• EBIDTA down 3.3% to €470.2M
• Average cost of debt decreases to 1.8% and net debt falls to 3%
• REN licenced to issue 'green bonds'
• Consumption of electricity decreases 3.1% and consumption of natural gas decreases 1.6%
• Renewable sources supplied 59% of total electricity consumption and renewable generation set a record for the second consecutive yeaR
• Despite the challenges created by the pandemic, quality of service remains among the best internationally and in line with that of previous years
REN - Redes Energéticas Nacionais reported a net profit of €109.2M in 2020, a reduction of 8.1% vis-à-vis 2019, despite the improvement in financial results, which decreased €5.7M to -€46.8M (+10.9%), mainly due to a lower cost of debt (reduction from 2.1% to 1.8%). Net debt also fell 3% to €2.7419B.
REN continued to be penalised by the Energy Sector Extraordinary Contribution (CESE), which, since 2020, also applies to Portgás, and which increased by €3.7M, totalling €28.1M. The effective tax rate stood at 40%, a similar figure to that of 2019. Since its inception, CESE's weight in REN's accounts has accrued to €180M.
EBITDA fell 3.3% to €470.2M, resulting from a lower return on assets (-€23.8M due to the fall in sovereign debt rates and to the new parameters in the gas regulatory framework), and from a lower OPEX contribution. EBIDTA was also positively influenced by international business, namely by the consolidation of Transemel in Chile.
CAPEX and transfers to operations fell from €184.1M and €190.6M to €161.2M and €79.6M, respectively, with the company managing to recover a considerable share of the delay caused by the pandemic. In addition, studies, and administrative procedures for the signing of the first 14 bilateral agreements with solar promoters were concluded, in order to develop the grids needed to connect 3.5 GW of solar energy and whose CAPEX projects will be executed in the next 6 years.
Despite COVID-19 having added an additional level of complexity to our operations last year, although never compromising the safety of our teams, all critical activities were ensured, which was reflected in the normal yet high service levels.
On 4 February 2021, REN was granted a licence to issue B-rated ('Prime') 'green bonds' by the International Shareholder Services ESG (ISS-ESG).
Taking into account 2020's results, REN's Board of Directors will propose, at the General Shareholders' Meeting, the payment of a dividend of 17.1 cents per share, a value in line with the ones practiced in previous years and with REN's dividend policy.
New highs in a year marked by COVID-19 and lower energy consumption
At the operational level, the year was marked by the impacts of the COVID-19 pandemic on economic activity. This was reflected in a few energy system indicators, with electricity and natural gas consumption falling 3.1% and 1.6%, respectively.
In 2020, electricity consumption reached its lowest value since 2005: 48.8 TWh. Renewable production supplied 59% of electricity consumption in 2020 (8 percentage points more than in 2019), split between hydro and wind, both with around 25%, biomass with 7% and photovoltaics with 2.6%. Non-renewable generation supplied 38% of consumption, mainly from natural gas, with coal representing around 4% of consumption, the lowest share in the last 30 years. The foreign trade balance supplied the remaining 3% of the domestic consumption.
Natural gas consumption was 66.9 TWh, 1.6% down from the previous year, mainly due to a reduction of the industrial conventional consumption, since consumption for electric power centrals increased 3,8%. This consumption of natural gas at the Portuguese System's Thermoelectric Power Plants reached, on 16 October, the highest daily value ever, surpassing the previous maximum of 17 August 2017.
In 2020, and following the public consultation of the Portuguese National Strategy for Hydrogen and the opening of declarations of interest for applications for the status of Important Project of Common European Interest, REN, in partnership with a group of other companies with national relevance, presented its response.
REN, through its easement corridors reforestation programme, in recent years (2010-2020) has already planted over one million trees in an area of 2,922 ha, involving over 17,000 landowners. In 2020, a total of 117,262 trees were planted on an area of approximately 424 hectares, with the strawberry tree standing out as one of the most planted species, with an area of 274 hectares (65%). In 2020, REN carried out the cleaning of 9,587 hectares in easement corridors and contacted 31,093 landowners.
On 14 May, REN hosts its Capital Markets Day where it will present the company's strategic plan for the next three years.