Italy's Snam Reports Steady Q1 Results
Italian grid operator Snam reported May 14 steady first quarter financial results, despite continued stagnation in gas demand.
Net profit rose by 11.4% year on year to €283mn, the TSO said, noting that alongside a positive operational performance, reduced financing costs and one-off returns on equity investments helped. However, gas flows remain subdued.
Revenue rose by 3.8% to €654mn, thanks to higher turnover from the regulated and transportation segments. Gas volumes moving through Italian networks were largely flat at around 19bn m3, as demand dropped by -1.6% to 25.5bn m3. While industry consumed more gas in January-March, warm weather saw residential demand fall. In 2018, 72.82bn m³ were injected into Snam's network, down 2.4% compared with 2017.
Gas sourced from domestic production continued to fall in the first quarter, dropping by 7.7% to 1.2bn m3. Imports grew by 1.5% to 17.8bn m3. LNG imports rose by close to 95% to equal 1.64bn m3. Snam expects no significant shift in Italian gas demand across 2019.
Given that lack of momentum, Snam is looking forward to the arrival of gas from the Caspian next year. As the Southern Gas Corridor cranks into life it will deliver via the TAP pipeline to southern Italy.
CEO Marco Alvera chose in his statement to concentrate on the support the results show for Snam’s efforts to adjust its business to technical and environmental trends.
“Results for the first quarter of 2019 were very positive, underpinning the growth strategy outlined in Snam’s business plan to 2022. We are modernising our network and increasing its sustainability, specifically leveraging the Snamtec project to develop new businesses and focus on digital transformation,” he asserted.
In 2018, Snam bought an 82% stake in TEP Energy Solutions (TEP), a 70% stake in IES Biogas - which specialises in the building biomethane plants - and 100% of Enersi Sicilia, a business unit dedicated to technological solutions for natural gas refuelling stations for MTM transport.
Investments relating to Snamtec, a project “focussed on innovation and the energy transition,” amounted to €25mn in the first quarter of 2019. This year the company has embarked on projects with Hitachi to develop methane-powered trains and with Tamoil to build natural gas service stations. It also sold its debut Climate Action Bond as it sold €500mn in 6-year paper with an annual coupon of 1.25%.