EBITDA AND NET INCOME DECREASE WITH LESS REMUNERATION OF REGULATED ASSETS AND INCREASE IN TAXES

EBITDA AND NET INCOME DECREASE WITH LESS REMUNERATION OF REGULATED ASSETS AND INCREASE IN TAXES 11.11.2021

• EBIDTA down 2.6% to €343.4M

• CAPEX rises to €141.7M

• Average cost of debt falls to 1.6%

• Net debt decreases €363.7M

• Renewables supply 60.6% of energy consumption

• Service quality maintains levels of excellence

REN - Redes Energéticas Nacionais ended the first nine months of 2021 with a net profit of €68.4M, down €7.7M (-10.1%) from the same period in 2020. The period was marked by an improvement in financial income (€5.5M), as a result of the decrease in the average cost of debt (from 1.9% to 1.6%) and from the Energy Sector Extraordinary Contribution (-€1.1M). The total tax rate reached 43%, an increase of 5.8% (€3.5M) compared to the same period of 2020.

Until September 2021, EBITDA decreased by 2.6% (-€9.1M) to €343.4M, mainly due to the reduction in the value of the return on assets (-€6.6M) and a lower OPEX contribution (-€3.4M). The international segment contributed negatively (-€0.9M), despite the improvement of this indicator by the Chilean Transemel (€0.3M).

CAPEX increased 36.7% (€38M) compared to September 2020, reaching €141.7M, a number that falls within expectations in a context less burdened by the pandemic. Transfers to the RAB increased by 267.6% (€58.6M) to €80.5M. In the past nine months, net debt decreased 13.3% to €2,378.2M, which represents a decrease of €363.7M.

In August, ERSE (the Energy Services Regulatory Authority) published its opinions on the PDIRT (the Development and Investment Plan for the Electricity Transmission System) and on the PDIRG (Development and Investment Plan for the National Transmission Network, Storage Infrastructure and Liquefied Natural Gas Terminal), recommending a reduction in the proposed investments in the electricity and natural gas networks, a position that is in conflict with current government policies and with the sector's response. REN is currently carefully assessing ERSE's positions on investment projects in detail before incorporating its view in the documents to be submitted to the Government.

Record in the production of photovoltaic energy

Renewable energy production enabled supplying 61% of the country's electricity consumption in the first nine months of 2021, a number that is higher than the one from the same period of 2020 (56%). Hydropower ensured 28%, wind 24%, biomass 7%, and photovoltaics 3.7%. Non-renewable production supplied the remaining 31% of consumption in the first nine months, split between natural gas with 29% and coal with 2%. The remaining 8% came from imported energy.

In the field of renewable energy production, importantly was the record monthly output of solar energy, which reached 200 GWh in July this year. Regarding natural gas consumption in the period from January to September, there was a year-on-year decrease of 3.5%, with the 4.2% increase in the conventional segment not being sufficient to offset the 16% drop in the electricity generation segment. When compared to the same period in 2019, there was a decrease of 5%.

This quarter, REN became the first Portuguese company to join Transport4nature, which seeks to mobilise and encourage European companies in the transport of goods, people, and energy sector to protect, promote, and restore biodiversity. REN was also one of the signatories of the "Towards COP26" manifesto, promoted by BCSD Portugal, which presented 11 objectives to halt climate change.

In July, there was a problem in the interconnection of the electricity system between France and Spain, following an incident in the French transmission network, which led to the Iberian electricity system being separated from the rest of the European network in a context of significant importing. The Portuguese national electricity system defence plan was automatically activated, which resulted in a reduction in consumption at hydropower pumping stations, at interruptible industrial consumers, and at various consumers in the Portuguese national distribution network, preselected in coordination between REN and E-REDES. This action avoided more serious consequences, which could have ultimately led to a total blackout of the electricity system.