Reclassified consolidated income statement
The reclassified consolidated income statement of the Terna Group for 2011 and 2010 is shown below.
| In millions of euros | 2011 | 2010 | Change | % |
|---|---|---|---|---|
| Revenue: | ||||
| Grid transmission fees (1) | 1,380.9 | 1,306.3 | 74.6 | 5.7% |
| Other energy items (1) | 163.4 | 169.8 | (6.4) | (3.8%) |
| Other revenue from sales and services (1) | 47.0 | 57.0 | (10.0) | (17.5%) |
| Other revenue and income | 44.3 | 56.1 | (11.8) | (21.0%) |
| Total revenue | 1,635.6 | 1,589.2 | 46.4 | 2.9% |
| Operating expenses: | ||||
| Personnel expenses | 211.0 | 212.2 | (1.2) | (0.6%) |
| Services and leases and rentals | 149.0 | 152.2 | (3.2) | (2.1%) |
| Materials | 20.7 | 28.2 | (7.5) | (26.6%) |
| Other costs (2) | 25.2 | 21.7 | 3.5 | 16.1% |
| Total operating expenses | 405.9 | 414.3 | (8.4) | (2.0%) |
| EBITDA (gross operating profit) | 1,229.7 | 1,174.9 | 54.8 | 4.7% |
| Amortisation and depreciation (3) | 394.1 | 360.5 | 33.6 | 9.3% |
| EBIT (operating profit) | 835.6 | 814.4 | 21.2 | 2.6% |
| Net financial income (expense) (4) | (121.0) | (102.5) | (18.5) | 18.0% |
| Profit before taxes | 714.6 | 711.9 | 2.7 | 0.4% |
| Income taxes | 387.3 | 246.8 | 140.5 | 56.9% |
| Profit for the year from continuing operations | 327.3 | 465.1 | (137.8) | (29.6%) |
| Profit for the year from discontinued operations and assets held for sale | 112.7 | 146.9 | (34.2) | (23.3%) |
| Profit for the year | 440.0 | 612.0 | (172.0) | (28.1%) |
| - Attributable to owners of the Parent | 440.0 | 612.0 | (172.0) | (28.1%) |
In the consolidated income statement:
(1) this amount is included in the “Revenue from sales and services” caption;
(2) corresponds to “Other operating expenses” and “Amortisation, depreciation and impairment” for the impairment of non-current assets (€2.1 million) and trade receivables (€0.1 million);
(3) corresponds to “Amortisation, depreciation and impairment” net of the impairment of non-current assets (€2.1 million) and trade receivables (€0.1 million);
(4) total of the captions presented in points 1, 2 and 3 of letter C. “Financial income/expense”.
In 2011, the Terna Group recorded revenue for €1,635.6 million, relating to the Parent Company for approximately €1,484.5 million and to the subsidiary Terna Rete Italia for approximately €150.1 million, up €46.4 million on the previous financial year (+2.9%), attributable to the trend of the grid transmission fees, up €74.6 million and relating to:
- the Parent Company for €64.6 million, as a result of the combination of:
- review of the tariffs (€51.2 million, including the incentive on the remuneration of strategic works, pursuant to Resolution ARG/elt 87/10) and the related contingency items of competence (€2.1 million);
- grid transmission fees related to the Defence Plan (€11.3 million);
- the subsidiary Terna Rete Italia, for its share of the NTG, €10.0 million (compared with the €133.3 million reported in 2010).
The increase in the transmission fee is partially compensated for by lesser revenue (overall for a negative €28.2 million) for:
- dispatching activities, totalling a negative €6.4 million, mainly attributable to lower investments made on dispatching infrastructures (5) with respect to the previous financial year (a negative €4.2 million);
- other sales and services (a negative €10 million), mainly for less engineering and renewable plant connection activities; and
- lower other revenue and income (a negative €11.8 million), mainly due to the recognition during the previous financial year of:
- gain from bargain purchase, of €6.0 million, deriving from the acquisition of the investment in Rete di Trasmissione Brescia; and
- greater reimbursements for damages to major plants (3.5 million) recognised by the Parent Company.
In 2011, operating expenses amounted to €405.9 million and mainly referred to the Parent Company (€394.4 million) and the subsidiary Terna Rete Italia (€10.8 million), recording a decrease of approximately €8.4 million on last year (a negative 2%), mainly by virtue of the combined effect of the following phenomena:
- personnel expenses: a €1.2 million reduction, mainly due to greater capitalisation;
- costs for services and materials: overall reduction of €10.7 million, referring to lesser investments in dispatching infrastructures (6) (a negative €4.3 million), mainly for the optimisation on the Services Market in 2010; and for the reduction of non-regulated activities and engineering towards third parties;
- other costs: the item in question increases by €3.5 million, referring for the most part to greater impairment of fixed assets (€1.9 million) and to higher net costs linked to energy transmission and dispatching (€1.4 million).
EBITDA (gross operating profit) for the year stands at around €1,229.7 million, up €54.8 million on the €1,174.9 million recorded for 2010 (+4.7%). Terna Rete Italia contributes for €139.3 million (amounting to approximately 11.3%).
The increase in revenue, together with the drop in costs is reflected in the EBITDA margin which went from 73.9% in 2010 to 75.2% in financial year 2011.
Amortisation and depreciation for the year are up by €33.6 million on 2010, for €30.0 million related to the Parent Company, basically for the start-up of new plants, and for €3.5 million to the amortisation of the subsidiary Terna Rete Italia.
As a result, EBIT (operating profit) stands at about €835.6 million, up by €21.2 million (+2.6%) compared with 2010.
Net financial expense, amounting to €121.0 million, refers entirely to the Parent Company and increases to €18.5 million from €102.5 million of 2010, mainly as a result of the increase in financial expense relating to the medium and long-term debt and related hedges (a negative €60 million), mainly due to the increase in gross debt and the rise in market interest rates; partially compensated for by:
- greater liquidity invested at higher interest rates (€21.2 million); and
- higher capitalised financial expense (€8.5 million) due to greater capital expenditure during the financial year;
- positive impact deriving from the currency adjustment to the provision for probable expenses relating to the sale of the equity interest held in the Brazilian subsidiaries (€6.8 million);
- recognition and adjustment of the equity interests in the companies CGES (€1.8 million) and CESI (€2.3 million) to the share held in the shareholders’ equity of the associates.
After the impact of net financial expense, the profit before taxes stands at €714.6 million, €2.7 million higher than the previous financial year (+0.4%).
Income taxes for the financial year amount to €387.3 million, up on the previous financial year by €140.5 million (+56.9%), mainly as a result of the “corrective manoeuvre-bis” (the “Robin Hood Tax”), against a pre-tax result that was basically in line with 2010.
More specifically, greater taxes are recognised for the year for €153.8 million resulting from the adjustment to net deferred tax liabilities for approximately €65.4 million and greater current taxes for €88.4 million.
Income taxes also reflect the overall impact of the IRAP adjustment (€8.7 million) with reference to the effects of the economic manoeuvre for the concession holders, lower income from prior years adjustments (€4.0 million) and the one-off positive effects relating to the release of Terna Rete Italia goodwill which is seen in the consolidated financial statements (a negative €23.5 million).
The year’s tax rate amounts to 54.2%; without considering one-off elements, it stands at 46%, up approximately 11 points on the 2010 figure, mainly as a consequence of the IRES tax (the “Robin Hood Tax”, +10.7%) and also for the additional IRAP (regional tax on prodictive activities) tax on pre-tax profit (+0.5%).
Profit from continuing operations consequently stands at €327.3 million, down €137.8 million on 2010.
The profit from continuing operations adjusted by the total effects of the “Robin Hood Tax”, and the extraordinary one-off items described above, including IRAP adjustment, amounts to €465.3 million, up €5.2 million on the same figure of the previous financial year (+1.1%).
The Group’s profit amounts to €440 million and includes €112.7 million net profit deriving from discontinued operations and assets held for sale, relating to extraordinary transactions in the photovoltaic sector (€50.6 million for the share of RTR S.r.l. and €28.3 million for NRTS S.r.l.) and the release of the guarantee connected with the sale of the Brazilian subsidiaries (€33.8 million). In the previous financial year, the item “Profit for the financial year from discontinued operations and assets held for sale”, amounting to €146.9 million mainly included the net margin for 2010 realised on photovoltaic plants sold with the subsidiary RTR.
(5) Pursuant to IFRIC 12.
