Snam Profits Edge Higher, Flows Stable
Italian national gas grid operator Snam has increased profits, despite a fall in gas consumption.
It reported August 1 a 1H net profit of €523mn ($612mn), up 4% year on year, whereas Italian national gas demand fell by 1.6% thanks to the lower demand from power generation. Gas injected into Snam’s transportation network though was little changed (-0.4%) at 37.93bn m3 and its storage capacity at end-June 2018 was 12.4bn m3, an increase of 0.2bn m3 year on year. Only 0.356bn m3 of LNG was regasified at its Panigaglia terminal, but that was up by 111% (or 0.187bn m3) year on year; nine tankers were unloaded, of which two were spot loads
Snam's earnings before interest and tax (Ebit) were €729mn in 1H2018, up 2% year on year. The company also raised its full year 2018 net profit guidance to around €1bn (previously €975mn) and confirmed its forecast for end-2018 net debt at €11.5bn. It also bought back and cancelled 1.39% of its share capital during 1H2018 at a cost of €183mn.
Among key events, it noted the agreement, along with Enagas and Fluxys, signed July 20 to acquire a majority 66% stake in Greek gas grid Desfa for €535mn; a foreign consortium that Snam will lead.
Investments during 1H2018 in its existing assets totalled €349mn, down 18%, of which €314mn was in transportation and €31mn in storage.
It repeated its previously-stated plan to invest roughly €5.2bn in 2017-2021, of which €1bn was invested in 2017, saying it aims to create additional reverse flow capacity towards other European countries, and open new gas flows from the Caspian through the TAP gas pipeline (in which Snam has 20% equity). It aims to expand its Italian network, last year 32,500 km, by 2% by 2021, its compressors (2017: 922 MW) by around 5%, its 2017 storage level by 4%, and to build several natural gas filling stations.