Elia 2022Grouphalf-year financial report
Brussels, 27 July 2022
Elia Group | 2022 half year results 2 Content 1. Business performance review......................................................................................................................... 4 1.1. Consolidated results and financial position of Elia Group for the first 6 months of 2022……………………...4 1.1.1 Segment reporting Elia Transmission (Belgium).......................................................................................... 5 1.1.2. Segment reporting 50Hertz (Germany) 9 1.1.3 Segment reporting Nemo Link and non regulated activities 13 2. Statement on the true and fair view of the condensed consolidated interim financial statements and the fair overview of the interim management report.................................................................................................... 15 3. Condensed consolidated interim financial statements............................................................................... 16 4. Notes to the condensed consolidated interim financial statements 21 5. The report of the joint statutory auditors and their review of the condensed consolidated interim financial information................................................................................................................................................. 35 6. Alternative performance measures............................................................................................................... 36
1H 2022 1H 2021 Difference (%)
Elia Group | 2022 half year results 3
Share of net income of equity method entities (net of tax) 24.5 16.8 45.8% EBITDA 544.2 490.5 10.9%
1.1 Consolidated results and financial position of Elia Group for the first 6 months of 2022
Net finance costs (43.8) (57.9) (24.4%)
Net profit attributable to owners of ordinary shares 157.4 124.9 26.0% Key figures of the financial position (in € million) 2022 2021 Difference (%)
Equity attributable to owners of the company 5,367.8 4,552.0 17.9% Net financial debt 3,503.8 4,886.3 (28.3%) Key figures per share 1H 2022 1H 2021 Difference (%)
Adjusted net profit 186.7 150.5 24.1% Net profit 186.7 150.5 24.1%
Total assets 20,305.6 18,144.3 11.9%
Pursuant to IFRS 8, the Group identified the following operating segments: Elia Transmission (Belgium), which comprises regulated activities in Belgium (i.e. the regulated activities of Elia Transmission Belgium); 50Hertz Transmission (Germany), which comprises regulated activities in Germany; Non-regulated segment and Nemo Link, which comprises non regulated activities within Elia Group, Nemo Link, Elia Grid International, Eurogrid International, re.alto, WindGrid and the financing cost linked to the acquisition of an additional 20% stake in Eurogrid GmbH in 2018.
For the first six months of 2022, revenue totalled €1,952.1 million, up 48.8% compared to the previous period. This increase was driven by higher revenues in Belgium (+€198.6 million) and Germany (+€464.2 million), which were partially offset by lower revenues from Elia Grid International ( €1.2 million).
EBIT 296.3 265.3 11.7%
Rounding In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some variances may not add up.
Net profit attributable to the group 166.9 134.5 24.1%
Hybrid securities 9.6 9.6 0.0%
Revenue, other income and net income (expense) from settlement mechanism 1,952.1 1,311.9 48.8%
Key figures (in € million)
1.Business performance review
Reported earnings per share (in €) (Elia share) 2.29 1.82 25.8%
Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2021
EBIT increased compared to the previous period, totalling €296.3 million (+11.7%), driven by a higher EBIT in both Belgium (+€11.3 million) and Germany (+€13.9 million). For Belgium, this increase was the result of a higher regulated net profit, higher depreciations linked to the growing asset base and higher financial costs all passed through into revenue. In Germany, the higher EBIT was mainly a result of higher investment remuneration and lower operational expenditures as prior year costs were marked by a peak in the maintenance cycle. Associates contributed
Non controlling interests 19.8 16.0 23.8%
Equity attributable to owners of the company per share (in €) 63.4 61.1 3.8% See the glossary for definitions See Section 6 for information on adjusted items
Financial
strongly to the Group’s EBIT up to €24.5 million, mainly driven by the high contribution of the Nemo Link interconnector, which amounted to €22.8 million (+€7.3 million).
In the first half of the year, Elia Group invested €623.6 million with a focus on projects that are aimed at strengthening the backbone in both the Belgian and German grids and integrating increasing amounts of renewable energy into the system. Elia Group carried a total net financial debt of €3,503.8 million ( €1,382.5 million) at the end of June 2022. The decrease was driven by on one hand the capital increase that took place at the end of June (€590.1 million) and on the other hand a strong decrease in net debt at 50Hertz. This decrease in net debt in Germany ( €688.4 million) is entirely driven by high EEG cash in (+€1,024.8 million) which resulted from the very high energy market prices, while the investment programme was mainly financed from operating cash flow. In Belgium, Elia’s net debt dropped slightly ( €85.5 million) with organic growth financed entirely by cash flow from operating activities.
Elia Transmission (Belgium) achieved strong results with an adjusted net profit of €74.2 million (+€12.1 million). The higher result is mainly due to a higher fair remuneration driven by the increase of equity, a higher performance on incentives, a positive regulatory settlement and the one off tariff compensation for the financial cost linked to the capital increase.
Elia Group’s adjusted net profit increased by 24.1%, reaching €186.7 million:
The net profit of Elia Group attributable to the owners of ordinary shares (after deducting the €19.8 million in non controlling interest and €9.6 million attributable to hybrid securities holders) was up by 26.0%, reaching €157.4 million. This increase was driven by the realisation of investments in Belgium and Germany, a higher remuneration in Belgium following the capital increase and a strong performance from Nemo Link.
50Hertz Transmission (Germany) (on a 100% basis) recorded a higher adjusted net profit of €98.7 million (+€18.8 million). This result is mainly driven by higher investment remuneration from asset growth, a reduction in onshore operational costs following last year’s peak in maintenance, higher financial result driven by lower long term provisions and partially offset by higher depreciations.
Elia Group | 2022 half year results 4
The non-regulated segment and Nemo Link posted strong results with an adjusted net profit of €13.9 million (+€5.5 million), which were driven by the strong performance of Nemo Link these due to the full availability of the interconnector and high market price spreads and partially offset by higher holding costs and the set up of WindGrid.
Elia Group’s average costs of debt remained flat at 1.7%, as no new debt has been contracted. Standard & Poor’s credit rating of Elia Group remained BBB+ with a stable outlook.
Equity attributable to owners of the company rose by €815.8 million to €5,367.8 million (+17.9%). This increase was mainly due to the net proceeds of the rights issue of €583.2 million, the profit attributable to the owners of the company (+€166.9 million), the revaluation of post employment benefit obligations ( €2.9 million) and the revaluation of a financial participation in EEX (+€26.2 million) and was offset by the 2021 dividend payment ( €120.3 million). In addition, the hedge reserve increased by €165.5 million, mainly due the revaluation of future contracts for grid losses by 50Hertz (+€152.3 million) and an interest rate hedge by ETB (+€13.0 million).
Highlights
Elia Transmission key figures (in € million) 1H 2022 1H 2021 Difference (%)
Net finance costs (31.4) (31.7) (0.9%) Income tax expenses (21.3) (21.8) (2.3%)
Adjusted items on net profit 0.0 0.0 n.r. Adjusted net profit 74.2 62.1 19.5%
Equity accounted investees 1.7 1.2 41.7% EBITDA 232.1 216.0 7.5% EBIT 126.9 115.6 9.8%
Total equity 2,822.7 2,445.5 15.4%
Free cash flow (259.5) (117.6) 120.7%
See the glossary for definitions
Financial
Net financial debt 3,355.5 3,441.0 (2.5%)
Segment reporting Elia Transmission (Belgium)
Key results
Elia Group | 2022 half year results 5
See section 6 for information on adjusted items
Key figures of the financial position (in € million) 2022 2021 Difference (%)
Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2021
Investment programme on track to deliver needed infrastructure for driving the energy transition Higher fair remuneration driven by growing asset base and a higher equity following the capital increase by Elia OneGroupoff tariff compensation for the financial costs linked to the capital increase
Revenue, other income and net income (expense) from settlement mechanism 733.4 534.8 37.1% Revenues 648.7 475.2 36.5% Other income 35.0 32.7 7.0% Net income (expense) from settlement mechanism 49.7 26.9 84.6%
Net profit 74.2 62.1 19.5%
Elia Transmission's revenue was up 37.1% compared with 2021, increasing from €534.8 million to €733.4 million. Revenue was impacted by a higher regulated net profit, higher depreciations linked to the growing asset base, one off tariff compensation for the financial cost linked to the capital increase (i.e. portion allocated to ETB) and higher costs for ancillary services. Higher ancillary services resulted from the high gas prices caused by the war in Ukraine and the increase of imbalance volume caused by the increase of the renewables share.
1.1.1
Total assets 7,438.6 7,153.5 4.0%
(in € million)
Revenues from the management and development of grid infrastructure, the management of the electrical system, the market integration and the grid connection remained flat compared to prior year.
1H 2021 Difference (%)
Last mile connection 1.6 1.4 17.9% Other revenue 0.0 0.8 (100.0%)
The table below provides more details on the changes in the various revenue components:
1H 2022
Services rendered in the context of energy management and individual balancing of balancing groups are paid under revenues from compensation for imbalances. These revenues, which increased from €101.6 million to €168.1 million (+65.4%), were largely due to the tariff for maintaining and restoring the residual balance of individual access responsible parties (+€67.7 million). The higher balance activation costs due to the increase of gas prices caused by the war in Ukraine and the increase of imbalance volume caused by the increase of renewables share (in particular offshore wind) which are more subject to forecast errors in the generation mix are the main drivers of the revenue increase.
The last mile connection (previously called transfer of asset from customers) was up compared to the previous year, while other revenues dropped by €0.8 million, mainly due to no works delivered to third parties.
The settlement mechanism increased from €26.9 million in 2021 to €49.7 million in 2022 and encompassed both deviations in the current year from the budget approved by the regulator ( €4.8 million) and the settlement of net surpluses from the previous tariff period (€54.5 million). The operating deficit ( €4.8 million), with respect to budgeted costs and revenue authorised by the regulator, will be recovered from consumers in a future tariff period. The deficit was primarily the result of higher costs for ancillary services (€105.1 million), higher influenceable costs (€95.1 million), a higher net profit (€10.4 million) and higher taxes (+€6.7 million) and was partially offset by an increase in tariff sales (€110.1 million), which was mainly driven by imbalance compensations, higher international and other sales (€108.4 million).
International revenue increased to €131.8 million (+476.3%), mainly due to increasing congestion income on the border with France since the beginning of the year. Indeed, the prices in France are higher than in the rest of Europe due to nuclear unavailability and Belgium, as direct neighbour of France, has a big share of the congestion revenues linked to price spread with France.
Total revenue and other income 733.4 534.8 37.1%
EBITDA rose to €232.1 million (+7.5%) due to a higher regulated net profit, higher depreciations linked to the growing asset base and higher financial costs all passed through into revenue. The EBIT increased more pronounced (+9.8%) mainly due the lower depreciations of assets not covered by tariffs being the intangible assets expensed during the previous regulatory period and activated under IFRS and for leasing contracts. The contribution of equity accounted investments increased to €1.7 million due to a higher contribution from HGRT.
Grid revenue: 647.1 473.0 36.8% Grid connection 22.2 22.2 0.0% Management and development of grid infrastructure 239.3 241.4 (0.9%) Management of the electrical system 74.3 73.5 1.1% Compensation for imbalances 168.1 101.6 65.4% Market integration 11.4 11.4 0.2% International revenue 131.8 22.9 476.3%
Other income 35.0 32.7 6.9%
Net income (expense) from settlement mechanism 49.7 26.9 84.6%
Subtotal revenue 648.7 475.2 36.5%
Elia Group | 2022 half year results 6
1. A higher fair remuneration (+€6.0 million) due to asset growth and higher equity. The fair remuneration includes the equity increase allocated to the Belgian regulated activities (€290.1 million) following Elia Group’s capital increase.
Adjusted net profit rose by 19.5% to €74.2 million, mainly due to the following:
Net finance cost remained flat ( 0.9%) compared to the previous year, mainly driven by the higher capitalisation of borrowing cost due to the growth of the asset base (€1.0 million) and partially offset by other financial costs. The financial costs linked to Elia Group’s capital increase are allocated to the Belgian regulated activities on a pro rata basis in accordance to the use of proceeds. Under IFRS, these costs (€3.4 million) are directly accounted through equity. ETB did not tap into the debt market over the first half of 2022 and has a well balanced debt maturity profile with no upcoming near term maturities. The average cost of debt remained at 1.9% at the end of June 2022 and all outstanding debt has a fixed coupon.
2. Increase in incentives (+€0.5 million), primarily linked to better performance of the timely commissioning and strong achievements on interconnection capacity.
Operational
5. Higher capitalised borrowing costs due to a higher level of assets under construction (+€0.9 million).
Total assets increased by €285.1 million to €7,438.6 million driven by the proceeds of the capital increase allocated to Elia Transmission (€290.1 million). As per 30 June 2022, this increase was not yet reflected in the statutory accounts of ETB but recorded as a receivable against Elia Group SA leading to a negative free cash flow of €259.5
The net offtake from the Elia network decreased by 1.2% from 31.2 TWh in 2021 to 30.8 TWh in 2022. Net injection on Elia network decreased by 9.0% from 36.1 TWh in 2021 to 32.8 TWh in 2022, mainly due to a lower nuclear availability in 2022 compared to 2021 but also a lower amount of production by gas units.
Themillion.
In 2022, Belgium was still a net exporter due to the highly available nuclear injection capacity. However, compared to 2021, the net exports decreased from 5.2 TWh in 2021 to 3.7 TWh in 2022 linked to the lower nuclear injection. Total exports slightly decreased from 11.5 TWh (2021) to 11.0 TWh (2022). Total imports increased from 6.3 TWh in 2021 to 7.3 TWh in 2022.Overall electricity flows between Belgium and its neighbouring countries increased from 20.0 TWh in 2021 to 21 TWh in 2022.
Elia Group | 2022 half year results 7
3. One off tariff compensation for the financial costs linked to the capital increase (+€3.4 million).
6. Other ( €0.9 million): this was primarily due to the lower depreciation of software and hardware (+€0.9 million) as some of the assets acquired during the previous regulatory period and covered by its regulatory methodology were written off. This is partially offset by higher damages to electrical installations ( €1.2 million), higher provisions for employee benefits ( €0.3 million) and deferred tax effects ( €0.1 million).
4. Regulatory settlements and the reversal of provision for the influenceable incentive following the Saldi 2021 review (+€2.2 million).
Equity increased to €2,822.7 million (+€377.2 million) mainly due to the reservation of the profit (+€74.2 million), the net proceed from the capital increase of €286.6 million (i.e. the portion allocated to the Belgian regulated activities net of issuing cost), the fair value of an interest rate hedge (+€13.0 million), a lower allocation of equity towards Nemo Link (+€6.3 million). This was partially offset by the revaluation of post employment benefit obligations ( €2.9 million).
net financial debt remained flat at €3,355.5 million ( 2.5%), as Elia’s CAPEX programme was fully financed by cash flows from operating activities. The sustainability linked RCF (€650 million), which was extended with 2 years, and the commercial paper (€300 million), which was partially drawn at the end of 2021 (€60.0 million) are fully undrawn at the end of June 2022. Elia Transmission Belgium is rated BBB+ with a stable outlook by Standard & Poor’s.
The total load estimation decreased by 1.65 % from 42.8 TWh in 2021 to 42.1 TWh in 2022 mainly due to a decrease of the DSO gross consumption counterbalanced by a higher consumption of the Grid Users connected to Elia’s grid. The DSO consumption has been impacted by higher temperatures than last year, an increase of the local production on the distribution grid (mainly solar) and high electricity prices probably impacting the household’s consumption behaviour. The higher consumption of the Grid Users connected to Elia’s grid is mainly explained by the consumption of Sotel. Indeed, as of January 2022, Sotel decided to consume in Belgium instead of France due to higher prices in France. Indeed, the prices in France increased a lot following nuclear unavailability.
Investments
As part of the second phase of the Boucle de l’Est investment programme (€4.6 million), the existing Bévercé Bronromme Trois Ponts 70 kV overhead line is being replaced and upgraded by a new double 110 kV line across a distance of 25 km. The reconstruction of the line section Bevercé Bronromme (16.5km), started in 2020 and was commissioned by the end of 2021. The reconstruction works on the line section Bronromme Trois Ponts (8.5km) and the installation of new transformers in Bevercé and Butgenbach are currently ongoing and a commissioning is foreseen in 2023.
1 Including the capitalisation of software and IAS 23 (Borrowing costs), IFRS 15 (Revenue recognition Transfer of assets from customers) and IFRS 16 (Leasing), the total is €188.3 million
Elia continued to deliver on its investment plan. In the first half of 2022, Elia invested €203.91 million in its onshore and offshore grid infrastructure to facilitate the integration of large volumes of renewable generation into the grid, in order to sustainably electrify our society. Elia maintains its high voltage grid on a continual basis. In the first half of 2022, there were 145 replacement projects across the Belgian grid, amounting to a total investment of €53.8 million. As mentioned above, Elia continued to carry out important reinforcement works along the existing Belgian 380 kV Forbackbone.theupgrade of the Mercator Bruegel HTLS (€12.2 million), the permit has been received and constructions works started. The last reinforcement works between Avelgem and Avelin, part of the 380kV backbone between Mercator and France, will start in August and will be finalized by the end of the year. Regarding the Massenhoven Van Eyck Corridor (€17.2 million), construction works continue.
Elia Group | 2022 half year results 8
Net finance costs (7.8) (22.1) (64.7%) +€14.3 Income tax expenses (44.9) (35.4) 26.8% €9.5
Free cash flow 800.2 2,889.4 (72.3%) €2,089.1
Income, expenses, assets and liabilities are reported in the table at 100% See the glossary for the definitions See section 6 for information on adjusted items
Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2021
Higher result driven by asset growth and lower interest expenses for provisions, while onshore operating costs are maintained under control
Financial
Total assets 11,590.7 9,941.3 16.6% +€1,649.4
Elia Group | 2022 half year results 9
Key figures of the financial position (in € million) 2022 2021 Difference (%) Difference
50Hertz Transmission key figures (in € million) 1H 2022 1H 2021 Difference (%) Difference Revenue, other income and net income (expense) settlementfrom mechanism 1,249.1 784.9 59.1% +€464.2
Net profit 98.7 79.9 23.5% +€18.8 Of which attributable to the Elia group 78.9 63.9 23.5% +€15.0
Net debt decreased further compared to end of 2021, which is mainly driven by higher EEG cash flow due to rising energy prices
1.1.2 Segment reporting 50Hertz (Germany)
Total equity 2,130.5 1,928.7 10.5% +€201.8
Adjusted items on net profit 0.0 0.0 n.r. +€0.0
50Hertz Transmission’s total revenue and other income increased compared to 2021 (+59.1%).
Highlights
Net financial debt 326.5 1,014.9 (67.8%) €688.4
Investment plan on track, with good progress made on Ostwind 2 and SuedOstlink project
Revenues 991.1 764.0 29.7% +€227.1 Other income 51.2 45.1 13.5% +€6.1 Net income (expense) from settlement mechanism 206.8 (24.1) (958.1%) +€230.9
Key results
EBITDA 293.6 262.0 12.1% +€31.6 EBIT 151.3 137.4 10.1% +€13.9
Adjusted net profit 98.7 79.9 23.5% +€18.8
Other revenues (including last mile connection) decreased ( €2.4 million), mainly due to lower revenues received from the “Inter Transmission System Operator Compensation” (ITC). The ITC mechanism is based on an EU regulation and compensates TSOs for the costs of hosting cross border electricity flows on their networks. TSOs contribute/receive funds based on electricity flows onto/from their national transmission systems.
Energy revenue 431.7 135.3 219.1% Other revenue (incl. last mile connection) 0.5 2.8 (83.5%)
Total revenue and other income 1,249.1 784.9 59.1%
Other income rose (+€6.1 million), as a result of higher own work capitalised following the increase in staffing to execute and manage the investment programme (+€4.5 million). Furthermore, revenues from subsidies and grants increased (+€1.4 million), due to the amortisation of EU subsidies for the Kriegers Flak Combined Grid Solution interconnector as of July 2021.
Net income (expense) from settlement mechanism 206.8 (24.1) (958.2%)
1H 2022
Revenue from offshore regulation 147.8 157.0 (5.9%)
Revenues from incentive regulation consist of grid tariffs before the settlement mechanism and are driven primarily by the regulatory remuneration for onshore activities (revenue cap).
Grid revenue: 990.6 761.1 30.1%
Elia Group | 2022 half year results 10
Subtotal revenue 991.1 764.0 29.7% Other income 51.2 45.1 13.6%
Total revenues are detailed in the table below.
(in € million)
1H 2021 Difference (%)
Revenues from incentive regulation decreased by €57.7 million, coming from lower volume effects than last year and lower revenues from the revenue cap. The infeed of renewable energy into the distribution grid was higher than expected, leading to lower volumes in the transmission grid. Consequently, the volume effect was lower than in previous years ( €50.5 million). The revenue cap decrease ( €7.2 million) is mainly driven by the increase of payback for old regulatory balances via the regulatory account ( €33.6 million). Additionally, the pass through energy costs for reserve power plants decreased compared to last year ( €7.3 million). These effects were partially compensated by an increase of the allowance for onshore investments (+€10.9 million) as well as higher cost allowance for ancillary services (+€24.2 million).
Revenues from offshore surcharge include all revenues derived from the offshore grid surcharge. This includes regulatory remuneration for the connection of offshore wind farms, reimbursement of offshore liability payments and offshore costs charged to 50Hertz by third parties, e.g. other TSOs.
The offshore surcharge revenues decreased compared to the previous year ( €9.2 million) as the remuneration of 50Hertz’s own offshore grid connection costs decreased ( €10.4 million), driven by lower maintenance costs compared to previous year (cost plus regulation) and partially compensated by the ongoing CAPEX programme (e.g. Ostwind 2). The pass through costs charged to 50Hertz by third parties rise compared to the same period last year (+€1.2 million).
Energy revenues increased strongly compared to the previous year (+€296.4 million), due to the continuing rise in energy prices. The charges to other TSOs for redispatch measures increased (+€173.1 million), as did revenues from the compensation of involuntary exchange at the grid’s borders (+€19.3 million). Furthermore, higher control power costs were charged to the balancing groups (+€25.8 million) and revenues from the auctioning of interconnector capacities benefitted from the price developments (+€68.0 million).
Energy revenues include all revenues related to system operation and are mostly corresponding costs charged on to third parties, such as redispatch measures, costs for reserve power plants or control power costs. Revenues generated from auctioning interconnector capacity are also included in this section.
Revenue from incentive regulation 411.1 468.8 (12.3%)
Adjusted net profit increased to €98.7 million (+23.5%) as a result of:
The net regulatory income (expense) from settlement mechanism neutralises regulatory time lags. It consists of two components: firstly, the neutralisation of differences between cost allowances in the tariffs and the actual costs incurred for the current year (+€150.0 million); secondly, the balancing of said differences from prior years (+€56.8 million).
EBITDA increased to €293.6 million (+12.1%). The growing asset base benefitted the investment remuneration (+€28.0 million). Onshore maintenance costs decreased (+€1.6 million) compared to last year, as we ramp down from a peak in the maintenance cycle while focussing on operational efficiency and safety. In order to deliver on the energy transition and manage the increasing complexity of system operations in the future, we kept expanding our talent pool leading to higher personnel costs ( €1.8 million). Additionally, the digitalisation of the business is progressing as we face a need to efficiently manage the growing complexity of our system operations. Nevertheless, IT expenses slightly decreased compared to previous year (+€3.4 million). With the expansion of the business and following the recovery from the COVID 19 measures, operational expenses for areas such as consulting, external services and travelling slightly increased ( €0.7 million), while also the costs and revenues from service level agreements increased (+€1.3 million).
There was a less pronounced increase in EBIT (+€13.9 million) driven by higher depreciations ( €17.9 million) following the commissioning of projects. Furthermore, provisions remained flat (+€0.1 million) and no adjusted items occurred in 2022
2. Higher financial results (+€10.0 million), driven by the revaluation of provision for congestion income from interconnectors to be returned to grid customers based on upward revision of the interest forward curve.
The total equity increased by €201.8 million to €2,130.5 million. This increase is primarily driven by the higher hedge reserve for future contracts (+€190.4 million). Since 2021, 50Hertz applies hedge accounting on future contracts for grid losses. Due to the further increase in energy prices in the first half of the year, the fair value of these contracts increased to €628.4 million. Considering a deferred tax effect, a hedge reserve amounting to €440.3 million was recorded in other comprehensive income. As the costs for grid losses are almost fully passed through to the tariffs, the fair value of the future contracts has no relevance for the current and future profitability of the company.
Total assets rose by €1,649.4 million compared to 2021 mainly due to a favorable development of the EEG business and further progress on the investment programme. The free cash flow totalled €800.2 million and was heavily affected by the high cash inflow for the EEG account (+€1,024.8 million). The EEG cash flow was uplifted by the strong increase in energy prices, leading to higher cash in than expected. The parliament decided to reduce the EEG surcharge to zero as of 1 July 2022 in order to relieve households and companies in view of the increased electricity costs. In the future, the costs for promoting RES will be financed through the Energy and Climate Fund. 50Hertz will keep acting as a trustee.
In 2022, a net volume of 21.4 TWh was drawn off from the 50Hertz grid, 7.1% less than last year (23.1 TWh). As usual, we were a net exporter of electricity with a net export of 24.9 TWh (17.5 TWh in 2021); this followed from 34.9 TWh in exports and 10.0 TWh in imports (29.1 TWh and 11.6 TWh in 2021, respectively). As of June, the peak load was 8.0 GW (compared to 8.6 GW last year).
The net financial debt dropped by €688.4 million compared to end of 2021 due to the strong increase of the EEG cash balance, while the investment programme was financed from operating cash flow and existing liquidity. The EEG cash position as of June 2022 amounted to €3,134.8 million. 50Hertz did not tap into the debt market over the first half of 2022 and given all outstanding debt has a fixed coupon, the average cost of debt remained at 1.4% at the end of June 2022.
Elia Group | 2022 half year results 11
1. Higher investment remuneration (+€19.6 million) following the growth of the asset base.
3. Decreased onshore OPEX and other costs (+€1.7 million), mainly following the ramp down from last year’s peak of the maintenance cycle and lower digitalisation costs, partly offset by the growing workforce driven by the expanding business. These effects were partially offset by:
Operational
4. Higher depreciations ( €12.5 million), driven by the commissioning of projects.
Investments
Offshore investments mainly focused on the Ostwind 2 project (€94.6 million), with the next offshore wind farm connection (Ostwind 3) already advancing along the project pipeline (€8.5 million). Furthermore, the realisation of the connection of the offshore wind park Gennaker has started (€2.9 million).
Elia Group | 2022 half year results 12
50Hertz invested €419.7 million in 2022, up 89.4% compared to last year. In total, €303.6 million was invested in onshore projects, while offshore investments amounted to €116.1 million. The most significant onshore investments comprised the DC SuedOstLink line (€116.7 million); the upgrading of high voltage pylons to boost operational safety (€24.1 million); the restructuring of the substation Lauchstädt (€22.1 million); the overhead line in the southern Uckermark region (€17.5 million); and the restructuring and reinforcement of the overhead line between Wolmirstedt and Güstrow (€17.1 million).
Non regulated activities and Nemo Link Key figures (in € million)
Of which attributable to the Elia Group 13.9 8.4 65.5% Adjusted items on net profit 0.0 0.0 n.r. Adjusted net profit 13.9 8.4 65.5% Key figures of the financial position (in € million) 2022 2021 Difference (%)
1.1.3
See the glossary for definitions
Key results
Highlights
Equity-accounted investments contributed €22.9 million to the Group’s result, which is almost entirely attributable to Nemo Link. With an availability rate of 100%, Nemo Link remains one of the highest performing assets of its kind in the world. The very high revenues are the result of the many flow reversals and the fact that the Belgium electricity price in May and June was structurally much higher than the UK electricity price, the opposite was true from the months January until April. This mainly due to a 50% discount of spot NBP gas, which drives UK prices versus TTF gas, which drives continental EU prices and very low nuclear availability in France (only 45%). Nemo Link performed strongly leading to a total net profit of €45.6 million for the first half of 2022 and a contribution to Elia Group’s net profit amounting to €22.8 million.
Adjusted EBIT rose to €18.0 million (+€5.5 million). This increase was entirely due to the higher contribution from Nemo Link (+€7.3 million) and partially offset by higher operating costs at the holding linked to the pursuit of inorganic growth ambitions and the set up of WindGrid ( €1.0 million),higher costs for the development of re.alto ( €0.3 million) and other non regulated operating costs ( €0.8 million). Despite the drop in revenues, EGI’s EBIT increased (+€0.4 million), reflecting the cost control measures.
Elia Group | 2022 half year results 13
Total revenues and other income 18.3 14.2 28.9% Equity accounted investees 22.9 15.7 45.9% EBITDA 18.4 12.6 46.0% EBIT 18.0 12.5 44.0% Net finance costs (4.5) (4.3) 4.7% Income tax expenses 0.4 0.2 100% Net profit 13.9 8.4 65.5%
Net finance cost remained flat at €4.5 million, primarily comprising the interest cost linked to the senior bond (€2.4 million), the cost linked to the Nemo Link private placement (€1.1 million) and other financial costs linked to Elia Group SA. The pro rata costs linked to the capital increase of Elia Group and allocated to respectively Elia Group SA and Eurogrid International are directly recognised in equity under IFRS (€3.5 million).
Non-regulated revenue increased by 28.9% to €18.3 million compared to 2021. This is the result of lower revenues generated by Elia Grid International (‘EGI’) ( €1.2 million), as last year’s revenues benefited from the commissioning of a turnkey project, while the international consulting business is slowly recovering from the COVID 19 restrictions. This was offset by higher intersegment transactions mainly between Elia Group SA, Elia Transmission Belgium and 50Hertz. The effect of these intersegment transactions is disclosed in ‘Note 2.2. Segment reconciliation’.
1H 2022 1H 2021 Difference (%)
Segment reporting Non-regulated activities and Nemo Link
Total assets 2,218.0 1,654.0 34.1% Total equity 1,420.0 1,142.9 24.2% Net financial debt (178.2) 430.4 (141.4%)
Comparative figures for Total Assets, Equity and Net financial debt as at 31/12/2021
See Section 4 for information on adjusted items
Realising a positive contribution of €13.9 million to the Group’s result Nemo Link continuous to deliver a very strong operational and financial performance Set up of WindGrid led to higher operating cost at the holding
2. Higher result from EGI (+€0.6 million)
Elia Group | 2022 half year results 14
4. Lower contribution from re.alto ( €0.4 million)
1. Higher contribution from Nemo Link (+€7.3 million)
Adjusted net profit increased by €5.5 million to €13.9 million, mainly as a result of:
3. Higher holding costs driven by business development activities and set up of WindGrid ( €1.3 million)
5. Other items ( €0.7 million) driven by lower regulatory rejections (+€0.1 million) and offset by higher other non regulated costs ( €0.8 million).
Total assets increased by 34.1% amounting to €2,218.0 million (+€564.0 million) and the net financial debt dropped significantly ( €608.7 million) due to the net proceeds of the capital increase (€583.2 million). The portion of the proceeds allocated to respectively ETB (€290.1 million) and Eurogrid GmbH (€200 million) will take place in the third quarter of 2022 when the statutory capital increase will be effective.
The undersigned Chairman of the Management Committee and Chief Executive Officer Chris Peeters and Chief Financial Officer Catherine Vandenborre declare that to the best of their knowledge:
Chris ChairmanPeetersofthe Management Committee & Chief Executive Officer
Brussels, 26 July 2022
2.Statement on the true and fair view of the condensed consolidated interim financial statements and the fair overview of the interim management report
b) the interim management report includes a fair overview of the information required under Article 13, paragraphs 5 and 6 of the Royal Decree of 14 November 2007 on the obligations of issuers of financial instruments admitted to trading on a regulated market.
a) the condensed consolidated interim financial statements, which have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union, give a true and fair view of the equity, financial position and financial performance of the company, and the entities included in the consolidation as a whole,
Catherine Vandenborre Chief Financial Officer
Elia Group | 2022 half year results 15
Trade and other receivables (4.9) 1,100.4 861.3
Deferred tax liabilities (4.12) 341.1 209.7
CURRENT LIABILITIES 5,945.3 4,734.6
Provisions 119.3 125.6
Equity attributable to ordinary shares: 4,656.8 3,850.6
Share premium (4.6) 734.8 262.9
Intangible assets (4.8) 164.2 148.6
Other financial assets (4.11) 435.4 136.3
Other liabilities 285.8 289.5
NONASSETSCURRENT ASSETS
EQUITY 5,794.5 4,938.4
Treasury shares (1.7) (0.8)
Condensed consolidated statement of financial position
Inventories 20.9 21.6
Employee benefits 102.7 104.9
Trade and other payables 5,192.0 3,696.4
Loans and borrowings (4.10) 70.6 194.0
Goodwill 2,411.1 2,411.1
CURRENT ASSETS 5,822.0 4,276.8
(in € million) As at Notes 30 June 2022 31 December 2021
Loans and borrowings (4.10) 7,716.9 7,741.7
Deferred charges and accrued revenues 32.2 18.1
Deferred tax assets (4.12) 1.4 1.9
Reserves 176.2 173.0
Hedging reserve 362.6 197.1
Cash and cash equivalents 4,283.7 3,049.5
Retained earnings (4.7) 1,564.3 1,509.2
Trade and other receivables non current 0.5 0.5
NON CURRENT LIABILITIES 8,565.7 8,471.3
Equity attributable to hybrid securities holders 711.0 701.4 Non controlling interest 426.7 386.4
Current tax liabilities 24.5 26.8
Share capital (4.6) 1,820.5 1,709.2
Accruals and deferred income 650.0 809.8
Total equity and liabilities 20,305.6 18,144.3 The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Elia Group | 2022 half year results 16
EQUITY AND LIABILITIES
3.Condensed consolidated interim financial statements
Provisions 8.3 7.7
Other financial assets 334.0 316.2
14,483.7 13,867.5
Total assets 20,305.6 18,144.3
Equity attributable to owners of the Company 5,367.8 4,552.0
Current tax assets 50.8 10.1
Equity accounted investees (4.4) 279.1 309.6
Property, plant and equipment (4.8) 11,192.0 10,859.5
Elia Group | 2022 half year results 17
Condensed consolidated statement of profit or loss
Profit for the period 186.7 150.5
Profit before income tax 252.5 207.4 Income tax expense (4.13) (65.8) (56.9)
Earnings per share (in €) Basic earnings per share 2.29 1.82 Diluted earnings per share 2.29 1.82 For a segmentation of the revenue, we refer to chapter 1 Business Performance Review. The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Net profit 186.7 150.5 Profit attributable to: Equity holders of the parent equity holders of ordinary shares 157.4 124.9 Equity holders of the parent hybrid securities 9.6 9.6 Non controlling interest 19.8 16.0
Earnings before interest and tax (EBIT) 296.3 265.3
Net finance costs (43.8) (57.9) Finance income 0.8 2.3 Finance costs (44.6) (60.2)
Revenue 1,618.6 1,234.0 Raw materials, consumables and goods for resale (29.3) (51.3) Other income 77.0 75.1 Net income (expense) from settlement mechanism 256.5 2.8 Services and other goods (1,205.5) (603.6) Personnel expenses (177.0) (163.6) Depreciation, amortisation and impairment (247.3) (225.7) Changes in provisions (0.5) 0.6 Other expenses (20.7) (19.8)
(in € million) Six-month period ended 30 June Notes 2022 2021
Share of profit of equity accounted investees (net of tax) 24.5 16.8
Results from operating activities 271.8 248.5
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Total comprehensive income attributable to: Equity holders of the parent ordinary shareholders 346.1 133.3 Equity holders of the parent hybrid securities holders 9.6 9.6 Non controlling interest 64.4 16.0
Elia Group | 2022 half year results 18
Remeasurements of post employment benefit obligations (3.9) 10.9
Net changes in fair value of investments 32.7 0.1 Related tax 1.0 (2.7)
Net profit 186.7 150.5 Other comprehensive income (OCI)
(in € million) Six-month period ended 30 June Notes 2022 2021
Total comprehensive income for the period 420.1 158 9
Other comprehensive income for the period, net of tax 233.4 8.4
Total comprehensive income for the period 420.1 158 9
Condensed consolidated statement of profit or loss and other comprehensive income
Items that will not be reclassified to profit or loss:
Foreign currency translation differences of foreign operations 0.0 0.0 Related tax (86.8) (0.1)
Net changes in fair value of cash flow hedges 290.4 0.3
Items that may be reclassified subsequently to profit or loss:
Total contributions and distributions 0.2 0.4 (129.5) (128.9) 9.6 (119.3) (24.0) (143.3)
Hybrid: dividend accrual (9.6) (9.6) 9.6 0.00 0.0
Balance at 1 January 2021 1,709.1 262.4 (3.3) 173.0 1,330.5 3,471.7 701.4 4,173.1 326.9 4,500.0
equityTotal
Acquisition of treasury shares (0.9) (0.9) (0.9) (0.9)
Total comprehensive income for the period 0.2 142.7 142.9 142.9 16.0 158.9
Issuance costs (6.9) (6.9) (6.9) (6.9)
capitalShare Sharepremium reserveHedging Reserves sharesTreasury earningsRetained toattributableEquity sharesordinary toattributableEquity securitieshybrid toattributableEquity theofownersthe company controllingNon interests
Total contributions and distributions 111.3 471.9 0.0 3.2 (0.9) (135.1) 450.4 9.6 460.0 (24.0) 436.0
Shares issued 0.2 0.4 0.6 0.6 0.6 Issuance costs
Hybrid: dividend accrual (9.6) (9.6) 9.6 0.0 0.0
Total transactions with owners 111.3 471.9 0.0 3.2 (0.9) (135.1) 450.4 9.6 460.0 (24.0) 436.0
Balance at 1 January 2022 1,709.2 262.8 197.1 173.0 (0.8) 1,509.2 3,850.6 701.4 4,552.0 386.4 4,938.4
Dividends to non controlling interests (24.0) (24.0) Dividends (120.3) (120.3) (120.3) (120.3) Other 3.2 (2.9) 0.3 0.3 0.3
Balance at 30 June 2022 1,820.5 734.7 362.6 176.2 (1.7) 1,564.3 4,656.8 711.0 5,367.8 426.8 5,794.5 accompanying notes are an integral part of these condensed consolidated interim financial statements
Other comprehensive income 165.5 23.3 188.8 188.8 44.6 233.4
Condensed consolidated statement of changes in equity
Shares issued 118.2 471.9 590.1 590.1 590.1
Hybrid: tax effect on dividend accrual (2.4) (2.4) (2.4) (2.4)
Other comprehensive income 0.2 8.1 8.3 8.3 0.0 8.4
Profit for the period 167.0 167.0 167.0 19.8 186.7
Hybrid: tax effect on dividend accrual (2.4) (2.4) (2.4) (2.4) Dividends to non controlling interests (24.0) (24.0) Dividends (117.5) (117.5) (117.5) (117.5)
Elia Group | 2022 half year results 19
Profit for the period 134.5 134.5 134.5 16.0 150.5
Total comprehensive income for the period 165.5 0.0 0.0 190.2 355.7 355.7 64.4 420.1
Transactions with owners, recorded directly in Contributionsequityby and distributions to Owners
Transactions with owners, recorded directly in Contributionsequityby and distributions to Owners
(in € million) Six month period ended 30 June
Total transactions with owners 0.2 0.4 (129.5) (128.9) 9.6 (119.3) (24.0) (143.3)
Balance at 30 June 2021 1,709.3 262.8 (3.1) 173.0 1,343.6 3,485.6 711.0 4,196.7 318.9 4,515.6
The
Change in loans and borrowings 1.6
Change in other current liabilities (180.7) 75.5
(in € million) Six-month period ended 30 June Notes 2022 2021
Condensed consolidated statement of cash flows
Dividend received 22.1 9.0 Net cash used in investing activities (532.3) (394.4)
Cash flow from financing activities
Cash flows from operating activities
Net cash flow from (used in) financing activities 349.2 (352.2)
Dividends to non controlling parties (24.0) (24.0) Repayment of borrowings (4.10) (89.0) (725.7)
Profit for the period 186.7 150.5 Adjustments for:
Change in trade and other payables 1,393.8 953.9
Cash flows from investing activities
Proceeds from the issue of share capital 590.1 0.6 Expenses related to the issue of share capital (6.9) 0.0
Change in deferred taxes 43.7 5.5
Change in inventories 0.3 (3.6)
Net finance costs 49.5 57.9
Changes in working capital 1,026.9 1,813.7 Interest paid (67.1) (68.9) Interest received 0.7 2.3 Income tax paid (64.1) (55.6)
Proceeds from sale of property, plant and equipment 18.8 2.8
Profit or loss of equity accounted investees, net of tax (24.5) (16.8)
Cash & Cash equivalents at 30 June 4,283.7 2,015.6
Acquisition of intangible assets (4.8) (19.4) (16.7)
Proceeds from capital decrease from equity accounted investees 33.0 2.0
Change in provisions (0.8) 0.3
Proceeds from sales of investments 0.0 1.6
Elia Group | 2022 half year results 20
Depreciation of property, plant and equipment and amortisation of intangible assets 247.3 225.8
Net increase (decrease) in cash and cash equivalents 1,234.3 1,425.5
Impairment losses of current assets 0.5 0.8
Purchase of own shares (0.7) 0.0
Net variations in cash & cash equivalents 1,234.3 1,425.5
The accompanying notes are an integral part of these condensed consolidated interim financial statements
Change in trade and other receivables (4.9) (174.0) 794.3
Cash & Cash equivalents at 1 January 3,049.4 590.1
Other non cash items 1.1 0.3
Current income tax expense 22.1 51.4
Net cash from operating activities 1,417.3 2,172.1
Acquisition of property, plant and equipment (4.8) (586.9) (393.1)
Proceeds from withdrawal of borrowings 0.0 514.4
Dividend paid (4.7) (120.3) (117.5)
Cash flow from operating activities 520.8 480.6
Change in other current assets (12.5) (6.3)
Loss / proceeds on sale of property, plant and equipment and intangible assets (4.8) 3.5
4.Notes to the condensed consolidated interim financial statements
The condensed consolidated interim financial statements were prepared in accordance with IAS 34 Interim Financial Reporting, issued by the IASB as approved by the European Union.
The group also has a 50% stake in Nemo Link Ltd, which constructed an electrical interconnector between the UK and Belgium: the Nemo Link interconnector. Nemo Link Ltd is a joint venture between Elia Transmission Belgium SA/NV and National Grid Ventures (from the UK). It began its commercial operations on 30 January 2019, with a transfer capacity of 1000 MW.
Elia Group NV/SA (hereinafter the ‘Company’) is established in Belgium, having its head office at Boulevard de l’Empereur 20, B 1000 Brussels.
4.2 Basis for preparation and changes to the Group's accounting policies
The Company is a limited liability company, with its shares listed on Euronext Brussels, under the symbol ELI.
Elia Group | 2022 half year results 21
The Elia group comprises two electricity transmission system operators (TSOs): Elia Transmission Belgium SA/NV in Belgium and 50Hertz Transmission GmbH, in which the Elia group holds an 80% stake. 50Hertz Transmission GmbH is one of Germany’s four transmission system operators; it operates in the north and east of the country.
The condensed consolidated interim financial statements were approved by the Board of Directors of Elia Group SA/NV on 26 July 2022
Basis for preparation
The condensed consolidated interim financial statements do not include all the information and disclosures required for a complete set of IFRS financial statements and should be read in conjunction with the Group’s last annual consolidated financial statements for the year ended 31 December 2021. However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Group's position and performance since the last annual consolidated financial statements.
With around 2,750 employees and a transmission system that comprises some 18,990 km of high voltage connections and serves 30 million end consumers, the Elia group is one of Europe’s top five TSOs. It efficiently, reliably and securely transports electricity from generators to distribution system operators and major industrial consumers, while also importing and exporting electricity from and to neighbouring countries. The group is a driving force behind the development of the European electricity market and the integration of energy generated from renewable sources. In addition to its transmission activities in Belgium and Germany, the Elia group offers businesses a range of consultancy and engineering services. The group operates under the legal entity Elia Group SA/NV, which is a listed company whose reference shareholder is municipal holding company Publi T SC.
4.1 General information
4.2.1 Basis for preparation and new standards
There were no changes in the accounting policies for the Group compared to the Annual Report 2021. We refer to this Annual Report for a detailed overview of the accounting policies used.
The below standards and interpretations are published, but not yet applicable for the annual period beginning on 1 January 2022 and are not expected to have a material impact for the Group and are therefore not set out in detail:
These new, revised or amended standards did not have a material impact on the consolidated financial statements of the Group.
Amendments to IAS 12 Income Taxes: implementation of a comprehensive balance sheet method of accounting for income taxes (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU).
The accounting policies applied when preparing the condensed consolidated interim financial statements are consistent with those used to prepare the Group's annual consolidated financial statements for the year ended 31 December 2021.
Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 Comparative Information (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the AmendmentsEU);
to IAS 1 Presentation of Financial Statements: Classification of liabilities as Current or Non current (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the AmendmentsEU);
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (applicable for annual periods beginning on or after 1 January 2023);
Annual Improvements to IFRS Standards 2018 2020 (applicable for annual periods beginning on or after 1 January 2022)
to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies (applicable for annual periods beginning on or after 1 January 2023);
IFRS 17: Insurance Contracts (applicable for annual periods beginning on or after 1 January 2023);
Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework (applicable for annual periods beginning on or after 1 January 2022);
Amendment to IFRS 16 Leases: COVID 19 Related Rent Concessions beyond 30 June 2021 (applicable for annual periods beginning on or after 1April 2021);
Standards, interpretations and amendments, effective as from 1 January 2022, can be summarised as follows:
New standards, interpretations and amendments adopted by the Group
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets; Onerous Contracts Cost of Fulfilling a Contract (applicable for annual periods beginning on or after 1 January 2022);
Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (applicable for annual periods beginning on or after 1 January 2022);
Standards issued but not yet effective
Elia Group | 2022 half year results 22
The impacts of the current market volatility and macroeconomic developments were taken into account by the group to assess potential effects on Elia’s financial performance and the valuation of its assets and liabilities In particular, key assumptions used in the calculation of the post employments obligations have been reviewed to ensure a proper valuation as per 30 June 2022.
The impact of the war in Ukraine on our activities
Elia Group | 2022 half year results 23
Given the nature and location of its operations and the fact that Elia Group does not currently have activities in Russia nor in Ukraine or with Russian companies, Elia Group does not foresee a direct impact of the Ukrainian conflict on its business. However, there is a strong push at the European level to become less dependent from Russian gas and fossil fuels. Accordingly, the Group observes a willingness among the authorities in Belgium and Germany to accelerate the energy transition. This could lead to an increase of the Group’s investment program over the mid term. In addition, with regard to the increasing inflation rates, no material negative profit impact is expected by Elia Group under its regulatory frameworks.
4.3 Use of estimates and judgements
The condensed consolidated interim financial statements for the first half of 2022 were prepared using estimates and judgements as indicated in note 2.5 accompanying the Group’s annual consolidated financial statements as of and for the year ended 31 December 2021
Elia Asset NV/SA Belgium Bd de l’Empereur 20, 1000 Brussels 99.99 99.99
Elia Engineering NV/SA Belgium Bd de l’Empereur 20, 1000 Brussels 100.00 100.00
50Hertz Transmission GmbH Germany Heidestraße 2, 10557 Berlin 80.00 80.00
European Energy Exchange (EEX) Germany Augustusplatz 9, 0409 Leipzig 4.32 4.32
Investments accounted for using IFRS9 - other shareholdings
TSCNET Services GmbH Germany Dingolfinger Strasse 3, 81673 Munich 5.36 5.36 Kurt Sanderling Akademie des Konzerthausorchester Berlin Germany Gendarmenmarkt, 10117 Berlin 8.32 8.32
Elia Transmission Belgium NV/SA Belgium Bd de l’Empereur 20, 1000 Brussels 99.99 99.99
H.G.R.T S.A.S. France 1 Terrasse Bellini, 92919 La Défense Cedex 17.00 17.00
Elia Re SA Luxembourg Rue de Merl 65, 2146 Luxembourg 100.00 100.00
Elia Grid International Pte. Ltd. Singapore 20 Collyer Quay #09 01, Singapore 049319 90.00
Investments accounted for using the equity method Joint Ventures
Subsidiaries
Eurogrid GmbH Germany Heidestraße 2, 10557 Berlin 80.00 80.00
Elia Grid International NV/SA Belgium Bd de l’Empereur 20, 1000 Bussels 90.00 90.00
For detailed accounting policies in respect to ‘Business combinations and Goodwill’, we refer to note 3.1 in the Group’s annual consolidated financial statements as at and for the year ended 31 December 2021
Elia Group | 2022 half year results 24
Eurogrid International NV/SA Belgium Bd de l’Empereur 20, 1000 Brussels 100.00 100.00
4.4 Subsidiaries, joint ventures and associates
Coreso NV/SA Belgium Avenue de Cortenbergh 71, 1000 Brussels 22.16 22.16
Re.Alto Energy BV/SRL Belgium Bd de l’Empereur 20, 1000 Brussels 100.00 100.00 Re.Alto Energy GmbH Germany Ratingstraße 9, 40213 Dusseldorf 100.00 100.00
In the next few years, large scale investments in renewable energy production and the offshore grid are due to be undertaken. To make a fundamental contribution to the accelerated development of offshore energy, Elia Group created during the period a new subsidiary: WindGrid.
JAO SA Luxembourg 2, Rue de Bitbourg, 1273 Luxembourg Hamm 7.20 7.20
Group structure
50Hertz Offshore GmbH Germany Heidestraße 2, 10557 Berlin 80.00 80.00
Elia Grid International LLC Saudi Arabia Al Akaria Plaza Olaya Street, Al Olaya Riyadh 11622 90.00 90,00
Elia Grid International GmBH Germany Heidestraße 2, 10557 Berlin 90.00 90.00
Nemo Link Ltd. United Kingdom Strand 1 3, London WC2N 5EH 50.00 50.00
The below table provides an overview of subsidiaries, joint ventures, associated companies and other shareholdings held across the group.
Windgrid NV/SA Belgium Bd de l’Empereur 20, 1000 Brussels 100.00
Name Country establishmentof Headquarters Stake % 2022 2021
Investments accounted for using the equity method Associates
Elia Group
Net income (expense) from settlement mechanism 49.7 206.8 0.0 0.0 256.5
Net financial debt 3,355.5 326.5 (178.2) 0.0 3,503.8
Total assets 7,438.6 11,590.7 2,218.0 (941.7) 20,305.6
We refer to chapter 1 for a detailed description of the performance per segment. In the table below, the segment reconciliation is provided.
Earnings before interest and tax (EBIT) 126.9 151.3 18.0 0.0 296.3
Income tax expenses (21.3) (44.9) 0.4 0.0 (65.7)
Earnings before depreciation, amortisation, interest and tax (EBITDA) 232.1 293.6 18.4 0.0 544.2
Capital expenditures 188.3 419.7 0.4 0.0 608.4
Elia Group | 2022 half year results 25
Profit attributable to the owners of the company 74.2 78.9 13.9 (0.0) 167.0
Share of profit of equity accounted investees, net of tax 1.7 0.0 22.9 0.0 24.6
Consolidated statement of financial position (in € million) 30.06.2022 30.06.2022 30.06.2022 30.06.2022 30.06.2022
Depreciation, amortisation, impairment and changes in provisions (105.2) (142.3) (0.3) 0.0 (247.8)
Consolidated results (in € million) − period ended 30 June 2022 2022 2022 2022 2022 TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink Consolidationentries&intersegmenttransactions
4.5 Segment reconciliation
Finance income 0.5 0.2 3.5 (3.4) 0.8 Finance costs (32.0) (8.0) (8.0) 3.4 (44.6)
( a ) ( b ) ( c ) ( d ) ( a ) + ( b ) + ( c ) + ( d )
Revenue 648.7 991.1 4.4 (25.6) 1,618.6 Other income 35.0 51.2 13.9 (23.0) 77.1
Results from operating activities 125.2 151.3 (4.8) 0.0 271.7
Elia Group
Profit attributable to the owners of the company 62.1 63.9 8.4 0.0 134.5
Results from operating activities 114.4 137.4 (3.2) (0.2) 248.5
Consolidated statement of financial position (in € million) 31.12.2021 31.12.2021 31.12.2021 31.12.2021 31.12.2021
All revenues are earned from external customers.
Earnings before interest and tax (EBIT) 115.6 137.4 12.5 (0.2) 265.3
Total assets 7,153.5 9,941.3 1,654.0 (604.4) 18,144.4
Capital expenditures 417.2 880.4 1.6 0.0 1,299.2
( a ) ( b ) ( c ) ( d ) ( a ) + ( b ) + ( c ) + ( d )
TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink Consolidationentries&intersegmenttransactions
Elia Group | 2022 half year results 26
Net income (expense) from settlement mechanism 26.9 (24.1) 0.0 0.0 2.8
Depreciation, amortisation, impairment and changes in provisions (100.4) (124.5) (0.2) 0.0 (225.1)
30 June 2021 2021 2021 2021 2021
Finance income 0.8 1.5 0.0 0.0 2.3 Finance costs (32.5) (23.6) (4.3) 0.2 (60.2) Income tax expenses (21.8) (35.4) 0.2 0.0 (56.9)
Net financial debt 3,441.0 1,014.9 430.4 0.0 4,886.3
− Year
Revenue 475.2 764.0 2.8 (7.9) 1,234.0
Earnings before depreciation, amortisation, interest and tax (EBITDA) 216.0 262.0 12.6 (0.2) 490.4
Share of profit of equity accounted investees, net of tax 1.2 0.0 15.7 0.0 16.8
Other income 32.7 45.1 11.4 (14.2) 75.1
Consolidated results (in € million) ended
Elia Group | 2022 half year results 27
4.6 Share capital
4.9 Current assets – Trade and other receivables
A net sum of €608.4 million was invested in the entire Elia Group, of which €188.3 million in the Belgian segment and €419.7 million in the German segment in the first half of 2022. This amount includes €19.7 million intangible fixed assets (mainly licenses and software) and € 588.7 million tangible fixed assets (mainly machinery and equipment related to the grid) see section 1.1 and 1.2 here above for more details.
Acquisitions and disposals of (in)tangible fixed assets
The increase of trade and other receivables from €861.3 Million at 31 December 2021 to € 1,100.4 Million at 30 June 2022 is mainly related to the German Segment, where the deposits to secure futures contracts increased from €0.3 million to €333.1 million.
4.7 Dividends
The successful rights offering will allow Elia Group to finance important investment projects that will drive the energy transition forward in its home markets. The listing of the new Elia Group shares on Euronext Brussels took place on 28 June 2022.
As at 30 June 2022, the Group had a commitment of €2,850.7 million (€2,068.4 million end of 2021) relating to purchase contracts for the installation of property, plant and equipment for further grid extensions.
On 24 June 2022, Elia Group SA/NV successfully completed a public offering of new shares to existing shareholders and any holders of an extra legal preferential right. Through this offering, the capital of Elia Group SA/NV has increased by an amount of €118.2 million along with an increase in share premium of €471.9 million for which 4.739.865 new shares have been issued at a subscription price of €124.5 per share. €6.9 million of costs were incurred in relation to the capital increase.
4.8
On 17 May 2022, the shareholders approved payment of a gross dividend of €1.75 per share, corresponding to a total gross dividend of €120.3 million.
Amountnon-current Amount current Interestrate
Lease debts 78.5 13.4
Total bank loans 253.7 14.0
Total other loans 150.0
Amortising term loan 2033 Linear 153.7 14.0 1.80% European Investment Bank 2025 At maturity 100.0 1.08%
Total bonds 7,234.6 8.3
Loan with KfW 2026 At maturity 150.0 0.90%
Maturity Redemptionschedule
(i) € 77 million in the segment Elia Transmission (Belgium) (€60.0 million of Commercial Paper, €14.0 million of capital repayment of the amortizing loan and €3.0 million of lease payments
Eurobond issues 2013/15 years
Registered bond 2014 2044 At maturity 50.0 3.00%
Senior bond 2018/10 years 2028 At maturity 298.1 1.50% Eurobond issues 2019/7 years 2026 At maturity 498.8 1.38% Eurobond issues 2020/10 years 2030 At maturity 790.3 0.88% Amortising bond 7.7 years 2028 Linear 42.0 8.3 1.56% Amortising bond 23.7 years 2044 Linear 132.4 1.56% Bond as part of Debt Issuance Programme 2015 2025 At maturity 498.8 1.88% Bond as part of Debt Issuance Programme 2015 2023 At maturity 749.5 1.63% Bond as part of Debt Issuance Programme 2015 2030 At maturity 139.3 2.63% Bond as part of Debt Issuance Programme 2016 2028 At maturity 747.9 1.50% Bond as part of Debt Issuance Programme 2020 2040 At maturity 199.4 0.88% Bond as part of Debt Issuance Programme 2020 2032 At maturity 747.6 1.11% Bond as part of Debt Issuance Programme 2021 2028 At maturity 498.2 0.74%
Accrued interests 34.8
Total Loans and Borrowings (Current and Non current) 7,716.9 70.6
The total repayments of loans and borrowings in the first half of 2022 amounts to € 89.0 million, of which
(ii) € 3.5 million in the segment 50Hertz (Germany); and (iii) € 8.4 million of capital repayment of the amortizing bond in the segment Non regulated and Nemo Link.
Elia Group | 2022 half year results 28
2028 At maturity 547.8 3.25% Eurobond issues 2013/20 years 2033 At maturity 199.3 3.50% Eurobond issues 2014/15 years 2029 At maturity 347.4 3.00% Eurobond issues 2015/8.5 years 2024 At maturity 499.4 1.38% Eurobond issues 2017/10 years 2027 At maturity 248.4 1.38%
4.10 Loans and borrowings
Loans and borrowings as at 30 June 2022 comprise the following: (in € million) 30 June 2022
Amountnoncurrent
Elia Group | 2022 half year results 29 (in € million) - 31 December 2021
Amortising bond 7,7 years 2028 Linear 50.4 8.3 1,56 % Amortising bond 23,7 years 2044 Linear 132.3 1,56 %
Lease debts 83.7 35.1
Total bonds 7,240.5 8.3
Maturity Redemptionschedule
Eurobond issues 2020/10 years 2030 At maturity 789.7 0,88 %
Bond as part of Debt Issuance Programme 2015 2030 At maturity 139.3 2,63 % Bond as part of Debt Issuance Programme 2016 2028 At maturity 747.7 1,50 % Bond as part of Debt Issuance Programme 2020 2032 At maturity 747.4 1,11 % Bond as part of Debt Issuance Programme 2020 2040 At maturity 199.4 0,88 % Bond as part of Debt Issuance Programme 2021 2033 At maturity 498.1 0,88 % Registered bond 2014 2044 At maturity 50.0 3,00 %
Total other loans 150.0 60.0
Bond as part of Debt Issuance Programme 2015 2025 At maturity 498.6 1,88 % Bond as part of Debt Issuance Programme 2015 2023 At maturity 749.4 1,63 %
Accrued interests 76.4
Commercial Paper 2022 At maturity 60.0 0,15 % Loan with KfW 2026 At maturity 150.0 0,90 %
Amortising term loan 2033 Linear 167.3 14.4 1,80 % European Investment Bank 2025 At maturity 100.0 1,08 % Total bank loans 267.3 14.4
Eurobond issues 2013/15 years 2028 At maturity 547.7 3,25 %
Senior bond 2018/10 years 2028 At maturity 297.9 1,50 % Eurobond issues 2019/7 years 2026 At maturity 498.6 1,38 %
Eurobond issues 2013/20 years 2033 At maturity 199.2 3,50 % Eurobond issues 2014/15 years 2029 At maturity 347.2 3,00 % Eurobond issues 2015/8.5 years 2024 At maturity 499.1 1,38 % Eurobond issues 2017/10 years 2027 At maturity 248.2 1,38 %
Total Loans and Borrowings (Current and Non-current) 7,741.5 194.2
Amountcurrent Interestrate
Unsecured bond issues (7,248.5) (7,248.5) (7,476.8) (247.8) (7,724.6)
4.11 Financial instruments
Accrued interests (76.4) (76.4) 0.0 Trade and other payables (3,696.4) (3,696.4)
Total 7.0 399.4 3,957.5 (11,632.0) (7,268.2) n.r. n.r. n.r. n.r.
Balance at 30 June 2022 14.0 1,444.0 80.7 0.0 1,538.7 1,305.6 0.0 152.4 1,458.0
Lease liabilities (118.8) (118.8) 0.0
Fair value
Regulatory assets 40.3 40.3 Trade and other receivables (Current and Non current) 1,100.9 1,100.9
Lease liabilities (91.9) (91.9) 0.0
Equity instruments at fair value through other comprehensive income 76.2 76.2 76.2 76.2
Equity instruments at fair value through income 7.0 7.0 7.0 7.0 Derivatives 355.6 355.6 355.6 355.6
Other financial assets 7.0 722.0 40.3 0.0 769.4 652.8 0.0 76.2 729.0
(in € million)
Elia Group | 2022 half year results 30
Trade and other receivables (Current and Non current) 861.8 861.8
Cash and cash equivalents 4,238.7 4,238.7
Unsecured bond issues (7,242.9) (7,242.9) (6,613.4) (166.8) (6,780.1)
Equity instruments at fair value through other comprehensive income 43.8 43.8 43.8 43.8
Cash and cash equivalents 3,049.5 3,049.5 Loans and borrowings (Current and Non Current) (7,935.7) (7,935.7) (7,968.8) (247.8) (8,216.6)
Unsecured financial bank loans and other loans (492.0) (492.0) (492.0) (492.0)
Loans and borrowings (Current and Non Current) (7,787.4) (7,787.4) (7,031.1) (166.8) (7,197.9)
Equity instruments at fair value through income 7.0 7.0 7.0 7.0
fairatDesignated value throughvalueFair OCI costAmortised financialOther amortisedatliabilities cost Total 1Level 2Level 3Level Total
Derivatives 645.8 645.8 645.8 645.8
Regulatory assets 46.2 46.2
The above tables do not include fair value information for cash and cash equivalents, trade and other receivables, trade and other payables, as their carrying amount is a reasonable approximation of fair value. The fair value of finance lease liabilities and accrued interests are not included as there is no requirement for disclosure.
Unsecured financial bank loans and other loans (417.7) (417.7) (417.7) (417.7)
7.0 399.4 46.2 0.0 452.6 362.6 43.8 406.4
Carrying amount
31 December 2021
Other financial assets
The table below shows a comparison of the carrying amount and fair value of financial instruments as at 30 June 2022 and the fair value hierarchy:
Accrued interests (34.8) (34.8) 0.0 Trade and other payables (5,192.0) (5,192.0)
Total 14.0 1,444.0 5,420.2 (12,979.5) (6,101.2) n.r. n.r. n.r. n.r.
Elia Group | 2022 half year results 31
The fair value of financial assets and liabilities, other than those presented in the above table, approximates to their carrying amounts largely due to the short term maturities of these instruments.
The derivative from the price hedge for grid loss procurement, which is measured at fair value in OCI without affecting profit or loss, falls under level 1 of the measurement hierarchy. Its value is determined on the basis of the reporting date valuation of the existing futures contracts, which are fully contracted via the EEX electricity exchange and quoted there. Credit and default risks are avoided with this form of price hedging via exchange transactions. The group recognizes derivatives for an amount of EUR 628.4 milllion.
Level 3: If one or more of the significant inputs used in applying the valuation technique is not based on observable market data, the financial instrument is included in level 3. The fair value amount included under ‘Other financial assets’ has been determined by referring to either (i) recent transaction prices, known by the group, for similar financial assets or (ii) valuation reports issued by third parties.
FAIR VALUE HIERARCHY
The fair value of the bonds is €6,780.1 million (prior period: €7,724.6 million). Fair value was determined by reference to published price quotations in an active market (classified as level 1 in the fair value hierarchy). The fair value of the registered bond is €43.9 million (€64,0 million as of 31 December 2021) and was determined by reference to third party information, such as pricing services (classified as level 3 in the fair value hierarchy). The fair value of the private placement amounts to EUR 166.8 million (€183,8 million as of 31 December 2021) (classified as level 3 in the fair value hierarchy).
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These maximise the use of observable market data where these are available and rely as little as possible on entity specific estimates. If all significant inputs required to assess the fair value of an instrument are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices), the instrument is included in level 2.
The fair value of other financial assets increased by €322.6 million compared to previous year. The increase mainly results from the fair value of the future contracts entered into by 50Hertz for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. The fair value of these contracts has increased by €272.8 million compared to 31 December 2021 (price effect). The remaining balance is explained by the revaluation of the group’s stake in EEX (+€32.4 million) and other derivatives (cash flow hedge for +€17.8 million). The fair value of the Sicav remains stable.
The fair value of other bank loans approximates to their carrying amounts largely due to the short term maturities of these instruments.
Level 1: The fair value of a financial instrument that is traded in an active market is measured based on quoted (unadjusted) prices for identical assets or liabilities. A market is considered active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
Fair value is the amount for which an asset could be exchanged or a liability settled in an arm's length transaction. IFRS 7 requires, for financial instruments that are measured in the statement of financial position at fair value and for financial instruments measured at amortised cost for which the fair value has been disclosed, the disclosure of fair value measurements by level in the following fair value measurement hierarchy:
The fair value of the bank loans and bond issues decreased by €1,018.7 million, due to a lower pricing on the market. The fair value of Sicavs falls into level 1, i.e. valuation is based on the listed market price on an active market for identical instruments.
(in € million)
Recognisedinprofitandloss Recognised comprehensiveinincome Total
Provisions 46.8 (2.2) 44.6
Total (84.5) (10.5) (112.8) (207.8)
Provisions 44.6 (1.8) 42.8
Non current trade and other receivables 0.8 0.3 1.1
Other items (6.5) (2.8) (9.3)
Intangible assets (15.4) 2.1 (13.3) Financial assets (105.7) (86.6) (192.3)
Interest bearing loans and other non current financial liabilities 46.3 (5.5) (2.5) 38.4
Non current trade and other receivables 1.1 (5.7) (4.6)
Total (207.8) (43.7) (88.1) (339.6)
Elia Group | 2022 half year results 32
Losses carried forward 1.0 1.0 Other items (9.3) 6.0 (3.3)
Losses carried forward 0.8 0.2 1.0
1H Property,2022 plant and equipment (221.0) 34.9 (186.1)
(in € million)
Employee benefits 19.0 2.9 (7.0) 14.9
Net asset/(liability)tax
Regulatory liabilities 22.2 (73.6) (51.4)
Intangible assets (6.3) (9.1) (15.4)
Interest bearing loans and other non current financial liabilities 27.6 18.9 (0.2) 46.3
Property,2021 plant and equipment (210.6) (10.4) (221.0)
Net asset/(liability)tax inRecognisedprofitandloss
Deferred tax on investment grants (1.1) 0.1 (1.0)
Financial assets (105.7) (105.7)
Net deferred tax liabilities increased from €207.8 million to €339.6 million, of which €43.7 million has been recognised in profit or loss and €88.1 million in OCI.
Employee benefits 14.9 (0.4) 1.0 15.5
Deferred tax on investment grants (1.0) (1.0)
Recognised comprehensiveinincome Total
Deferred revenue 22.5 (7.8) 14.6 Regulatory liabilities 22.6 (0.4) 22.2
4.12 Deferred tax liabilities
Deferred revenue 14.6 0.2 14.8
Controlling entities
We refer to notes 9.1, 9.2 and 9.3 accompanying the annual consolidated financial statements as of and for the year ended 31 December 2021 for more details.
4.14 Settlement mechanism (regulatory framework)
Transactions with joint ventures and associated companies
There were no significant transactions with entities in which Elia’s Management Committee members or Elia’s Board of Directors’ members exercise a significant influence (e.g. holding positions such as CEO, CFO or members of the Management Committee) in the first half of 2022.
Transactions with joint ventures and associated companies (6.5) 1.1
Sales of goods 1.2 1.9
Outstanding balances with joint ventures and associated companies (1.0) (0.9)
4.15 Related parties
Elia Group | 2022 half year results 33
Transactions with key management personnel
Trade debtors (0.5) (0.7) Trade debts (0.5) (0.2)
The core shareholder of Elia Group is still Publi T. Other than the yearly dividend payment, no transactions occurred with the core shareholder in the six months ended 30 June 2022.
Key management personnel include Elia's Board of Directors and Elia’s Management Committee. Both Elia’s Board of Directors and Elia’s Management Committee have a significant influence across the entire Elia Group.
At 50Hertz Transmission (Germany), key management personnel include Eurogrid International CVBA’s Board of Directors, who are responsible for monitoring the activities of 50Hertz Transmission (Germany). Key management personnel also includes the Board of Management of 50Hertz Transmission and the Supervisory Board, which was established in the German segment.
Key management personnel did not receive stock options, special loans or other advances from the Group during the year.
Details of transactions with joint ventures and associated companies are shown below:
In Belgium, the settlement arising from the tariff regulation mechanism for the year ended 31 December 2021 was accounted for in the period ended 30 June 2022 and decreased the net profit for the period by €4.0 million.
In Germany, there are no changes in the regulatory uncertainties due to the final settlements arising from the tariff regulation mechanisms to be approved by the relevant authorities.
(in € million) period ended 30 June 2022 2021
Purchases of goods (7.6) (0.8) (in € million) 30 June 2022 31 December 2021
4.13 Income tax expense
Excluding the share of profit of equity accounted investees, the best estimate of the weighted average annual income tax rate expected for the full financial year was 28.9% for the six months to June 2022 compared to 29.9% for the six months to June 2021
Part of the Group's revenue (mainly German Segment) profile follows a seasonal pattern, primarily due to the higher volumes of electricity consumed during the winter that have to be transmitted by the grid operator from power generators to distributors and large industrial customers, and also due to the impact of renewable energies, which are highly sensitive to weather conditions and hence have a considerable effect on revenue inflows and the course of business.
4.18 Regulatory framework
On 30 June, the Belgian Federal Commission for Electricity and Gas Regulation (the CREG) officially approved the electricity tariff methodology for the period covering 2024 27. The approval follows a public consultation on the methodology, which was launched in April, and its approval by the Federal Government in early June. The new tariff methodology is similar to the methodology which is currently in force. The regulatory framework will remain as a cost plus model, with cost coverage of all reasonable costs and remuneration. Based on the parameters described in the methodology the average regulatory return on equity for the period should be around 5.7%, in accordance with the effective results on incentive regulation.
Regulatory framework for the Nemo Link interconnector
In 2022, there were no significant changes to the regulatory framework for the Nemo Link interconnector. (as described in note 9.3 to the annual consolidated financial statements as of and for the year ended 31 December 2021).
There were some transactions with parties in which these key persons have a significant influence. All these transactions took place in the normal course of Elia’s business activities. There were expenses for a total amount of €1.1 million and an outstanding payable of €0.2 million (vendor with debit balance). There were no sales transactions in the first half of 2022, nor any outstanding receivable per 30 June 2022.
4.17 Events after the reporting date
Elia Group | 2022 half year results 34
Transactions with other related parties
In 2022, there were no significant changes to the regulatory framework applicable for the regulatory period 2020 2023 in Belgium (as described in note 9.1 to the annual consolidated financial statements as of and for the year ended 31 December 2021)
In 2022, there were no significant changes to the regulatory framework in Germany applicable until 31 December 2023 (as described in note 9.2 to the annual consolidated financial statements as of and for the year ended 31 December 2021)
Regulatory framework in Belgium
4.16 Seasonal fluctuations
Regulatory framework in Germany
In addition, Elia's Management Committee also assessed whether transactions occurred with entities in which they or members of the Board of Directors exercise a significant influence (e.g. positions as CEO, CFO, vice presidents of the Management Committee, etc.).
Management is not aware of any other material events to report since 30 June 2022, which could affect the condensed consolidated interim financial statements.
BDO Réviseurs d’Entreprises SRL / Bedrijfsrevisoren BV represented by
EY Réviseurs d’Entreprises SRL / Bedrijfsrevisoren BV represented by Paul
Joint statutory auditor's report to the board of directors of Elia Group NV on the review of the condensed consolidated interim financial information as at 30 June 2022 and for the sixmonth period then ended
*ActingPartnerFank*onbehalf of a BV/SPRL
Elia Group | 2022 half year results 35
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information as at 30 June 2022 and for the six month period then ended is not prepared, in all material respects, in accordance with IAS 34, “Interim Financial Reporting” as adopted by the European Union.
We conducted our review in accordance with the International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Scope of Review
Felix
We have reviewed the accompanying condensed consolidated statement of financial position of Elia Group NV as at 30 June 2022, the condensed consolidated statement of profit or loss, the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the six month period then ended, and notes to the interim financial information (“the condensed consolidated interim financial information”). The board of directors is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34, “Interim Financial Reporting” as adopted by the European Union. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.
Joint statutory auditors
Brussels, 26 July 2022
Conclusion
Introduction
5.
*ActingPartnerEelen*onbehalf of a BV/SRL
Adjusted EBIT is defined as EBIT excluding the adjusted items.
Share of profit of equity accounted investees (net of tax) 1.7 0.0 22.9 24.5 EBIT 126.9 151.3 18.0 296.3
EBIT (Earnings Before Interest and Taxes) = adjusted result from operating activities, which is used to compare the operational performance of the Group over the years. The adjusted EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provisions and other operating expense and plus the share of equity accounted investees net and plus or minus adjusted items
Adjusted items are those items that are considered by management not to relate to items in the ordinary course of activities of the Group. They are presented separately as they are important for the understanding of users of the consolidated financial statements of the performance of the Group and this compared to the returns defined in the regulatory frameworks applicable to the Group and its subsidiaries.
CAPEX (Capital Expenditures)
EBIT
Equity attributable to the owners of the company
Adjusted items
Adjusted EBIT
Net finance costs
Equity attributable to the owners of the company (per share)
Adjusted EBIT
The Half year Financial Report contains certain financial performance measures that are not defined by IFRS and are used by management to assess the financial and operational performance of the Group. The main alternative performance measures used by the Group are explained and/or reconciled with our IFRS measures (Consolidated Financial Statements) in this document.
Net financial debt
Adjusted items
Free cash flow
Adjusted net profit
EBITDA
Reported earnings per share (in €) (Elia share)
6.Alternative performance measures
(in € million) period ended 30 June 2022
The following APM’s appearing in the Half year Financial Report are explained in this appendix:
Elia Group | 2022 half year results 36
Regulatory Asset Base (RAB)
Results from operating activities 125.2 151.3 (4.8) 271.8
AdjustedDeduct: EBIT 126.9 151.3 18.0 296.3
TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink Elia Group
CAPEX (Capital Expenditures) = Acquisitions of fixed assets (a.o. property, plant and equipment and intangible assets) minus proceeds from sale of fixed assets. Capital expenditures, or CAPEX, are investments realised by the Group to acquire, upgrade, and maintain physical assets (such as property, buildings, an industrial plant, technology, or equipment) and intangible assets. CAPEX is an important metric for the Group as it affects its Regulated Asset Base (RAB) that serves as basis for its regulatory remuneration.
AdjustedDeduct: EBIT 115.6 137.4 12.5 265.3
Adjusted net profit
Profit for the period 74.2 98.7 13.9 186.7
Results from operating activities 114.4 137.4 (3.2) 248.5
AdjustedDeduct: net profit 62.1 79.9 8.4 150.5
AdjustedDeduct: net profit 74.2 98.7 13.9 186.7
Elia Group
(in € million) period ended 30 June 2021
Share of profit of equity accounted investees (net of tax) 1.2 0.0 15.7 16.8 EBIT 115.6 137.4 12.5 265.3
Elia Group | 2022 half year results 37
Adjusted net profit is defined as net profit excluding the adjusted items. The adjusted net profit is used to compare the performance of the Group over the years.
(in € million) period ended 30 June 2022
TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink
(in € million) – period ended 30 June 2021
Profit for the period 62.1 79.9 8.4 150.5
CAPEX (Capital Expenditures)
Elia Group
TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink
TransmissionElia Transmission50Hertz andregulatedNon-activitiesNemoLink
Elia Group
Add:
Depreciation, amortisation and impairment 104.5 142.4 0.3 247.3 Changes in provisions 0.7 (0.1) 0.0 0.5
EBIT 115.6 137.4 12.5 265.3
EBIT (Earnings Before Interest and Taxes) = result from operating activities, which is used for the operational performance of the Group. The EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provision and other operating expense and plus the share of equity accounted investees.
Share of profit of equity accounted investees (net of tax) 1.7 0.0 22.853 24.5
(in € million) period ended 30 June 2022
EBITDA
Share of profit of equity accounted investees (net of tax) 1.7 0.0 22.9 24.5
Results from operating activities 125.2 151.3 (4.8) 271.8
EBIT
TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink
(in € million) period ended 30 June 2021
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisations) = results from operating activities plus depreciations, amortisation and impairment plus changes in provisions plus share of profit of equity accounted investees. EBITDA is used as a measure for the operational performance of the Group, thereby extracting the effect of depreciations, amortisation and changes in provisions of the Group. EBITDA excludes the cost of capital investments like property, plant, and equipment.
EBITDA 232.1 293.6 18.4 544.2
Results from operating activities 114.4 137.4 (3.2) 248.5
Elia Group
TransmissionElia Transmission50Hertz andregulatedNon-activitiesNemoLink
(in € million) period ended 30 June 2022
Results from operating activities 125.2 151.3 (4.8) 271.8
EBIT 126.9 151.3 18.0 296.3
Elia Group | 2022 half year results 38
TransmissionElia Transmission50Hertz andregulatedNon-activitiesNemoLink
Elia Group
Share of profit of equity accounted investees (net of tax) 1.2 0.0 15.7 16.8
Elia Group
Changes in provisions (0.6) 0.0 0.0 (0.6)
(in € million)
30 June 2022 31 December 2021
Equity 5,794.5 4,938.4 Deduct: Non controlling interests 426.7 386.4 Equity attributable to the owners of the company 5,367.8 4,552.0
Equity attributable to the owners of the company (per share) (in € million) period ended 30 June 2022 2021
Elia Group
Equity attributable to the owners of the company
Equity attributable to ordinary shares 4,656,805,788.1 4,196,758,389.8
Number of shares outstanding 73,456,328 68,728,055
Equity attributable to ordinary shareholders and hybrid security holders, but excluding non controlling interests.
Weighted average number of ordinary shares 68,773,950 68,722,792
TransmissionElia Transmission50Hertz andregulatedNon-activitiesNemoLink
Divide by:
Share of profit of equity accounted investees (net of tax) 1.2 0.0 15.7 16.8 EBITDA 216.0 262.0 12.6 490.5
Results from operating activities 114.4 137.4 (3.2) 248.5 Add: Depreciation, amortisation and impairment 101.0 124.6 0.2 225.7
(in € million) – period ended 30 June 2021
Reported earnings per share (in €) (Elia share) 2.29 1.82
Equity attributable to owners of ordinary shares 63.4 61.1
Elia Group | 2022 half year results 39
Net profit attributable to owners of ordinary shares 157.4 124.9 Divide by:
Reported earnings per share (in €) (Elia share) (in € million) period ended 30 June 2022 2021
TransmissionElia Transmission50Hertz andregulatedNon-activitiesNemoLink
Represents the net financial result (finance costs plus finance income) of the company.
Non-current liabilities: Loans and borrowings 3,408.0 3,835.9 473.0 7,716.9 3,421.9 3,838.6 481.3 7,741.7
Add:Current Liabilities: Loans and borrowings 32.4 24.5 13.6 70.6 147.6 33.5 12.9 194.0
30
Deduct:Current Assets: Cash and cash equivalents 84.9 3,533.9 664.8 4,283.7 128.5 2,857.2 63.8 3,049.4
Elia Group
Net finance costs
Free cash flow
Net cash from operating activities (84.8) 1,211.4 290.7 1,417.1 Deduct:
Net cash used in investing activities 174.8 411.1 (149.6) 436.3 Free cash flow (259.5) 800.2 440.3 980.8
Net financial debt
Net cash from operating activities 124.7 2,057.4 (10.1) 2,171.9 Deduct:
Net Financial Debt = Non current and current interest bearing loans and borrowings (incl. lease liability under IFRS 16) minus cash and cash equivalents. Net financial debt is an indicator of the amount of interest bearing debt of the Group that would remain if readily available cash or cash instruments were used to repay existing debt.
(in € million) June
2022 31 December 2021 TransmissionElia Transmission50Hertz regulatedNon-activitiesandNemoLink GroupEliaTotal TransmissionElia Transmission50Hertz regulatedNon-activitiesandNemoLink GroupEliaTotal
(in € million) period ended 30 June 2022
Free cash flow = Cash flows from operating activities minus cash flows from investment activities. Free cash flow provides an indication of the cash flows generated by the Group.
Elia Group
Net financial debt 3,355.5 326.5 (178.2) 3,503.8 3,441.0 1,014.9 430.4 4,886.3 EEG surplus (levies) 3,134.8 3,134.8 2,110.0 2,110.0 EEG deficit (levies)
Elia Group | 2022 half year results 40
(in € million) period ended 30 June 2021
Net financial debt, exl. EEG position 3,355.5 3,461.3 (178.2) 6,638.6 3,441.0 3,124.8 430.4 6,996.3
Net cash used in investing activities 167.2 237.8 (106.6) 298.4 Free cash flow (42.5) 1,819.7 96.5 1,873.5
TransmissionElia Transmission50Hertz andregulatedNonactivitiesNemoLink
Regulated asset base (RAB) is a regulatory concept and an important driver to determine the return on the invested capital in the TSO through regulatory schemes. The RAB is determined as follows: RABi (initial RAB determined by regulator at a certain point in time) and evolves with new investments, depreciations, divestments and changes in working capital on a yearly basis using the local GAAP applicable in the regulatory schemes. In Belgium when setting the initial RAB, a certain amount of revaluation value (i.e. goodwill) was taken into account which evolves from year to year based on divestments and/or depreciations
Regulatory Asset Base (RAB)
Elia Group | 2022 half year results 41
