REN Redes Energeticas Nacionais : Resultados dos 9 meses de 2017 - Report (versão inglesa)

RESULTS REPORT 9M 2017

November 03rd, 2017

HIGHLIGHTS

RESULTS REPORT

MAIN INDICATORS

€M 3Q17 9M17 9M16 Δ% Δ Abs.

EBITDA(1) 121.6 364.4 357.2 2.0% 7.2

Financial

Result(1) -17.0 -44.5 -63.4 29.8% 18.9

Net Profit 35.9 88.9 70.5 26.1% 18.4

Recurrent Net

Profit 36.0 116.9 96.4 21.3% 20.5

In the first nine months of 2017, EBITDA stood at €364.4M, an increase of

€7.2M (2.0%) comparing with the same period of 2016. Net Profit (€88.9M) and Recurrent Net Profit (€116.9M) rose by €18.4M (26.1%) and €20.5M (21.3%), respectively;

The improvement in EBITDA stemmed mostly from the consolidation of Electrogas' results (€5.8M), the Chilean company in which REN has a 42.5% stake since February. This result was partially offset by the decline in gas' regulatory asset base remuneration (€-8.3M YoY), in which the average Rate of Return (RoR) decreased to 6.1% (6.9% in 9M16);

Net Profit continued to benefit from the better financial performance that stood at -€44.5M (+29.8%), coupled with the downward trend in the average cost of debt (2.6%, versus 3.4% in 9M16). Conversely, Net Debt was slightly

1. Financial result from the interconnection capacity auctions between Spain and Portugal (-€0.5M in 9M16 and -€0.3M in 9M17) - known as FTR (Financial Transaction Rights) was reclassified from Financial Result to Revenues (EBITDA level);

2. Fixed/variable rates: 60%/40%.

   focus, without compromising the company's strong financial and credit profiles, maintaining the alignment with REN's ongoing strategic framework;

   In 26th October, S&P reaffirmed REN's Rating at Investment grade level

   (BBB-), with positive outlook. 1

   CAPEX STOOD AT €80.3M

   CAPEX and RAB

   RESULTS REPORT

   €M 9M17 9M16 Δ% Δ Abs.

   Average RAB 3,462.5 3,502.0 -1.1% -39.5

   Electricity 2,129.4 2,115.6 0.6% 13.7

   Land 257.2 269.9 -4.7% -12.8

   Natural gas 1,076.0 1,116.4 -3.6% -40.4

   RAB end of period 3,405.2 3,437.7 -0.9% -32.6

   Electricity 2,096.6 2,076.1 1.0% 20.4

   Land 252.4 265.1 -4.8% -12.8

   Natural gas 1,056.2 1,096.5 -3.7% -40.3

   CAPEX 80.3 73.4 9.4% 6.9

   Electricity 74.8 68.6 9.0% 6.2

   Natural gas 5.4 4.7 14.1% 0.7

   Other 0.1 0.1 0.1

   RAB variation e.o.p. -114.6 -128.6

   Electricity -65.4 -79.1

   Land -9.6 -9.6

   Natural gas -39.6 -39.9

   *OHL - Overhead Line.

   Both CAPEX and Transfers to RAB have increased to

   €80.3M (+€6.9M vs 9M16) and €36.1M (+€14.9M vs 9M16),

   respectively. Average RAB was €3,462.5M, slightly lower when compared with the previous year (€-39.5M), mainly due to the lack of investments in natural gas;

   Within the framework of the electricity transmission infrastructures, the following projects were completed:

   • Greater Lisbon area

     • New 400/60 kV substation in Alcochete.

   • Center of Portugal

     • Lavos-Rio Maior, 400 kV OHL, Uprating and refurbishment;

     • Falagueira-Cedillo, 400 kV OHL, Uprating and refurbishment.

Natural Gas investments were in line with 9M16, with no highlighted projects.

2

AVERAGE RAB DECREASED BY 1.1%

Despite the increase in Electricity assets with premium (3.2%)

RESULTS REPORT

6.2%1

(€M)

3,502.0

0.4%

-12.8

6.3%

-21.2

7.1%

35.0

6.1%

-40.4

6.1%1

3,462.5

Despite the favourable contribution from electricity with premium, average RAB fell by 1.1%;

In the electricity business, the base rate of return (RoR) increased to 6.3% from 6.1%. Electricity with premium (with a 7.1% RoR) was up by €35.0M vs 9M16, while lands, the category with the lowest RoR (0.4%), saw a decrease in the value of its average RAB of

€12.8M, to €257.2M;

In natural gas, the average RAB had a decrease of €40.4M (RoR 6.1%);

At the end of 9M17, electricity accounted for 61.5% of the average RAB, natural gas for 31.1% and lands for the remaining 7.4%.

1) RoR is equal to the specific asset remuneration, divided by the average RAB. 3