Czech EPIF sees stable 2020 despite pandemic

Central European energy infrastructure company EP Infrastructure (EPIF) reported April 13 results for 2020 that were comparable to the year before, despite the COVID-19 outbreak. Pre-tax earnings (EBITDA) and adjusted earnings were €1.62bn ($1.93bn) and €1.53bn respectively, the latter being just 5% less than the company's "rather extraordinary results of 2019."

Its operating performance is primarily driven by long-term contracts and regulatory based payments, ensuring money flows even when gas and power do not. Its gas transmission business transported 57 bn m³. The grid carries gas westwards from Ukraine but has the capacity to carry over 80bn m³/yr.

Slovak SPP Distribucia distributed almost 54 TWh of natural gas, which is a 3.5% increase year-on-year. And Stredoslovenska Distribucna, the electricity distributor in central Slovakia, distributed almost 5.9 TWh of electric power in 2020. That was just 4.8% below the last year’s volume and reflected the slow-down in industrial output. Household demand, where it does take volume risk, was similar to previous years, it said.

The heat infrastructure segment was hit by mild weather but performance remained robust. EPIF also last year sold two  district heating companies, one in Prague and one in Budapest, which together accounted for 5% of total EPIF adjusted pre-tax earnings. The sale also cut EPIF's carbon footprint "substantially in line with the group‘s long-term goals," it said. 

EPIF's gas storage business "significantly benefited from the rising storage price in the region," as facilities were unusually stocked after the warm winter in 2019/2020. EPIF has storage capacity of more than 62 TWh. 

Adjusted free cash flow was €1bn, down 5.5% compared with 2019 when EPIF "achieved exceptional results." The decline is mainly driven by the aforementioned 5% decline in adjusted EBITDA and time-shift of income tax payments from 2019 into 2020.

CFO Vaclav Palecek said: "Pleasing results were achieved thanks to the diversification of the business operations across several industries, largely regulated or contracted revenues, superb cash conversion ability, and ample liquidity. Financial health of the group remains strong due to its conservative capital structure and well-managed funding strategy proved by, among other things, successful issuance of a 10-year bond of €500mn in early March 2021.”