Redeia Corporacion S A : Financial results (January - September 2023)

Financial

Results

January-September2023

31 October 2023

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For the purpose of facilitating the understanding of the information provided in this document, certain alternative performance measures have been included. Their definition can be found at:

https://www.redeia.com/en/shareholders-and-investors/financial-information/alternative-performance-measures

Financial Results. January - September 2023

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Contents

Financial Results. January - September 2023

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1. Mainhighlights

The Spanish electric system and the energy transition

Demand for electricity in Spain in the first nine months of the year amounted to 183.6 TWh, down 4.1% year-on-year.

Electricity generation in these first nine months of the year reached 197.7 TWh, with energy from sources that do not generate CO2 accounting for 71% of the total, versus 63% in the same period last year. This increase is largely explained by the increase by electricity from photovoltaic sources, close to 33% compared to the first three quarters of 2022. Electricity from wind power--with a weight of over 22% -was the most used by the Spanish system. Lastly, it should be noted that 98.8 TWh came from renewable energy sources, which accounted for 50% of the total generated in Spain.

From 1 January to 30 September this year, the average price of electricity on the Spanish spot market was EUR 91 per MWh, compared to EUR 185.8 per MWh in the same period last year. A lower price of natural gas and a higher share of renewable energy sources in the energy mix have made this evolution possible.

It should also be noted that on 9 October, the European Commission finalised the key legislation of the Fit for 55 Package, with the Council enacting the Directive on renewable energies. The European Union has set a binding target of a minimum of 42.5% of energy from renewable sources by 2030, compared to the current target of 32%. This Directive includes an article on 'areas of grid infrastructure and storage necessary to integrate renewable energies into the electricity system' whereby projects could benefit from a more streamlined procedure, especially in environmental matters.

TSO activity in Spain

Red Eléctrica continues to provide high service quality levels. The rates of availability at 30 September were 97.9% for the national transmission network, similar to the 98.2% attained in 2022. In the Canary Islands this rate was 98.6%, compared to 98.7% the previous year; in the Balearic Islands it stood at 98.2%, compared to 98.5% in 2022, while on the mainland it reached 97.9%, versus 98.2% a year earlier.

On 27 July, the CNMC Board approved the Resolution establishing the remuneration of electricity transmission facilities for 2020. This resolution, together with those enacted in late 2022 relating to 2016 to 2019, allowed the refund of part of the excess tariffs charged by Redeia in previous years to be paid out this year. It is estimated, given that the tariffs for 2021 to 2023 are still provisional, that in the

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6	Financial Results. January - September 2023

remainder of the year and in the first months of 2024 an amount of more than EUR 300 million will be refunded to the system for these overcharges from previous years.

Telecommunications

Last February saw the launch of the Amazonas Nexus satellite and it began its commercial activity in late July. Since then, this satellite has generated EUR 8.9 million in revenue. All this will represent a turning point in the satellite business by allowing access to new markets and businesses with high growth potential in the coming years.

Other relevant issues

Interim dividend

The Board approved the distribution of an interim dividend of EUR 0.2727 per share against 2023 earnings, similar to the amount distributed last year.

Rating

On 9 October, the credit rating agency Fitch ratified the group's rating at 'A-', with a stable outlook.

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Financial Results. January - September 2023

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Redeia: Key figures

Income statement

January - September

(millions of euros)	2023	2022	Δ%
Revenue	1,548.4	1,523.0	1.7%
Share of profit of companies accounted for using the	49.4	31.7	55.7%
equity method
Gross operating profit (EBITDA)	1,183.1	1,182.3	0.1%
Net operating profit (EBIT)	790.1	788.0	0.3%
Profit before tax	725.3	718.2	1.0%
Profit/(loss) attributable to the parent	535.3	551.4	(2.9%)

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July - September

2023 2022 Δ%

519.3 519.8 (0.1%)

14.6 4.0 268.7%

393.7 397.7 (1.0%)

262.4 263.9 (0.6%)

237.2 238.4 (0.5%)

181.0 188.4 (4.0%)

8	Financial Results. January - September 2023

Results by business, September 2023

(millions of euros)

Management and operation			Other
of electricity infrastructure	Telecommunications
businesses,
	Satellite		corp. and
Spain International	Business	Optic fibre	adjustments	Total

Revenue	1,221.0	55.6	181.5	112.3	(21.9)	1,548.4
Share of profit of companies accounted for using	-	45.9	3.5	-	0.0	49.4
the equity method
Gross operating profit (EBITDA)	904.0	80.6	97.4	83.2	17.9	1,183.1
Net operating profit (EBIT)	615.2	64.5	30.4	61.9	18.2	790.1
Profit before tax	567.8	37.2	26.3	56.6	37.3	725.3
Profit for the year	425.2	38.3	30.1	42.4	21.6	557.6
A) Profit attributable to the parent company	425.2	39.5	27.3	21.6	21.6	535.3
B) Profit attributable to non-controlling interests	-	(1.2)	2.7	20.8	(0.0)	22.3

Results by business, September 2022

(millions of euros)

Management and operation			Other
of electricity infrastructure	Telecommunications
businesses,
	Satellite		corp. and
Spain International	Business	Optic fibre	adjustments	Total

Revenue	1,224.3	48.9	157.9	108.0	(16.1)	1,523.0
Share of profit of companies accounted for using	-	29.9	1.3	-	0.5	31.7
the equity method
Gross operating profit (EBITDA)	917.2	62.2	109.9	81.3	11.8	1,182.3
Net operating profit (EBIT)	634.1	48.3	33.8	60.2	11.7	788.0
Profit before tax	580.1	35.3	27.9	59.6	15.2	718.2
Profit for the year	433.8	33.6	42.0	44.6	8.2	562.1
A) Profit attributable to the parent company	433.8	33.8	37.4	38.3	8.2	551.5
B) Profit attributable to non-controlling interests	-	(0.2)	4.6	6.3	0.0	10.7

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Financial Results. January - September 2023

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Other financial figures

January - September

(millions of euros)	2023	2022	Δ%
FFO	991.3	998.6	(0.7%)
Investments	621.6	484.9	28.2%
Dividends paid	555.9	543.9	2.2%

July - September

2023	2022	Δ%
358.9	378.1	(5.1%)
208.1	211.5	(1.6%)
404.9	392.2	3.2%

Consolidated balance sheet

(millions of euros)

September 2023

December 2022

Δ%

Non-current assets	12,148.2	11,834.2	2.7%
Equity	5,589.5	4,894.3	14.2%
Net financial debt	4,970.6	4,633.8	7.3%

Credit rating

Agency	Credit rating	Outlook	Date
Standard & Poor's	A-	Stable	02/06/2023
Fitch Ratings	A-	Stable	09/10/2023

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10	Financial Results. January - September 2023

2. Earningsperformance

Income

The total revenues and profits/losses of the investees amounted to EUR 1,597.8 million, 2.8% higher than the EUR 1,554.8 million recorded at September 2022. By activities, revenues evolved as follows:

• Management and operation of electricity infrastructure in Spain: Revenue from this activity amounted to EUR 1,221.0 million, 0.3% lower than last year. The increase in system operation revenue of EUR 6.4 million, from the review of the remuneration parameters for the second regulatory period 2023-25 and larger third-party projects (EUR +4.7 million), was offset by a decrease of EUR 14.4 million in transmission activity income mainly arising from the estimate made for 2023 in December of the criteria included in the definitive tariff orders for 2016 to 2020, and some commissionings that were below the regulatory amortisation.
• International electricity transmission: The revenue and profits of the investee companies in this activity amounted to EUR 101.5 million,
  28.8% higher than in September 2022. The detail of this variation is due to:

1. Revenues improved from EUR 48.9 million in the first 9 months of 2022 to EUR 55.6 million this year. The 13.7% increase is mainly due to the higher revenues generated by Redenor (Chile), following the launch of the second part of the project in September 2022, and Tesur 4 (Peru), after the commissioning of the facilities associated with this project in January 2023.

• 1. The result from international business holdings amounted to EUR 45.9 million, versus EUR 29.9 million a year ago. This improvement is largely due to the addition of new assets to the perimeter of the Brazilian Argo and better earnings at TEN (Chile).
• Telecommunications: This activity generated revenue and profit from investees of EUR 297.2 million through September 2023, up EUR 30 million from last year's figure.
• 1. Satellite business: Satellite revenues together with the profit share of the investees improved by 16.2% year-on-year to EUR 185.0 million. This performance is explained by higher revenues from Axess (EUR 44.2 million), which has been consolidated since August last year, partially offset by lower revenues from the planned termination of certain video services in Brazil. The improved result associated with investees, from EUR 1.3 million in the first nine months of 2022 to EUR 3.5 million this year, is due to a greater contribution from Hisdesat.

1. Optic fibre: Optic fibre generated EUR 112.3 million in revenue, EUR 4.3 million more than in the first three quarters of 2022, up 4.0%. This increase is mainly due to the inflation-linked nature of some contracts.

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