Results Report

1H2021

29th July 2021

AGENDA

1.

2.

3.

Overview of the period

Business performance

Closing remarks

1H21 RESULTS

2

1. Overview of the period

1H21 RESULTS

3

1. Overview of the period

KEY MESSAGES

1H2021

EBITDA reached €227.9M, a contraction of 3.9% (-€9.2M)YoY attributed to (1) a reduction in RAB remuneration (-€5.6M), motivated by the decrease in RAB (with an impact of -€3.7M) and in RoR (-€1.9M); (2) a smaller OPEX contribution (-€2.5M), partially offset by a higher incentive for economic efficiency of investments (+€0.9M).

International business performance had a negative delta of €1.3M, of which €1.1M attributed to Electrogas.

Net Profit amounted to €39.5M, due to (1) a positive contribution from Financial results (increase of €3.4M to -€18.0M), a consequence of the decrease of the cost of debt (from 1.9% to 1.6%); and (2) a lower energy levy (+€1.1M) recognized in 1Q21.

Capex grew by €18.7M vs 1H20 to €79.3M, while transfers to RAB increased by 7.3M€ to €16.9M. There were some delays in transfers to RAB due to the COVID pandemic but that should be concluded by year-end.

Renewable energy sources (RES) reached 68.1% of total supply (approx. +4 p.p. than in 1H20). Consumption of electricity and natural gas increased as well as the amount of natural gas distributed.

Quality of service was stellar, for both electricity and NG, with 0.00 min of electricity interruption time, and natural gas combined availability rate at approximately 100%.

REN remains committed to the UN's Sustainable Development Goals, its efforts have not only already been recognized by ESG rating agencies, but also throughout this year, there has been several events such as, the Green bond issue and the Capital Markets day reinforcing this commitment to ESG.

1H21 RESULTS

4

1. Overview of the period

SECTOR OVERVIEW

The Energy Transition is at the center of the Portuguese Government agenda

New regulatory

period for the

electricity sector

Gas Distribution

Network Development

Plans 2021-25

Natural Gas annual capacity auctions

Electricity auctions

  • ERSE launched a public consultation with proposals to revise the Tariff Regulation for the electricity sector, with the aim of updating the regulatory mechanisms and methodologies related to the tariff structure and the allowed revenues model for the regulated activities, to be applied over the next regulatory period , from 2022 onwards
  • According to ERSE, the proposed changes provide a flexible regulatory framework, in order to respond to the challenges of decarbonisation and decentralization of the electricity sector. In this sense, it is worth highlighting the proposal of a TOTEX regulation, applied to the transmission (VHV) and distribution (HV and MV) activities
  • Public consultation on the Gas Distribution Network Development Plans for the period 2021-25.ERSE concluded that the proposed investments do not result in tariff increases in 2025 and that there are quite different risk levels between the PDIRD-GN2020 proposals of the different DSOs, leaving the final decision over these differences to the Government discretion, to approve part or all of the investment projects proposed by each DSO.
  • ERSE considers relevant the concern of the DSO's to introduce pilot projects in their PDIRD-GN2020 proposals, with the objective of obtaining information and expertise in the of decarbonized gases injection, namely hydrogen, in the distribution networks.
  • The yearly send-out capacity auction that took place last week resulted again in the complete allocation of the Terminal send-outcapacity with a price premium of 1% over the regulated tariff.
  • During the month of June, ERSE promoted an auction for placing electricity from Special Regime Production and an auction for the acquisition of energy by the Last Resource Supplier. The total contract volume sold is equivalent to 872 355 MWh in the 39th PRE Auction and 110 430 MWh in the 8th Last resource supplier Auction, with an weighted average final price of: 87,78 EUR/MWh and 91,26 EUR/MWh, respectively.

1H21 RESULTS

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REN - Redes Energéticas Nacionais SGPS SA published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2021 13:18:05 UTC.