Energy group Naturgy announced its results for FY 2018 on Wednesday. The company notified it closed the year with recurring EBITDA growth of 3 percent. It also reported a consolidated loss of €2.8 billion, which it attributed to a significant deterioration in the value of its assets by mid-period.
In its annual report, the energy firm explained that this impact includes the effects of hyperinflation in Argentina and other extraordinary expenses. Similarly, it indicated that its profits amounted to €1,245 billion in 2018, up by 57 percent from the previous year.
Highlight of the results
- If it had not been for the negative impact of currency devaluation (€218 million), recurrent EBITDA growth would have been 17 percent.
- The energy company improved its results thanks to the gas and power business unit, coupled with the stability of the infrastructure area and the launch of its efficiency plan.
- Naturgy invested €2.32 billion, 30 percent more than in 2017. Investments in organic growth projects accounted for more than 70 percent of the total, up to 1.64 billion euros.
- Over the year, the company generated cash amounting to €5.5 billion thanks to the positive performance of the business and the sale of non-strategic assets, which was used to increase the asset base, reduce debt and remunerate shareholders.
Net debt is down by 9.8 percent in 2018
In the report published on Wednesday, Naturgy announced that it reduced its net debt to €13,667 billion, up by 9.8 percent in FY 2018. The company also reaffirmed its shareholder remuneration policy, established in its 2018-2022 Strategic Plan.
Among other financial items, the Spanish energy group said it recorded a consolidated loss of €2.8 billion. This result is attributed to the depreciation of its energy generation assets by €4.8 billion, executed in the first half of 2018; this is significant and even more so if compared with the €1.3 million benefit obtained in 2017.
At the moment of presenting its 2018-2022 Strategic Plan in late June 2018, Naturgy publicly announced the review of the value of its assets, carried out as a result of the updated business outlook. It said that this circumstance resulted in a write-down of €4.8 billion, mainly conventional power generation assets in Spain. This had an important and extraordinary impact on the consolidated income and losses of the FY.
€1,245 million revenue in 2018
In a statement to the Spanish National Stock Market Commission (CNMV), the company indicated that it had, however, obtained an ordinary net profit of €1.2 billion in 2018, without taking into account the adjustment of the book. This is a 57 percent rise from the net ordinary profits obtained in 2017.
In 2018, the Catalonian firm was marked by the arrival of new CEO Francisco Reynés. It was also shaken by the arrival of new shareholders and the fact that Repsol sold its stake in the company to VC Partners. Furthermore, Naturgy’s Board of Directors was renewed and a new organization structure was established as it presented its new 2018-2022 Strategic Plan.
Naturgy’s share price goes down
On Wednesday, the group’s stocks fell by 1 percent in the stock market.
Some estimate that this reaction in the local market reacted stemmed from the announcement of its losses, despite the rise seen in the Ibex 35.
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