15 Additional notes to the consolidated financial statements

Gasunie plays an important role in the energy market in north-western Europe. We manage, maintain and develop infrastructure for large-scale transmission, transport, storage and conversion of energy. At the moment, this is mainly natural gas, but with the energy transition our focus is increasingly shifting towards CCS and hydrogen. Besides this, we promote the development of the technology for green gas and the feed-in of this gas, and we work on the construction and management of heat grids. We take into account several future scenarios, all of which envision achieving a carbon-neutral society by 2050. It is Gasunie’s social duty to be able to serve society with our infrastructure in all scenarios. An in-depth elaboration of these scenarios is presented in the Integrated Infrastructure Survey 2030-2050 (II3050). The key conclusions from the new II3050 report relating to us are: 

• Hydrogen, green gas, heat and CCS will be key elements in bringing about a carbon-neutral future. 
• After 2030, the hydrogen network planned to be built between now and 2030 will approximately double in size. Our existing gas infrastructure can largely accommodate this expansion. 
• The storage of hydrogen is essential if we are to keep the supply and demand for energy in balance in the future. This can be done in abandoned salt caverns in the Netherlands and Germany. 
• Research is needed to determine the extent to which we can store hydrogen in depleted gas fields, which can then play a key role as a strategic buffer and backup.
• The CCS network is not only a short-term solution: it will serve us in the long term too. In the short term, we will transport captured CO₂ to offshore storage fields to reduce industrial carbon emissions. In the long term, we will transport sustainable CO₂ for production processes that are currently still based on fossil resources.

We believe in a sustainable future with a balanced energy mix and a lasting role for diversified gases. Our assets are expected to play an important role in this. Given the uncertainties concerning future developments, we have made certain assumptions and used estimates in our financial statements, including assumptions about the useful life of our network infrastructure and the associated depreciation periods. These lifespans and periods may be shorter or longer than we currently estimate, depending on, among other things, which assets we can repurpose for alternative use and when the transmission of natural gas will be phased out. We explain this further in note 5 ‘Tangible fixed assets’. These developments may also affect the required size of the provision for redevelopment costs (i.e. costs of asset rehabilitation, replacement or removal). Depending on which assets we can reuse, redevelopment may affect more or fewer assets. We explain this further in note 24 ‘Other provisions’.

As a result of our increasing investments in the energy transition, our financing requirement will also increase in the coming years. Several projects, or certain parts of these, have now been approved. For the coming years, we expect an investment level of approximately € 1 billion per year, assuming we develop the energy transition projects more quickly. We are increasingly trying to finance these projects with ‘green bonds’. In 2023, we issued our first green bond, with a value of € 300 million. We explain this further in note 18 ‘Interest-bearing loans’.

In our management report, we explain our activities in the area of the energy transition in more detail.

Aside from this, in Q4 2023 we sold half of our shares in EemsEnergy Terminal B.V. to Vopak LNG Holding B.V., with Gasunie retaining a 50% shareholding after the sale. With this transaction, EemsEnergyTerminal now qualifies as a joint venture. As a result, an initial remeasurement of the retained interest took place based on fair value. In 2023, the transaction led to a one-off sales result of approx. € 29.5 million on the shares we sold and a one-off remeasurement result of approx. € 29.5 million on the shares we retained.

Further details on the transactions stated above and the consequences for the consolidated financial statements are included in note 2 ‘Business combinations and disposals of group companies’.

We provide further details on this matter in note 4 ‘Impairment tests’.

In 2023, one material business combination and one business combination under common control (which is completely eliminated in the consolidation) took place. Additionally, we sold a part of one of our wholly-owned group companies. These transactions are explained in more detail below.

Now, after this acquisition, Gasunie has a 75% economic interest in BBL Company (year-end 2022: 60% interest):

• our shareholding of 100% in our group company Gasunie BBL B.V. gives us a 60% interest; and
• our shareholding of 75% in our group company GUFU BBL B.V. gives us a 20% interest (effectively a 15% interest).

Based on the agreements between the partners of BBL Company, the voting threshold for significant decisions regarding BBL Company is 80%. Although Gasunie can exercise a total of 80% of the voting rights via Gasunie BBL B.V. and GUFU BBL B.V., certain relevant decisions require unanimity. Furthermore, if the parties are unable to agree on certain relevant matters that do not require unanimity, the matter may be subject to a binding ruling by an independent third party. Based on these considerations, Gasunie has not obtained control over BBL Company. Accordingly, this remains a case of joint control and we continue to recognise our interest as a joint operation in accordance with IFRS 11.

Given that no control over BBL Company has been acquired, Gasunie’s existing 60% interest held through Gasunie BBL B.V. has not been remeasured at fair value. We note here that the fair value and the carrying amount of the existing 60% interest are virtually equal. This is because the existing interest in BBL Company was already measured at the recoverable amount at the end of 2022 as a result of an impairment.

The acquired assets and the assumed liabilities of GUFU BBL B.V. are, however, measured at fair value. Based on our control, we include GUFU BBL B.V. in our consolidation (and, with this, also its 20% share in BBL Company). In accounting for Fluxys' 25% share in GUFU BBL we recognise a non-controlling interest in the equity and in the result. The legal structure as described above results in a de facto 80% consolidation of BBL Company with a 5% non-controlling interest. We have opted to measure the non-controlling interest using the proportional method.

Assets acquired and liabilities assumed
The fair value of the assets acquired and liabilities assumed at the acquisition date was as follows:

We paid the acquisition price of € 55.1 million outright and in cash. As part of the acquisition, we acquired € 36.4 million in cash and cash equivalents and included them in our consolidated financial position at the acquisition date. This means that the acquisition price for the assets and liabilities, excluding cash and cash equivalents, totals € 18.7 million.

The fair value of the tangible fixed assets on the acquisition date was determined using a DCF valuation model. When calculating the recoverable amount, we made assumptions, the most important of which concerned the expected revenues and the pre-tax discount rate. The figures for the main cash flows are based on the business plan for the next three years drawn up by the management of BBL Company and approved by Gasunie (as shareholder) and on a recent medium-term forecast. These assumptions do not differ significantly from the assumptions applied at year-end 2022 for the impairment test carried out.

When determining expected future revenue, a distinction was made between revenue from existing fixed transport contracts and revenue from auctioning future transport capacity. The assumptions regarding the expected future transmission volumes are partly based on transmission capacity that has already been reserved (auctioned capacity) and on scenario studies and National Grid’s 10-year network development plan. The tariffs for capacity sales are determined on the basis of the current tariffs, which are adjusted annually for expected inflation. In the fair value calculation it has been assumed that the BBL interconnector will be used in the future for the offshore hydrogen network and that this will therefore generate a future cash flow once it is transferred to a hydrogen transmission operator. The forced sale by Uniper in combination with other assumptions in the measurement are the main reasons for this transaction constituting a bargain purchase under IFRS 3.

The deferred tax liabilities refer to temporary differences in measurement of tangible fixed assets and right-of-use assets. The fair value of the trade and other receivables has been set at their contractual value based on the nature of these receivables and the fact that they are short term. There are no expected material credit losses on these receivables, nor are there any contingent liabilities or transactions that need to be processed separately from the acquisition. The acquisition price was paid outright and in cash. There are no relevant future conditions attached to the acquisition price that could influence the final acquisition price.

From the date of the acquisition, GUFU BBL B.V. has contributed € 15.7 million to revenue and € 8.1 million to the result from continuing operations before taxation. If the business combination had taken place from the beginning of the financial year, these figures would have been € 27.3 million and € 15.0 million respectively.

The financial data of the acquired companies has been recognised in the financial statements of the acquiring company, WarmtelinQ Transport Services B.V., with effect from 1 January 2023. The acquired companies are shown in note 62 ‘List of group companies and participating interests’.

This transaction was completed in mid-November 2023 through Gasunie selling 50% of its shares in EemsEnergyTerminal to Vopak. From a financial perspective, the transaction was effected on 1 October 2023, from which date EemsEnergyTerminal qualifies as a de facto joint venture based on joint control and is no longer included in the consolidation. At the acquisition date, the fair value estimate of the net sales price was € 27.9 million, consisting of the gross sale proceeds of € 41.6 million less compensation of € 13.7 million payable to Vopak for certain corporate income tax. It has been agreed that Vopak will pay for the shares outright in cash in April 2024. In accordance with the contractual agreements, we will set the final selling price in mid-2024.

When determining the fair value of the selling price, an additional earnout of € 4.5 million was not taken into account given that the earnout payment is contingent on certain EBITDA targets for 2028 and 2029 being achieved, i.e. after the end of the current business case period (September 2027). Realisation of these targets is still uncertain. However, the effect of corporate income tax compensation agreed between the two shareholders as part of the transaction has been taken into account. This concerns corporate income tax to be paid by EemsEnergyTerminal on certain payments already received in full by Gasunie before Vopak joined the venture, but which will only be taxed in the future. We have estimated the fair value of this compensation to be € 13.7 million and we will pay the compensation annually to Vopak between 2024 and 2027. The exact amount of the compensation will be determined annually and depends in part on EemsEnergyTerminal’s tax results. We have included this liability under non-current and current liabilities. If these estimates change in the future, we will process the effects in the profit and loss account at that time.

By effecting this share deal we no longer have control in EemsEnergyTerminal and, accordingly, we have remeasured the interest we retain at fair value and applied this as the initial carrying amount. Differences between the carrying amount and the fair value of EemsEnergyTerminal, as determined at the time of loss of control, has been recognised in profit and loss. This also applies to the result on the part of the interest we have disposed of. The transaction resulted in a one-off result of € 29.5 million on the portion of the interest disposed of. With regard to the interest we have retained, the fair value of the sold portion is a reasonable approximation of the fair value of the retained portion, and so we have remeasured the retained portion at € 29.5 million. We have included the remeasurement result of € 29.5 million in the profit and loss account.

We break down our financial information according to our operations, with the operating segments reflecting our management structure. We differentiate between the following segments:

• Gasunie Transport Services
  This segment covers network operations in the Netherlands and is responsible for managing natural gas transmission, developing the natural gas network and related plants, and helping to facilitate a well functioning market.

• Gasunie Deutschland
  This segment covers network operations in Germany and is responsible for managing natural gas transmission, developing the natural gas network and related plants, and helping to facilitate a well functioning market.

• Participations
  This segment focuses on developing infrastructure for alternative energy carriers and making optimal use of existing participating interests, including by facilitating gas flows to north-western Europe through the supply of LNG and transporting gas over long-distance pipelines.

The accounting policies for measurement of assets and liabilities and the determination of the results used for the operating segments are the same as the accounting policies used when drawing up these consolidated financial statements. The assets, revenues and results of a segment comprise items directly related to the segments and items that can reasonably be attributed to them. Because our financing mainly takes place at group level, liabilities are not segmented and are, therefore, not reported on separately. Transactions between companies which belong to the segments are carried out at arm’s length. As regards intersegment eliminations, we have removed transactions between the segments in the financial information by operating segment.

During 2023, the Gasunie Transport Services operating segment provided inter-segment services worth € 54.3 million (2022: € 59.6 million), the Gasunie Deutschland operating segment provided such services to the value of € 0.8 million (2022: € 0.6 million) and the Participations operating segment provided such services to the value of € 79.3 million (2022: € 68.5 million).

We provide more information on net revenue in note 30 ‘Net revenue’.

The assets of the Gasunie Deutschland segment are increasing mainly due to the construction of transmission pipelines connecting onshore and FSRU-based LNG import terminals of third parties to the German gas transmission network. The decrease in the assets of the Participations segment is mainly due to the disposal of a portion of our shares in EemsEnergyTerminal, as explained in note 2 ‘Business combinations and disposals of group companies’.

Allocated assets include tangible and intangible fixed assets, investments in joint ventures and associates, and investments in other equity interests. Unallocated assets comprise deferred tax assets, the derivative financial instruments and current assets.

Investments in and depreciation and amortisation of tangible and intangible fixed assets (including right-of-use assets) and other material non-cash items were as follows:

Other material non-cash items consist of, among other things, movements in personnel-related and other provisions, results of disposals and certain costs of the defined benefit pension plan.

In 2023, the other material non-cash items also include the remeasurement result in the retained interest in EemsEnergyTerminal and the result on the acquisition of GUFU BBL B.V., as explained in note 2 ‘Business combinations and disposals of group companies’.

The geographical distribution of the assets is as follows:

Fixed assets included in the table above comprise tangible and intangible fixed assets and the share in the joint ventures, associates and other equity interests.

Investments in joint ventures in 2023 mainly refer to our interest in the German LNG Terminal and Porthos.

We have included a further explanation of the changes in joint ventures and associates in note 8 ‘Investments in joint ventures’ and note 9 ‘Investments in associates’.

At the end of each reporting period, we determine whether there are any events or indications for impairment of fixed assets and we investigate whether there are reasons to reverse previously recognised impairments.

The outcomes of this analysis for the most significant cash-generating units are shown below.

Furthermore, in the autumn of 2023, ACM, GTS and market parties made additional sector agreements on various topics pursuant to NC-TAR (network code regarding harmonised transmission tariff structures for natural gas). With these agreements, all related objection and appeal proceedings have been concluded and the parties have agreed not to initiate new proceedings regarding the cases that are part of the sector agreements during the remaining years of the current methodology decision. We expect that the additional sector agreements will be finalised in their present form in Q1 2024.

Prior to the impairment test at year-end 2023, the carrying amount of the gas transmission network – which is considered to be a single interrelated cash-generating unit – was approximately € 6.4 billion.

Impairment test method 
We use an impairment test based on value in use (a ‘value-in-use calculation’) to determine the recoverable amount of the gas transmission network. The value in use is determined using a discounted cash flow (DCF) model. A fair value less costs to sell figure was not available at year-end 2023; there is no indication that the fair value less costs to sell is higher than the value in use.

Key assumptions in determining the recoverable amount and the key assumptions and estimates
The recoverable amount is, in principle, determined on the basis of the regulatory framework as laid down in the 2022-2026 methodology decision for GTS and in other regulations and decisions.

The starting point for the forecast revenue in the period 2024-2026 is the expected permitted revenue based on the 2022-2026 methodology decision for GTS and the cash flows derived from this, as well as cash flows from the post-calculations from previous years. For the period after 2026, the value of the network is derived from the regulatory asset base expected at that time (terminal value approach). The regulatory asset base is the value of the investments which the network operator may charge through the tariffs allowing for a reasonable return. Given the regulated nature of the business operations and the use of the expected regulatory asset base as the terminal value, no growth percentage has been applied to the future cash flows. In the regulatory framework, the stance has always been that GTS is entitled to recoup its adequately targeted investments in its future tariffs.

When making the value-in-use calculation, it was assumed that this stance will not change in the future, not even as a result of a possible phasing out of the gas transmission network in the long term as a result of the energy transition. We explain this further in note 1 ‘Significant matters and events in 2023’. For this reason, the regulatory asset base has been used as the terminal value in the terminal value approach.

The company’s management determines the starting point for the forecast expenditure and other variables, such as the expected development of operating costs, and the investment level. The key operating and investment cash flows (relevant for the capital cost allowance and the related post costing) are based on the business plan for the next three years.

A nominal pre-tax discount rate of 5.1% (derived from the post-tax discount rate of 3.8%) was applied when making the value-in-use calculation. The value-in-use calculation assumes a discount rate for determining the present value of the projected future cash flows equal to the capital cost allowance determined by ACM. In determining the future discount rate in the value-in-use calculation we have used the same methodology ACM uses, with the result that the value-in-use calculation has only limited sensitivity to changes in the discount rate (for example the timing effect of the post calculation of the capital cost allowance).

The key principles in the value-in-use calculation are explained below.

Static efficiency after the 2022-2026 regulatory period 
For the calculation of value in use at year-end 2023, we assumed that the average weighted static efficiency for the regulatory period after 2026 will be maintained at 100%. For the 2022-2026 regulatory period, ACM initially set GTS’ average weighted static efficiency at 96.1%, based on a benchmark study. This was one of the grounds for GTS filing an appeal with the Dutch Trade and Industry Appeals Tribunal against ACM’s methodology decision for GTS. In GTS’ view, the robustness of ACM’s benchmark study was too limited and the model was not verifiable and did not provide a basis for the imposed efficiency discount. In 2023, the Tribunal ruled in favour of GTS on this point and required that ACM apply a static efficiency score of 100%.

Inflation adjustment for permitted revenue 
For the forecast revenue in 2025 and 2026, the value-in-use calculation includes an estimate of the inflation adjustment allowance for the permitted revenue. ACM determines the amount of the inflation adjustment allowance over a reference period that differs from the assumption used in the business plan regarding the projected inflation. If the actual inflation adjustment allowance deviates from the allowance assumed in the value-in-use calculation, this will affect the projected future cash flows and, with this, the value in use of the gas transmission network.

Actual (vs forecast) operating expenses
The forecast operating expenses for the 2024-2026 period are based in part on the approved business plan for the next three years. With the exception of most of the energy costs, for almost all operating expenses no post calculation is carried out. If the actual operating expenses deviate from the forecast costs this will affect the projected future cash flows and, with this, the value in use of the gas transmission network.

Sensitivity analysis 
The recoverable amount is based on significant assumptions. Changes may have a considerable effect on these assumptions. The table below provides an indication of the effect that changes to an important assumption will have on the recoverable amount. We assume that, all other things being equal, the change will take place at the start of the business plan period.

Outcome of the impairment test 
From the value-in-use calculation, we have determined that the recoverable amount of the gas transmission network in the Netherlands is virtually the same as its carrying amount. This means that there is neither an impairment loss nor a need to reverse a previously recognised impairment loss.

Movements in tangible fixed assets in 2023 were as follows:

In the Netherlands, the investments related mainly to the GTS nitrogen plant in Zuidbroek and to the WarmtelinQ pipeline. We have provided more details of the disposal of a portion of our shares in EemsEnergyTerminal and the acquisition of GUFU BBL in note 2 ‘Business combinations and disposals of group companies’. In Germany, the investments mainly related to the construction of transmission pipelines connecting onshore and FSRU-based LNG import terminals of third parties to the German gas transmission network. The investments column also contains transfers from fixed operating assets under construction to the other asset categories for assets that were taken into use in 2023.

The conditional investment obligations at year-end 2023 are detailed in note 29 ‘Off-balance sheet obligations’.

Tangible fixed assets at year-end 2023 includes an amount of € 97.4 million (year-end 2022: € 525.8 million) for right-of-use assets. We have economic but not legal ownership of these right-of-use assets. More detailed information about the associated lease liabilities can be found in note 20 ‘Lease liabilities’. Tangible fixed assets also includes a number of pipelines that are jointly owned with other network operators; this only concerns a number of German gas transmission pipelines, of which EUGAL and NEL are the most important. At year-end 2023, the carrying amount of our share in these pipelines was € 486.6 million (year-end 2022: € 536.7 million).

Movements in right-of-use assets associated with leases in 2023 were as follows:

Movements in tangible fixed assets in 2022 were as follows:

In the Netherlands, investments in 2022 related mainly to the construction of the new nitrogen plant, switching certain customers from high-calorific to low-calorific gas, the FSRUs and appurtenances at the port of Eemshaven, and the WarmtelinQ heat network.

In Germany we also invested in assets required for the import of LNG. The investments column also contains transfers from fixed operating assets under construction to the other asset categories for assets that were taken into use in 2022.

The change in the reclassifications column relates to a changed use of a small portion of the line pack/cushion gas and part of the nitrogen inventories. From 2022, we present this portion of the gas inventories under the balance sheet item ‘Inventories’.

Movements in right-of-use assets associated with leases in 2022 were as follows:

The cost and accumulated depreciation of tangible fixed assets were as follows:

Our assets largely comprise regulated assets. The regulated depreciation periods are set by the regulatory authorities for the regulated networks in the Netherlands (ACM) and Germany (BNetzA). In the methodology decision for GTS for the 2022-2026 period, ACM still assumes – based partly on their energy transition studies – a long depreciation horizon (up to as long as 55 years for transmission pipelines) for the gas transmission network. At year-end 2023, the German gas transmission network was in a similar situation in terms of the useful life of existing assets assumed by the regulatory authority for the gas transmission network. However, in the Netherlands depreciation of the regulated assets has been accelerated in the current methodology decision through the application of a declining factor. Furthermore, with regard to certain assets under construction that will be put into use in the coming years, at the end of 2023 the regulatory authority in Germany gave German TSOs the option of writing these down over a period ending in 2045, a much shorter period than that set for writing down current regulated assets (the ‘regulated depreciation period’). Depreciation of these assets had not yet started at year-end 2023. No formal decision has yet been taken regarding the regulated depreciation period for current German assets.

When determining the depreciation periods in the financial statements, at the end of 2023 we attached particular importance to the regulatory framework as it stood at that time and to the assumed longer useful life of regulated assets resulting from this. We anticipate that in the coming years more clarity will arise concerning the regulators’ view on the expected useful life of the regulated assets in the long term and on any further adjustments to the expected useful life/depreciation period set by the regulator for current and new regulated assets. At that time, we will reassess the impact on our depreciation period and/or methodology in the financial statements.

Alongside external regulations, another key consideration in determining depreciation periods is our own view on the energy transition and environmental and climate targets, as well as on other social and political developments. This goes both for the regulated and the non-regulated assets and/or or assets exempted from regulation. We share ACM’s and BNetzA’s view that the existing gas infrastructure will continue to be needed in the medium to long term. We are also working on the possibility of using the existing gas infrastructure, in due course, for the transmission and storage of alternative energy carriers, such as hydrogen. In the Netherlands, an increasingly concrete long-term vision is emerging in the field of hydrogen, heat and CCS, and the details are expected to become ever more clear over the coming years. A practical example of this is the start of the construction of the national hydrogen grid in the Netherlands at the end of 2023. The German government is also working on plans in the climate domain, in which hydrogen is also expected to feature heavily. The Russian invasion of Ukraine in 2022 further accelerated these developments. We periodically evaluate the impact of social and political developments on the depreciation periods. At the end of 2023, this review did not result in a change in the depreciation periods.

Lastly, in our regular assessments of depreciation periods we check whether they relate to individual assets that will in the medium term no longer be used for the transmission or storage of gas. In such specific cases, we may possibly amend the depreciation periods for these individual assets. These installations have been temporarily decommissioned, or could be in the near future; in such cases these assets are depreciated at an accelerated rate until the date of decommissioning. In the approach to the technical decommissioning, if an alternative use is foreseen for hydrogen, heat or CCS, we take into consideration the possibility of recommissioning the installations in the future. The installations will therefore not be removed/replaced, but sustainably preserved. In 2023, accelerated depreciation was applied to one installation, resulting in additional depreciation costs of approximately € 4.5 million.

We have no indications that the expected useful life of the other regulated and non-regulated assets and/or or assets exempted from regulation is shorter than the current depreciation period.

The depreciation periods for the most important asset categories were as follows:

We depreciate right-of-use assets in accordance with the above categories; we depreciate leased land in accordance with the useful life of the asset with which the land lease is connected. We do not calculate depreciation on land, line pack/cushion gas volumes or assets under construction.

Movements in intangible fixed assets in 2023 were as follows:

The intangible fixed assets exclusively concerned activated software, insofar as these assets were not directly related to the IT operating system for the gas transmission network; we present the latter under tangible fixed assets. The investments include the implementation of a new ERP system.

The amortisation period for intangible fixed assets varies between five and ten years, depending on the nature of the software.

Movements in intangible fixed assets in 2022 were as follows:

The cost and accumulated amortisation of intangible fixed assets were as follows:

We have interests in the following joint operations, either directly or indirectly:

See note 2 ‘Business combinations and disposals of group companies' for more details on our acquisition of the shares in GUFU BBL B.V. in 2023. Acquiring the shares in GUFU BBL B.V. did not at any point give Gasunie control over BBL Company. Moreover, a V.O.F. structure is considered to be a transparent structure in the Netherlands, with the partners having a direct interest in the assets and liabilities of the V.O.F. The legal and economic reality of BBL Company is therefore comparable with that of a joint operation.

We have interests in the following joint ventures, either directly or indirectly:

The aim of the joint arrangement is to build a demonstration facility to demonstrate that this new technology can work robustly on an industrial scale over the coming years. Gasunie’s financial interest has been 35% since 2021; however, based on the contractual arrangements there is joint control.

The movements in joint ventures have been aggregated as follows:

The investments in 2023 mainly related to German LNG Terminal and Porthos. The direct movements in equity referred to the remeasurement of the interest in Gate terminal as a consequence of the change in fair value of the effective part of one of Gate terminal’s cash flow hedges. Gasunie has recognised this change in equity in other comprehensive income.

The reclassification of EemsEnergyTerminal from group company to joint venture ensued from the sale of 50% of Gasunie’s shares in EemsEnergyTerminal on 1 October 2023. By effecting this share deal, Gasunie no longer has control in EemsEnergyTerminal and, accordingly, we have remeasured the interest we have retained in the terminal at fair value. For more details on this share deal, see note 2 ‘Business combinations and disposals of group companies’. The disposals mainly related to the sale of 60% of our interest in Germany LNG GmbH. The shareholding to be transferred was already recognised as ‘assets held for sale’ at the end of 2022.

Loans to joint ventures concern loan facility agreements with EemsEnergyTerminal and VertiCer. See note 43 ‘Financial fixed assets’. In 2023 an amount of € 46 million was taken out in loans. An amount of € 42 million was redeemed. These amounts are included in the consolidated cash flow statement.

Of the joint ventures, Gate terminal and EemsEnergyTerminal have a material effect on our equity and result. Information about the carrying amount, the share in other comprehensive income, the result for the financial year and the dividend received on investments broken down into Gate terminal, EemsEnergyTerminal and other joint ventures is as follows:

Due to the material effect on Gasunie’s equity and result, we have included more detailed information below with regard to Gate terminal and EemsEnergyTerminal.

Information about Gate terminal and EemsEnergyTerminal
The financial information concerning Gate terminal and EemsEnergyTerminal is as follows:

At year-end 2023, investments in associates related solely to the interest in Trading Hub Europe GmbH and Beheerder Afsprakenstelsel B.V. 

THE has no material effect on our equity and result. The value of Gasunie’s interest in THE was € 0.6 million at year-end 2023 (€ 0.6 million at year-end 2022). 

Gasunie’s total share in the other comprehensive income of associates in 2023 is less than € 0.1 million (2022: less than € 0.1 million). 

The other equity interests are as follows:

Nord Stream is responsible for the two gas pipelines that form the Nord Stream connection which runs under the Baltic Sea from Russia to Germany. Gasunie gained a stake in the equity of Nord Stream in 2008. Based on agreements with shareholders, Gasunie has no significant influence in Nord Stream. 

The fair value of other equity interests at year-end 2023 was € 7 million (also € 7 million at year-end 2022). For all participating interests this is a level 3 measurement (year-end 2022: level 3). The other equity interests paid no dividend in 2023 (the same as in 2022).  

The assumption for the other equity interests in PRISMA, EDSN and SCW Systems is that, partly on account of their relatively small size, the carrying amount is a good estimate of the fair value. We have, therefore, not included a fair value calculation and sensitivity analysis in the financial statements for these interests. 

Deferred tax assets arise from temporary differences between the measurement of assets and liabilities for financial reporting purposes and their measurement for tax purposes. There are no capitalised losses carried forward. At year-end 2023, we expected sufficient future taxable profits to utilise the deferred tax asset (year-end 2022: the same). This assumption is based on the projected taxable results for the coming years (based on the most recent multi-year plan) and on the assumption that, based on the current regulatory frameworks, we can in principle always make a reasonable return on our invested amounts and the operating expenses and depreciation costs will always be recovered, meaning that we will also earn sufficient taxable profits in the long term.

The temporary differences concerned the tax treatment of the purchase price paid by the Dutch State, the differences in respect of the measurement of tangible fixed assets and other temporary differences. The first difference arose when Gasunie was split into a transport and a trading company in 2005. At the time, the Dutch State made a deemed capital contribution to Gasunie for tax purposes. Gasunie did not capitalise this purchase price for tax purposes under IFRS. This recognition of the purchase price has given Gasunie an additional tax depreciation potential, for which a deferred tax asset has been recognised. 

The temporary difference resulting from the measurement of tangible fixed assets is mainly due to the one-time remeasurement of tangible fixed assets when Gasunie was split in 2005 and the subsequent transition to IFRS. In addition, the depreciation method for tax purposes deviates from time to time from the depreciation principles under IFRS (including the recognition of impairments and their reversals). Such temporary differences are recognised in the balance sheet. On balance, temporary differences in tangible fixed assets result in a deferred tax liability. 

The other differences relate mainly to temporary differences resulting from employee benefits and derivative financial instruments. 

The aforementioned deferred tax assets and liabilities relate to the fiscal unity for Dutch corporate income tax and satisfy the conditions for setting off tax debts. We have therefore presented deferred taxation as a net amount.

The movements in deferred tax assets in 2023 were as follows:

The deferred tax assets at year-end 2023 to be settled within one year after the balance sheet date amounted to € 33.5 million (year-end 2022: € 34.3 million). This amount is not shown separately under current assets. The non-current portion of the deferred tax assets has a term until 2070. 

The movements in deferred tax assets in 2022 were as follows: 

Inventories can be broken down as follows:

‘Inventories’ consists of gas inventories, emission allowances and other inventories. 

Gas inventories comprise the physical stores of gas and mainly consist of natural gas inventories, though also a small store of nitrogen, which we use for quality conversion. Our group company GTS maintains natural gas reserves, for one to fulfil its statutory duty to provide peak capacity in the Netherlands. GTS is required to take measures to secure peak capacity for suppliers of small-scale consumers. Peak capacity concerns the supply of gas in case of extremely cold weather conditions, i.e. when temperatures over a 24-hour period at the Royal Netherlands Meteorological Institute's base in the town of De Bilt drop to below -9°C. When that happens, GTS supplies gas to licence holders (i.e. the suppliers to the small-scale consumer market). 

In addition to possibly using our own natural gas, we contract third parties specifically for the purpose of fulfilling this statutory duty, putting the fulfilment of this obligation out to tender. However, given the volatile gas market in 2022 the tender was unsuccessful. The invitation to tender for the provision of peak capacity for the winter of 2023/2024 was successful, meaning we could store less of our own physical natural gas at the end of 2023. 

The emission allowances relate almost entirely to emission allowances under the EU ETS. The balance of the allowances included in the balance sheet concerned the surplus emission allowances not required to meet the obligation at the end of the financial year. We can use these allowances to settle future obligations. 

The other inventories concerned items kept for regular daily maintenance, for the company’s own present and future investments, and for projects carried out for third parties and joint ventures. 

In measuring the inventories at year-end 2023, we already took into account a write-down based on the lower recoverable amount. In 2023, an amount of € 0.3 million (2022: € 2 million) has been recognised in other costs as a result of the adjustment of the inventory measurement to the lower recoverable amount. This addition strictly concerned other inventories and not the gas inventories or emission allowances.  

Trade and other receivables are as follows:

Receivables from joint ventures and associates related mainly to costs we incurred and investments we made on behalf of the joint ventures in which we are a partner that are yet to be settled. The receivables have a regular payment term and therefore bear no interest. 

Other taxes mainly concerned current VAT receivables. The other receivables and accrued income include the acquisition price yet to be received for the sale of 50% of our shares in EemsEnergyTerminal, as explained in note 2 ‘Business combinations and disposals of group companies’ and the receivables following the settlement of the sale of 60% of our interest in German LNG Terminal, as explained in note 8 ‘Investments in joint ventures’.

Trade and other receivables have a nominal term of less than one year. Note 28 ‘Financial instruments’ provides more information on the securities received. Trade and other receivables are measured less a provision to cover expected credit losses. Movements in the provision for expected credit losses were as follows:

The addition of € 3 million to the provision in 2023 is related to one of our customers failing to fulfil a contractual obligation. We also have outstanding liabilities vis-à-vis the same customer, which we have reduced, also by € 3 million, based on our expectation that we will be able to set off our debt against our receivable. Accordingly, the above credit loss ultimately had no impact on the result in 2023.

The total of trade receivables and other receivables, excluding receivables under other taxes, totalled € 400.6 million at year-end 2023 (year-end 2022: € 300.3 million). The ageing of these receivables as at the balance sheet date was as follows:

Our exposure to credit risk does not exceed the carrying amount of the trade and other receivables. We have implemented strict processes and measures to limit credit risk. We determine the expected credit loss on trade and other receivables for each individual debtor separately, taking into account the age of the receivable, the probability of non-payment, and the loss incurred in the event of non-payment, among other factors. We use internal and external credit checks and ratings when accepting new customers and for determining credit limits for our existing customers. 

When deemed appropriate, we request bank guarantees or other securities to cover the credit risk. For a more detailed explanation of the credit risk see note 28 ‘Financial instruments'.

N.V. Nederlandse Gasunie and its wholly-owned Dutch group companies constitute a fiscal unity for corporate income tax. Gasunie Deutschland GmbH & Co. KG and its wholly-owned German group companies also constitute a fiscal unity for German corporate income tax purposes. We do not present receivables and liabilities relating to corporate income tax on different fiscal unities as a net amount. This also applies to receivables and liabilities for companies that do not belong to the fiscal unity. 

The corporate income tax refund receivable was as follows:

The corporate income tax payable was as follows:

Current receivables and liabilities relating to corporate income tax constitute the corporate income tax due for the current financial year less any sums paid on receipt of provisional or final tax returns and adjusted for any corrections from previous periods for the relevant fiscal unities. 

Movements in the corporate income tax payable/receivable were as follows:

The relatively large changes in taxes to be paid and tax refunds to be received mainly related to the amount and timing of the provisional tax returns in relation to the significant fluctuations in the results in 2022 and 2023 and the consequent corporate income tax to be paid. We provide further details on the result development in note 30 ‘Net revenue’.

More details of the acquisition of GUFU BBL are provided in note 2 ‘Business combinations and disposals of group companies’.

The cash and cash equivalents were as follows:

Bank balances carry an interest rate based on daily interest and are payable immediately. The call funds and deposits are also interest bearing and have a short term (varying between 1 and 90 days). 

The cash and cash equivalents balance decreased at year-end 2023, mainly due to lower security deposits received from customers. The higher balance in 2022 was an effect of the uncertainties and high prices on the European energy markets, as a result of which we received more financial security from our customers in that year. 

We aim to have a financial profile that will enable us to implement our strategy and, at the same time, lead to a satisfactory credit rating that aligns with our profile and the shareholder’s policy.

We have included further information about the company’s financial position, the financial and other instruments used, and the size of these instruments in note 18 ‘Interest-bearing loans’ and note 28 ‘Financial instruments’.

For a further explanation of our equity, we refer to the notes to equity in the company financial statements (notes: 45 ‘Issued share capital’; 46 ‘Remeasurement reserve’; 47 ‘Legal reserve for participating interests’; 48 ‘Other reserves’; and 49 ‘Unappropriated result’).

All shares issued are held by the Dutch State.

Movements in the minority interest were as follows: 

At the end of 2023, the non-controlling interest strictly concerned the 25% minority interest in GUFU BBL B.V. More details of the acquisition of GUFU BBL are provided in note 2 ‘Business combinations and disposals of group companies’.

GUFU BBL’s condensed financial information is as follows: 

At year-end 2023, the nominal amount of € 3,090 million (year-end 2022: € 3,015 million) in non-current loans comprised € 2,550 million (year-end 2022: € 2,250 million) in bond loans and € 540 million (year-end 2022: € 765.0 million) in private loans. The transaction costs and discount still to be amortised amounted to € 14.6 million (year-end 2022: € 14.5 million). These are loans drawn at group level, but which also serve as financing of group company investments. 

Movements in interest-bearing loans were as follows:

In November 2023, we issued our first green bond, with a value of € 300 million. With an agreed term of 9.5 years, this bond will be repaid in one lump-sum payment at the end of the term. The bond has been placed under Gasunie’s Green Financing Framework and, as a result, we must fully allocate the proceeds from this bond to ‘green’ spending. Our Framework complies with the International Capital Markets Association (ICMA) Green Bond Principles and the European Green Bond Standard approved by the European Council in October 2023. The effective coupon rate is 3.918% and is fixed for the entire term. After deducting € 1.6 million in discount and transaction costs, € 298.4 million in cash was received. This amount is also included in the consolidated cash flow statement. 

In October 2021 and July 2022, we issued ‘sustainability-linked bonds’ (SLBs), with a total value of € 800 million. Both bonds were issued in compliance with the Sustainability-Linked Bond Framework. This framework is in line with the 2020 version of the ICMA’s Sustainability-Linked Bond Principles (SLBPs). We have set two targets that have to be achieved by 31 December 2030. The first is for us to reduce our methane emission levels by approximately 50% compared to the 2020 level. The second target relates to our CO2-equivalent emissions that we can influence, which are to be reduced by 30% by 2030, compared to the 2020 level. From 2031 onwards, the sustainability targets could possibly result in an annual coupon increase of 0.10% to 0.20% or 0.125% to 0.25% (depending on the SLB) if we have not achieved one or more targets by 31 December 2030. Any coupon increases apply to the period from 2030 to either 2034 or 2036 (depending on the SLB).

These potential coupon increases on our SLBs were not recognised in the effective interest at year-end 2023 because, based on the agreed scope, there is currently no reason to assume that the company will not hit the targets.  

In 2023, two private loans were repaid in full on the maturity date. This repayment is also included in the consolidated cash flow statement.

The maturity schedule for interest-bearing loans (nominal value) is as follows: 

Non-current loans, including current repayment obligations are as follows: 

The weighted average effective interest rate on the non-current loans at year-end 2023 was 1.8% (year-end 2022: 1.6%). 

We have not provided any securities to credit providers with regard to the interest-bearing loans. Neither were there any significant financial covenants or ratios with which we had to comply. 

Our loans with the European Investment Bank (EIB) with a remaining value of € 540 million at year-end 2023 are subject to a number of change-of-control conditions regarding the Dutch State holding shares in N.V. Nederlandse Gasunie and regarding N.V. Nederlandse Gasunie holding shares in GTS B.V. We deem it unlikely that these change-of-control events will take place within the foreseeable future. 

See note 28 ‘Financial instruments’ for more information on the financial risks associated with the interest-bearing loans and how the company manages the financial risk with the aim of limiting these risks.

As at year-end 2023, the other non-current liabilities related to a long-term corporate income tax compensation obligation vis-à-vis Vopak arising from the sale of 50% of the shares in EemsEnergyTerminal, as explained in note 2 ‘Business combinations and disposals of group companies’. The liability has a term ending in 2027. The current part of this liability is recognised under trade and other payables.

We have entered into lease contracts covering such matters as land and buildings, regional transmission pipelines, and company vehicles. These right-of-use assets are for the company’s own use; there are no sub-leases involved. For more information about the related right-of-use assets see note 5 ‘Tangible fixed assets’.

Movements in lease liabilities were as follows: 

The increase in lease payments concerned EemsEnergyTerminal. This entity was part of the consolidation scope for approximately four months in the 2022 financial year and around nine months in 2023. Further information on the disposal of a portion of our shares in EemsEnergyTerminal and the acquisition of GUFU BBL is provided in note 2 ‘Business combinations and disposals of group companies’.

In certain cases, lease terms are based on estimates. This is specifically the case for leases payable on leased land. While these third-party assets are generally leased for an indefinite period, we have the option to terminate the lease at short notice. We measured the most likely lease period by looking at the useful life of the asset, such as a pipeline or a plant, for which the land is leased.  

The weighted average incremental borrowing rate in 2023 was 2.14% (2022: 2.20%). Lease contracts with a term of less than one year or with a contract value of less than € 5,000 are not included in the balance sheet. Both categories represented less than € 0.1 million per year at year-end 2023 (2022: the same).

Adjustments of lease variables concern interim adjustments of variables in the existing lease contracts that result in a change in the measurement of the contracts, such as expected or agreed lease terms and the size of lease payments. 

The remaining term of the lease liabilities is as follows: 

The current part of the lease liabilities is presented separately under current liabilities. For more information on the nominal value of the future lease payments see the ‘price risk’ section of note 28 ‘Financial instruments’.

Contract liabilities relate to recognition of our revenue from contracts with customers. The payment schedule for certain contracts is not synchronous with the way in which we are required to allocate revenues to the financial years. This happens in the case of contracts in which customers have made a financial contribution to an investment in specific transport capacity. In principle, these contributions are attributed to the contract with the customer and not to the asset to which the contribution relates. We have included a contract liability for such customer contributions, taking account of the financing element in these contracts. 

At year-end 2023, our contract liabilities totalled € 91.8 million (year-end 2022: € 70.8 million). The following table shows the movements in these contract liabilities. 

The increase in contract liabilities related in part to EemsEnergyTerminal. This entity was part of the consolidation scope for approximately four months in the 2022 financial year and around nine months in 2023. Further information on the disposal of a portion of our shares in EemsEnergyTerminal and the acquisition of GUFU BBL is provided in note 2 ‘Business combinations and disposals of group companies’. The increase in contract liabilities is further related to contributions received from third parties for the construction of transmission pipelines connecting onshore and FSRU-based LNG import terminals of third parties to the German gas transmission network.

The remaining term of the contract liabilities is as follows:

We have presented the current part of the contract liabilities separately under current liabilities. 

Deferred tax liabilities arise from temporary differences between the measurement of assets and liabilities for financial reporting purposes and the measurement for tax purposes. In particular, deferred tax liabilities mainly refer to temporary differences in the measurement of tangible fixed assets in Germany. In addition, there are a few other differences that lead to deferred tax liabilities and assets.

The deferred tax liabilities and assets mainly relate to the fiscal unity for German corporate income tax and satisfy the conditions for setting off tax debts. We have therefore presented deferred taxation as a net amount. 

The movements in deferred tax liabilities in 2023 were as follows: 

More details of the acquisition of GUFU BBL are provided in note 2 ‘Business combinations and disposals of group companies’. The amount of deferred tax liabilities to be settled more than one year after the balance sheet date was € 209.5 million at year-end 2023 (year-end 2022: € 170.2 million). 

The movements in deferred tax liabilities in 2022 were as follows:

The liabilities recognised in the balance sheet relating to deferred employee benefits can be broken down as follows:

For the most part, this is a non-current provision. The increase in the pension obligation in 2023 can be mainly explained by the decrease in the discount rate at year-end 2023.

The pension obligation as at the end of the financial year is set out in the historical summary below:

The weighted average duration of the pension obligations was approximately 17 years at year-end 2023 (year-end 2022: approx. 17 years). The assumptions underlying the calculation of the pension obligations are as follows:

Movements in the present value of pension obligations were as follows:

The actuarial results are as follows:

The actuarial results for 2023 were affected mainly by a decrease in the discount rate.  

Actuarial results taken directly to other comprehensive income totalled € 7.9 million in 2023 (2022: € 31.7 million). At year-end 2023, the accumulated actuarial result, net of deferred taxation, was € 12.5 million negative (year-end 2022: € 4.6 million negative). The actuarial results are accounted for in other comprehensive income.

The sensitivity of the calculation of the provision for pension obligations is as follows:

• If the discount rate changes by 0.1% point in otherwise unchanged circumstances, this is expected to lead to a change in the present value of pension entitlements and a change in other comprehensive income of € 1.5 million (year-end 2022: € 1.2 million).
• If the expected future salary increase changes by 0.1% point in otherwise unchanged circumstances, this is expected to lead to a change in the present value of pension entitlements and a change in other comprehensive income of € 0.3 million (year-end 2022: € 0.2 million).
• If the expected future pension increase changes by 0.1% point in otherwise unchanged circumstances, this is expected to lead to a change in the present value of pension entitlements and a change in other comprehensive income of € 1.1 million (year-end 2022: € 0.9 million).

The total pension expenses for the defined benefit pension plan as presented in the statement of profit and loss comprise:

The increase in the provision is mainly the result of the increased number of employees and a lower notional rate of interest. For the most part, this is a non-current provision. 

For the most part, this is a non-current provision. 

The other provisions are as follows: 

We update the redevelopment programme annually, including with regard to expected future prices, the estimate of the assets to be removed, and the nature and extent of the work to be carried out in connection with the removal (or rehabilitation) of the pipelines.    

At year-end 2023, we considered it unlikely that all transmission pipelines and appurtenances would have to be removed. In our assessment, we have taken into consideration that natural gas transmission will continue to be important over the coming years. Moreover, we see sufficient opportunities for various alternative uses, including for the transmission of alternative energy carriers, such as hydrogen. We expect to be gradually repurposing the existing natural gas transmission network for the transmission of alternative energy carriers in the near and further future. Aside from that, the revenues from alternative use (in the longer term) less the costs of preservation are anticipated to outweigh the costs of removal, including the societal costs. Based on the above considerations, a provision for abandonment costs for the gas transmission network as a whole in the longer term has not been recognised. 

In measuring the provision for abandonment costs and redevelopment, we take into account that our judgements and estimates may be affected by developments in the area of the energy transition and tightened environmental and climate targets. With respect to hydrogen, heat and CO₂, the long-term vision is becoming increasingly concrete and is expected to be worked out further over the coming years. On the balance sheet date, we have brought the provision for abandonment costs and redevelopment into line with the most recent developments. The aforementioned developments may also in future years lead to an adjustment to the scope of the provision for redevelopment, such as if certain network components turn out not to be fit for an alternative use that was previously thought feasible. Aside from that, the provision can be adjusted if experience figures prompt a change to the redevelopment method or if the costs of historic redevelopment activities are reason to assume higher or lower costs for future redevelopment activities. 

The movements in other provisions were as follows:

The ‘disposal of EemsEnergyTerminal’ item concerned the fact that EemsEnergyTerminal is no longer recognised in the consolidation as of 1 October 2023. We provide more information on this transaction in note 2 ‘Business combinations and disposals of group companies.

The current part of the provision for abandonment costs and redevelopment was expected to total € 14.6 million at year-end 2023 (year-end 2022: € 11.5 million). This amount is not shown separately under the current liabilities. In 2023, we applied a discount rate of between 3.5% and 3.6% (2022: between 3.5% and 3.8%). 

The fair value of the derivative financial instruments was as follows:

The forward exchange contracts were concluded in 2022 by N.V. Nederlandse Gasunie for the hedging, at group level, of the currency risk on the use of two FSRUs by our joint venture (at the time a wholly-owned group company) EemsEnergyTerminal. We are required to pay the costs of the charter of these FSRUs in US dollars. We fully consolidated EemsEnergyTerminal up to 1 October 2023, from which date we subsequently recognise EemsEnergyTerminal as a joint venture, as explained in note 2 ‘Business combinations and disposals of group companies’. As part of the share deal, N.V. Nederlandse Gasunie concluded an agreement with EemsEnergyTerminal under which changes in value of the forward exchange contracts that N.V. Nederlandse Gasunie has with its external counterparties are fully settled with EemsEnergyTerminal. This agreement itself also qualifies as a financial instrument under IFRS 9. Given that the conditions for netting have not been met, we present both balance sheet positions regarding the forward exchange contracts separately. Further, given that the two positions change in unison in opposite directions, there is on balance no effect on N.V. Nederlandse Gasunie’s result and the derivative and the hedged items are effectively recognised via EemsEnergyTerminal.

We provide further details on the gas price swaps in note 28 ‘Financial instruments'.

The derivative financial instruments are measured at fair value. Although we hold these derivative financial instruments for the purpose of risk hedging, as explained in note 28 ‘Financial instruments’, for practical reasons, and given the relatively short term of the derivative financial instruments, we have not used the option of cash flow hedge accounting or fair value hedge accounting. This means that changes in the value of these derivative financial instruments are recognised directly in profit and loss. 

Further details of the derivative financial instruments are provided in notes 28 ‘Financial instruments’, 35 ‘Financial income’ and 36 ‘Financial expenses’.

Current financing liabilities were as follows: 

For more information about non-current interest-bearing loans see note 18 ‘Interest-bearing loans’.

At year-end 2023, we had not taken out any current interest-bearing loans (year-end 2022: the same). During the financial year we took out and subsequently redeemded an amount of € 435 million in short-term loans. These amounts are included in the consolidated cash flow statement. 

Trade and other payables can be broken down as follows:

Other taxes and social security contributions primarily consist of VAT payable, social security contributions and wage tax payable.

The other liabilities and accruals consist mainly of accrued interest on loans, receivable invoices, security deposits received, and debts to joint ventures. Security deposits received are securities our customers have given us to cover the credit risk. We calculate a market interest charge for the security deposits. At year-end 2023, deposits received amounted to € 236.6 million (year-end 2022: € 307.8 million). Debts to joint ventures amounted to € 27.1 million at year-end 2023 (2022: € 26.4 million) and related entirely to the cash pools we manage with respect to several joint ventures. 

Trade and other payables, apart from the security deposits received, bear no interest and have a term of less than one year.

We may use derivative financial instruments to manage interest rate, currency, and price risks arising from ordinary operational activities. We only use derivative financial instruments to hedge risks and not for trading or any other purpose.

On average, between 5% and 10% of our non-current debts (including the current repayment obligation on non-current loans) are current financing arrangements (e.g. ECP or deposit loans). However, this situation may differ from day to day, including on the balance sheet date, and depends on the exact liquidity situation and the need for liquidity. Although we conclude these current loans with a fixed interest rate for the term, we do run an interest rate risk on the periodic refinancing. 

At year-end 2023, we had no outstanding non-current loans with a variable rate of interest (year-end 2022: € 100 million). 

A 1% point change in the interest rate will alter the interest expenses by approximately € 1.6 to € 3.1 million. We do not hedge the interest rate risk on loans with a variable interest rate given the limited size and term of these loans. 

The currency risk is limited in the context of regulated business operations in the Netherlands and Germany because virtually all transactions take place in euros. For a few non-regulated business activities and/or business activities exempted from regulation, the transactions take place in currencies other than the euro as well, mainly in pounds sterling. As a result of no longer consolidating EemsEnergyTerminal, as explained in note 2 ‘Business combinations and disposals of group companies’, the currency risk exposure arising from USD transactions no longer applies directly to Gasunie (year-end 2022: exposure, after hedging, of $ 26.6 million). We hedge currency risks if there is sufficient certainty about the amount and timing of the foreign currency cash flows. 

The total value of these liabilities in pounds sterling was £ 4.3 million at year-end 2023 (£ 0.5 million at year-end 2022). The currency risk on the liabilities in pounds sterling is not hedged by forward exchange contracts. Given the limited size of foreign currency positions at the end of the financial year, no sensitivity analysis has been included. 

At the end of 2023, no other foreign currency positions of significant size were held nor were other currency risk hedging instruments used, other than as explained in note 25 ‘Derivative financial instruments’.

As a result of the ruling by the Dutch Trade and Industry Appeals Tribunal, the original agreements concerning post calculation of GTS’ energy costs have been amended. For the 2022-2026 period, GTS may apply post calculation for 75% of the difference between the actual and estimated costs, provided that actual costs do not deviate from estimated costs by more than 20%. In the case of a deviation of more than 20% between the estimated and actual costs, we may fully apply post calculation to the costs above the 20% deviation. As a result, GTS’ price risk is limited. 

GTS applies a procurement strategy aimed at achieving a market-competitive price. The basic principle of our policy is that we do not trade in energy supply contracts and do not take speculative positions. We have committed to purchasing the contracted volumes ourselves and using them for our day-to-day operations. 

The energy supply contracts come with the contractual option to partly fix prices for a certain future supply period. We do this, for example, through forward supply contracts, in which we take into account the anticipated energy requirements for specific periods, in order to meet the own-use exemption under IFRS 9.2.4. The level of price risk hedging is influenced in part by the predictability of the volume and timing of the energy usage. GTS aims to cover at least 65% of the forecast energy usage. For required energy that has not been contracted under forward supply contracts, we procure this on the spot market as and when the need for energy arises.

Gasunie Deutschland fixes the prices only to a very limited extent or not at all under its current procurement contracts and within the current regulatory framework. In Germany, too, we are allowed to charge on higher energy costs in future tariffs. For other important group companies, such as EnergyStock and BBL Company, because their energy usage and timing is harder to predict in practice and because the price risk is predominantly borne by customers of these group companies, there is limited or no price fixing. For required energy that has not been contracted under forward supply contracts, we procure this on the spot market as and when the need for energy arises.

At year-end 2023, the nominal value of the forward supply contracts for the company’s energy usage totalled approximately € 73.5 million (year-end 2022: € 205.2 million). The forward supply of energy under these contracts consists entirely of electricity and gas to be supplied in the 2024 financial year. Under IFRS 9.2.4, liabilities from forward supply contracts are not recognised in the balance sheet.

With regard to the gas inventories held for GTS to fulfil its obligation to provide peak capacity, given the underlying regulated settlement system we do not run a price risk. 

Lastly, Gasunie has entered into investment obligations in a joint venture, the amount of which may vary depending on gas price developments. To limit the cash flow risk on these expected capital expenditures, we use gas price swaps, this way effectively fixing the future variable investment obligation – in terms of our share in this investment obligation – over the term of the investment obligation (until 31 December 2027). At year-end 2023, the volume of the variable investment obligation was 408,887 MWh (year-end 2022: 268,825 MWh). The increase in the hedged volume is related to the expected increase in the investment obligation now that we have made the final investment decision for this project. The price risk on the variable investment obligation was fully hedged at year-end 2023 (year-end 2022: the same). The value of the gas price swap was € 19.2 million negative at year-end 2023 (2022: € 15.3 negative).

At the end of 2023, we determined the sensitivity of the gas price swaps to reasonable changes in forward gas prices. The impacts of such changes on the result before taxation and on equity, based on the exposure at the end of the financial year, were as follows: 

At year-end 2023, we had received the following guarantees from third parties:

Securities received are primarily guarantees issued as part of gas transmission and storage arrangements, as well as guarantees provided by contractors and suppliers involved in major investment projects. The security deposits are held in cash and are interest-bearing. We calculate a market interest charge for the security deposits. The balance of security deposits received was lower than in 2022 due to energy markets stabilising somewhat.

The individual terms of the guarantees received are generally short (one to three years), with the terms of a few guarantees exceeding five years. The guarantees are not freely assignable.

In making use of financial instruments (such as derivative financial instruments) we apply strict limits for each individual counterparty in keeping with our treasury policy to mitigate the related credit risk. This limits the level of risk we are exposed to from our counterparties. We have drawn up criteria for selecting counterparties in financial transactions. These criteria limit the risk associated with possible credit concentrations and market risks. No collateral has been received/provided with regard to the derivative financial instruments held at year-end 2023 (year-end 2022: the same). 

Among other things, our financial policy is to reduce our liquidity risk at as low a cost as possible. The options for reducing this risk depend in part on our solvency. We are a solvent company and can therefore attract credit facilities relatively easily. According to Standard & Poor’s, Gasunie’s long-term creditworthiness is AA- with a stable outlook; the short-term rating is A-1+. According to Moody’s Investors Service, the long-term credit rating is A1 with a stable outlook, and the short-term rating is P-1.

At year-end 2023, to hedge our liquidity risk we had an uncommitted current account facility of € 45 million (year-end 2022: € 45 million), a committed credit facility of € 600 million (year-end 2022: € 600 million), a Euro Commercial Paper (ECP) programme of € 750 million (year-end 2022: € 750 million) and a European Medium Term Note (EMTN) programme of € 7.5 billion (year-end 2022: € 7.5 billion). The committed credit facility runs until April 2027. 

No funds were drawn on the committed credit facility over the past year. As part of our normal operational activities, we have occasionally raised short-term loans on the money market in the form of deposit loans and debt securities under the ECP. Under the EMTN programme, € 2,550 million had been issued in loans as at year-end 2023 (year-end 2022: € 2,250 million). The EMTN programme was approved on 30 October 2023 and applies for one year from the date of approval. 

Summary of future cash flows
The maturity profile of future cash flows relating to non-current and current financial liabilities outstanding as at the balance sheet date was as follows: 

The maturity profile of future cash flows relating to non-current and current financial liabilities outstanding in 2022 was as follows:

Virtually all the lease contracts included in the balance sheet are subject to an annual inflation adjustment based on underlying price indexes. The stated cash flows relating to the leases do not take future increases into account. At year-end 2023, there were no leases with a start date in the future, nor were there any residual value guarantees or material extension or termination options (year-end 2022: the same).  

The way in which fair value is determined is described under ’Determining fair value’ in the accounting policies for the measurement of assets and liabilities and the determination of the results. In 2023 no transfers took place between the various fair value measurement levels (2022: the same). 

Other equity interests
At year-end 2023, the value of other equity interests measured at fair value in the balance sheet was € 7 million (year-end 2022: € 7 million). This is a level 3 fair value measurement (year-end 2022: level 3). For more information see note 10 ‘Other equity interests’.

Derivative financial instruments
The derivative financial instruments are forward exchange contracts and a gas price swap. The fair value of the forward exchange contracts is determined based on the present value of projected future cash flows. For this purpose, we made use of forward exchange rates with a comparable term and a zero-coupon discount rate that matches the currency and the term of the transactions, taking into account Gasunie’s credit risk and that of the relevant counterparties. This is a level 2 fair value measurement. At year-end 2023, the fair value of the forward exchange contracts totalled € zero (year-end 2022: € 0.5 million negative). We explain this further in note 25 ‘Derivative financial instruments’.

The fair value of the gas price swap is determined based on the present value of quoted commodity prices for gas price swaps. For this purpose, we made use of the closing prices for gas forward products with a comparable term and a zero-coupon discount rate that matches the currency and the term of the transactions, taking into account Gasunie’s credit risk and that of the relevant counterparties. This is a level 2 fair value measurement. At year-end 2023, the fair value of the gas price swap was € 19.3 million negative (year-end 2022: € 15.4 million negative).

Interest-bearing loans
The interest-bearing loans are bond loans with a listing on the Amsterdam stock exchange, and private loans. 

The fair value of listed bonds is the same as the year-end exit price. This is a level 1 fair value measurement (year-end 2022: level 1). The fair value of the private loans has been determined by calculating the present value of the expected future cash flows at a discount rate equal to the applicable risk-free market interest for the remaining term, plus credit and liquidity surcharges. We also take the company’s risk profile and those of the counterparties into account. This is a level 2 fair value measurement (year-end 2022: level 2). 

The carrying amount and the fair value of the interest-bearing loans as at year-end 2023 were:

Other primary financial instruments
Other primary financial instruments comprise trade and other receivables, cash and cash equivalents, current financing liabilities (excluding current repayment obligations on non-current loans), trade and other payables. 

Given the short term of these instruments, their carrying amount approximates their fair value.

The securities provided include securities and guarantees provided to our customers, suppliers and other stakeholders (or those of our joint ventures). The increase in the ‘Parent company guarantees’ is mainly attributable to the disposal of a portion of our shares in EemsEnergyTerminal, as explained in note 2 ‘Business combinations and disposals of group companies’. This concerns guarantees for the charter of two floating storage and regasification units (FSRUs). We note here that we received € 186.1 million in counter-guarantees from the other shareholder in EemsEnergyTerminal at year-end 2023 (year-end 2022: € zero). Given that the legal conditions for netting have not been met, we have not deducted the counter-guarantees from the guarantees we have provided. 

The increase in the ‘Other guarantees’ item related to a guarantee provided to our joint venture German LNG Terminal. The guarantees are not freely assignable. The term of the securities provided generally varies between 1 and 10 years; a limited number of securities do not have an agreed end date. 

The non-current obligations mainly related to the procurement of nitrogen production capacity, reserved transmission capacity over transmission pipelines not owned by us and the associated management services, and IT and other services. The non-current obligations do not include amounts relating to the future supply of energy under forward supply contracts we have concluded. For further details of these contracts see the ‘price risk’ section of note 28 ‘Financial instruments’.

GTS and BBL Company have agreed with adjacent networks, storage facilities and production locations to the establishment and operation of OBAs. For Gasunie Deutschland, imbalances are managed by Trading Hub Europe and not by Gasunie Deutschland itself. 

The operational imbalance is closely and continuously monitored and continuously settled in kind with the relevant counterparty/counterparties through the physical intake or supply of natural gas. OBAs are only used for operational, not commercial, purposes. 

We base the use of the OBA on the going concern assumption and a continuous settlement in kind. The imbalances will only be settled financially if a party to the agreement ceases to exist and settlement in gas is therefore no longer possible. The OBAs are perpetual in nature. Given the considerations stated above, the balance of gas to be received or to be supplied can be regarded as ‘perpetual’ and has no value on the balance sheet date. For this reason, the imbalances are included in the off-balance sheet receivables and liabilities. 

At year-end 2023, the cumulative operational imbalance volume was 41 GWh negative (2022: 252 GWh positive), with a balancing claim against adjacent networks, storage facilities and/or production sites. Based on the TTF spot price on the balance sheet date, the value of this imbalance was approx. € 1.3 million negative (2022: approx. € 19.2 million negative).  

In addition to imbalances based on the OBAs, imbalances with customers can also occur based on the ‘System Balance Signal’ (SBS), the sum of the Portfolio Imbalance Signals of all shippers active in our transport network. Here, too, we apply a going concern assumption and a continuous settlement in kind. The imbalances will only be settled financially if the shipper’s licence is withdrawn and settlement in gas is, consequently, no longer possible. At year-end 2023, the shippers had a negative cumulative imbalance volume of 3 GWh (2022: 17 GWh negative). Based on the TTF spot price on the balance sheet date, the value of this imbalance was approx. € 0.1 million (2022: approx. € 1.3 million).  

We also face a claim for termination of certain existing transmission contracts, a claim that, in our view, is without merit. If the claim is nonetheless deemed to be legitimate, in whole or in part, we do not expect this to have any direct financial impact due to the legally stipulated revenue regulation system. 

Lastly, we have brought various claims against other parties as well, for example regarding breach of contract. We cannot predict the outcome of these claims with certainty either. We have not recognised a receivable on the balance sheet for the outcome of these claims and disputes.

Net revenue decreased by 12.7% compared to the previous financial year (2022: increase of 62%). A further explanation of this decline in revenue is provided below.

The second revenue stream is generated through non-regulated services and/or those exempt from regulation. The income for these services is determined by the market on the basis of supply and demand and it is generally subject to greater volatility in revenue compared to the regulated services. Revenue from the non-regulated services and/or those exempt from regulation is almost completely generated by the Participations business unit.

Revenue for each operating activity was as follows: 

The regulated revenue somewhat normalised in 2023 compared to the exceptional year 2022. Revenue from capacity bookings and auctions was substantially lower. This decline was tempered in part due to the regulated tariffs in the Netherlands and Germany being higher than in 2022. 

The breakdown is as follows:

Revenue from other activities increased mainly because of revenue from EemsEnergyTerminal forming part of the consolidated revenue for nine months in 2023, compared to approximately four operational months in 2022. 

The other revenue was as follows: 

The operating grants in 2023 mainly concerned grants received for the WarmtelinQ project and grants for research into the realisation of a hydrogen transmission network in the Netherlands. The operating grants in 2022 mainly related to a contribution to the WarmtelinQ project in the form of a grant.

More details of the acquisition of GUFU BBL and the disposal of a portion of our shares in EemsEnergyTerminal and the subsequent remeasurement are provided in note 2 'Business combinations and disposals of group companies’.

In 2023, the ‘Other’ item under ‘Other revenue’ mainly related to activities we carry out for third parties that are not part of our normal business operations (such as providing secondments, contributions we charge to third parties as a result of damage or diversions, etc.). This item also includes the result on the disposal of 60% of the shares in German LNG Terminal, which we already presented as held for sale at the end of 2022. For more information on this matter see note 8 ‘Investments in joint ventures’.

The personnel expenses were as follows:

The increase in personnel expenses related to an increase in staff numbers and to the index-linked pay rises (based on the consumer price index of Statistics Netherlands), as set out in our collective agreement. New employees were hired mainly for our energy transition-related activities.   

The cost of the defined contribution plans recognised in profit and loss was € 40.6 million (2022: € 31.8 million). For the cost of the defined benefit pension plan and the part of the costs taken directly to other comprehensive income, see note 23 ‘Employee benefits’.

The variable remuneration is based on the meeting of agreed targets during the financial year, as explained under ‘Remuneration policy for the Executive Board’ in the annual report. 

The pension plan for members of the Executive Board is the same as that for other Gasunie employees in the Netherlands. 

The reimbursements under the ‘Other benefits’ item are payments from the flexible allowance and a one-off payment made in the 2023 financial year under the terms of the collective agreement. In the case of Mr Fennema, any other benefits he had not yet received were paid out at the end of his employment. 

Remuneration for current and former members of the company’s Executive Board in 2022 was as follows: 

Remuneration for current and former members of the company’s Supervisory Board in 2023 was as follows: 

Remuneration for current and former members of the company’s Supervisory Board in 2022 was as follows: 

Remuneration for current and former members of the Supervisory Board comprises a basic payment and an additional payment for those who participate in the Audit Committee (AC) and/or the Remuneration, Selection and Appointment Committee (RSAC). Remuneration also includes premiums to be paid under the Dutch Health Insurance Act.

The depreciation costs were as follows:

The increase in depreciation costs of the right-of-use assets can mainly be explained by the depreciation of the chartered FSRUs at the port of Eemshaven commissioned in August 2022. These depreciation costs are included in the consolidated financial statements up to 1 October 2023, the date on which Gasunie sold a portion of it shares in EemsEnergyTerminal, which resulted in us reclassifying this as a non-consolidated joint venture from that date on. 

The result from disposals is the balance of the net realisable value of the assets sold or transferred minus the carrying amount of these assets when they were delivered.

The other costs were as follows:

The costs of subcontracted work and other external costs increased due to higher prices, more use of external personnel, and our intensified activities in the area of the energy transition. The cost of network operations mainly comprises the procurement of nitrogen production capacity and electricity for the production of nitrogen and the cost of electricity and gas for gas transmission and gas storage operations. The decrease in network management costs compared to 2022 is due mainly to lower energy prices and a decrease in the use of compression capacity. Having the operating activities of EemsEnergyTerminal included in the consolidation for about four months in 2022 and for around nine months in 2023 tempered this decline somewhat.

Other operating expenses comprise mainly insurance costs, other material and personnel expenses, and non-recurring costs, including the addition to the provision for abandonment costs and redevelopment. Other operating expenses will be lower in 2023 than in 2022 because in 2022 there was a relatively high addition to the provision for abandonment costs and redevelopment.

Financial income can be broken down as follows:

Interest income and similar income mostly comprises interest on deposits and call funds with a term of less than one year and the interest income on security deposits received (security provided by customers), to which a negative interest rate applied during part of 2023. 

The income relating to the instruments measured at fair value concerned the movement in the forward exchange contracts measured at fair value. No hedge accounting has been applied to these contracts. 

Additional information on derivative financial instruments is provided in note 25 ‘Derivative financial instruments’.

Financial expenses can be broken down as follows: 

Of the interest expenses, a total amount of € 12 million was capitalised in 2023 (2022: € 9.2 million). This capitalisation was based on the weighted average interest rate of N.V. Nederlandse Gasunie’s non-current loan portfolio. This interest rate averaged 1.7% in 2023 (2022: the same). The other finance expenses mainly comprise amortised transaction costs and discount on non-current loans, as well as interest we pay on security deposits received from customers. 

The expenses relating to the instruments measured at fair value concerned the movement in the gas price swaps measured at fair value. No hedge accounting has been applied to these contracts. We provide additional information on these derivative financial instruments in note 25 ‘Derivative financial instruments’.

The tax expense was as follows:

In addition to the above, € 2.4 million in taxes was directly recognised in the total result in 2023 (2022: € 9.4 million negative). This concerned the tax effect of the actuarial adjustments of a German pension plan, which are also taken directly to the total result.

The effective tax rate was as follows:

The other differences concerned various non-taxable results in the Netherlands and Germany. 

The tax expenses for 2023 do not include taxes relating to levies resulting from the introduction of the Pillar 2 framework. Further information on the impact of the introduction of this framework is included in the accounting policies under the heading ‘New and amended standards for financial reporting’. 

For the 2023 financial year, tax expenses are relatively low, partly as a result of a number of one-off transactions, as explained in note 2 ‘Business combinations and disposals of group companies’. These transactions qualify for application of the participation exemption or a comparable tax scheme. Furthermore, with our increased activities in the area of the energy transition we qualify for a higher ‘EIA ’ tax rebate for energy-saving and energy-greening investments than previously. 

The average number of employees expressed in FTEs was 1,948 in 2023, with 278 of these stationed outside the Netherlands (2022: 1,707 FTEs, with 250 stationed outside the Netherlands). 

The staff numbers grew mainly due to Gasunie’s intensified activities in the area of the energy transition. 

The services provided by GTS to GasTerra are performed in line with the provisions of the Dutch Gas Act. Under this legislation, GTS must not discriminate in its treatment of all market parties and must conduct business as requested. The tariffs charged to GasTerra are determined by the regulatory authority ACM. ACM works independently of GTS, GasTerra and the Dutch State. 

The following fees charged by Ernst & Young Accountants LLP for auditing the consolidated and company financial statements were charged to the company, its subsidiaries and other companies it consolidates, in accordance with Sections 2:382a(1) and (2) of the Dutch Civil Code. 

No significant events occurred after the balance sheet date that have to be recognised or explained in the financial statements.