Regulated information: Fluxys Belgium 2022 results
- Increase of consolidated net income to €83.7 million (2021: €75.5 million).
- Proposal to the Annual General Meeting on 9 May 2023: gross dividend of €1.40 per share (2022: €1.38 per share).
- Maximum support to the security of supply: in addition to the necessary flows to Belgium and storage filled at maximum, also high flows to Germany and the Netherlands.
- Desteldonk-Opwijk pipeline section: now built for natural gas and ready for hydrogen transport
- A multi-molecule system is taking shape: pipeline and terminal projects for hydrogen and CO2 are taking shape in cooperation with industry and partners
- A step towards our own climate neutrality
Pascal De Buck, Managing Director and CEO: "2022 was a terrible year for the Ukrainian people and the way they suffered from the violence. We can only hope that the suffering will end as soon as possible. For Fluxys, this is a twofold challenge: securing natural gas supplies for Europe while working towards a carbon-neutral future. Our staff, as well as the industry and our partners, have taken up this challenge with dedication and dynamism. We are proud of the result and look forward to the future with confidence."
Key financial data
| 31/12/2022 | 31/12/2021 | |
| Income statement in thousands of € | ||
|---|---|---|
| Operating Revenue | 912,559 | 573,191 |
| EBITDA* | 323,167 | 318,905 |
| EBIT* | 147,305 | 137,821 |
| Net Profit | 83,728 | 75,521 |
| Balance sheet in thousands of € | ||
| Investments for the period in property. plant and equipment | 105,525 | 50,647 |
| Total property. plant and equipment | 1,855,375 | 1,902,037 |
| Equity | 643,617 | 639,674 |
| Net Financial Debt* | 493,800 | 846,046 |
| Total consolidated balance sheet | 3,406,570 | 2,634,514 |
* Please consult the annex (PDF 286KB) for the definitions and rationale for using these indicators.
Increase in consolidated turnover and net profit
Throughout the year Fluxys Belgium's infrastructure was used particularly intensively by our customers to support security of supply in Germany and the Netherlands. The extra revenues from that additional capacity that was sold do not benefit the company's shareholders. As stipulated by regulatory provisions, those extra revenues are deposited on the buffer account provided for this purpose (the 'adjustment account'). The amounts in the adjustment account are reallocated under the supervision of the regulator, CREG.
As part of the October budget consultations, the federal government decided to collect an exceptional solidarity contribution of €300 million from Fluxys Belgium. This contribution represents additional support for Belgium’s population during the energy crisis.
The Fluxys Belgium group generated turnover of €912.6 million in 2022. This represents an increase of €339.4 million compared with 2021, when turnover stood at €573.2 million. The increase in regulated revenue is in line with tariff methodology and mainly stems from accounting for the exceptional solidarity contribution of €300 million.
Consolidated net profit rose from €75.5 million in 2021 to €83.7 million in 2022, an increase of €8.2 million. The rise in net profit is in line with the tariff proposal, in accordance with the tariff methodology for 2020-2023, and is therefore not due to the increase in sold capacity or in energy prices.
The 2020-2023 tariff methodology (set by the regulator, CREG) applies the principle that all reasonable costs including interest and fair remuneration are covered by regulated revenues. In addition, there are a number of incentives aimed at controlling costs and to direct and monitor some of the company's performance. By controlling its operating costs and making efficiency efforts, the Fluxys Belgium group succeeded in achieving the regulatory targets and incentives.
Tariff reduction
In line with the tariff methodology, Fluxys Belgium, in consultation with the market and the federal energy regulator CREG, reduced tariffs for transmission services by 10% from 1 July 2022 onwards. The tariff reduction had no impact on Fluxys Belgium's results.
The reduction corresponds to a total of €45 million being returned over the course of 2022 and 2023. This is in line with Fluxys Belgium and CREG's desire to support consumers against the backdrop of high natural gas prices.
€105.5 million in investment
In 2022, investments in property, plant and equipment amounted to €105.5 million as opposed to €50.6 million in 2021. Of this amount, €67.7 million was dedicated to LNG infrastructure projects and €36.8 million to transmission projects.
Key events
Supporting security of supply 24/7
The geopolitical situation has profoundly changed the dynamics of gas markets and the direction of flows in Europe. Throughout the year, our teams across the country left no stone unturned to ensure security of supply in North-West Europe – with impressive results. As well as supplying Belgium via the Belgian network, suppliers managed to get unprecedented quantities of natural gas to the Netherlands and Germany. Flows to Germany soared to 256 TWh (from 20 TWh in 2021) and those to the Netherlands increased to 145 TWh (from 68 TWh in 2021). At the same time, the Loenhout storage facility was filled to record levels before the winter period started. The Belgian network has thus once again confirmed its role as an energy hub for Europe, with the Zeebrugge area as an important gateway for both natural gas via pipelines and LNG via ship.
Desteldonk-Opwijk pipeline section: now built for natural gas and ready for hydrogen transport
Given the new supply situation in Europe, speed and adaptability are the watchwords for new infrastructure as well. We prepared thoroughly for the first phase in the construction of the Zeebrugge-Opwijk pipeline, comprising the section between Desteldonk and Opwijk. This will boost our capacity to carry natural gas inland from Zeebrugge. At the same time, the pipeline is an initial step towards speeding up the energy transition as it will be immediately available for hydrogen transport as soon as the market is ready. We will commission the Desteldonk-Opwijk section in late 2023.
Multi-molecule system takes shape
We aim to have the first hydrogen and/or CO2 infrastructure ready for users by 2026. Every effort is being made to make the necessary investment decisions to achieve this.
Together with the industry, our partners and adjacent operators, we have accelerated the process. We are developing the infrastructure from industrial clusters and establishing connections between them and neighbouring countries. In this way, we are building the necessary structural backbone and laying the foundations for a sustainable role for Belgium as a hydrogen and CO2 hub for the Belgian and North-Western European economy.
To this aim we have developed 10 concrete infrastructure proposals and consult the market about those. In 2022, 4 market consultations were organized. At this stage, the hydrogen hubs in Ghent and Mons are already cross-border hubs and represent the initial impetus to make Belgium a hydrogen hub for North-Western Europe.
Furthermore, we are working on the development of terminals for the import of hydrogen and the export of CO2 :
- Both in the Port of Antwerp-Bruges (Antwerp@C CO2 Export Hub) and in the North Sea Port (Ghent Carbon Hub) Fluxys Belgium is working, together with industrial partners and port authorities, on an open-access terminal that can receive CO2, liquefy it, store it temporarily and unload it onto ships that transport it to permanent offshore storage.
- In 2022, Fluxys Belgium and Advario have also joined forces to develop an open access green ammonia import terminal in the Port of Antwerp-Bruges. Ammonia is an efficient molecule for transporting green hydrogen from wind and solar energy over long distances.
Progress towards achieving our own climate neutrality
Our commitment: to be a climate-neutral company by 2035. The first milestone is to halve our greenhouse-gas emissions by 2025, compared with 2017. In 2022, we reached that milestone for methane emissions in our transmission and storage businesses. In our LNG business, three additional open-rack vaporisers currently under construction will reduce the Zeebrugge terminal's emissions.
The net result of Fluxys Belgium SA amounts to EUR 84.0 million, compared to EUR 71.7 million in 2021. Fluxys Belgium will present a gross dividend of EUR 1.40 per share to the Annual General Meeting on 9 May 2023.
Taking into account the EUR 79.3 million carried forward from the previous financial year and a EUR 28.2 million withdrawal from reserves, the Board of Directors will propose to the General Meeting that the result be allocated as follows:
- 98.4 million EUR for the distribution of the dividend and
- 93.1 million EUR to the profit to be carried forward.
If this proposal for the allocation of the result is accepted, the gross dividend for the financial year 2022 will amount to EUR 1.40 per share. This amount will be paid from 17 May 2023.
Financial outlook 2023
The net result of the Belgian regulated activities is determined, in accordance with the 2020-2023 tariff methodology, on the basis of various regulatory parameters, including invested equity, financial structure and incentives.
Based on the information available to date, it is very difficult to estimate the impact of the war in Ukraine on the economy. Based on the situation as it is currently known to the public, the essential nature of the company's activities and its regulatory framework, we do not currently expect the war and the resulting measures and market developments to have a significant impact on the Fluxys Belgium Group's consolidated result in 2023.
Since the start of the war in Ukraine, various sanctions have been imposed on Russia and Belarus and on Russian and Belarusian companies. In this context, Fluxys Belgium Group is not active on the Russian market and has no investments in Russian companies. The Fluxys Belgium Group does not see any evidence of impairment.
In its activities, Fluxys Belgium Group deals with Russian companies in accordance with European and national gas regulations and fully respects the sanctions regime that has been adopted.
Given the regulated nature of its business, the Fluxys Belgium Group's net result is not very sensitive to a drop in volumes or other temporary negative effects on its cash flow.
External audit
The external auditor has confirmed that his audit work, which has been substantially completed, has not revealed any significant corrections to be made to the accounting information contained in this press release.