in its role as Balancing Supervisor, is obliged to procure the quantities of gas required to balance the system and offered on the market by users through a dedicated platform of the Energy Markets Operator, and to financially settle the imbalances of individual users by buying and selling gas on the basis of a benchmark unit price (the “principle of economic merit”). Although the effects of this activity are essentially neutral in terms of the Company’s income statement and it does not receive specific compensation for performing this role, the gas sales generated by balancing activities in the 2014 financial year and offset in costs totalled around €1.7 billion.

Trade receivables relating to the storage segment (€242 million) include the effects of the addition of revenue connected to the allocation of natural gas storage capacity by auction10. The fall in trade receivables compared with 31 December 2013 (€493 million) was due mainly to:

  • presentation of the item “Trade and other receivables” net of the related liabilities11 associated with the strategic gas withdrawals by certain users in 2010 and 2011, in connection with which the fees set by the AEEGSI have not been paid and the quantities withdrawn have not been replenished within the time frames set forth in the Storage Code. This presentation of liabilities, in a total amount of €420 million, follows recent developments in the ongoing bankruptcy procedures, which suggest that it is unlikely that Stogit will be able to collect the receivables it is owed and that the gas wrongfully withdrawn will be replenished;
  • the offsetting of receivables with the related payables (€83 million) for the replenishment of some of the strategic gas by two users of the storage service.

Receivables are reported net of the provision for impairment losses of €34 million (€44 million at 31 December 2013). Changes in the provision for impairment losses on receivables during the year are shown below:

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(€ million)

Provision for impair­ment losses at al 31.12.2013

Provisions

Utilisations

Changes in scope of consolidation

Other changes

Provision for impair­ment losses at al 31.12.2014

Trade receivables

43

5

(6)

1

(10)

33

Other receivables

1

 

 

 

 

1

 

44

5

(6)

1

(10)

34

Provisions (€5 million) relate mainly to trade receivables in the transportation segment (€3 million).

Utilisations (€6 million) relate mainly to the portion of the provisions associated with the transportation segment (€5 million).

The changes in the scope of consolidation (€1 million) concern A.E.S. S.p.A, which was consolidated in the distribution segment as of 1 July 2014.

Other changes (−€10 million) relate mainly to the use of the provision for impairment losses to write off bad debts mainly relating primarily to the transportation segment (€6 million).

Financial receivables not held for operations (€216 million) refer to Snam S.p.A. awarding a short-term revolving credit line to Trans Austria Gasleitung GmbH (TAG) following contractual agreements regarding the acquisition of CDP Gas S.r.l.’s equity investment in TAG12.

Receivables from investment/divestment activities (€13 million; €12 million at 31 December 2013) concern receivables for public and private grants for investment activities (€7 million) and receivables from the sale of property, plant and equipment and intangible assets (€6 million).

Other receivables of €124 million (€160 million at 31 December 2013) comprise:

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(€ million)

31.12.2013

31.12.2014

IRES receivables for the national tax consolidation scheme

30

32

Other receivables:

130

92

- Electricity Equalisation Fund (EEF)

60

49

- Advances to suppliers

8

6

- Other

62

37

 

160

124

IRES receivables for the national tax consolidation scheme (€32 million, compared with €30 million at 31 December 2013) concern receivables with the former parent company, eni, relating to the IRES refund request resulting from the partial IRAP deduction relating to tax years 2004-2007 (pursuant to Article 6 of Decree-Law No. 185 of 28 November 2008, enacted by Law No. 2 of 28 January 2009) and tax years 2007-2011 (pursuant to Decree-Law 201/2011).

Receivables from the Electricity Equalisation Fund (€49 million, compared with €60 million at 31 December 2013) relate mainly to additional tariff components in the distribution segment.

The item “Other” (€37 million, compared with €62 million at 31 December 2013) refers mainly to receivables from government authorities in the natural gas distribution segment.

The market value of trade and other receivables is analysed in Note 24 – “Guarantees, commitments and risks – Other information about financial instruments”. All receivables are in euros.

The seniority of trade and other receivables is shown below:

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(€ million)

31.12.2013

31.12.2014

 

Trade receivables

Other receivables

Total

Trade receivables

Other receivables

Total

Non-overdue and non-impaired receivables

1,553

168

1,721

1,482

345

1,827

Overdue and non-impaired receivables:

715

6

721

246

8

254

- 0-3 months overdue

21

 

21

49

 

49

- 3-6 months overdue

4

 

4

3

1

4

- 6-12 months overdue

8

 

8

3

5

8

- more than 12 months overdue

682

6

688

191

2

193

 

2,268

174

2,442

1,728

353

2,081

Overdue and non-impaired receivables (€254 million; €721 million at 31 December 2013) refer mainly to the natural gas storage sectors (€127 million), primarily concerning VAT invoiced to users for the use of withdrawn strategic gas they had not replenished within the timeframes established by the Storage Code, transportation (€70 million), arising essentially from the balancing service13, and distribution (€56 million) segments.

The decrease in overdue and non-impaired receivables compared with 31 December 2013 (€467 million) was due mainly to the aforementioned difference in the way in which the effects of the strategic gas withdrawals made in 2010 and 2011 were presented in the balance sheet.

Receivables from related parties are described in Note 33 – “Related-party transactions”.

Specific information on credit risk can be found in Note 24 “Guarantees, commitments and risks – Management of financial risks – Credit risk”.

9 Trade receivables include the present value of outstanding receivables and related interest for the balancing service (€147 million), of which €108 million, taking account of the timing of repayments pursuant to AEEGSI Resolution 351/2012/R/gas, falls due beyond next year.

10 This revenue follows application of AEEGSI Resolution 295/2014/R/gas “Provisions on the financial settlement of storage services for the thermal year 2014-2015”, published on 23 June 2014. More information can be found in the “Business segment operating performance – Natural gas storage – Regulation and other provisions” section of the Directors’ Report.

11 As part of the regulatory regime in force before the current balancing regulations, considering the applicable regulatory framework (see Resolution ARG/gas 119/10, Article 10, paragraph 5 in Appendix A), which leaves the storage company in a neutral position with regard to the effects of the withdrawal of strategic gas by users, against fees for the use of strategic gas, the Company recognised a liability of equal amount. Information on the strategic gas withdrawals made by users and the credit recovery measures taken by Snam is provided in Note 24 – “Guarantees, commitments and risks – Recovering receivables from users of the storage system”.

12 The contractual agreements drawn up between Snam, TAG and Gas Connect Austria GmbH (GCA) stipulate that if TAG is not capable of self-financing, the other companies must finance it according to the equity investment held by each shareholder. Moreover, on the completion date, Snam and TAG entered into a shareholders’ loan agreement in the form of a revolving credit line worth up to €285.5 million, maturing in January 2015 and subsequently extended until July 2015. For more information on the acquisition, please see the “Annual profile – Main events” section of the Directors’ Report.

13 Information on balancing and the credit recovery measures taken by Snam is provided in Note 24 – “Guarantees, commitments and risks – Recovering receivables from certain users of the transportation and balancing system”.

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