2018 annual results up, a reflection of RTE's financial solidity
2018, the first year of the full application of the new TURPE 5 regulatory framework, confirms the strength of RTE’s economic model.
The 2018 financial year saw a +4% increase in RTE’s revenue, which stands at 4 817 million euros. This growth was mainly driven by the application of the TURPE 5 tariff, set by the French Energy Regulatory Commission (CRE), which was in full effect for the first time. The higher revenue was mitigated however by a reduction in the use of the transmission system due not only to the slight decrease in gross electricity consumption that resulted from the milder temperatures in 2018 compared to 2017, but also to the marked increase in decentralised production directly connected to the distribution grid.
In 2018, lower spending on energy purchases to compensate for electricity losses together with the lower price of system services used for network operation contributed to increasing the EBITDA. Up +15%, it stands at 2 059 million euros. This increase is all the more notable that reparation costs of the France-England (IFA 2000) interconnection cables, which were damaged in November 2016, weighed on the 2017 EBITDA.
Consequently, net income stands at 603 million euros for the 2018 financial year, up +62% compared to 2017, a year that was affected by the surcharge on the corporate tax rate for large companies.
2018 was a year of continued, sustained investments, amounting to 1 447 million euros, +4% in relation to 2017. This progression is largely due to the advance in construction work on the two direct-current interconnections between France and Italy, and France and the United Kingdom, the continued conversion work to 400 000 volts of the Cergy to Persan line as well as the commissioning of connections that facilitate the reception of renewable energies such as the lines listed in the regional plans of the Midi-Pyrénées for connecting to the renewable energy grid (S3REnR) that connect Gourjade to Mazamet and Gourjade to Brassac and Luzières.
In order to finance the modernisation and renewal of its industrial facilities, to maintain development investments and carry out interconnection projects, RTE is pursuing a prudent financial policy with a controlled recourse to debt. In 2018, the operating cash-flow generated during the financial year kept the debt-increase down to 23 million euros. At the end of 2018, the debt had risen +0.2% to 8 904 million euros.
RTE has solid financial ratios, confirmed by Standard & Poor’s in May 2018, with the A rating, outlook stable, maintained. This financial strength makes it possible to successfully conduct the financing operations required to carry out the activity. In September 2018, a bond issue for one billion euros was launched in two tranches of 500 million euros, one with a 12-year maturity and a coupon of 1.5%, the other with a 20-year maturity and a coupon of 2.125%. This issue extended the average debt maturity and lowered the average cost.