• Investment rose to €249 million, of which 92% was earmarked for transmission grid development.

The Red Eléctrica de España Group has reported a net profit of €289.9 million for the first half of 2014, a figure 6.6% higher than that achieved in the same period last year. The Company today announced its results for this period in which investments rose to €249 million.

Net revenue for the first half of 2014 totalled €926.5 million, with a growth of 8.2% on the same period last year, mainly due to the evolution of transmission revenue in Spain which grew 6.4% compared to June 2013 as a result of a larger asset base that incorporates installations commissioned in 2013.

Moreover, income for System Operation Services amounted to €28 million, a figure which for the first half of the year includes the effects of the consolidation of the Company’s Peruvian subsidiary Red Eléctrica del Sur (Redesur) and the increased volume of work carried out in Transmisora Eléctrica del Sur.

Gross operating result (EBITDA) reached €694.7 million, representing a growth of 7.7% year-on-year. EBITDA performance has been linked to the aforementioned increase in net revenue as well as the evolution of operating costs, due to increased activity associated with maintenance work on the transmission grid in Spain, as well as to the impact of the consolidation of Redesur and the increased volume of work in Transmisora Eléctrica del Sur.

It is worth noting that the net financial result improved by €12.8 million mainly due to the lower average cost of debt and the lower average debt balance.

The evolution of the aforementioned figures meant that net profit stood at €290 million, showing an increase of 6.6% over the figure for the same period last year.

Investments for the first six months totalled €249 million, of which 92%, i.e. €230.1 million was earmarked for the development of the Spanish transmission grid.

In addition, taking advantage of the favourable conditions in the debt markets, Red Eléctrica has successfully issued bonds amounting to 300 million with a maturity of nine years and a cost of 2.176%, which ensures the optimisation of the financial cost for this regulatory period and part of the next.

These results enable Red Eléctrica to confirm that it is on the right track to meet the objective set at the start of the year to achieve an increase in profits of between 4% and 5% in 2014.

Income statement

Relevant events in the second quarter of 2014

• On 24 June 2014, the credit rating agency Standard & Poor's raised the rating outlook for Red Eléctrica from Neutral to Positive. The action is a result of the recent improvement in the rating for Spain. Following this announcement, Red Eléctrica Corporación, SA and its subsidiary Red Eléctrica de España, S.A.U. have kept their  long-term rating level at 'BBB' and their short-term 'A-2', with the outlook upgraded from neutral to positive.
• On 6 June, the Cabinet of Ministers amended a number of specific aspects of the Electricity Transmission Grid Development Plan, including additional investment estimated at €917.5 million. Included amongst the most important activities are the submarine links between the Spanish Peninsula and Ceuta, between Ibiza and Formentera, between Lanzarote and Fuerteventura and finally between Tenerife and La Gomera.
• On 1 June, the 220 kilovolt (kV) Tintaya-Socabaya line and associated substations were brought into commercial operation in Peru, as part of the concession awarded to Transmisora Eléctrica del Sur in September 2010. The facilities were commissioned successfully in accordance with the schedule agreed with the Peruvian government and regulator. Transmisora Eléctrica del Sur has now started the operational phase of the concession, which will run for 30 years.
• The 10th Collective Bargaining Agreement came into effect on 1 May and will run for 5 years, with the agreement of all union representatives of Red Eléctrica. This new agreement is built around productivity, improving flexibility and sustainability. Salary increases are now totally independent of inflation and based exclusively on productivity criteria.

The Press Office of Red Eléctrica publishes all written and visual information via the Twitter account @RevistaREE.

Also on Facebook through the account Revista Entrelíneas