FLUXYS CAT.D : Interim statement

2012-05-08

• Fluxys changes name to Fluxys Belgium 
• Share split to make the Fluxys Belgium share more accessible and tradable: 100 new shares for each old share 
• Q1 turnover: €192 million 
• Investments Q1: €28 million 
• Final investment decision taken to lay the Dunkirk-Zeebrugge pipeline 
• Integration of the European natural gas market: alliance with 15 other transmission system operator to create European capacity platform 
• Highly successful bond issue closes at maximum of €350 million

The extraordinary general meeting of Fluxys today decided to change the name of the company to Fluxys Belgium. The new name clarifies the company's field of activity. For the same reason, parent company Fluxys G today changed its name to Fluxys. Parent company Fluxys coordinates the strategy and activities of the Fluxys group companies:

• Fluxys Belgium is the listed company responsible for regulated activities in Belgium: natural gas transmission and storage and - through subsidiary Fluxys LNG - terminalling of liquefied natural gas (LNG). 
• Fluxys Europe is the umbrella company for the Fluxys subsidiaries active outside Belgium or active in non-regulated businesses in Belgium. 
• Fluxys Finance centralises the management of cash funds and financing within the Fluxys group.

The extraordinary general meeting held on 8 May 2012 decided to split the share. Every Fluxys Belgium share, except the golden share held by the Belgian state, will be converted into 100 new shares on 9 May 2012. This will increase the accessibility and liquidity of the share.

In the first three months of 2012, Fluxys Belgium transmitted 8% less natural gas through its grid than in the same period in 2011. Transmitted volumes for consumption on the Belgian market remained more or less the same (63 TWh) while transmitted volumes for other markets dropped 15% (58 TWh in 2012 compared to 68 TWh in 2011). Regarding the energy transmitted for consumption on the Belgian market, consumption by power stations and industry fell, but consumption by public distribution rose due to the cold snap in February 2012. The trend in transmission volumes has no direct impact on turnover as the latter is determined mainly by reserved capacity.

In the first quarter of 2012, Fluxys Belgium invoiced its customers €192 million for all services, compared to €186 million for the same period in 2011. The increase is mainly triggered by the extra slots sold at the Zeebrugge LNG terminal to the increase in the number of loadings at the LNG terminal. The increased use of blending stations also contributed to the rise in turnover.

For 2012 Fluxys Belgium is planning projects for an overall budget of €111 million, with €28 million spent in the first three months of the year. The main projects this year are: 

• Projects to reduce the environmental impact of its activities. At the Zeebrugge LNG terminal, for example, work has been ongoing since the autumn of 2010 to build an open rack vaporiser that uses the heat from seawater to regasify LNG. 
• Projects enabling the changeover to a uniform entry/exit system with a virtual trading point for the Belgian market. Work is under way at the Berneau and Winksele compressor stations and a new nitrogen injection point is planned in the port of Zeebrugge to widen the options for combining natural gas flows. 
• Boosting capacity for the Grand Duchy of Luxembourg by laying a new pipeline between Ben-Ahin and Bras.

On 4 April 2012 Fluxys Belgium issued a bond issue which was closed early on that same day. The total amount of the issue was set at €350 million. The success of the issue confirms the confidence of the market and financial institutions in the company's financial reliability and in the crossroads role of the Belgian natural gas grid in Northwest Europe.

Fluxys Belgium will use the proceeds of the transaction to finance its investment programme. For 2012-2021 the company's indicative investment programme includes infrastructure projects worth in excess of €1.5 billion. Fluxys Belgium's projects focus on further enhancing Belgium's crossroads role with a view to supporting security of supply and the smooth operation of the market. Through the bond issue, the company's financial structure will evolve towards a ratio that is more in line with the regulatory framework in Belgium (ratio of 1/3 own capital to 2/3 external capital).

In March 2012 Fluxys Belgium and French transmission system operator GRTgaz successfully closed their open season for new capacity between Dunkirk and Zeebrugge: binding commitments totaling more than 219 GWh/day (801 TWh per year) have been made by shippers for up to a 20-year period. To make that capacity available, GRTgaz will build a
26-km pipeline from the Pitgam compressor station to the French-Belgian border. Fluxys Belgium will build a new interconnection point in Alveringem (near Veurne) and lay a 72-km pipline between Alveringem and Maldegem. Both transmission system operators aim to commission the new capacity in line with the commissioning of the Dunkirk LNG terminal in late 2015.

Fluxys Belgium has forged an alliance with 15 other European natural gas transmission system operators from Denmark, Germany, France and the Netherlands to work on a joint European capacity platform. Developing the platform is a major step towards an integrated European natural gas market: grid users will be able to use a single tool to book capacity at the interconnection points of the participating TSOs. The aim is to have the platform operational by April 2013.

Net results from regulated activities are determined mainly by invested equity, financial structure and interest rates (OLO). The recurring dividend will continue to evolve in line with the evolution of those three parameters. The decrease in equity triggered by the pay-out of reserves in 2012 is immediately reflected in a decrease in distributable results. At the same time, profitability of equity will improve as the financial structure evolves towards a gearing that is more in line with the regulatory framework.

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