The capital gains obtained from the sale of assets allowed Enagás to increase its net profit by 15% until September 30. The sole manager of the gas system recorded a profit after taxes of 353 million euros in the first nine months of the year, compared to 307 in the same period of 2021. All this, despite the fact that the gross operating result (Ebitda, the most faithful image of the evolution of a company’s business) fell almost 10%, to 605 million. Net debt was reduced by 16%, to 3,583 million.
Two sales allowed Enagás to widen its profit in the period: 45% of the Chilean company GNL Quintero and 30% of its renewable subsidiary, both closed in July. The first reported a gross capital gain of 249 million, while the second added another 50 million. In these results, the company does not yet include the sale of another 5% of Enagás Renovable to Pontegadea —the investment arm of the founder and largest shareholder of Inditex, Amancio Ortega— nor the most recent —announced last week— of another 5% to the public company Navantia. Both should be included in the results of the last quarter of the year or in the first of 2023.
Without the financial operations (the capital gains and, on the contrary, the deterioration of almost 134 million euros in its investment in the US company Tallgrass), Enagás’ profit before taxes would have fallen by 16% compared to the previous year. To a large extent, this decrease responds to a minimal decrease (1%) in revenues and a 22% increase in operating expenses, which went from 216 to 263 million. Also to the lower contribution of its investees, which added 10 million less (-6%) than in the first nine months of 2021.
In a statement sent this Tuesday to the National Securities Market Commission (CNMV), however, the company describes the evolution of its results until September 30 as “very positive” and believes that they “mark the path” to reach the objective of 380 or 390 million profit in all of 2022.
Protection against interest rate hikes
With interest rates clearly on the rise, investors are paying particular attention to the structure and costs of debt. In the case of Enagás, this flank seems well covered: more than 80% of what it owes is at a fixed rate, therefore protected from the increase in the price of money; and its total financial cost remained at 1.7%, the same as a year ago. As of September 30, the company had 1,468 million in cash, 24 more than a year earlier, and available lines of credit worth 2,164 million.
“We are considerably protected against the effect of interest rates”, the CEO of the company, Arturo Gonzalo, confided in the conference with analysts after the presentation of results.
As many gas arrivals by ship as in all of 2021
In its main line of business —the flow of gas through tubes in Spain and the regasification of that which arrives by ship—, Enagás registered a very strong increase in the demand for this fuel for electricity generation (+80%), largely due to the rise in electricity exports to France and Portugal, which “recorded a historical record on July 13”.
Conventional gas demand, on the other hand, contracted by 17% “affected by the decline in industrial demand.” Gonzalo, however, has shown his conviction that this is a “non-structural” loss in demand: “the drop in gas consumption in the industry does not respond to a destruction of activity, but to a substitution of fuels”. According to his data, so far this year 250 methane tankers have unloaded in Spain, almost as many as in all of 2021.
The sale of gas to France through the two small interconnections available in the Pyrenees increased by just over 14 terawatt hours (TWh) “due to the current European energy situation.” The latter, he affirms, “highlights the importance of international interconnections in this context”; an implicit reference to the gas pipeline project between Barcelona and Marseille, in which Enagás —in which the State has a 5% stake, which also has a gold share— will play an essential role.
Beyond this work, the CEO of the Spanish gas operator has trusted that the Spanish storage tanks for liquefied natural gas in the ports will be important to “give flexibility to the operation of the new regasification plants” that are being built in the central and northern Europe.