Enagás Earns €375.8M in 2022, 6.8% Less Due to the Regulatory Framework

Enagás registered a net profit of €375.8 million in 2022, which represents a decrease of 6.9% compared to a year earlier due to the impact of the 2021-2026 regulatory framework, as reported by the company to the Commission on Tuesday National Stock Market (CNMV).

However, Enagás exceeds the objective established for the year 2022 of achieving a profit of between 380 and 390 million euros, which included the net capital gain from the sale of the Morelos gas pipeline, an operation that is expected to close in the first four months of 2023.

Enagás has underlined having met all the objectives established for the year 2022 thanks to the “high” degree of execution of the Strategic Plan since its presentation on July 12th.

The company has highlighted that in a year of great volatility in the energy markets, the Spanish gas system has operated “with 100% availability 24 hours a day, every day of the year” and its infrastructures have been key to the security of supply in Spain and the European Union.

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Total revenue amounted to €970.3 million, 2.1% lower than those registered in 2021

Regulated revenue at the end of 2022 amounted to 950.4 million euros, 1.8% less, due to the application of the 2021-2026 regulatory framework (-€45.1 million), although this impact has been seen partially offset by the remuneration of audited expenses (approximately €38 million).

The gross operating result (Ebitda), for its part, reached €797.4 million, 10.9% less.

This result has been possible, as the firm explains, thanks to the effectiveness of the cost-efficiency plan implemented to minimize the impact of inflation on manageable costs.

Investee companies

The investee companies had “good behavior” in 2022, with a contribution that represents 39% of the profit after taxes, reaching €201.2 million, 7.5% less.

Enagás announced in January 2023, as part of the asset rotation process and in line with the announced strategy, the increase in its stake in TAP from 16% to 20%.

The company has also stressed that thanks to the intensification of its efficiency plan, recurring operating expenses increased by approximately 4% in 2022 compared to 2021, in accordance with the objective established in the strategic plan.

Enagás expects recurring costs to remain stable in 2023

For its part, the operating cash flow figure as of December 31, 2022, was €847.4 million, representing an increase of 14.5%. This figure includes the dividends received from investee companies, which on December 31st, 2022, amounted to €121.5 million, and the “positive” change in working capital, which reached €235.3 million.

The company has explained that this behavior of the working capital is a consequence of the high use of the infrastructures of the Spanish gas system, especially the regasification plants, keys for the security of supply in Spain and Europe, and that have caused an increase in the amounts of the company’s liquidations in the year 2022.

The high generation of cash flows and the positive effect of asset rotation had a positive impact on the company’s net debt in 2022, which fell by €808 million (-19%), from €4.27 billion in December 2021 to €3,5 billion at the end of 2022.

Likewise, the company has stressed that it has a “solid” liquidity situation, which at the end of the year amounted to €3.8 billion.

In December 2022, it contracted a bank loan for an amount of €450 million euros maturing in 2025 and under “very competitive” conditions to cover all maturities in 2023.

In total, gas demand and exports grew by 4.4% in 2022. Gas exports to Europe through interconnections with France increased by 22 TWh and LNG tanker refueling from Spanish terminals increased 45%, placing it in the third highest historical value.

In 2022, Spain had a supply portfolio from 19 different origins.

Lastly, on December 21st, an interim dividend of €0.688 gross per share was paid, in line with the annual commitment for 2022 to distribute €1.72 euros per share, which will be proposed for approval at the next general meeting of shareholders.

Goals for 2023

The company expects a profit after taxes for 2023 of between €310 and €320 million, due to the reduction in income established in the regulatory framework, and an Ebitda of around €770 million.

The subsidiaries will foreseeably contribute dividends of between €190 and €200 million. As part of compliance with the Efficiency Plan contemplated in the 2022-2030 Strategic Plan, Enagás maintains strict control of operating expenses in 2023.

Likewise, the company maintains its dividend policy of €1.74 per share for 2023.

Following a historic agreement to promote H2Med, Enagás, together with the Transmission System Operators (TSOs) of Portugal and France, presented to the EU Project of Common Interest (PCI) the first hydrogen corridor between these three countries to increase flexibility and guarantee continuity of supply to Europe.

On January 22nd, the Government of Spain announced an agreement for Germany to join the H2Med project, which will allow the transport of two million tons of green hydrogen to Europe, which will be produced in the Iberian Peninsula.

To meet this challenge, Enagás has highlighted that it has a “fundamental role” in the Spanish Hydrogen Trunk Network to connect the main hydrogen production centers with local demand and European interconnections.

As he explained, the company’s role as TSO is fully compatible with that of Hydrogen Network Operator (HNO) and Enagás’ current gas pipeline network is 100% prepared to transport hydrogen and 80% coincides with the route of the trunk network of hydroducts.

H2Med entails the development of a Spanish Hydrogen Backbone Network, which Enagás also presented to the PCIs call on December 15.

The total estimated gross investment of H2Med is 2.5 billion and that of the Spanish Hydrogen Trunk Network is €4.67 billion until 2030.

By 2023, Enagás plans to launch non-binding ‘Calls for interest’ for the Spanish Hydrogen Trunk Network, starting with the Vía de la Plata axis. Also this year, the approval of the list of projects presented to be designated as of common interest is expected in Europe.

“The future binding planning defined by the Government, as part of the energy policy, will mark the next steps,” the firm has indicated.

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(Featured image by geralt via Pixabay)

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First published in EL INDEPENDIENTE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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