Key Figures
LENGTH OF NETWORK (Km)
With a total of 5,691 km of network and 135,294 tested connections, during the course of this financial year, we have completed the third round of our network tracking.
MUNICIPALITIES
Our goal: connecting new customers and reaching new municipalities. To this end we have acquired more than 42,000 LPG supply points for their later conversion to natural gas.
USERS
Out of the 1.73 million users of gas in the Community of Madrid, more than 853,000 rely on us. We have 48.7% of the total number of supply points in the region.
RMS
More than 77% of the 206 regulation and metering stations (RMS) of Madrileña Red de Gas, together with other facilities of our network, are remotely controlled from the control centre.
EMPLOYEES
The low turnover rate indicates the degree of satisfaction within our team, with an efficient, right-sized and extensively experienced in the sector.
INCOME
The net income in this financial year was 165.4 M€. 83% comes from the distribution activity and the remaining 17% from other services.
EBIT
The adjusted gross operating result (EBIT) was € 103.1 M€, 1.1% up on the previous year’s figure.
CASSH FLOW
The cash flow generated by operations during the financial year was € 102.1 M€, representing an increase of 5% on the previous year.
LETTER FROM THE CHAIRMAN
In the financial year which is coming to an end, Madrileña Red de Gas has continued to meet the commitments made to its customers, the network users and society. On the one hand, we are maintaining high quality levels in the service and continuing to improve them. On the other hand, we are continuing to invest in the development of the network, providing access to natural gas for a growing number of families and industries.
Investment in the network is developing in two directions, both significant. The first is organic growth, expanding access to the use of natural gas for users both in areas where we are already established and in new municipalities where we have acquired ownership of new networks through competitive processes. The second is the acquisition of networks of customers supplied with liquefied petroleum gas (LPG), which we have been working to convert to natural gas in the near future, thus integrating them in the national gas distribution network.
The latest milestone in this regard has been the acquisition of around 42,000 connection points from Repsol, which will progressively be converted to natural gas over the next five years. The negotiations for this acquisition began in the fourth quarter of 2015 and were successfully concluded in May 2016. The work of converting and updating the relevant networks now lies ahead.
This acquisition significantly increases the number of connection points provided by Madrileña Red de Gas, which will exceed 900,000 by 2020, as the total of the acquired points and the expected organic growth.
As for the new municipalities, natural gas supply is usually provided from the high-pressure network, although in some cases, for reasons of distance and cost, the installation of liquefied natural gas (LNG) plants is preferred. The case of Valdetorres de Jarama, with its plant commissioned in February this year, is the latest example in which this solution has been adopted.
All this reflects the commitment to continue investing in the Community of Madrid which Madrileña Red de Gas announced from the very start of its existence, already six years ago.
In addition to the new investment, the company has continued with its policy of internal improvement in all areas. In this spirit, we have maintained the level of results from previous years, despite the impact of the regulatory reform of 2014 on income from regulated activities. And this has been without prejudice to the service quality indicators, as you can see in the pages of the annual report.
As ever, we have focused on the safety of operations. The indicators that reflect our performance in this area have been maintained at the same high levels as previously. Safety has been at all times a top priority with an explicit commitment to everyone: customers, suppliers and society in general.
Our activity is conducted within a regulatory framework which, as is well known, requires sufficient long term stability so that the decisions of all kinds that companies need to take and, in particular, strategic and investment decisions, can be implemented in conditions of safety.
After the regulatory reform of the gas sector in 2014, this framework is perceived as stable, which is a basic precondition for companies to perform regulated activities. It is desirable, and, in today’s conditions, can be expected, that this long-term stability will be maintained. However, it is also true that regulation in sectors such as energy requires continuous fine adjustment, which must be conducted on the basis of an ongoing dialogue with the stakeholders who know in detail the needs arising from a truly complex situation and who, on the basis of that knowledge and everyday experience, can contribute significantly to the improvement of the rules governing the operation of the sector.
We hope that the constructive dialogue that has existed in the recent past will continue and thus contribute to the development of a vital sector for the Spanish and Madrid economy, to the benefit of all stakeholders: business, consumers and regulatory authorities. What is at stake is the stability and competitiveness of companies, the household budgets of families and the attractiveness of Spain and this sector as an investment target.
Finally, I would like to express the gratitude of the company to the shareholders who, in this new phase, are continuing to support it in its development with a long-term vision. And also to the management team and all those who are dedicating their careers to Madrileña Red de Gas, as they are the key to the past successes and to those to which we are looking forward in an evolution that is destined to bring many triumphs and satisfactions.
Pedro Mielgo
Chairman