Total revenue amounted to 2,118 million euro, up by 79 million euro, or 3.9%, compared with 2017 (2,039 million euro). Net of components offset in costs8, total revenue amounted to 1,984 million euro, up by 110 million euro, or 5.9%, compared with the previous year.
The regulated revenues (2,041 million euro) essentially refer to the fees for the natural gas transportation service (2,023 million euro) and to the incentives granted to the Balancing Operator (RdB) (15 million euro) following the actions implemented, as required by Resolution 554/2016/R/gas. Regulated revenue, net of components that are offset in costs, amounted to Euro 1,907 million, up by Euro 91 million, or 5.0%, compared with 2017. The increase is essentially due to greater revenues from transmission (+81 million euro)9 in view of the update of the invested capital recognised for regulatory-RAB purposes (+64 million euro), the greater contribution of ITG (whole year 2018 as compared with 3 months in 2017; +15 million euro) and greater incentives recognised to the Balancing Operator (+7 million euro).
Non-regulated revenue (77 million euro) increased by 19 million euro, or 32.8%, compared with 2017. The increase is due to the services provided to other Group companies (+16 million euro) essentially following the transfer from Stogit to Snam Rete Gas, as part of the Integra Project completed on 01 July 2017, of the business unit “Technical plants and services”. The increase is matched by higher labour costs associated with the staff members transferred.
Adjusted operating profit, which excludes the special items represented by the charges relating to the incentives to take voluntary redundancy in application of the early pension mechanism regulated by Art. 4, paragraphs 1-7 of Italian Law no. 92/2012 (the “Fornero Law”), together with the introduction of the “quota 100” envisaged by the 2019 Budget Law (a total of 17 million euro), comes to 1,081 million euro, up 33 million euro, equal to 3.1% on FY 2017.
The increase is due to the greater revenues (+94 million euro, net of the charge-back of services provided to other Group companies), partly offset by the greater amortisation, depreciation and impairment (-25 million euro, equal to 4.5%), essentially due to the commissioning of new assets and the rise in operating costs (-36 million euro, equal to 14.5%, net of components with equivalent entries in revenues, the effects of the corporate reorganisation as part of the Integra Project and special items). This increase is mainly due to expenses deriving from the greater use of Unaccounted-For-Gas (UFG)10 with respect to the quantities conferred in kind by the users (-22 million euro, net of uses of the provision made during previous years) and greater costs for services, mainly IT in nature, charged back by the parent company Snam S.p.A., only partly offset by actions to optimise IT infrastructure management.
8 The main revenue items offset in costs relate to sales of natural gas carried out for the purposes of balancing the gas system, modulation and interconnection.
9 The change includes the adjustment of revenues recognised for natural gas transmission and dispatching for 2018, in order to take into account the final values for 2017, as ordered by the Authority in resolution 390/2018/R/gas of 18 July 2018.
10 With reference to the petition presented by the Company to the regulatory Authority - ARERA, for the recognition of the greater charges related to the purchase of gas for the coverage of the UFG for the years 2018-2019, it is specified that the Authority itself with communication of 13 February 2019, while positively assessing the Company's request, however, deemed it necessary to acquire additional information elements preliminary to the completion of the preliminary investigation. The Company is collaborating with the Authority in providing the requested information.