A summary of the financial news relating to Enexis follows.
Published 03-28-2012
Despite the economic crisis, grid operator Enexis invested 362 million euros in its electricity and gas grids last year. That is 17 million euros more than in 2010. Affordability has high priority: the permissible tariffs for 2012 have not been used in full. That gives households a saving of almost 20 euros on the maximum allowed tariffs. This is made possible in particular by extensive cost savings.
Enexis had a good year in 2011: profit for the year rose to 229 million euros (36 million higher than in 2010) on net revenue of 1.3 billion euro. The company proposes to distribute half of the profit (115 million euros) to its shareholders (provinces and municipalities). Continuing cost savings allowed tariff increases in 2012 to be kept at a limited level (below inflation). That means Enexis will not pass on around 80 million euros of potential increases to its customers, even though the government-regulated tariffs would make those increases possible.
Major investments
The majority of the investments went to extending the grid, for example for new building projects or for the connection to the grid of sustainable heating plants for horticulturalists. Enexis made good progress on the replacement of cast-iron gas pipes (112 km was replaced, compared with the planned 83 km). The increased investments contribute both to the reliability of the grid and to jobs in the regions, including those at subcontractors. Although Enexis is concerned about the availability of sufficient trained technical staff in the future, it was still able to recruit around 200 new employees for technical positions in 2011.
The investment policy has a positive effect on the reliability of the grids: the annual duration of supply interruptions, expressed as the average number of minutes of electricity outages per household per year, fell from 24.9 to 18.9 minutes. Customer satisfaction remained at a high level, with a score of 7.6. The number of applications from private consumers wanting to generate their own electricity doubled to almost 2000 in 2011. That brought the total number of customers feeding energy into the Enexis grid to 6400.
Acquisitions
The integration of the grid operator Intergas in the Brabant region was completed successfully in 2010. More than 150,000 former Intergas customers now have just one grid operator; around 60 staff members were transferred to Enexis as a result of the acquisition. At the end of February Enexis announced together with grid operator Rendo the intention also to acquire that company’s grid management activities, with electricity and gas grids in the provinces of Drenthe and Overijssel.
Sustainability policy
Good progress was made in increasing the sustainability of the grids. Next to the Smart Grids pilot in Breda, a second pilot was started in Zwolle. These test installations allow Enexis to find out how consumers themselves want to take control of their own energy consumption using ‘smart’ equipment. One of the underlying focal areas is the expected heavier load on the grids in the future, due for example to the increasing use of electric cars. New projects were also started up to feed biogas into the gas grid – for example in Witteveen, in the province of Drenthe, where a new fermentation plant was connected to the gas grid.
An important pillar of Enexis’ sustainability policy is increased insight into energy consumption. The special ‘Energy in View’ energy scan application is being used by more than 20 municipalities. The roll-out of smart meters will be used by Enexis to also give private customers more insight into their energy consumption.
Enexis decided in 2011 to build new, energy-neutral offices in Venlo and Maastricht (to replace the existing locations in Maasbree and Landgraaf) and in Zwolle. Building work also started on the EcoNexis House in Zwolle, a demonstration house for smart grid systems and technologies. The new buildings in Limburg and the EcoNexis House will be completed in 2012.
The summary of the annual results can be found here
Published: 02-27-2012
Enexis and RENDO have jointly investigated what the opportunities are for further collaboration. As a result of these talks, Enexis has expressed an interest in acquiring the grid operator N.V.RENDO, owner and operator of a gas and electricity distribution network in Drenthe and Overijssel with a total of approximately 100,000 gas connections and 32,000 electricity connections. In the other areas in this region Enexis is already responsible for the transport of gas and electricity. The possible acquisition will further extend the existing collaboration that already exists between the two companies.
'The acquisition of RENDO's grid operations is in line with our efforts to create clearer zoning for customers, as a result of which customers have only one grid operator for both gas and electricity. The RENDO network is extremely suitable for achieving this aim as it fits seamlessly with Enexis's distribution network, according to Han Fennema, chair of the Enexis managing board. 'RENDO is also a financially healthy company that, just like us, attaches high priority to reliability, affordability, sustainability and focusing on the public's needs.'
Richard Woldring, director of RENDO, says of the interest shown by Enexis: 'There have been discussions in the sector and in politics for a long time about the reallocation of electricity and gas network areas among grid operators. RENDO's distribution network fits seamlessly with that of Enexis. So I was not surprised by Enexis's interest. It was a difficult decision for my shareholders to look into this further. After all, RENDO is a sound company with motivated employees and good performances.'
For the sustainability activities the RENDO shareholders decided to look at other options as they involve different types of interests.
In 2010 RENDO's group turnover amounted to over EUR 34 million with a 122-strong workforce. RENDO shares are owned by nine municipalities. The definitive decision will have to be approved by RENDO's shareholders and the Works Council is being asked to provide a recommendation. The aim is to come to a decision in the first half of 2012.
In 2010 Enexis's turnover was EUR 1.2 billion in an area with 2.6 million customers. Enexis is owned by public shareholders: six provinces and a large number of municipalities. At Enexis the acquisition will also be subject to an approval process.
Published: 01-26-2012
Today, Enexis Holding N.V. placed a 10-year loan under a Euro Medium Term Note (EMTN) programme of EUR 3 billion that is listed on the Euronext in Amsterdam. The coupon rate amounts to 3.375%. During a road show through financial centres in Europe, it appeared that there was a lot of interest in the Enexis bond loan.
With the demerger from Essent, shareholders (provinces and municipalities) converted a bridging loan from Essent into shareholders' loans with a total value of EUR 1.8 billion and various maturities. This first issue results from maturity of a EUR 450 million loan.
As part of the EMTN Programme, Enexis wants to refinance EUR 1.8 billion of shareholders' loans. In addition, the grid management company is creating room, up until 2020, to attract more than EUR 1 billion of additional capital for implementation of the investment programme. Enexis is investing in aspects including the replacement and expansion of the grid, smart meters, and in the context of smart grids: preparing the grid for two-way transmission of electricity, in connection with return supplies, and facilitating electrical transport.
Financial key figures:
- A+ (positive outlook) S&P Rating
- Aa3 (stable outlook) Moody's rating
- Revenue in 2010: EUR 1,204 million
- EBIT 2010: EUR 355 million
- Value of assets: EUR 5,911 million
Published: 08-04-2011
Enexis is on course to realise its strategic targets: affordable, reliable, sustainable and public-oriented energy distribution. The last six months featured an increase in net profit and the acquisition of Intergas. Net profit increased by EUR 47.5 million, from EUR 79.6 million in H1 2010 to EUR 127.1 million in H1 2011. While higher in H1 2011 than in the same period in 2010, this is still below the level seen in H1 2009. This is the normal effect of the tariff regulation system. The level of net profit realised has created room for future investment. The average outage time for electricity was still less than 11 minutes. With the roll-out of various smart-grid pilots, Enexis played an important part in the facilitation of the energy transition. The customer satisfaction measure remained in line with our targets at 7.5.
Affordable
The results in the first six months were better than expected. Net profit increased by EUR 47.5 million, from EUR 79.6 million in H1 2010 to EUR 127.1 million in H1 2011. This was due to higher revenue from higher regulated tariffs and lower costs due to the cost-savings programme introduced several years ago. We expect the results to continue this development in the second half of 2011. The increased level of net profit is now approaching that seen in the first half of 2009. The level of net profit realised has created room for future investment. With the acquisition of Intergas, the gas grid operator in 21 municipalities in West Brabant, Enexis has made progress in realising its strategy with regard to sector planning. Customers can thus benefit from a combined service for electricity and gas distribution at lower cost.
Reliable
The average outage of electricity remained limited to less than 11 minutes in the first half of the year. More than a quarter of the outages were due to excavation activities. Enexis is striving to reduce this number in various ways. The anti-cyclical investment policy was continued by compensating for reduced investment requests from customers with additional replacement investments. Safe networks for customers and safe working conditions remain important considerations for Enexis. In early June, Enexis was the first in the energy industry to open an examination institute for personal certification for safe working with electricity and gas. Performance as regards safety remained at the same level in the first half of 2011 as it was in 2010. In addition, Enexis has now opened two training institutes for the training of new technical employees. With these institutes and its campaigns in the labour market, Enexis strives to maintain a sufficient intake of technical personnel to compensate for the natural outflow that will occur in the coming years.
Sustainable
The Energy Report for 2011 underlines the importance of energy networks in the transition to sustainable energy. Enexis contributes to this with its active policy as regards sustainability and innovation. During the reporting period, Enexis initiated the smart neighbourhood experiments in Breda with its Easystreet and Meulenspie projects. A second pilot scheme will start in the next six months. As one would expect, Enexis also pursues an active sustainability policy for its own organisation. The construction of two climate-neutral offices will commence in September.
Public-oriented
Enexis strives to offer its customers the best possible service. To achieve this objective, significant improvements were made to our customer processes in the past six months. The highest priority is now given to customers and their needs more than ever before. This has led among other things to new customer segmentation and a more tailor-made approach to customers. The general level of customer satisfaction at just over 7.5 score remains at the level in 2010.
Half-year report 2011
The half-year report for 2011 is available for download from our website.
Published: 06-01-2011
The acquisition of Intergas Energie, the owner and manager of a gas distribution network in Mid and West Brabant by Enexis has been completed. The parties completed all the legal conditions for the share transfer on 31 May.
The 20 municipalities who were shareholders in Intergas Energie all voted in favour of the sale, and the Works Councils of both companies issued a positive recommendation.
Enexis reached agreement with Intergas Holding regarding the acquisition of Intergas Energie on 25 January 2011. The acquisition of Intergas is part of Enexis' strategy to clarify the regional classification for its customers so that there is one network manager responsible for both electricity and gas. The Intergas network is an excellent fit with the distribution network of Enexis. The new combination will achieve substantial synergy and efficiency benefits.
Published: 04-05-2011
CEO of Enexis: "Government, make energy saving a priority in energy policy"
Energy saving needs to be a priority of energy policy in order to achieve savings worth many millions and to achieve the CO2 targets. The Netherlands is currently concentrating on expanding (fossil) production, while there is great potential for energy saving. Greater awareness and a change of thinking are needed, because the population is still not adequately involved in the issue; energy is not a live issue. The government needs to take the initiative with stimulative measures, linked for example to the energy label of a home. The government's 'Green Deal' initiative needs to focus on increasing awareness and on initiatives that are visible to citizens, as this will lead to real involvement.
Fennema takes the view that energy saving in the Netherlands needs an 'all hands on deck' approach. The pace of energy saving is low, also given the targets for 2020 (20% energy saving). This is also why the European Commission wants to make progress on energy saving with its Roadmap 2050. Many consumers support energy saving, but are not sufficiently aware of the potential financial and other benefits or encounter practical obstacles. Energy saving will only become a live issue if there are numerous, visible sustainable energy projects. These should involve initiatives that touch the lives of our citizens. Legislation, regulation and subsidies should be designed to encourage consumers to save energy. For instance with regard to home sales, whereby a good energy label generates substantially more money as a result of lower transfer tax. The government should also encourage citizens to install solar energy or micro-CHP, as they will then experience the benefits of producing energy themselves.
Energy saving is good for the environment and for one's wallet, particularly in view of the increase in energy prices. For a network manager like Enexis, it also will reduce the burden on the grid in the coming decades and therefore reduce the maintenance work necessary. In total, this will amount to a reduction of the investment in peak capacity amounting to tens of millions of euros. And this will avoid unnecessary rises in the costs of transporting energy to consumers and businesses.
Closer: the smart meter
This month, Enexis starts a test with 1000 households to see how consumers deal with various tools that provide them with information on their energy use. The various gadgets (display, plug, applications for smartphones and Internet) are linked to the smart meter, a digital meter for energy use that will be introduced in the coming years. The Lower House of Parliament approved the introduction of this smart meter in February. The test should show what is the most effective way to encourage consumers to save energy and how they can best be supported in this effort. Energy saving becomes more attractive when citizens can manage this themselves, saving money and gaining satisfaction in the process. This is the assumption.
Lower tariffs, lower costs
Enexis can look back on a good year: the net profit of EUR 194 million was lower than in 2009, but this was due to lower regulated customer tariffs and therefore lower revenue. The net result was improved by a reduction in costs of EUR 25 million. Enexis invested EUR 345 million in the networks, comprising both replacement work and the laying of new infrastructure. Much attention was devoted to sustainability and innovation; not only the above-mentioned energy saving and smart meters, but also the development of smart grids (intelligent networks) that are prepared for decentralised energy production and innovations such as electric cars. These smart grids will keep the network affordable and reliable in future. There was an interruption to the provision of the energy in the Enexis electricity network of just over 25 minutes in 2010, 9 minutes lower than the national average.
Published: 01-27-2011
Enexis and Intergas Holding have reached agreement regarding the transfer of Intergas Energie, owner and manager of a gas distribution network in Mid and West Brabant with approximately 148,000 connections. Enexis is already responsible for the transport of electricity in the region. The acquisition price, based on the value of the business, is EUR 200 million. The shareholders or their representatives, as well as the Works Councils of both parties, still have to approve the plan.
The existing cooperation between the two companies will be further increased as a result of the transaction.
'The takeover of Intergas fits with our efforts to achieve a clearer regional classification for our customers so that they have one network manager to deal with. The Intergas network is moreover an excellent fit with the distribution network of Enexis', said Han Fennema, Chairman of the Management Board of Enexis. 'Intergas is moreover a financially sound business that is efficiently organised'.
Robert van Mourik, director of Intergas, said regarding the proposed transaction: 'The deal fits with the consolidation trend that has been in force for some years, and which is leading towards an optimal structure for the network companies. For Intergas this is a logical step, in view of our scale and the fact that we already cooperate with third parties to a great extent. Intergas is organised on extremely ‘lean and mean’ lines. The Intergas distribution network is a seamless fit with the Enexis network in Brabant. The new combination will achieve substantial synergy and efficiency benefits. The deal is good news for our people, our customers and our shareholders.'
Intergas realised revenue of almost EUR 30 million in 2009. The company employs over 60 people, all of whom will transfer to Enexis. The shares of Intergas Holding B.V. are held by 20 municipalities in Brabant. To definitively finalise the deal, the Intergas shareholders must give their approval and a recommendation must be requested from the Works Council. The intention is to finalise the transaction by the end of May.
Enexis realised revenue of EUR 1.4 billion in 2009 from an area containing 2.6 million customers. Enexis is funding the acquisition of Intergas from its own capital. Enexis is also owned by public shareholders: six provinces and a large number of municipalities.