Fenosa's LatAm revenues surge on FX impact

Thursday, February 8, 2018

Gas Natural Fenosa's gas distribution revenues in Latin America increased 33.3% last year to 3.73bn euros (US$4.57bn) due to appreciation of the region's main currencies.

The Spanish firm is active in Argentina, Brazil, Chile, Mexico and Peru.

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Fenosa's net income for 2017 was 1.36bn euros, up 1% on 2016, while net sales increased 6.4% to 23.3bn euros.

Regional gas distribution Ebitda rose 15.4% to 708mn euros, the company said in its annual financial report. Brazil and Chile were the biggest contributors to Ebitda, with 40% and 29.1% respectively, while Mexico contributed 24.7%.

Gas distribution in Latin America totaled 264,428GWh last year, up 9.3% from 2016, while electricity distribution totaled 21,631GWh, down 35.5%. Electricity distribution connections did however increase, at 2.9% to 3.72mn.

Electricity generation in Latin America, where the company is active in Brazil, Costa Rica, Dominican Republic, Mexico and Panama, reached 18,436GWh, up 3.2% from 2016. The biggest increase was seen in the Mexico combined cycle operations, which increased 4.4%, while the largest decline was in the Mexican wind sector, declining 17.3% to 656GWh.

The company's installed capacity in the region rose 5.5% to 2.73GW, an increase driven by Mexico capacity, which grew 3.6% to 2.10GW.

The company said in January it would invest 1.7bn pesos (US$85.4mn) in Argentina this year on network projects to improve distribution in that market.

Fenosa agreed last November to sell its 59.1% stake in Colombia's Gas Natural to Brookfield Infrastructure for 1.67tn Colombian pesos (US$574mn). The company is engaged in distribution and retail supply of natural gas.

The same month saw the merger of Chilean subsidiaries CGE Distribución, Compañía Nacional de Fuerza Eléctrica and Empresa Eléctrica Atacama into their parent company, Compañía General de Electricidad, resulting in a reduction of 117mn euros in deferred tax liabilities, said Fenosa.

The company has set in motion an efficiency plan for 2018-2020, which will generate non-recurring restructuring costs of 110mn euros, it said.