Bloomberg News

Enagas Third-Quarter Net Rises 8.5% as Company Adds Assets

October 25, 2011

(Updates with profit forecasts from third paragraph.)

Oct. 25 (Bloomberg) -- Enagas SA, the operator of Spain’s natural-gas grid, said third-quarter profit rose 8.5 percent as it added assets including stakes in regasification plants and storage facilities.

Net income increased to 97.5 million euros ($136 million) from 89.8 million euros a year earlier, the Madrid-based company said today in a regulatory filing. That compares with the average estimate of 95.3 million euros in a Bloomberg survey of three analysts. Regulated revenue rose 32 percent from a year earlier to 321.6 million euros in the quarter.

Enagas, which earns a fixed return on its investments, is boosting its dividend payout ratio as profit gains after it expanded its network of assets. Chief Executive Officer Antonio Llarden has said net income will rise at an average annual pace of at least 7 percent from 2009 through 2014 as the company reaps the benefit of acquisitions and expansion in Spain.

The company aims to increase profit by about 5 percent this year. Enagas on July 19 said it will raise the dividend payout ratio to 65 percent of 2011 earnings and 70 percent for 2012 through 2014.

Enagas plans to invest 650 million euros in 2011 and start operating 650 million euros of assets. It invested 534 million euros in the first nine months of the year and started operating 549 million euros of assets.

Into Operation

Enagas intends to put 3.4 billion euros of assets into operation through 2014, or an average of 680 million euros a year, more than the average of 550 million euros in 2007-2009, the company said last year. It will invest 700 million euros a year on average through 2014.

Net debt climbed to 3.32 billion euros at the end of September from 2.97 billion euros a year earlier and the average cost of borrowing increased to 2.82 percent from 2.68 percent in the first nine months of last year.

Besides pipelines, Enagas is also investing in liquefied natural gas terminals and the El Musel regasification plant is under construction. The company runs three of Spain’s six regasification terminals, which turn LNG back into gas before distribution to customers. Spain is Europe’s biggest importer of LNG.

The company in September said it bought a 41.94 percent stake in Gascan, a gas transportation company in the Canary Islands, from Regional Canaria de Energias.

--Editors: Stephen Cunningham, Amanda Jordan.

To contact the reporters on this story: Joao Lima in Lisbon at jlima1@bloomberg.net; Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.


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