Results 9M2023

October 24, 2023

Conference-call/Webcast

24 October 2023. 09:00 CEST

Spanish Telephone Number:

Tel. No.: +34 91 901 16 44 / Pin Code: 780588 #

Tel. No.: +44 (0 ) 20 3936 2999 / Pin Code: 780588 #

English Telephone Numbers:

Tel. No.: +34 91 901 16 44 / Pin Code: 699113 #

Tel. No.: +44 (0 ) 20 3936 2999 / Pin Code: 699113 #

www.enagas.es

9M2023 Results Report

Highlights

Net profit

€258.9 M

Net Profit at September 30, 2023 stood at €258.9 M and is on schedule to reach the target for the year, at the high end of the range (€310 M/€ 320 M).

EBITDA

€572.0 M

EBITDA for the first nine months of 2023 reached 572.0 million euros and is on track to reach the annual target of 770 million euros. In the positive evolution of the gross operating income, the following stand out:

The intensification of the Efficiency Plan and control of operating expenses that as of September 30, 2023 decreased to -245.1million euros, 18.5 million euros lower than those registered in the first nine months of 2022. By eliminating the non- recurring items and audited costs of both periods, operating expenses would be fully on track in both periods.

Results from affiliates is more positive than in 2022, taking into account that GNL Quintero contributed 11.9 million euros at September 2022 and that this asset was sold at the end of 2022.

Funds from Operations (FFO)

€405.9 M

Funds from operation (FFO) at September 30, 2023 reached 405.9 million euros, which includes the payment of taxes associated with the sales of LNG Quintero and Morelos (-€71.2M) and dividends received from affiliates in the amount of 137.5 million euros. This amount, which is in line with the annual target, includes the collection of TAP's first dividend after its entry into operation amounting to 42.4 million euros.

Net Debt

€3.406 Bn

Net debt at the end of the third quarter of 2023 was reduced, compared to December 31, 2022, by 63 million euros, amounting to 3.406 billion euros at September 30, 2023. The financial cost of gross debt at September 30, 2023 was 2.6%, in line with the first half of 2023. More than 80% of Enagás' debt is at a fixed rate, which allows the company to mitigate the impact of current interest rate movements. The FFO/ND ratio as at September 30, 2023 was 17.1%.

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9M2023 Results Report

Progress of the Strategic Plan in 3Q2023

Closure of the deal between Enagás and Reganosa to create an energy hub in the northwest of Spain. On September 29, Enagás and Reganosa closed the agreement for the acquisition by Enagás of Reganosa's gas pipeline network (53.5 million euros) and Reganosa has become a shareholder of Musel Energy Hub (25%) for

99.9 million euros. Enagás awards Endesa the logistics services for the Musel Energy

Hub.

Closing of Enagás' entry in Hanseatic Energy Hub (Stade LNG in Germany). Enagás has been incorporated with a 10% stake in the Hanseatic Energy Hub consortium, which will launch the future liquefied natural gas (LNG) terminal of Stade in Germany. Enagás will be an industrial partner of the project and will also have a majority stake in the future company operating the plant.

On September 14, Enagás launched the Call for Interest process for the first axes of the Spanish Hydrogen Backbone Network. The result of this process will be announced on January 31, 2024 at the II Enagás Hydrogen Day.

On October 18, H2Med Day was held in Berlin an example of European energy cooperation, where German operator OGE joined Enagás, GRTgaz, Teréga and REN as promoters of the European H2Med green hydrogen corridor.

Industrial demand 3Q2023

+25.4%

Strong recovery of industrial demand in Q3 2023, +25.4% compared to Q3 2022.

Dividend Payment

€1.032/share

On July 6, a final dividend of €1.032 gross per share charged to the 2022 financial year was paid out, as approved at the last Shareholders' General Meeting held on March 30, 2023.

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9M2023 Results Report

Key figures

Income statement

January-September

9M2022

9M2023

Var. 2022-

(€M)

2023

Total revenues

714.9

672.7

(5.9%)

EBITDA

605.1

572.0

(5.5%)

EBIT

367.7

334.8

(8.9%)

Net Profit 1

353.4

258.9

(26.7%)

  1. The Net Profit at September 30, 2023 included the net capital gain on the closing of the sale of the Morelos gas pipeline for +€42.2 M. The Net Profit at September 30, 2022 included the adjustment to the carrying amount of the stake in TGE for -€133.8 M and the net capital gains on the sale of GNL Quintero for €178.9 M and the entry of partners in Enagás Renovable for €49 M.

Balance sheet and leverage ratios

Dec.-2022

Sep.-2023

Net Debt (€M)

3,469

3,406

Net Debt / EBITDA(1)

4.8x

4.8x

FFO / Net Debt

17.6%

17.1%

Financial cost of debt

1.8%

2.6%

(1) EBITDA adjusted for dividends received from affiliates

Cash Flow and Investments

January-September

9M2022

9M2023

Var. 2022-

(€M)

2023

Funds From Operations (FFO)

507.8

405.9

(20.1%)

Operating Cash Flow (OCF)

614.6

474.9

(22.7%)

Dividends from affiliates

118.8

137.5

15.8%

Net investments

585.4

(126.0)

(121.5%)

In accordance with the Guidelines on alternative performance measures published by the European Securities and Markets Authority on October 5, 2015 (ESMA/2015/1415es), a glossary of definitions and reconciliation with the items presented in the Financial Statements of certain alternative financial measures used herein is published on the corporate website.

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9M2023 Results Report

Evolution of results

Income statement

Millions of euros

9M2022

9M2023

Var. %

(unaudited figures)

2022-2023

Income from regulated activities

701.5

655.6

(6.5%)

Other operating income

13.4

17.1

28.0%

Total income

714.9

672.7

(5.9%)

Personnel expenses

(105.6)

(99.1)

(6.1%)

Other operating expenses

(158.0)

(146.0)

(7.6%)

Operating Expenses

(263.6)

(245.1)

(7.0%)

Results from Affiliates

153.9

144.4

(6.2%)

EBITDA

605.1

572.0

(5.5%)

Depreciation and amortisation

(196.9)

(198.7)

0.9%

PPA

(40.5)

(38.5)

(5.0%)

EBIT

367.7

334.8

(8.9%)

Financial result

104.5

(20.2)

(119.4%)

Corporate income tax

(118.4)1

(55.3)

(53.2%)

Income attributable to minority interests

(0.5)

(0.3)

(26.1%)

Net profit

353.42

258.93

(26.7%)

  1. In 2022, corporate tax includes -€67 M associated with the sale process of GNL Quintero.
  2. Includes the adjustment of the book value of the stake in TGE for -€133.8 M and the capital gains from the sale of GNL Quintero +€178.9 M and the entry of partners in Enagás Renovable for +€49 M.
  3. Includes the net capital gain from the closing of the sale of the Morelos gas pipeline for +€42.2 M.

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9M2023 Results Report

Operating revenue

€672.7 M

The company's total revenue amounted to 672.7 million euros as at September 30, 2023, a decrease of -5.9%compared to the first nine months of 2022.

Regulated revenues amounted to 655.6 million euros at the end of the first nine months of 2023, a decrease of 45.9 million euros compared to the previous year. These revenues decreased due to the application of the 2021-2026regulatory framework (-38.5million euros) and lower audited costs, with no impact on

EBITDA.

Operating Expenses

-€245.1 M

Operating expenses in the first nine months of the year decreased by 18.5 million euros compared to the first nine months of 2022, standing at -245.1million euros, a -7.0% lower than those recorded in the first nine months of 2022.

The trend in operating expenses in 2023 shows the effectiveness of the cost efficiency plan implemented by the company to minimise the impact of inflation on manageable costs.

In the first nine months of 2022, a non-recurring effect of around 9 million euros was recorded for the restructuring programme of the Enagás management team.

Recurring operating expenses have been kept in line with those obtained in the same period of the previous year.

Results from affiliates

€144.4 M

The result of the affiliates is more positive than in 2022, taking into account that GNLQ contributed 11.9 million euros at September 2022 and that this asset was sold at the end of 2022.

EBITDA

€572.0 M

EBITDA at September 30, 2023 reached 572.0 million euros, 33.1 million euros less than in the first nine months of 2022 which is on track to reach the annual target of 770 million euros.

Financial result

-€20.2 M

On September 30, 2023, the company registered a negative financial result of -20.2million euros, which includes the gross capital gain due to the closure of the sale of Gasoducto de Morelos in the amount of 46.7 million euros. It should be noted that in the first nine months of 2022, the financial result included an adjustment in the book value of our stake in Tallgrass and the capital gains from the sale of GNLQ and the entry of partners in Enagás Renovable.

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9M2023 Results Report

The financial cost of gross debt at September 30, 2023 was 2.6%, up 1.7% on the third quarter of 2022.

The Financial Result associated with debt remains stable compared to 2022 due to the improvement in the remuneration of financial deposits.

Corporate income tax

-€55.3 M

Corporate tax at September 30, 2023 amounted to -55.3 million euros. This figure includes the tax associated with the capital gain of Gasoducto de Morelos of -4.5million euros

In 2022, corporate tax includes -€67 M associated with the sale process of GNL Quintero, accounting on the third quarter of that year.

Net profit

€258.9 M

Net Profit at September 30, 2023 stood at 258.9 million euros and is on track to reach the target for the year, at the high end of the range (€310 M/€320 M).

The net profit includes the following non-recurring effects:

  • Non-recurringeffects from 2022 for +€94.1 M (impairment of TGE for -€133.8 M and the capital gains from the sale of GNLQ for +€178.9 M and the entry of partners in Enagás Renovable for +€49 M).
  • Non-recurringeffects in 2023 due to capital gain on the sale of Morelos (+€42.2 M).

After deducting the one-off effects included in the financial results in both periods, net profit would decrease by -16.4%.

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9M2023 Results Report

Funds generated and Balance Sheet

Consolidated Cash Flow Statement

Millions of euros

9M2022

9M2023

(unaudited figures)

EBITDA

605.1

572.0

Results from affiliates

(153.1)

(144.4)

Tax

(3.4)

(91.4)

Interest

(57.7)

(68.5)

Dividends from affiliates

118.8

137.5

Adjustments

(1.1)

0.7

FUNDS FROM OPERATIONS (FFO)

507.8

405.9

Change in operating working capital

106.8

69.0

OPERATING CASH FLOW (OCF)

614.6

474.9

Net investments

585.4

(126.0)

International business

637.7

(93.9)

Business in Spain

(52.2)

(32,1)

FREE CASH FLOW (FCF)

1,200.0

349.0

Dividends paid

(267.0)

(269.8)

Effect of exchange rate changes

64.2

4.5

DISCRETIONAL CASH FLOW (DCF)

997.3

83.7

Financing flows

(967.4)

(616.0)

Debt repayment

(967.4)

(616.0)

Debt contracting

0.0

0.0

Capital increase

0.0

0.0

Proceeds/payments on equity instruments

(8.4)

0.8

Effect of change in consolidation method

NET CASH FLOWS

Cash and cash equivalents at beginning of period

CASH AND CASH EQUIVALENTS AT END OF PERIOD

2.3 0.0

23.8 (531.6)

1,444.2 1,359.3

1,467.9 827.7

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9M2023 Results Report

Balance sheet

Millions of euros

Dec. 2022

Sept. 2023

(unaudited figures)

ASSETS

Non-current assets

7,413.0

7,608.4

Intangible assets

83.2

80.3

Goodwill

17.5

17.5

Other intangible assets

65.6

62.8

Investment properties

17.4

17.4

Property, plant, and equipment

4,164.9

4,083.6

Investments accounted for using the equity method

2,552.6

2,727.0

Other non-current financial assets

593.2

697.6

Deferred tax assets

1.7

2.4

Current assets

1,985.6

1,007.3

Non-current assets held for sale

40.5

0.2

Inventories

35.2

33.7

Trade and other receivables

513.5

127.1

Other current financial assets

29.2

8.7

Other current assets

8.0

10.0

Cash and cash equivalents

1,359.3

827.7

TOTAL

9,398.6

8,615.7

EQUITY AND LIABILITIES

Equity

3,218.3

3,216.0

Shareholder's equity

3,076.5

3,068.6

Subscribed capital

393.0

393.0

Issue premium

465.1

465.1

Reserves

2,036.9

1,956.4

Shares and stakes in treasury shares

(18.4)

(16.0)

Profit for the year

375.8

258.9

Result of prior years

0.0

8.5

Interim dividend

(179.7)

0.0

Other equity instruments

3.7

2.6

Adjustments for changes in value

125.8

131.4

Minority interests (external partners)

16.0

15.9

Non-current liabilities

4,417.8

4,394.2

Non-current provisions

295.9

305.1

Non-current financial liabilities

3,935.8

3,916.3

Bank loans

1,220.1

1,070.8

Bonds and other marketable securities

2,316.0

2,324.8

Long-term suppliers of fixed assets

0.0

0.0

Derivatives

19.3

13.8

Other financial liabilities

380.4

506.9

Deferred tax liabilities

150.4

137.0

Other non-current liabilities

35.7

35.8

Current liabilities

1,762.4

1,005.5

Current provisions

11.6

5.9

Current financial liabilities

970.4

518.7

Bank loans

470.5

434.4

Bonds and other marketable securities

420.6

17.9

Derivatives

4.8

7.0

Other financial liabilities

74.6

59.4

Trade and other payables

780.4

481.0

TOTAL

9,398.6

8,615.7

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9M2023 Results Report

Operating cash flow (OCF)

€474.9 M

Funds from operations (FFO) at September 30, 2023 reached 405.9 million euros, which includes the payment of taxes associated with the sales of LNG Quintero and Morelos (-€67.5M and -€3.7M, respectively) and dividends received from affiliates in the amount of 137.5 million euros. This amount, which is in line with the annual target, includes the collection of TAP's first dividend after its entry into operation amounting to 42.4 million euros.

Operating cash flow (OCF) reached 474.9 million euros, which incorporates the above effects, as well as the effect of the working capital change of +69.0 million euros in the first nine months of 2023. This figure includes payment of the cash repatriation tax associated with the sale of GNL Quintero for -€42.5 M

Investments

-126.0M

The investment figure at the end of the first nine months of 2023 shows a net cash outflow of -126.0 million euros, mainly due to the following effects:

  • The purchase of the additional 4% of TAP (-151.8 million euros).
  • The closing of the acquisition by Enagás of Reganosa's gas pipeline network (-53.5 million euros).
  • The closing of Enagás' entry into Hanseatic Energy Hub (HEH), Stade LNG in Germany, which was Enagás' first investment in Germany (-15 million euros).
  • The collection associated with the sale of 25% of El Musel to Reganosa (99.9 million euros).
  • The collection associated with the sale of Gasoducto de Morelos (+73.0 million euros).

Enagás continues with the asset rotation policy announced in the Strategic Plan, divesting non-core assets, such as GNL Quintero and Morelos, and focusing on investments in security of supply and decarbonisation in Spain and Europe

Net Debt

€3.406 Bn

Net debt in the first nine months of 2023 has been reduced by 63 million euros and stood at September 30, at 3.406 billion euros, -1.8% lower than the one registered at December 31, 2022.

The financial cost of gross debt at September 30, 2023 stood at 2.6%, in line with the first half of 2023 and higher than the 1.7% recorded in the third quarter of 2022.

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Enagas SA published this content on 24 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 October 2023 15:57:11 UTC.