FLUXYS BELGIUM SA Download the press release as a pdf
1. Key events
2. Fluxys Belgium Group - 2015 financial statements (IFRS)
2.1. Consolidated income statement
2.2. Summary consolidated comprehensive income
2.3. Consolidated balance sheet
2.4. Consolidated statement of changes in equity
2.5. Consolidated cash flow statement
3. Fluxys Belgium SA - 2015 results (Belgian GAAP): proposed allocation of profits
4. Financial outlook for 2016
5. External audit
Rise in volumes transported, but decline in booked capacity
2015 saw the continuation of a known trend: customers increasingly book capacity on a short-term and align their capacity portfolios as closely as possible with the capacity they will actually use. In this context and despite the rise in transported volumes, Fluxys Belgium achieved 8% less bookings for transmission capacity in 2015 than in 2014. On the other hand, transported volumes were up: compared to 2014, 9.6% more natural gas was transported for the Belgian market and 1.1% more for border-to-border transmission to neighbouring grids.
Belgian grid entirely bidirectional
Since 1 November 2015, customers have been able for the first time to bring natural gas from France to Belgium: via the newly laid Artères des Flandres and Alveringem-Maldegem pipelines in France and in Belgium, and via the new Hondschoote/Alveringem interconnection point, up to 8 billion cubic metres of natural gas can be transported from Dunkirk to the Zeebrugge area, and from there it can flow both to Germany, the Netherlands and the United Kingdom. The new pipeline strengthens market integration, security of supply and diversification of sources, and also makes the Belgian grid entirely bidirectional: natural gas can physically flow in both directions with all neighbouring markets, including the United Kingdom.
Strong growth in traded quantities
Traded quantities on the two Belgian gas trading places - Zeebrugge Beach (up 6%) and ZTP (up 45%) - rose sharply last year; total traded quantities were at 930 TWh.
Fluxys Belgium takes over hub services
In December 2015 Fluxys Belgium took over the hub services from sister company Huberator. These form an important logistical link to perform exchanges on the gas trading places and have been part of the regulated framework as a component of transmission activities since 1 January 2016.
Versatile LNG terminalling service offering proves successful
With 41 ship unloading operations, 28 ship loading operations and 1,184 truck loadings in 2015, the Zeebrugge LNG terminal saw a high level of capacity utilisation compared to other terminals in Northwest Europe. The largest proportion of ship loadings were operations in the small-scale LNG segment. In 2015 a market test showed there was interest in additional possibilities for loading small LNG ships. Accordingly, Fluxys LNG launched a preliminary study on the infrastructure expansions that would be needed.
20-year contract for LNG transshipment services
In March 2015, Fluxys LNG concluded a 20-year contract with Yamal Trade for the transshipment of up to 8 million tonnes of LNG per year. The transshipment services will form a key link in the logistics chain from Russia's Yamal peninsula to supply countries in Asia and the Pacific Ocean year-round.
A first in Europe: integrated gas market for Luxembourg and Belgiu
On 1 October 2015, Fluxys Belgium and Creos Luxembourg launched the very first gas market integration between two European Union member states: the Grand-Duchy of Luxembourg and Belgium. The successful integration is the result of intense cooperation that started in 2013 between Fluxys Belgium, Creos Luxembourg and the energy regulators in both countries. Combining the two markets enhances market competitiveness for both countries, and for Luxembourg it also strengthens security of supply.
2016-2019 tariffs approved by CREG
The tariffs for the 2016-2019 regulatory period were approved in October 2015 by the federal regulator CREG and took effect on 1 January 2016. They offer the market stability in terms of both price level and structure. The 7% tariff decrease introduced at the start of 2015 is maintained in the new tariffs.
€188 million invested in infrastructure in Belgiu
In 2015, Fluxys Belgium invested €188 million in infrastructure projects in Belgium. 67% of the total investment amount went to transmission projects, 1% to storage projects and 32% to LNG terminalling projects. The main projects were:
- a new natural gas pipeline with associated aboveground installations between Alveringem and Maldegem;
- the partial renewal of two parallel pipelines in Ravels and Oud-Turnhout;
- the construction of a second jetty for loading and unloading LNG carriers. The second jetty, where the smallest LNG ships will also be able to berth, will be commissioned in 2016;
- the construction of a fifth tank and associated installations in order to guarantee sufficient storage capacity between unloading and loading operations for transshipment services from an icebreaker/LNG ship to a conventional LNG ship under the contract with Yamal Trade.
Interest rates remain low
The interest rates used as a benchmark to calculate the authorised return on regulated assets are those of the 10-year OLO bonds issued by the Belgian federal government. These remain low and put pressure on profits. The result of 2015 is in line with that of 2014, thanks mainly to efficiency efforts made, the recovery of revaluation surpluses with regard to the decommissioning of old installations and the take-over of the hub services for the Belgian market.
Most of Fluxys Belgium's business activities are regulated and its results are primarily determined by invested equity, financial structure and interest rates.
In thousands of € | 31-12-2015 | 31-12-2014 |
Operating revenue | 538,007 | 554,957 |
Sales of gas for balancing and operational needs | 55,104 | 40,393 |
Other operating income | 12,205 | 17,873 |
Raw materials and other materials used | -3,920 | -4,232 |
Purchases of gas for balancing and operational needs | -55,044 | -40,395 |
Services and other goods | -123,635 | -138,555 |
Personnel expenses | -112,072 | -117,428 |
Other operating charges | -18,668 | -20,190 |
Net depreciation and amortisation | -143,068 | -147,266 |
Net provisions | 2,268 | 3,030 |
Impairment losses | -537 | -1,902 |
Profit from continuing operations | 150,640 | 146,285 |
Change in the fair value of financial instruments | -494 | 269 |
Financial income | 5,061 | 3,194 |
Financing expenses | -59,539 | -57,884 |
Profit from continuing operations after net financial results | 95,668 | 91,864 |
Income tax expense | -34,572 | -31,427 |
Net profit for the financial year | 61,096 | 60,437 |
Fluxys Belgium share | 61,096 | 60,437 |
Non-controlling interests | 0 | 0 |
Basic earnings per share attributable to the parent company's shareholders in € | 0.8695 | 0.8601 |
Diluted earnings per share attributable to the parent company's shareholders in € | 0.8695 | 0.8601 |
In thousands of € | 31-12-2015 | 31-12-2014 | |
Net profit for the period | 61,096 | 60,437 | |
Items that will not be reclassified subsequently in the income statement | |||
Actuarial gains/losses on employee benefits | 15,056 | -13,691 | |
Income tax expense on other comprehensive income | -5,118 | 4,654 | |
Other comprehensive income | 9,938 | -9,037 | |
Comprehensive income for the period | 71,034 | 51,400 | |
Fluxys Belgium share | 71,034 | 51,400 | |
Non-controlling interests | 0 | 0 | |
Operating revenue. Operating revenue totalled k€538,007 in 2015, compared to k€554,957 in 2014, down k€16,950.
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Income from regulated activities amounted to €519.8 million (accounting for 96.6% of the total), a decrease of €21.0 million compared to the previous year.
The decrease in operating revenue from invoiced transmission services can be explained by the 7% tariff reduction in place since January 2015 as well as by a slight decline in capacities sold. The revenue authorised under the regulation is down due to the reduction in costs to be covered by tariffs and this cost reduction is primarily the result of efficiency efforts made.
Against the backdrop of a difficult storage market, Fluxys Belgium managed to maintain a revenue in line with the previous year.
The revenue from terminalling services was slightly lower than the previous year. Services billed to customers benefit from the development of small-scale LNG services, while the revenue authorised under the regulation is down due to the reduction in costs to be covered by tariffs and this cost reduction is primarily related to the change in authorised return rates. - Income from the company's other activities totalled €18.2 million (accounting for 3.4% of the total), up €4.0 million on 2014. This increase is linked to the work performed on behalf of third parties and to the take-over of the hub services by Fluxys Belgium as from 1 September 2015.
Profit from continuing operations. Profit from continuing operations totalled €150.7 million in 2015, compared to €146.3 million in 2014. This €4.4 million increase can primarily be attributed to the positive impact of efficiency gains, the recovery of revaluation surpluses with regard to decommissioning, and the impact of the take-over of the hub services for the Belgian market.
These items were attenuated by the reduction in the authorised rate of return on regulated activities due to lower rates for Belgian linear bonds (OLOs).
Net financial income. Net financial income was down €0.6 million compared to the previous year. This change is mainly due to the early refinancing of the bond loan maturing in late 2015, which is offset to a large extent by the impact of the increase in discount rates for employee benefits (IAS19).
In thousands of € | 31-12-2015 | 31-12-2014 |
I. Non-current assets | 2,490,573 | 2,391,714 |
Property, plant and equipment | 2,330,542 | 2,293,712 |
Intangible assets | 60,986 | 11,940 |
Equity-accounted investments | 16 | 0 |
Other financial assets | 48,624 | 44,523 |
Finance lease receivables | 12,805 | 16,641 |
Loans and receivables | 4,218 | 8,009 |
Other non-current assets | 33,382 | 16,889 |
II. Current assets | 546,779 | 795,224 |
Inventories | 26,116 | 29,848 |
Finance lease receivables | 3,836 | 3,334 |
Current tax receivables | 774 | 1,305 |
Trade and other receivables | 77,237 | 93,832 |
Short-term investments | 96,487 | 411,271 |
Cash and cash equivalents | 327,061 | 240,937 |
Other current assets | 15,268 | 14,697 |
Total assets | 3,037,352 | 3,186,938 |
Non-current assets. The investments carried out in 2015 (€188.1 million) exceeded depreciation booked during the period (€136.1 million), which explains the increase in property, plant and equipment. The investments made pertain mainly to the Alveringem-Maldegem pipeline, the replacement of the pipelines in Ravels and Oud-Turnhout, the construction of the second jetty and the start of investments linked to the LNG transshipment project at the Zeebrugge terminal. The take-over of the hub services for the Belgian market explains to a large extent the increase in intangible assets. Other non-current assets show surplus assets for covering defined-benefits pension schemes compared to the actuarial debt estimated on 31 December 2015, on the one hand, and the insurance cost to carry forward, on the other hand.
Current assets. The repayment of the bond loan that matured in late 2015 (€350 million) explains the decrease in the Group's short-term investments and cash and cash equivalents at the end of December 2015.
In thousands of € | 31-12-2015 | 31-12-2014 |
I. Equity | 736,222 | 749,504 |
Equity attributable to the parent company's shareholders | 736,222 | 749,504 |
Share capital and share premiums | 60,310 | 60,310 |
Reserves and retained earnings | 675,912 | 689,194 |
Non-controlling interests | 0 | 0 |
II. Non-current liabilities | 2,146,118 | 1,864,139 |
Interest-bearing liabilities | 1,778,934 | 1,476,421 |
Provisions | 2,408 | 2,889 |
Provisions for employee benefits | 59,781 | 66,823 |
Deferred tax liabilities | 304,995 | 318,006 |
III. Current liabilities | 155,012 | 573,295 |
Interest-bearing liabilities | 73,329 | 479,794 |
Provisions | 6,502 | 7,945 |
Provisions for employee benefits | 3,533 | 4,046 |
Current tax payables | 1,821 | 5,567 |
Trade and other payables | 68,489 | 74,378 |
Other current liabilities | 1,338 | 1,565 |
Total equity and liabilities | 3,037,352 | 3,186,938 |
Interest-bearing liabilities. In anticipation of a long-term financing, Fluxys LNG took out a medium-term financing in order to cover the financial requirements for current investments at the LNG terminal in Zeebrugge. Moreover, the bond loan that matured at the end of 2015 (€350 million) explains the decrease in interest-bearing current liabilities.
The decrease in equity can be explained by the dividend paid for the previous financial year, the amount of which exceeds the comprehensive income for the period:
In thousands of € | Equity attributable to the parent company's shareholders | Non-controlling interests | Total equity |
CLOSING BALANCE AS AT 31-12-2014 | 749,504 | 0 | 749,504 |
1. Comprehensive income for the period | 71,034 | 0 | 71,034 |
2. Dividends paid | -84,316 | 0 | -84,316 |
CLOSING BALANCE AS AT 31-12-2015 | 736,222 | 0 | 736,222 |
In thousands of € | 31-12-2015 | 31-12-2014 |
Cash at the start of the period* | 652,208 | 241,156 |
Cash flows from operating activities (1) | 237,106 | 274,031 |
Cash flows from investing activities (2) | -225,298 | -99,645 |
Cash flows from financing activities (3) | -240,468 | 236,666 |
Net increase/decrease in cash | -228,660 | 411,052 |
Cash at the end of the period* | 423,548 | 652,208 |
(1) Cash flows from operating activities also include changes in working capital requirements. The change in working capital explains to a large extent the change in cash flows from operating activities compared to 2014.
(2) This amount takes into account sales realised and public subsidies received.
(3) These cash flows include dividends paid and the reimbursement of the bond loan that matured at year-end 2015 (€350 million), an amount that was refinanced in late 2014.
* 'Cash' includes cash and cash equivalents, as well as short-term investments with a term of one year or less.
Fluxys Belgium SA's net profit amounted to €49.3 million, compared to €47.8 million in 2014.
The net profit was slightly higher than the previous year because of the positive impact of efficiency gains, the recovery of revaluation surpluses with regard to decommissioning, and the impact of the take-over of the hub services for the Belgian market.
These items were attenuated by the reduction in the authorised rate of return on regulated activities due to lower rates for Belgian linear bonds (OLOs).
As of 2010 and barring unforeseen events, Fluxys Belgium aims to distribute 100% of its net profit for the year plus any reserves released as and when the revaluation surplus depreciates.
Factoring in a profit of €39.6 million carried over from the previous year and withdrawal from reserves of €43.2 million, the Board of Directors will propose to the Annual General Meeting to allocate the profit as follows:
- €84.3 million as dividend pay-out,
- €16.9 million as reserves not available for distribution,
- €30.9 million as profit to be carried forward.
If the proposed allocation of profits is accepted, the total gross dividend per share for 2015 will be €1.20. That amount will be paid out as of 20 May 2016.
The net profit from regulated activities is primarily determined by the equity invested, the financial structure and interest rates (OLOs). The recurring dividend will continue to evolve depending on the development of these three parameters. The current financial markets do not allow for accurate projections regarding changes to interest rates and, therefore, the return on regulated activities.
The statutory auditor has confirmed that his audit activities, which have been thoroughly carried out, have not revealed the need for any significant adjustments to the accounting information contained in this press release.
Contacts
Fluxys SA issued this content on 30 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 30 March 2016 16:06:15 UTC
Original Document: http://www.fluxys.com/belgium/en/NewsAndPress/2016/160330_YearlyResults?cPage=1&year=2016&cat=press
