we receive e we publish the following press release from Snam.
The Board of Directors of Snam, which met yesterday under the chairmanship of Monica de Virgiliis, approved the consolidated results for the first nine months of 2024. The Board, after consulting the Auditing Company, also resolved to distribute an interim dividend for 2024 of 0,1162 euros per share, to be paid starting from 22 January 2025.
“The results of the first nine months are very positive and confirm the trend recorded during the previous quarters, with investments and the main indicators in strong growth, fully consistent with our guidance”, commented Snam CEO Stefano Venier. “We continue on our path to strengthen the security of the system with the aim of a sustainable energy transition in the long term, as outlined in the Transition Plan presented in October to our stakeholders: 50% of our investments are aligned with the Sustainable Development Goals (SDGs) and 30% with the European Taxonomy”.
Summary of the results of the first nine months of 2024
| Economic highlights | ||||
| first nine months | ||||
| (millions of €) | 2023 | 2024 | Var.abs. | %change |
| Total revenue (a) | 2.863 | 2.651 | (212) | (7,4) |
| Gas infrastructure business revenues (a) | 2.127 | 2.430 | 303 | 14,2 |
| – of which Regulated revenues (a) | 2.071 | 2.398 | 327 | 15,8 |
| Energy transition business revenues | 736 | 221 | (515) | (70,0) |
| EBITDA adjusted (*) | 1.862 | 2.089 | 227 | 12,2 |
| Operating profit (EBIT) adjusted (*) | 1.171 | 1.340 | 169 | 14,4 |
| Net income adjusted (*) (b) | 942 | 996 | 54 | 5,7 |
| Special items | 105 | (44) | (149) | |
| Reported net profit (b) | 1.047 | 952 | (95) | (9,1) |
Total investments
In the first nine months of 2024, the total investments amounted to 1.800 million euros, up 46,1% compared to the same period of the previous year (1.232 million euros). This result was determined by the increase in investments in the gas infrastructure business, mainly attributable to the construction of the Ravenna regasification terminal and its connection to the gas transport network as well as the start of work on the Adriatic Line. Total investments were aligned by 50% and 30% respectively to the Sustainable Development Goals (SDGs) and the European Taxonomy. With reference to technical investments by business segment, 1.220 million euros are related to the transport sector (757 million euros in the first nine months of 2023; +61,2%), 293 million euros to the regasification sector (151 million euros in the first nine months of 2023; +94%) and 160 million euros to the storage sector (148 million euros in the first nine months of 2023; +8,1%). Investments in energy transition businesses amount to 88 million euros (73 million euros in the first nine months of 2023; +20%), mainly driven by the Ravenna CCS project for the capture and storage of CO2.
Total revenue
I total revenue stood at 2.651 million euros, down 212 million euros (-7,4%) compared to the first nine months of 2023. With reference to the gas infrastructure business, revenues increased (+303 million euros; +14,2%). Revenues from the energy transition businesses decreased (-515 million euros; -70,0%) due to the lower contribution of energy efficiency following the end of the so-called Superbonus incentives.
The increase in regulated revenues (+327 million euros; +15,8%) is mainly attributable to: (i) the increase in WACC in all business sectors (+133 million euros); (ii) higher revenues related to the growth of RAB in the transport and storage segments (+113 million euros, net of lower incentives input based) related to the implementation of the investment plan; (iii) the effects of the application of the ROSS (Regulation by Expenditure and Service Objectives) to the natural gas transportation service (+49 million euros); (iv) revenues related to the start of operations of the Piombino regasification plant (+48 million euros), which entered into operation in July 2023; (v) the recognition of revenues due to the higher volumes regasified in 2023 (+29 million euros compared to the higher revenues relating to 2022 recognized in 2023). These positive effects were absorbed by the incentives output based (-32 million euros) in the storage business, due to the lower demand for flexibility services on short-term auctions (-24 million euros), and lower incentives in the transport sector (-8 million euros) for the default service.
EBITDA adjusted
THEEBITDA adjusted for the first nine months of 2024 stood at 2.089 million euros, up by 227 million euros (+12,2%) compared to the corresponding value of the first nine months of 2023. The higher revenues of the gas infrastructure business (+303 million euros; +14,2%) were partly absorbed by the higher fixed costs associated with: i) the entry into operation of the FSRU plant in Piombino and ii) the increase in labor costs, also following the extension of the welfare services offered to employees and the entry of new resources. The positive impact of the gas infrastructure business was offset by the contribution of the energy transition businesses (-73 million euros), which were mainly affected by i) the energy efficiency business, due to the exhaustion of the so-called superbonus incentives, and ii) the change in the scope of the biogas/biomethane business.
Adjusted operating profit (EBIT adjusted)
THEoperating profit adjusted for the first nine months of 2024 was equal to 1.340 million euros, an increase of 169 million euros (+14,4%) compared to the corresponding value of the first nine months of 2023. The increase in EBITDA adjusted was partially offset by higher amortization, depreciation and write-downs (-58 million euros, equal to 8,4%) mainly due to the entry into service of new assets and the write-down of assets in the transport sector.
Net financial charges
- net financial charges stood at 230 million euros, up 75 million euros (+48,4%) compared to the first nine months of 2023. The increase is due, in particular, to the increase in net financial debt and the higher average cost of net debt which stood at approximately 2,5% in the first nine months of 2024 compared to 1,9% in the corresponding period of 2023. The increase is mainly attributable to the changed interest rate scenario between the two periods, mitigated by the positive impact of income related to the active management of liquidity.
However, the increase in financial charges was partly absorbed by higher capitalized financial charges and higher income from the effect of time on Superbonus credits and other minor bonuses.
Net income from equity investments
I net proceeds from participations amounted to 233 million euros, down compared to the first nine months of 2023 (-6,0%). The contribution of the Italian associates is substantially in line with the first nine months of 2023. With reference to international participations, the main results derive from: i) a lower contribution from the Greek DESFA, especially due to lower auction premiums at the export point to Bulgaria and at the entry point from the Revithoussa LNG terminal, now back to a normalized level in line with the period before the Russian-Ukrainian conflict; ii) lower capacity bookings and absence of positive adjustments (release of regulatory provisions one off) compared to the corresponding period of the previous year for the Austrian GCA. These effects were partly absorbed by i) a higher contribution from EMG mainly due to the recognition of income one off relating to previous financial years, and ii) from higher revenues of the Austrian TAG following the sale of capacity with more profitable short-term products.
Adjusted net profit
THENet income adjusted Group net profit for the first nine months of 2024 amounted to 996 million euros, up 54 million euros (+5,7%) compared to the same period of 2023. The result was driven by the growth in EBIT and partially absorbed by the increase in net financial charges, the lower contribution of international subsidiaries and higher income taxes against the increase in pre-tax profit, together with the repeal of the ACE tax benefit (starting from 2024).
Cash flow
Il cash flow from operating activities (+1.249 million euros), impacted by the absorption of cash (-419 million euros) mainly deriving from the dynamics of working capital linked to the balancing activity, allowed to finance part of the net investments of the period (1.850 million euros, including the change in debts for investment), generating a negative cash flow of 601 million euros. Thenet financial debt, including the cash flow from the payment of the 2023 dividend to shareholders (-938 million euros) and non-cash changes (-76 million euros), partly absorbed by the cash flow generated by the issuance of the first perpetual subordinated hybrid instrument (+989 million euros), recorded an increase of 664 million euros compared to December 2023, now standing at 15.934 million euros.
Sustainable finance
As of September 30, 2024 the sustainable finance is equal to 84% of the total funding which factors in, among other instruments, the financing obtained from the EIB for a total of 100 million euros to support energy efficiency interventions signed in June, as well as the new credit line Sustainability-linked, for a total amount of 1 billion euros, in accordance with the new Sustainable Finance Framework of the Group, signed in May. Over 50% of sustainable financing is linked to emissions reduction indicators, further confirming Snam's broader commitment to the Roadmap towards Net Zero.
Interim dividend
Based on the results of the first nine months and the forecasts for the end of the entire financial year, the Board of Directors of Snam has resolved to distribute to shareholders a interim dividend 2024, equal to 0,1162 euros per share, up 3% compared to 2023. The dividend will be paid on January 22, 2025 (record date January 21, 2025).
Sustainability
On 17 October 2024, Snam published its First Transition Plan, approved by the Board of Directors, which outlines the objectives, actions and resources made available by the company to support energy transition objectives and contribute to the decarbonisation of the country.
The document is based on long-term energy scenarios that represent the most up-to-date evolution of Italian energy demand, in line with i) the scenarios developed with the Italian electricity transport operator (Terna), ii) the PNIEC (Integrated National Plan for Energy and Climate) and iii) European sector scenarios, such as those developed by the European Network of Transmission System Operators (ENTSOs). The risk assessment on all scenarios corroborates the solidity of Snam's multi-molecule business model.
Snam's roadmap towards Net Zero is based on two main pillars: (i) reducing emissions and (ii) minimising the impact on biodiversity. As part of its climate strategy, Snam is strongly committed to achieving carbon neutrality by 2040 (for scope 1 and 2 emissions) and Net Zero for all emissions, including scope 3, by 2050. Snam is also committed to the decarbonisation of the energy system, leveraging its key role in the development of transition activities: biomethane, hydrogen, carbon capture and storage and energy efficiency.
With regard to biodiversity, Snam is committed to achieving Zero Net Conversion during 2024 and to generating a positive environmental impact on nature by 2027, providing for the complete restoration of vegetation and landscape ex ante, with policies defined on the principles of land, water and waste management.
The new edition of the “Together for Others” volunteering initiative, which since 2019 has allowed Snam people to donate part of their time to help social organizations and Third Sector entities fight food poverty, in partnership with the Azione contro la Fame Foundation, was a success. This year's edition saw the participation of over 800 people, including Snam employees, suppliers and retired colleagues, who donated 3.000 hours, helping 46 associations in 17 Italian locations.
Foreseeable evolution of management
The most recent estimates on theevolution of natural gas demand in Italy, for the current year they foresee a slight decline compared to 2023, mainly determined by the drop in gas-fired thermoelectric production due to the increase in electricity production from renewable sources, especially in the hydroelectric sector.
The economic results of the current financial year benefit, however, from the increase in revenues connected to the growth of the RAB, thanks to the investments made, the updating of the WACC and the introduction of the new ROSS (Regulation by Expenditure and Service Objectives) regulatory model for transport.
During the period, there were perform the following actions:
- signing (on 25 July 2024) of a binding agreement for the acquisition of 100% of Edison Stoccaggio, for a consideration of approximately 560 million euros;
- increase of the shareholding in Adriatic LNG, a regasification terminal operating in the waters off Porto Viro (Rovigo), from the current 7,3% to 30%, the closing of which is expected at the beginning of December following the obtaining, among other things, of the clearance antitrust by the European Commission (DG Competition). The 30% stake in Adriatic LNG, also thanks to the operational role that will be covered in the Company, takes on significant importance within the portfolio of LNG activities managed by Snam, projecting it to become the third operator in terms of regasification capacity at continental level.
These operations are in line with Snam's objective of ensuring a safe, diversified and sustainable energy system for the country.
In October the European Central Bank has further reduced its key rates, by a total of 75 basis points since June this year. However, the global context and the rate reduction trajectory remain uncertain and high interest rates will continue to have a negative impact in 2024, increasing net financial costs. The main levers for optimising the financial structure concern an ever greater diversification of financing sources and instruments, as well as the dynamic management of working capital and cash flows. At the same time, Snam intends to maintain adequate flexibility with respect to rating metrics and a solid financial structure. This was confirmed by the recent issuance of a hybrid instrument for a value of 1 billion euros.
With reference to situation in the Middle East, the conflict does not currently have a direct impact on Snam's assets or on the pipeline connecting Israel and Egypt (EMG), which is operating regularly. Any escalation of maritime attacks or a geographical extension of the conflict that could cause, for example, a prolonged interruption of maritime transport (for example of LNG ships) in the current year, could give rise to tensions at an international level, with the consequent impact on the prices of energy goods for which Italy, and Europe in general, are heavily dependent on foreign imports. These turbulences could not only negatively affect the world economy, increasing production costs and further impacting economic stability and national and European growth, but could also lead to further complexities in the management of energy supply sources. Snam will continue to monitor the evolution of the situation in the Middle East, including the possible consequences and effects on the Group.
With regard to sustainability, Snam continues to monitor performance through the KPIs of Sustainability Scorecard. The set of KPIs shows good progress towards the end-of-year targets. In particular, the expected reduction in Scope 1 and 2 emissions expected for 2024 is expected to be down by more than 20% compared to the 2022 baseline, a further improvement compared to the 10% reduction recorded in 2023.
Confirmed the financial goals for 2024, already strengthened on the occasion of the first quarterly report, as follows:
- investments of 3,0 billion euros (of which 2,8 billion euros in gas infrastructure and 0,2 billion euros in energy transition);
- a tariff RAB of 23,8 billion euros;
- a level of EBITDA adjusted greater than 2,75 billion euros;
- a level of net profit adjusted equal to approximately 1,23 billion euros;
Finally, the target for net debt has been updated to 16,5 billion euros (compared to the previous 17,5 billion euros) resulting from the recent hybrid issue (1 billion euros).
| Main operational data | |||||
| first nine months | |||||
| 2023 | 2024 | Var.abs. | %change | ||
| Natural Gas fed into the National Gas Pipeline Network (a) (b) | (billion m3) | 49,03 | 46,33 | (2,70) | (5,5) |
| Gas question (a) | (billion m3) | 44,36 | 43,18 | (1,18) | (2,7) |
| LNG Regasification (a) | (billion m3) | 2,37 | 3,42 | 1,05 | 44,3 |
| Total storage capacity (B.C) | (billion m3) | 16,66 | 16,88 | 0,22 | 1,3 |
| Natural gas moved in storage (a) (b) | (billion m3) | 9,91 | 10,36 | 0,45 | 4,5 |
| Biomethane/biogas plants in operation | (number) | 35 | 35 | ||
| Backlog (D) | (millions of €) | 1.085 | 1.215 | 130 | 12,0 |
| Employees in service at the end of the period (E) | (number) | 3.741 | 3.847 | 106 | 2,8 |
| (a) | With reference to the first nine months of 2024, gas volumes are expressed in Standard cubic meters (Smc) with an average Gross Calorific Value (GVC) of approximately 38,1 MJ/Smc (10,573 Kwh/Smc) for the transport and regasification activity and 39,3 MJ/Smc (10,919 Kwh/Smc) for the natural gas storage activity for the thermal year 2024-2025. |
| (B) | The data relating to the first nine months of 2024 is updated as of 10 October 2024. The corresponding value for 2023 has been definitively updated. |
| (C) | Of which 4,48 billion cubic meters related to strategic gas and 12,40 billion cubic meters related to available capacity for modulation, mining and balancing services (so-called working gas). The available capacity as of 30 September 2024 is that declared to the Authority for Electricity, Gas and Water System at the beginning of the thermal year 2024-2025. Following the processes for the assignment of storage services offered for the thermal year 2024-2025, the available capacity has been entirely assigned. |
| (D) | Indicates the value of revenues pertaining to financial years subsequent to 2024, associated with contracts awarded and stipulated as of 30 September 2024. |
| (E) | Fully consolidated companies. |
Natural gas fed into the national transport network
In the first nine months of 2024, 46,33 billion cubic meters were introduced into the national transport network, a decrease of 2,70 billion cubic meters (-5,5%) compared to the first nine months of 2023, following lower demand and the significant drop in exports.
La gas demand in the first nine months of 2024, equal to 43,18 billion cubic meters, recorded a reduction compared to the corresponding period of 2023 (-1,18 billion cubic meters; -2,7%), attributable to the contraction in consumption: (i) in the thermoelectric sector (-0,97 billion cubic meters; -5,0%) following the greater hydroelectric production due to heavy rainfall in the period and the increase in production from renewable sources; (ii) in the residential and tertiary sector (-0,25 billion cubic meters; -1,6%), essentially due to the overall milder temperatures compared to the first nine months of 2023, particularly in the winter months. Consumption in the industrial sector is substantially in line with the corresponding period of the previous year (+0,08 billion cubic meters; +1,0%).
Excluding the climate impact, gas demand amounted to 44,70 billion cubic meters, recording a slight reduction of 0,16 billion cubic meters (-0,4%) compared to the corresponding value of the first nine months of 2023 (44,86 billion cubic meters), in the face of the end of the gas demand containment actions that impacted the first months of 2023 and a more favorable consumer price dynamic.
Regasification of Liquefied Natural Gas (LNG)
In the first nine months of 2024, regasified 3,42 billion cubic meters of gas (compared to 2,37 billion cubic meters in the first nine months of 2023) and 50 unloadings were carried out from LNG carriers (55 unloadings in the first nine months of 2023). The increase in regasified volumes is mainly attributable to the entry into service of the Piombino FSRU plant, operational since July 2023, which in the first nine months of 2024 regasified a total of 2,45 billion cubic meters, carrying out 27 unloadings from LNG carriers (3,57 billion cubic meters and 39 unloadings since the terminal began operating). This effect was partially offset by the reduction in regasified volumes at the Panigaglia LNG terminal (La Spezia), i.e. 0,97 billion in the first nine months of 2024 compared to 2,27 billion in the same period of 2023, reflecting the effects of the Russian-Ukrainian conflict on the gas market.
Natural gas storage
As of September 30, 2024, the total storage capacity, including strategic storage, is equal to 16,88 billion cubic meters (an increase of 0,22 billion compared to 30 September 2023), of which 4,48 billion cubic meters relating to strategic storage (unchanged compared to the thermal year 2023-2024), and 12,40 billion cubic meters relating to available capacity. As of 30 September 2024, the available capacity for the thermal year 2024-2025 is 100% allocated (also entirely allocated for the thermal year 2023-2024).
At the end of the injection campaign (March 31, 2024), storage filling volumes amounted to approximately 60% of maximum capacity. With the start of the next injection campaign, storage levels reached approximately 30% by September 2024, 96, remaining in line with those recorded at the same date in 2023.
Energy transition
As of September 30, 2024, they are in operation 35 biomethane/biogas plants, in line with the same period in 2023, with an installed capacity of 40 MW (down 4 MW compared to the same period of the previous year). The change is mainly attributable to the exit from the Group's scope of 4 biogas and agricultural biomethane plants following the sale of Iniziative Biometano SpA, for an installed capacity in operation of 8 MW, partly absorbed by the entry into the portfolio of 5 new agricultural plants, for a total of 5 MW of installed capacity.
With reference to energy efficiency, the backlog at 30 September 2024 records a total value of 1.215 million euros, of which over 95% relates to EnPC (Energy Performance Contract) contracts.
On 14 October 2024, Snam signed with Sonatrach (Algeria), Sonelgaz (Algeria), VNG (Germany), SeaCorridor (Italy) and Verbund Green Hydrogen (Austria) a Memorandum of Understanding for the joint implementation of the necessary studies along the entire hydrogen value chain in order to assess the feasibility and profitability of an integrated project for the production of green hydrogen in Algeria, leveraging the SoutH2Corridor to access the European hydrogen market. At the same time, the Tunisian Government also announced the signing of six memoranda of understanding for the production of green hydrogen in Tunisia that refer to the SoutH2 Corridor as a platform for accessing the same market.
