Results for the year

Thanks to our continual focus on operating and financial efficiency, Snam was again able to achieve strong results in 2014, with EBITDA totalling €2,776 million and EBIT at around €1,973 million, more or less in line with 2013. The higher revenue recorded in all the main business segments was absorbed by the increase in operating costs, which was due mainly to the effects of higher provisions for risks and charges and the impairment loss recorded in relation to strategic gas wrongfully withdrawn by some users in 2010 and 2011, as well as the increase in amortisation, depreciation and impairment losses (−€34 million). These results are even more significant given that 2014 was the first year of the fourth regulatory period for the natural gas transportation, regasification and distribution segments.

Breaking down the EBIT by business segment, the strong performance of the storage segment (+1.0%), in spite of the impairment loss recorded for strategic gas, was offset by the reductions recorded by the distribution (−5.5%) and transportation (−1.7%) segments.

Net profit in 2014 amounted to €1,198 million, up by €281 million, or 30.6%, compared with 2013. This increase was due mainly to lower income taxes, improved financial management, and the contribution from assets recognised as part of the business development strategy. Specifically, the reduction in taxes, despite the increase in pre-tax profit, was attributable mainly to the impact of the adjustment made to deferred taxes after the additional corporation tax known as the “Robin Hood Tax” was declared to be unconstitutional, with effect from 12 February 2015⁶.

Adjusted net profit⁷, which excludes the positive effect of the adjustment made to deferred taxes, amounted to €1,078 million, an increase of 15.4% compared with the previous year.

The positive net cash flow from operations (€1.5 billion) allowed the Company to cover all of the financial requirements associated with net investments and to generate free cash flow of €0.3 billion. Following the payment of a dividend of €0.5 billion to shareholders, net financial debt totalled €13.65 billion, up by €0.3 billion compared with 31 December 2013.

Dividends

Thanks to its healthy results and solid business fundamentals, the Company will propose a dividend of €0.25 per share to the Shareholders’ Meeting, to be paid from 20 May 2015, confirming Snam’s commitment to an attractive and sustainable remuneration of its shareholders.

Natural gas transportation

A total of 62.28 billion cubic metres of gas was injected into the transportation network, down by 6.72 billion cubic metres (−9.7%) compared with 2013. The decrease was due mainly to lower natural gas demand in Italy (down by 11.6% compared with 2013), as a result primarily of lower consumption in the residential and tertiary (−17.0%) and thermoelectric (−14.0%) sectors, which was partly offset by lower net withdrawals from storage (+1.34 billion cubic metres). When adjusted to take account of the weather, natural gas demand decreased by 4.5% compared with 2013.

Regasification of liquefied natural gas (LNG)

In 2014, 0.01 billion cubic metres of LNG were regasified, compared with 0.05 billion cubic metres in 2013. The volumes regasified are attributable mainly to the global trend in demand for LNG, which has seen particularly strong demand in the markets of the Far East, to the detriment of the European market.

Natural gas storage

A total of 15.70 billion cubic metres of gas was moved through the storage system in 2014, down by 2.72 billion cubic metres (14.8%) on the previous year. The reduction was due mainly to lower withdrawals from storage (−1.93 billion cubic metres; −20.3%).

Available storage capacity at 31 December 2014 was 11.4 billion cubic metres (unchanged compared with 31 December 2013), which was allocated in full for the 2014-2015 thermal year (in the 2013-2014 thermal year, allocated available capacity and unallocated available capacity totalled 9.9 billion and 1.5 billion cubic metres respectively).

Natural gas distribution

At 31 December 2014, Snam had concessions for gas distribution services in 1,437 municipalities (1,435 at 31 December 2013), of which 1,361 were in operation and 76 had to complete and/or create networks. It had 6.408 million active meters at gas redelivery points to end users (households, businesses, etc.), compared with 5.928 million at 31 December 2013, an increase of 8.1%.

Technical investments

Investments in 2014, totalling €1,313 million (€1,290 million in 2013), referred mainly to the transportation (€700 million), distribution (€359 million) and storage (€240 million) business segments.