Half-yearly financial report 30 June 2011

www.eandis.be
Regulated information
Melle, 31 August 2011
HALF-YEARLY FINANCIAL REPORT OF THE EANDIS-GROUP1 AS PER 30 JUNE 2011
HIGHLIGHTS2
As from 1 July 2011 Luc De Bruycker has succeeded Guy Peeters as Chairman of Eandis’
Management Committee. Walter Van den Bossche has become Vice-Chairman of the
Management Committee.
Electrabel withdraws its representatives from Eandis’ governing bodies as from 30 June
2011.
Eandis has established - in collaboration with Infrax, Ores and Sibelga – the new company
Atrias cvba. Atrias should develop a new standard for the market processes and information
exchanges by the year 2015.
Eandis and the mixed Flemish distribution system operators (DSOs) have decided to launch a
broad-scale pilot project for smart meters.
Thanks to a reallocation in the share capital of each of the DSOs the capital attributable to
the public authorities has increased to an average of 79 per cent; the private partner’s
portion in the share capital has decreased to an average of 21 per cent.
The Constitutional Court has partly nullified the so-called Ratification Act for the distribution
tariffs of electricity, but this judgment has no direct impact on the DSO tariffs which had
been approved earlier.
Antwerpse Waterwerken (AWW) has joined De Stroomlijn, an Eandis subsidiary. This
confirms De Stroomlijn’s unique position as customer contact centre for network related
companies.
1
The Eandis-group comprises Eandis cvba and its consolidated subsidiaries De Stroomlijn cvba, Indexis cvba and Atrias
cvba.
2
All comparisons are with the figures reported as per 30 June 2010, unless stated otherwise.
1
Total operating revenue and operating costs have increased with approx. 7 per cent in
relation to an increase in the activity level.
The increase of the costs for Rational Use of Energy (RUE) subsidies to [•] million EUR, or + [•]
per cent, reflects the enduring success of the RUE measures.
A status-quo in the number of staff for Eandis cvba with 4.303 employees (4.175,50 full-time
equivalents), i.e. a limited increase with 7 employees or + 0,16 per cent compared to 31
December 2010.
No profit or loss, since all costs can be fully transferred to the distribution system operators
based on the ‘transfer at cost’ principle.
MANAGEMENT REPORT
The management of the company has undergone some major changes during the first half of the
year 2011. Guy Peeters, Chairman of the Management Committee, has terminated his professional
career. The Board of Directors has nominated Luc De Bruycker, previously director-general and ViceChairman of the Management Committee, as his successor. Walter Van den Bossche, director
Finance and Administration, was nominated as director-general and Vice-Chairman of the
Management Committee. These nominations entered into force on 1 July 2011 and are valid until
the Annual Shareholders’ Meeting in 2013. At that moment Walter Van den Bossche will assume the
chairmanship of the Management Committee. The Board of Directors has requested the renewed
management to investigate a few possible strategic options on the mid term for the Eandis Group.
Electrabel, private shareholder in the 7 Flemish mixed distribution system operators, has decided to
withdraw as from 30 June 2011 all of its representatives in Eandis’ governing bodies (Board of
Directors, HR Committee and Audit Committee). Electrabel has also reduced its representation in
the DSOs’ governing bodies and foregone a number of its statutory and contractual rights.
Electrabel’s financial participation in the DSOs will remain unchanged as it was realized after the
capital optimization carried out on 30 June 2011. After this optimization an average of 79 per cent of
the DSOs’ share capital is held by the public authorities, 21 per cent of the capital is held by
Electrabel.
In a judgment dated 31 May 2011, the Constitutional Court has partly nullified the Ratification Act of
15 December 2009; this act was in particular nullified insofar as it relates to the articles 9 to 14 of
the Royal Decree of 2 September 2008 with respect to the distribution tariffs for electricity.
However, this judgment does not have a direct impact on the tariffs which had been approved
earlier and which the DSOs charge for the use of their network infrastructure.
On 9 May 2011 Eandis and three other distribution grid companies (Infrax, Ores and Sibelga)
established a new company, Atrias cvba. Atrias has the mission to develop by the year 2015 a new
UMIG, i.e. a standard for the market processes and information exchange, and to pave the way for a
future federal Clearing House. Eandis has taken a 25 per cent stake in Atrias’ share capital. Atrias is
included in the consolidation as from the half year results 2011 according to the equity method.
2
In February 2011 the Boards of Directors of Eandis and the Flemish mixed DSOs have decided to
launch a broad-scale pilot project for smart meters. Approximately 50.000 smart meters will be
installed (40.000 at Eandis, 10.000 in the Infrax area). This project should allow for an optimization
of the technical systems to a mature technology which is suitable for a general roll-out. The
economic viability of a global roll-out will be investigated in a cost/benefit analysis. Special attention
will be paid to the (surplus) value of a smart meter for the consumers and society in general, to the
advantages in the field of energy efficiency, and to privacy and data security aspects.
As from 1 May 2011, De Stroomlijn has enlarged its scope of activities with the settlement of calls
from customers of the Antwerp Water Works (AWW), a water distributing company in the Antwerp
region. AWW also joins De Stroomlijn as one of its shareholders; as a result, Eandis’ portion in De
Stroomlijn’s share capital is reduced from 65,92 per cent to 64,03 per cent.
Eandis and the Flemish mixed DSOs keep their focus on the Rational Use of Energy (RUE). The most
remarkable event in this respect was the signing at the end of February 2011 by the City of Antwerp,
the Antwerp Autonomous Municipal Company for Education, distribution system operator IMEA and
Eandis of an agreement for the largest RUE-project in Flanders. Through 92 projects a total amount
of 16,6 million EUR will be invested in energy saving measures, aiming at improving the overall
quality of 50 school buildings and their comfort of use. After implementation of these projects the
energy bills of these 50 school buildings will be down by approx. 26 per cent.
Eandis actively participates in several projects of research, innovation and development in the field
of electric mobility. For example, Eandis is currently collaborating with a number of partners within
the ‘Electric Vehicles in Action’ platform (EVA) in order to facilitate the innovation and adoption of
electric vehicles.
As announced in the 2010 Annual Report the increase of Eandis cvba’s staff has stabilized during the
first half of 2011. The net increase between January and June 2011 amounted to 7 persons to a new
total of 4.303 staff members.
RISK FACTORS
The risk factors as described in the 2010 Annual Report and the prospectus dated 2 June 2010 (as
updated on 24 November 2010) have remained valid for the first semester of 2011.
OUTLOOK
For the second semester of 2011 Eandis expects that, barring unforeseen economic developments,
there will be no substantial deviations vis-à-vis the defined objectives. Meanwhile, Eandis is closely
monitoring the financial and economic evolutions.
3
REPORTING STATUS
These condensed financial statements for the period ended 30 June 2011 were approved for
publication by Eandis’ Board of Directors on 31 August 2011.
On 31 August 2011 Eandis’ statutory auditor, Ernst & Young Bedrijfsrevisoren represented by Mr Jan
De Luyck, issued a limited review report on the consolidated half-year financial information for the
six-month period ended 30 June 2011, stating that the interim financial information has been
prepared in accordance with IAS 34, “Interim Financial Reporting” as adopted by the EU.
STATEMENT BY THE RESPONSIBLE PERSONS
“The undersigned persons state that, to the best of their knowledge,
the condensed financial statements of Eandis cvba and its subsidiaries as of 30 June 2011
have been prepared in accordance with the International Financial Reporting Standards
(IFRS), and give a true and fair view of the assets and liabilities, financial position and
results of the whole of the companies included in the consolidation; and
the interim management report gives a fair overview of the information required to be
included herein.
Melle, 31 August 2011,
For the Board of Directors,
Luc DE BRUYCKER, Director-general, Chairman Management Committee
Walter VAN DEN BOSSCHE, Director-general, Vice-Chairman Management Committee“
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AUDITOR’S REPORT
5
6
PROFILE OF THE REPORTING ENTITY
Eandis cvba and its subsidiaries De Stroomlijn cvba, Indexis cvba and Atrias cvba (together the
‘Eandis-group’ or the ‘Group’) is the independent company that carries out operational tasks and
public service obligations for electricity and gas at cost price for the Flemish mixed distribution
system operators Gaselwest, IMEA, Imewo, Intergem, Iveka, Iverlek and Sibelgas. The Group’s result
therefore is without any profit or loss.
ANNEX
Condensed IFRS financial statements for the six-month period ended 30 June 2011:
Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Comments
Notes
7
EANDIS Group
IFRS financial statements for the six-month period
ended 30 June 2011
CONSOLIDATED ACCOUNTS
Income statement
(In thousands of EUR)
30 June
2011
30 June
2010
Operating revenue
611.397
570.913
Revenue
605.328
565.132
6.069
5.527
0
254
-608.773
-566.546
Other operating revenue
Own construction capitalized
Operating expenses
Cost of trade goods
-84.729
-72.003
Cost for services and other goods
-317.705
-299.647
Personnel expenses
-203.191
-190.800
-3.016
-3.829
0
11
-132
-278
2.624
4.367
Depreciation, amortization and changes in provisions
Amounts written down on current assets
Other operational expenses
Result from operations
Financial income
Financial expenses
Profit before tax
Income tax expenses
Result for the period
9.495
1.696
-8.943
-1.507
3.176
4.556
-3.176
-4.556
0
0
8
Statement of comprehensive income
30 June
2011
30 June
2010
-4.379
-23.768
4.379
23.768
Other comprehensive income
0
0
Result for the period
0
0
Total comprehensive income for the period
0
0
(in thousands of EUR)
Actuarial gain (loss) on long term employee benefits
Actuarial gain (loss) on rights to reimbursement on long term employee benefits
9
Balance sheet
(In thousands of EUR)
30 June
2011
31 December
2010
Non-current assets
780.328
797.412
11.836
14.261
Property, plant and equipment
Investments in an associate
5
0
1.102
1.092
Rights to reimbursement on long term employee benefits
447.369
462.031
Long term receivables, other
320.016
320.028
Current assets
Financial assets
571.792
565.426
Inventories
30.922
28.090
Trade and other receivables
37.413
30.275
Receivables cash pool activities
495.710
499.409
Current tax assets
1.273
2.748
Cash and cash equivalents
6.474
4.904
1.352.120
1.362.838
TOTAL ASSETS
EQUITY
1.099
1.091
Equity attributable to owners of the parent
20
20
Share capital and reserves
20
20
1.079
1.071
Non-controlling interest
LIABILITIES
1.351.021
1.361.747
Non-current liabilities
767.394
782.062
Provisions for employee benefits
447.369
462.031
Loans, non-current
320.025
320.031
Current liabilities
583.627
579.685
Loans, current
359.879
379.030
Trade payables and other current liabilities
223.685
179.968
0
20.202
63
485
1.352.120
1.362.838
Liabilities cash pool activities
Current tax liabilities
TOTAL LIABILITIES
10
Cash flow statement
(In thousands of EUR)
Result for the period
Depreciation on property, plant and equipment
Amounts written off on current assets (Write back -; recorded +)
Loss/profit on realization receivables
Net finance expense
Gain and loss on sale of property, plant and equipment
30 June
2011
30 June
2010
0
0
3.034
3.829
-18
-11
64
6
-552
-189
0
-18
3.176
4.556
5.704
8.173
Change in inventories
Change in trade and other receivables
-2.832
739
-4.574
4.919
Change in trade payables and other current liabilities
42.483
28.937
Net operating cash flow
35.077
34.595
Financial expenses paid
-8.165
-1.427
Income tax expense
Operating cash flow before changes in working capital and provisions for employee
benefits
6.098
41
627
535
Income tax paid
-1.671
-2.706
Net cash flow from operating activities
37.670
39.211
0
19
-609
-2.179
Financial income received
Financial discount on debts
Proceeds from sale of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of financial assets
-15
0
12
-1
-612
-2.161
Issuance of capital
Repayments of loans
8
0
0
-7.000
Issuance of bonds
0
150.180
Change in short term loans and borrowings
-19.151
-306.281
Change in cash pool (Current account)
-16.505
273.633
0
-150.000
Proceeds/(acquisition) from other long term receivables
Net cash flow used in investing activities
Provide long term loans
Dividends received
160
0
Net cash flow used in financing activities
-35.488
-39.468
Net change in cash and cash equivalents
1.570
-2.418
Cash and cash equivalents - at beginning of period
4.904
6.364
Cash and cash equivalents - at end of period
6.474
3.946
11
Statement of changes in equity
Share
Capital
Reserves
Equity
attributable
to owners
of the
parent
18
2
20
1.071
1.091
Changes in consolidation scope
0
0
0
0
0
Result for the period
0
0
0
0
0
Other comprehensive income
0
0
0
0
0
Subtotal
0
0
0
0
0
Balance as per 30 June 2010
18
2
20
1.071
1.091
Balance as per 1 January 2011
18
2
20
1.071
1.091
Changes in consolidation scope
0
0
0
8
8
Result for the period
0
0
0
0
0
Other comprehensive income
0
0
0
0
0
Subtotal
0
0
0
0
0
18
2
20
1.079
1.099
(in thousands of EUR)
Balance as per 1 January 2010
Balance as per 30 June 2011
Noncontrolling
interest
Total
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Comments
Income statement
Revenue amounts to 605.328 kEUR, an increase of 40.196 kEUR compared to the first half of 2010.
The increase is related to the costs, which can be entirely charged mainly to the distribution system
operators.
The cost of trade goods increases to 84.729 kEUR or 12.726 kEUR more compared to the first half of
2010, especially for the division Electricity.
The costs for services and other goods amount to 317.705 kEUR, an increase of 18.058 kEUR
compared to the first half of 2010. This increase is mainly due to costs for the smart metering project
and costs related to investments and distribution network operating costs.
The costs for rational use of energy (RUE) amount to 23.609 kEUR for the first half of 2011 or 2.925
kEUR more than in the same period of last year.
Due to a higher number of staff members as compared with the first semester of 2010 the
personnel expenses increased with 12.391 kEUR to 203.191 kEUR.
The financial income increases to 9.495 kEUR, an increase of 7.799 kEUR due to the provisions for
interest receivable on loans to the distribution system operators. The other interest income relates
to interest mainly achieved through the cash pool activities with the DSOs, the financial discount
obtained from the suppliers and dividend received from financial assets.
The financial expenses increase to 8.943 kEUR, an increase of 7.436 kEUR as a result of the set up of
provisions for interest payable on the bond loans and interest paid on other financial obligations
with the banks.
During the first half of 2011 interest rates are on average higher than in 2010. Therefore the
financial income and expenses are higher in 2011 than they were in 2010.
The result is always without any profit or loss, since all the costs can be charged on mainly to the
distribution system operators, shareholders.
Balance
Review and analysis of the first six months of 2011 compared to the full year ended on 31 December
2010.
As a result of the establishment of Atrias, a central clearing house with Infrax, Ores and Sibelga, the
Group has recorded an amount of 5 kEUR as an investment in an associate.
The right to reimbursement on long term employee benefits decreases from 462.031 kEUR to
447.369 kEUR, a decrease of 14.662 kEUR. This decrease is the result of the decrease in the provision
for employee benefits with this same amount.
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The other long term receivables remain almost unchanged and amount to 320.016 kEUR. This
receivable originates from lending on to the distribution system operators funds that were obtained
by Eandis from the issuance of the bonds during 2010.
Trade and other receivables amount to 37.413 kEUR, or an increase of 7.138 kEUR. This increase is
due to the recording of provisions for accrued income, mainly for interest receivable from the
distribution system operators.
Receivables cash pool activities from the Distribution system operators slightly decrease with 3.699
kEUR from 499.409 kEUR to 495.710 kEUR.
The non-controlling interest increases with 8 kEUR following the participation of Antwerpse
Waterwerken (AWW) in the share capital of De Stroomlijn, a subsidiary of Eandis.
The long-term loans include the proceeds of two bond issuances during 2010 for a total of 320.025
kEUR. These bond loans were issued above par at 101,995 per cent and 101,920 per cent
respectively and are due in 2017 and 2020 respectively.
The current loans decrease from 379.030 kEUR to 359.879 kEUR, a decrease of 19.151 kEUR.
The trade payables and other current liabilities increase from 179.968 kEUR to 223.685 kEUR,
mainly as the result from increased provisions for invoices to be received, interest payable on the
bond loans and accrued expenses related to personnel expenses.
Cash flow
The net cash flow from operating activities represents a net inflow of 37.670 kEUR in the first half of
2011 and 39.211 kEUR in the first half of 2010.
The net cash flow from investing activities represents a net outflow of 612 kEUR in the first half of
2011 and 2.161 kEUR in the first half of 2010.
The net cash flow from financing activities represents a net outflow of 35.488 kEUR in the first half
of 2011 and 39.468 kEUR in the first half of 2010.
Risk factors
The risk factors as described in the 2010 Annual Report and the prospectus dated 2 June 2010 (as
updated on 24 November 2010) have remained valid for the first semester of 2011.
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Notes
Reporting entity
Eandis cvba and its subsidiaries De Stroomlijn cvba, Indexis cvba and Atrias cvba (together the
“Group”) is the independent company that carries out operational tasks and public service
obligations for electricity and gas at cost price for the Flemish mixed distribution system operators
Gaselwest, IMEA, Imewo, Intergem, Iveka, Iverlek and Sibelgas. The Group’s result therefore is
without any profit or loss.
These consolidated interim financial statements for the six months ended 30 June 2011 were
approved for publication by the Board of Directors on 31 August 2011.
IFRS standards
The consolidated IFRS financial statements for the six-month period ended 30 June 2011 have been
prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’, as
adopted by the European Union.
They do not contain all the information necessary for a full set of financial statements, and should
therefore be read in conjunction with the Group’s financial statements for the year ended on 31
December 2010.
The accounting policies used in the preparation of the consolidated financial statements correspond
to the accounting policies applied in the preparation of the consolidated financial statements for the
year ended 31 December 2010 except for the new standards or interpretations in force since 1
January 2011. A detailed list of these new standards and interpretations was included in the financial
statements of 31 December 2010 (see note – Summary of significant accounting rules). The
application of these new standards, interpretations, and amendments to published standards do
not significantly affect the Group’s results.
The Group has chosen not to early apply standards and interpretations.
Important events during the reporting period
The Eandis consolidation changed due to the establishment of Atrias cvba on 9 May 2011. Eandis has
taken a 25 per cent stake in this company’s share capital. Therefore, Atrias is included in the Eandis
consolidation according to the equity method, and for the first time in the financial statements for
the six-month period ended 30 June 2011.
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Transactions with related parties
The nature of the transactions with the members of the Management Committee and the directors
during the first semester of 2011 do not materially differ from the transactions as included in the
2010 Annual Report.
Subsequent events
No major events after balance sheet date have materialized.
CONTACT
Eandis cvba, Brusselsesteenweg 199 – B-9090 Melle
VAT number: BE 0477.445.084
Press
Simon VAN WIJMEERSCH, tel. +32 9 263 45 54 - mail: [email protected]
Investor relations
Koen SCHELKENS, tel. +32 9 263 45 04 - mail: [email protected]
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