7.5% up on the previous year
The profit of the Red Eléctrica Group reached 529 million euros in 2013
  • During 2013, the Company made investments worth 596 million euros, in line with the targets set.
  • Red Eléctrica will invest about 550 million euros in 2014.

Red Eléctrica de España (REE) has made ​​a profit of 529.1 million euros during the 2013 fiscal year, up 7.5% on the figure for 2012 which totalled 492.3 million. The Company today reported the consolidated results for 2013, period in which investments worth 596 million euros were made. For 2014, the planned investments amount to 550 million euros.

The gross dividend per share for 2013 that the Company will submit for approval at the next Annual Shareholders’ Meeting totals 2.5422 euros per share, representing an increase of 7.5% over the previous year.

The financial statements for the year have been marked by non-recurring events, such as Royal Decree-Law 9/2013, which reduced transmission revenues, and Law 16/2012, on revaluation of corporate balance sheets. Eliminating the effect of this and other extraordinary events that occurred during 2012 and 2013, the Group's profit in 2013 grew, in homogenous terms, by 8.8%.

Net revenue last year totalled 1.823 billion euros, also in homogeneous terms, registering a growth of 4.4% over the same period the previous year. This growth reflects the effect of a larger asset base to be remunerated for facilities put into service in 2012.

The gross operating result (EBITDA) in homogeneous terms totalled 1.369 billion euros, up 5.9% year on year, due to increased net revenue and a positive evolution in operating costs, which remained fairly constant with regard to the previous year.

Impacts of the new regulation

The approval of Royal Decree 1047/2013, of 27 December, which establishes the methodology for calculating electricity transmission remuneration, clarified the principles and criteria of the remuneration of the Company. Thus, Red Eléctrica comes into line with comparable European companies (transmission agents and electricity system operators), which helps define the transmission activity in a more stable and predictable environment. It also introduces incentives to boost efficiency in both the construction of facilities and the operation and maintenance of grids.

The approval of the Royal Decree, clears up the uncertainty regarding the regulatory changes introduced in recent years aimed at eliminating the tariff deficit and that have had an impact of more than 500 million euros on Red Eléctrica (see attached document), through the income cuts or deferral thereof.

Income statement in homogenous terms         

 

January-December (pro-forma)

(in thousands of euros)

2013

2012

%

Net revenue

1,822.6

1,745.0

4.4

Gross operating result (EBITDA)

1,369.0

1,292.2

5.9

Net operating result (EBIT)

967.6

900.0

7.5

Profit before taxes

799.2

734.2

8.8

Profit for the period

558.0

513.1

8.8
 

Investments 2013

In 2013, Red Eléctrica invested a total of 596 million euros, in line with the targets set for the year. The development of the transmission grid accounts for most of this investment, with 564 million euros.

In 2013, 776 kilometres of new circuit line and 2,525 megavolt-amperes (MVA) of transformer capacity was put into service. Noteworthy was the commissioning of the Almaraz-Guillena axis (which ensures the quality of supply in Extremadura and Andalusia) and the Guillena–Puebla de Guzmán axis (which together with the previous stretch of line allows a stronger connection with Portugal).

Moreover, in the north of the Spanish peninsula, the coming into operation of the Grado-Salas axis, that forms part of a larger project to link up the axis of the Cantabrian coast and enable the evacuation of wind power from Galicia and Asturias to areas of high consumption, such as the Basque Country and Cantabria.

During 2013, ​​significant progress was made on the interconnection with France via the Eastern Pyrenees and work on the tunnel under the Pyrenees was practically completed. In addition, works continued on the implementation of the trenches of the sections where the line runs underground.

Arbitration in Bolivia

Regarding Transportadora de Electricidad (TDE), Red Eléctrica initiated the arbitration proceedings in July 2012 with the declaration of controversy, attempting to jointly resolve the conflict until this February. Having found that agreement is not possible; the Company has today filed an arbitration notice due to the disparity between the offers received and the claims that Red Eléctrica see as legitimate. However, even with the proceedings underway, Red Eléctrica will not close the door on negotiations for an agreement and avoid, therefore, the entire arbitral process begun in defence of the reputation of the Company and the interests of its shareholders.

Since the purchase of TDE in 2002 for $91 million until its nationalisation on May 1, 2012, Red Eléctrica made ​​a major investment in Bolivia. To the more than $74 million invested from 2002 to 2011, a further $14 million earmarked for other projects already underway needs to be added, which gives a total of more than $88 million. According to the annual audited accounts report of TDE at the end of 2011, net equity amounted to $164 million.

Outlook for 2014

On 1 February, 2014, the Ministerial Order which revises the tariffs for access to the transmission and distribution grids for this year was approved. In this sense, Red Eléctrica’s transmission revenues for 2014 will be 1.622 billion euros, with a transmission grid availability incentive of 14 million euros, and the remuneration for System Operation will reach 56 million euros.

Amongst the most important investments the Company will make in 2014, noteworthy is that the Company will continue moving forward with the interconnection with France and Portugal, as well as to with the Majorca-Ibiza interconnection. The level of investment expected for 2014 will be around 550 million euros. The investment activities of the Company will allow the 2014 Net Profit to grow in the range of 4-5% with respect to 2013.

Corporate responsibility, innovation and excellence in management

Red Eléctrica, in its firm commitment towards sustainability, the environment and the relationship with its stakeholders as an essential part of its business strategy, in 2013 carried out more than fifty corporate responsibility projects to contribute to the development and welfare of society.

For the fourth consecutive year, the Company continues to be part of the prestigious Dow Jones Sustainability World Index (DJSI) and the FTSE4Good Sustainability Index, being a leader in the Utilities sector, amongst others.

In addition, during 2013, the Company increased its commitment to innovation and participated in 60 R&D+i projects in order to continue studying the best initiatives to ensure the sustainability and efficiency of the Spanish electricity system.

In the month of January this year, Red Eléctrica became the Spanish company with the highest rating in the European Seal of Excellence 500+, granted by the Club de Excelencia en Gestión, the official representative in Spain of the European Foundation for Management Quality (EFQM).

 

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