Regulated information: 2020 results
31/03/2021 18:00
- Pandemic:
- All essential services operational
- Active support to help alleviate needs - Consolidated turnover increases to €560.6 million (2019: €531.0 million) and the consolidated net result rises to €73.2 million (2019: €69.5 million)
- Proposal to be submitted to the annual general meeting on 11 May 2021: gross dividend of €1.37 per share (2019: €1.30 per share)
- Transmission volumes down
- Zeebrugge LNG terminal strengthens future prospects
- Record traffic for ships and LNG trucks
- Strong market interest in additional send-out capacity - Shouldering the energy transition
- Roll-out of action plan to halve our greenhouse gas emissions by 2025
Key financial data
| 31/12/2020 | 31/12/2019 | |
| Income statement in thousands of € | ||
|---|---|---|
| Operating Revenue | 560,590 | 530,995 |
| EBITDA* | 313,623 | 297,337 |
| EBIT* | 133,482 | 134,841 |
| Net Profit | 73,237 | 69,498 |
| Balance sheet in thousands of € | ||
| Investments for the period in property. plant and equipment | 42,255 | 91,282 |
| Total property. plant and equipment | 2,011,209 | 2,129,400 |
| Equity | 639,038 | 662,677 |
| Net Financial Debt* | 903,339 | 881,932 |
| Total consolidated balance sheet | 2,730,039 | 2,867,575 |
* For the definitions and rationale for using these indicators: see appendix (PDF 134KB).
Increase in consolidated turnover and net profit
The Fluxys Belgium group generated consolidated turnover of €560.6 million in 2020. This represents an increase of €29.6 million compared with 2019, when turnover stood at €531.0 million. Consolidated net profit rose from €69.5 million in 2019 to €73.2 million in 2020, an increase of €3.7 million. The increase in turnover and net profit is mainly due to the commissioning of the fifth storage tank for transshipment services in Zeebrugge in late 2019 and is in accordance with the tariff methodology and the associated terms on authorised manageable costs and incentives for the period 2020-2023.
Efficiency efforts in line with regulated tariff model
In June 2018, CREG, the federal regulator, set out a new tariff methodology for the transmission and storage of natural gas and LNG terminalling for the period 2020-2023. The new methodology is based on existing principles that have been honed and supplemented.
The principle ensuring that tariffs cover all reasonable costs, including interest and fair remuneration, continues to apply. Alongside incentives to control costs, a set of new incentives has been introduced to monitor and manage some aspects of company performance. The company share of realised savings has been adjusted. As a consequence, potential gains of efficiency efforts are limited. By managing its operating costs and continuing its efficiency drive, the Fluxys Belgium group achieved these regulatory objectives and benefitted from incentives.
Investments totalling €42.3 million
In 2020, investments in property, plant and equipment totalled €42.3 million, compared with €91.3 million in 2019. In 2020, €31.9 million was spent on transmission projects, €0.7 million on storage infrastructure and €9.7 million on LNG infrastructure projects.
Key events
All essential services operational during pandemic
Despite the widespread impact of the coronavirus outbreak, all of Fluxys Belgium's essential services remained operational and the company focused fully on playing its vital role in society and for its customers, ensuring safety and continuity of gas supply. At the same time, all necessary steps were taken to protect the health of our employees and contain the spread of the virus.
Active support to help alleviate pandemic-related needs
In a broader social context too, Fluxys Belgium worked to help alleviate coronavirus-related needs. During the lockdown period, many employees throughout the company were personally involved in Fluxys Belgium initiatives and other actions to provide social and health assistance. They produced medical protective equipment and delivered it to healthcare workers and institutions. Others played a logistical role, getting Fluxys company PCs ready to donate to schools and charities, or were involved in local initiatives.
With the support of the shareholders, Fluxys Belgium and parent group Fluxys also freed up approximately €1 million for various organisations and institutions engaged with vulnerable groups, front-line professionals and scientific research into COVID-19 in Belgium.
Infrastructure projects on time
The sanitary measures on the construction sites brought about a number of delays, but the new infrastructure between Maarkedal and Ronse and between Leuze and Beloeil was commissioned in good time. The works planned for 2020 in connection with the project to convert part of the low-calorific grid to high-calorific natural gas were also carried out. Together with distribution system operators Sibelga, Fluvius and Ores, we carried out a large-scale conversion project in which 120,000 connections were switched over. Thanks to active cooperation between Fluxys Belgium and the distribution system operators (DSOs), the remaining schedule for the conversion has been shortened. The entire market for low-calorific natural gas will be converted by 2024 instead of 2029.
Transmission volumes down
Transmission volumes were down compared to 2019. Border-to-border volumes fell by 14% to 204.9 TWh and volumes for consumption on the Belgian market declined slightly by 1% to approximately 190.6 TWh.
- Transmission to distribution system operators was down by 4%, reflecting milder weather.
- Offtake by directly connected industrial companies fell slightly (almost 1%).
- Transmission volumes for natural-gas-fired power plants rose by approximately 5%.
Zeebrugge LNG Terminal achieves all-time record
The start of the long-term transshipment contract in December 2019 pushed traffic at the Zeebrugge LNG terminal to new heights in 2020. A total of 172 vessels docked at the terminal, smashing the previous record of 130 in 2019. March 2020 was the busiest ever month for ship traffic at the terminal, with a total of 30 vessels docking, more than double the previous record in May 2019. The number of transshipment operations almost tripled while the number of unloading operations decreased. LNG truck traffic increased by over 20% to nearly 3,200 loading operations.
Strong market interest in additional send-out capacity
Responding to market signals, the Zeebrugge LNG terminal held an open season for additional regasification capacity. This was a success: the offered capacity of 6 million tonnes per year (or approx. 10.5 GWh/h) was fully subscribed during the open season's binding phase. In light of this success, the final investment decision was taken to build the necessary additional infrastructure at the terminal that will also make it possible to reduce the facility's CO2 emissions.
Shouldering the energy transition
The European Green Deal and the European recovery plan that took shape in the wake of the pandemic gave a major new push in 2020 for the transition to a climate-neutral economy by 2050. The European Commission's projections for 2050 show that a net-zero emissions energy system is likely to be based on a roughly 50/50 split between renewable electricity and carbon-neutral gases and biofuels. CO2 capture and reuse or storage will also be needed in the transition to a carbon-neutral society.
The Green Deal and recovery plan have created a momentum for Fluxys Belgium to proactively accelerate its energy transition strategy. In 2020, we devised a plan to use our natural gas infrastructure sustainably as a tool of the energy transition. In line with the strategy of the European Commission and taking into account the necessary evolutions in the legal and regulatory framework, we can gradually transform and develop our infrastructure into complementary networks in which we also transport hydrogen and CO2, for example.
The plan will be further developed in collaboration with our customers, the distribution system operators, the government and other stakeholders. The intention is to build step by step, taking into account evolutions in the market. At the same time, we are laying the foundations for Belgium's lasting role as an energy hub in North-West Europe for the molecules of the future.
Helping to develop the biomethane market
Compared with neighbouring countries, biomethane production in Belgium is still at an early stage. Two biomethane facilities are currently operational, one in the Kempen region and one in Fleurus. The latter was commissioned in 2020. Fluxys Belgium is supporting the development of the biomethane market in Belgium by actively contributing to the appropriate certification systems on the basis of which consumers can purchase biomethane. In 2020 we also developed an adapted contract for connecting biomethane producers to our grid. Another important development is the fact that the Zeebrugge LNG terminal was awarded official certification as an EU-approved process plant for bio-LNG.
Roll-out of action plan to halve our greenhouse gas emissions by 2025
Fluxys Belgium has set itself the objective of halving its own greenhouse gas emissions by 2025 compared with 2017 levels. To this end, it is rolling out various programmes designed to further reduce greenhouse gas emissions from the operation of its infrastructure.
One new thing is that three additional open-rack vaporizers will be built at the LNG terminal in Zeebrugge. Using the heat from seawater to regasify LNG will significantly reduce the terminal's energy consumption and emissions.
Fluxys Belgium SA/NV – 2020 profit (according to Belgian standards): proposed allocation of profit
Fluxys Belgium SA/NV's net profits totalled €70.8 million, compared with €42.5 million in 2019. This increase compared to the previous financial year is due in part to the commissioning of the fifth storage tank at the LNG terminal operated by subsidiary Fluxys LNG.
At the Annual General Meeting on 11 May 2021, Fluxys Belgium will propose a gross dividend of €1.37 per share.
Taking into account a profit of €53.6 million carried over from the previous financial year and a withdrawal of €38.7 million from the reserves, the Board of Directors will propose to the Annual General Meeting that the profits be allocated as follows:
- €96.3 million as a dividend payout;
- €66.8 million as profit to be carried forward.
If that profit allocation proposal is adopted, the total gross dividend for the 2020 financial year will be €1.37 per share. This amount will be payable from 19 May 2021 onwards.
Financial outlook for 2021
Under the 2020-2023 tariff methodology, the net profit from Belgian regulated activities is determined based on various regulatory parameters, including equity invested, financial structure and incentives.
Based on the information available at the time of this report and based on the essential nature of the company's activities and their regulatory framework, we do not anticipate for 2021 any significant impact due to the COVID-19 pandemic and the resulting market developments on the consolidated result of the Fluxys Belgium Group.
External audit
The statutory auditor has confirmed that his audit activities, which were conducted meticulously, have not revealed the need for any significant adjustments to the accounting information contained in this press release.