Analysis of income statement items

Financial income and expense in 2020 (1,087 million euros) rose by 242 million euros or 28.6% compared with the previous year.

Income from equity investments (1,124 million euros) consists mainly of the dividends distributed by the subsidiaries Snam Rete Gas S.p.A. (665 million euros) and Stogit S.p.A. (197 million euros), by the companies under joint control Terēga (86 million euros) and Trans Austria Gasleitung GmbH – TAG (83 million euros), and by the related companies Italgas S.p.A. (28 million euros), Galaxy Pipeline Assets HoldCo Limited (17 million euros) and Senfluga Energy Infrastructure Holding S.A. (11 million euros). The increase of 226 million euros, up 25.2% compared with 2019, was mainly due to the greater dividends distributed by the subsidiaries Snam Rete Gas S.p.A. (+85 million euros) and Stogit S.p.A. (+11 million euros), by the companies under joint control Terēga (+72 million euros) and Trans Austria Gasleitung GmbH – TAG (+20 million euros), and by the related companies Galaxy Pipeline Assets HoldCo Limited (+17 million euros) and Senfluga Energy Infrastructure Holding S.A. (+11 million euros).

Interest receivable and other financial income (151 million euros), principally relates to: (i) interest deriving from the intra-group loans granted by Snam S.p.A. to the subsidiaries Snam Rete Gas S.p.A. and Stogit S.p.A. (106 million euros overall) and to company under joint control OLT – Offshore LNG Toscana S.p.A. (13 million euros); (ii) the income from the direct recharging and treasury arrangements concluded between Snam S.p.A. and the companies, the expenses connected by the compulsory buy back transaction implemented by Snam in December 2020 (18 million euros in total).

The interest payable and other financial expenses (178 million euros) relate to: (i) the expenses connected to the bond buy back transaction (22 million euros), equal to the difference between the buy back price of the bonds on the market and the relative value at the amortised cost; (ii) expenses for bond loans⁴¹ (138 million euros) and for loans provided by banks and other financial institutions (18 million euros).

The losses from derivatives financial instruments (10 million euros) relate to the effects deriving from the unwinding of derivative financial contracts on bonds subject to the buyback operation.

Revenue for the provision of services (260 million euros) mainly involve charge backs for services provided by Snam to subsidiaries (229 million euros in total). The services are governed by contracts entered into with Snam S.p.A. and the subsidiaries, and concern the following areas: ICT, Personnel and Organisation, Planning, Administration Finance and Control, General Services, Property, Security, Legal and Corporate Affairs and Compliance, Health, Safety and Environment, External Relations and Communication, Internal Audit, Technical, Commercial, Regulation and Procurement. The services provided also include the revenue on projects of the Global Solution Business Unit (31 million euros).

The increase of 33 million euros compared with the previous year is due to the greater charge backs to subsidiaries (+26 million euros), for services mainly of an ICT nature and to the greater revenue from Global Solution Business Unit projects (+7 million euros) essentially following the design services rendered to the subsidiary TAP.

Other income (15 million euros) essentially refers to income from the leasing and maintenance of fibre optic telecommunications cables for third-parties (13 million euros).

Costs for non financial services and other costs are composed of operating costs (242 million euros) and depreciation and amortisation (11 million euros). The increase of 67 million euros is essentially due to: (i) higher costs for services (27 million euros), mainly attributable to ICT services charged back to Group companies; (ii) costs incurred as a result of the state of emergency related to the Covid-19 pandemic for a total amount of 24 million euros, relating mainly to donations of health equipment (14 million euros) and money (2 million euros) to the Italian health system and the third sector, purchases of personal protection equipment for internal use (6 million euros) and costs for services (2 million euros), mainly relating to employee support and security; (iii) the dynamics of the provision for risks and charges (17 million euros).

Personnel costs totalled 90 million euros, an increase of 2 million euros, essentially in line with the corresponding period of the previous year.

The number of employees as at 31 December 2020 (804 people) is analysed below by professional status:

Income tax

Income tax amounts to 4 million euros mainly on account of the share of non taxable dividends collected in the year.