Results for first half of 2014 confirm stability

07 August 2014
  • More investments in grids, fewer new connections than expected
  • Increased productivity and cost management contribute to profit growth
  • Strategy fine-tuned, with emphasis on sustainability
Maarten Blacquière, CFO and acting Chairman of the Executive Board:

“We look back on a good first half of 2014, with the planned workload on scheme and solid financial results. An area of concern is the increased number of minor accidents in the first six months. An intensive programme to raise awareness of safety issues is being conducted company-wide, with the aim of reducing the number of accidents. The stable investment level is a good indicator of our success in achieving our long-term objectives of ensuring a reliable and affordable energy delivery. The proportion represented by customer-driven investments remains lower than expected. The construction industry is still feeling the effects of the recession. The increase in profit levels is due to a modest tariff increase, combined with cost management and gradual improvements in productivity, partly as a result of restructuring the Infra Services division. The first six months of 2013 also saw some additional expenses like higher interest expenses among others, which have not occurred in the first half of 2014. Our new strategy strongly reflects our focus on sustainability, which has already been implemented in successful energy saving initiatives, such as ‘Neighbourhood Power’ (‘Buurkracht’) and ‘The sun gives you energy’ (‘Van zon krijg je Energie’). Reliability, affordability and customer focus continue to be the three other pillars of our policy. Reviewing the first six months of 2014, we are proud that we have shown continuous improvement,
both financially and in organisational terms, in a changing organisation and a changing society.” 

Key figures
In € million
Half year 2014
Half year 2013
Profit for the period 135.7  124.0  9%
Revenues 696.1  688.5  1%
Gross investments 217.9  228.6  -5%
Electricity outage time (minutes per connection) 7.4  14.4  -49%
Gas outage time (seconds per connection) 54.0  20.0  170%
Half year 
Capital employed 5,300.7  5,265.7  1%
Customer connections (x 1.000) 4,76 4,751 0%
Accident index own employees (DART rate) 0.74  0.54  37%
Number of employees 4,315 4,294 1%

Enexis’s planned workload is progressing on schedule. The total value of the programme in 2014 exceeds EUR 600 million. The proportion made up by customer-driven investments in the first half of 2014 remains lower than expected and also below that for the first six months of 2013. No evidence of economic recovery is yet apparent from customer demand for grid expansions. Part of the capacity set aside for this purpose is being used for additional investments in grid improvements such as the replacement of grey cast-iron pipes. In carrying out these works, greater use has been made of internal resources, without losing sight of the position of contractors. 

Revenues increased by 1% in the first six months of 2014 compared to the equivalent period in 2013, rising to EUR 696.1 million (first half of 2013: EUR 688.5 million). This increase resulted principally from the small tariff increase that took effect on 1 January. Enexis was still able to introduce a tariff increase in 2014 due to the modest tariff increases in previous years. The profit for the period was, at EUR 135.7 million, higher than in the first half of 2013 (EUR 124.0 million). The reasons for this increase include cost management, gradual improvements in productivity and one-off expenses in 2013 like higher interest expenses among others, next to the above mentioned tariff increase.

The number of outages in the first six months of 2014 was considerably lower than in the same period in 2013. The electricity outage time dropped to 7.4 minutes per connection (first half of 2013: 14.4 minutes). The difference in the outage time is distorted by a major electricity outage in Enschede in early January 2013. The gas outage time increased to 54 seconds (first half of 2013: 20 seconds), which includes 35 seconds due to a major gas outage in Enschede in June 2014. This outage was due to a broken water pipeline which caused the gas pipeline to break and fill with water. As a result, 300 households were without gas for several days.

The accident figure (DART rate) was, with a score of 0.74, higher than in the first half of 2013 mainly due to a large number of minor accidents. No incidents resulting in injury or absence occurred in Enexis’s core activities of electricity and gas. However, even relatively minor accidents (e.g. tripping) and near accidents should be prevented in Enexis’s practice, due to the potential for such minor incidents to result in more serious consequences. In January 2014, a programme was introduced to raise awareness of safety issues throughout the company. The number of internal reports of potentially dangerous situations has increased significantly since the programme began.

On 10 April 2014, Enexis’s shareholders approved a revised strategic plan with a strong focus on sustainability, in line with the agreements in the Dutch Energy Agreement for Sustainable Growth (Energieakkoord). So Enexis’s ‘Neighbourhood Power’ (‘Buurkracht’) programme, intended to help the residents of a neighbourhood make energy savings by providing expertise and practical assistance, achieved remarkable success in the first six months. 29 neighbourhoods are now taking part in the programme.