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Financial review

Financial review and other information (Photo)
Financial review and other information (Photo)


On November 7, 2016 the industrial and corporate reorganization operation began, with the goal of separating the natural gas distribution business in Italy from Snam. The operation, divided into several steps both unitary and contextual among them led to the transfer of the entire share base of Snam S.p.A., equal to 100% of the share capital, in Italgas Reti S.p.A. (previously Italgas S.p.A.) to Italgas S.p.A. (previously ITG Holding S.p.A.) and the relative deconsolidation of Italgas Reti S.p.A.

In accordance with the terms of IFRS 5 accounting principle “Non-current assets held for the sales and discontinued financial operations”, the economic results in the natural gas distribution sector referring to the period January 1 – November 6, 201621 have been represented as “Discontinued Operations”22 and, for this reason, expressed separately in a single line on the financial statement. The fiscal years of comparison were then reclassified. As a result, the present Report primarily illustrates the results of the continuing operations (transport and dispatch, re-gasification and storage, in addition to Corporate assets).

In this regard, however, it should be considered that the separate recording of the discontinued operations according to the criteria of IFRS 5 refers only to the relations with third parties leaving the elision of the infra-group relations. In this way, this causes a distortion in the separation of the values between continuing and discontinued operations which, at the economic level, causes a penalty to one or the other which becomes more significant as the infra-group economic relations of the discontinued sectors increase.

In particular, in reference to the Snam Group, the separate recording of the results in the natural gas distribution sector according to the criteria discussed in IFRS 5 penalizes the continuing operations as a result of the elision of the revenue and financial yield, recorded respectively in light of the re-charge of the costs deriving from the provision of services and the loans issued at the concentrated level of Snam S.p.A. to Italgas Reti S.p.A., with the costs generated by the aforementioned re-charges remaining part of continuing operations.

In order to remove these distortions, we have prepared alternative performance measures not established by the IFRS (Non- GAAP measures) which reset the results of the continuing operations, at the level of the individual entry on the financial statement, the intercompany transactions towards discontinued operations, in order to obtain a representation of the results of the continuing operations as if the discontinued operations had been deconsolidated.

In addition, the Non-GAAP measures, including the net adjusted profit of the Group, exclude several profit components classified in special items in order to provide a better analysis of the performances and to ensure greater comparability of the results.

As a result, the operating profits and the net profits of the Group have been reported in the reported and adjusted configurations for the fiscal year 2016 and for the periods of comparison.

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Belonging fully to Snam shareholders







Adjusted EBIT






Net profit (*)






Adjusted net profit (*)






For additional information in regards to the determination of the adjusted results, see the section “Recalculation of the Operating Profit and the Reported Net Profit to Adjusted Profit.

21 These results include the contribution to the financial statement of Italgas S.p.A. because the company controlled by Snam up to the effective date of the operation was constituted on June 1, 2016 exclusively in the realm of the operation in question as a beneficiary holding of the transfer of the entire share of Snam S.p.A. in Italgas Reti S.p.A.

22 In accordance with IFRS 5 accounting principle, section 32 “A discontinued operating asset is a component of an entity that was discontinued or classified as held for sale and: (a) represents a significant autonomous branch of an asset or a geographic asset area; (b) is part of a single coordinated plan to write-off of a separate autonomous branch of an asset or a geographic asset area; or (c) is a controlled sum acquired exclusively according to a resale.” In reference to discontinued operations, subsequent section 33 requires the indication, among other aspects, of a single sum, to be expressed in the complex financial statement prospectus represented by the total of the profits or losses from discontinued assets net financial effects.

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