Consolidated interim financial statements
Condensed consolidated statement of financial position as at 30 June 2022
(before appropriation of result)
| In millions of euros | Notes | 30 June 2022 | 31 Dec. 2021 |
|---|---|---|---|
| Assets | |||
| Fixed assets | |||
| - tangible fixed assets | 4 | 9,173.4 | 9,077.5 |
| - investments in joint ventures | 5 | 335.2 | 286.6 |
| - investments in associates | 0.6 | 0.5 | |
| - other equity interests | 9 | 247.4 | 515.2 |
| - deferred tax assets | 246.2 | 258.0 | |
| Total fixed assets | 10,002.8 | 10,137.8 | |
| Total current assets | 408.3 | 342.0 | |
| Assets held for sale | 5 | 24.9 | - |
| Total assets | 10,436.0 | 10,479.8 |
| In millions of euros | Notes | 30 June 2022 | 31 Dec. 2021 |
|---|---|---|---|
| Liabilities | |||
| Total equity | |||
| attributable to shareholder | 1 | 6,206.2 | 6,429.3 |
| Non-current liabilities | |||
| - interest-bearing loans | 6, 9 | 2,506.7 | 2,506.0 |
| - lease liabilities | 167.8 | 96.9 | |
| - contract liabilities | 45.3 | 46.2 | |
| - deferred tax liabilities | 207.4 | 193.9 | |
| - other non-current liabilities and provisions | 117.4 | 147.0 | |
| Total non-current liabilities | 3,044.6 | 2,990.0 | |
| Current liabilities | |||
| - current financing liabilities | 7 | 509.2 | 744.2 |
| - lease liabilities | 8.0 | 7.8 | |
| - trade payables, corporate income tax, other payables and contract liabilities | 8 | 668.0 | 308.5 |
| Total current liabilities | 1,185.2 | 1,060.5 | |
| Total liabilities | 10,436.0 | 10,479.8 |
Condensed consolidated statement of profit and loss for the first half of 2022
| In millions of euros | Notes | First half-year of 2022 | First half-year of 2021 | ||
|---|---|---|---|---|---|
| Continuing operations | |||||
| Revenues | 2, 3 | 896.9 | 717.2 | ||
| Capitalised expenses | 32.6 | 31.3 | |||
| Personnel expenses and other operating expenses | 1 | -455.7 | -286.2 | ||
| Depreciation expenses | -167.0 | -166.1 | |||
| Total expenses | -590.1 | -421.0 | |||
| Operating result | 306.8 | 296.2 | |||
| Finance income and expenses | -20.1 | -33.5 | |||
| Share in result of joint ventures | 5 | 18.1 | 14.1 | ||
| Result before taxation | 304.8 | 276.8 | |||
| Income taxes | -77.3 | -69.7 | |||
| Result after taxation | 227.5 | 207.1 |
Consolidated statement of other comprehensive income for the first half of 2022
| In millions of euros | Notes | First half-year of 2022 | First half-year of 2021 | ||
|---|---|---|---|---|---|
| Result after taxation according to consolidated statement of profit and loss | 227.5 | 207.1 | |||
| Sum of actuarial gains and losses on employee benefits, | 29.8 | 9.5 | |||
| of which corporate income tax | -8.8 | -2.8 | |||
| Total of results taken to equity which will not be reclassified subsequently to profit and loss | 21.0 | 6.7 | |||
| Changes in other participating interests measured at fair value | 9 | -267.8 | 15.6 | ||
| Changes in the cash flow hedge reserve concerning joint ventures and associates | 5 | 14.0 | 5.8 | ||
| Total of results taken to equity which will be reclassified subsequently to profit and loss | -253.8 | 21.4 | |||
| Total comprehensive income for the year | -5.3 | 235.2 | |||
| Attributable to shareholder | -5.3 | 235.2 |
Consolidated statement of changes in equity for the first half of 2022
| In millions of euros | Share capital | Fair value reserve | Other reserves | Unappropriated result | Total |
|---|---|---|---|---|---|
| First half-year of 2022 | |||||
| Balance as at 1 January 2022 | 0.2 | 335.4 | 5,782.9 | 310.7 | 6,429.2 |
| Total of comprehensive income for the financial year | - | -267.8 | 35.0 | 227.5 | -5.3 |
| Dividend paid for 2021 | - | - | - | -217.5 | -217.5 |
| Added to other reserves | - | - | 93.2 | -93.2 | - |
| Balance as at 30 June 2022 | 0.2 | 67.6 | 5,911.1 | 227.5 | 6,206.2 |
| First half-year of 2021 | |||||
| Balance as at 1 January 2021 | 0.2 | 336.5 | 5,404.6 | 599.7 | 6,341.0 |
| Total of comprehensive income for the financial year | - | 15.6 | 12.5 | 207.1 | 235.2 |
| Dividend paid for 2020 | - | - | - | -262.3 | -262.3 |
| Added to other reserves | - | - | 337.4 | -337.4 | - |
| Balance as at 30 June 2021 | 0.2 | 352.1 | 5,754.5 | 207.1 | 6,313.9 |
Condensed consolidated cash flow statement for the first half of 2022
| In millions of euros | Notes | First half-year of 2022 | First half-year of 2021 | ||
|---|---|---|---|---|---|
| Cash flow from business operations | 799.7 | 537.2 | |||
| Net amount of interest paid and received, corporate income tax and dividends received | 5 | -57.3 | -75.4 | ||
| Cash flow from operating activities | 742.4 | 461.8 | |||
| Cash flow from investing activities | 4 | -227.6 | -141.4 | ||
| Cash flow from financing activities | |||||
| Uptake of long-term loans | 6 | - | 240,0 | ||
| Repayment of long-term loans | 6 | - | -300.0 | ||
| Lease payments | -4.2 | -4.6 | |||
| Change in short-term financing | 7, 8 | -234.9 | 15.0 | ||
| Dividend paid | 1 | -217.5 | -262.3 | ||
| Cash flow from financing activities | -456.6 | -311.9 | |||
| Net cash flow for the financial year | 58.2 | 8.5 | |||
| Cash and cash equivalents at previous year-end | 38.3 | 17.9 | |||
| Cash and cash equivalents at year-end | 8 | 96.5 | 26.4 | ||
| Change in cash and cash equivalents | 58.2 | 8.5 |
Notes to the condensed consolidated interim financial statements for 2022
General
Preparation of the interim financial statements
The 2022 interim financial statements were prepared by the Executive Board on 19 July 2022.
Reporting entity
N.V. Nederlandse Gasunie (hereinafter also ‘Gasunie’ or ‘the company’) is a European energy infrastructure company. Domiciled in Groningen, the Netherlands, the company’s primary activity is to provide regulated transport services in the Netherlands and Germany. Gasunie is increasingly making its infrastructure and knowledge available for the further development and integration of alternative energy sources and carriers, such as hydrogen, heat and green gas, as well as the development of CCS. Gasunie is moreover involved in joint arrangements for pipelines that connect the Gasunie transport network with markets outside the Netherlands. Gasunie also provides other energy infrastructure services, including gas storage and the certification of green gas.
The company has its registered and actual office at Concourslaan 17, Groningen, Netherlands, and is registered with the Chamber of Commerce under number 02029700. N.V. Nederlandse Gasunie is the ultimate parent of the group. All shares in N.V. Nederlandse Gasunie issued as at the balance sheet date are held by the Dutch State.
Reporting period
These condensed consolidated interim financial statements (hereinafter called ‘the interim financial statements’) relate to the first six months of the 2022 financial year, with 30 June 2022 being the balance sheet date.
Presentation and functional currency
The interim financial statements are presented in euros, which is also the company’s functional currency. Unless otherwise specified, all amounts are in millions of euros.
Going concern
These interim financial statements have been prepared on a going concern basis.
Seasonal influence
Due in part to meteorological conditions, Gasunie’s revenue and costs are not spread out evenly over the year. Both revenue and costs are subject to seasonal influences. The company’s core activity is the transmission of natural gas through the gas transport network. Revenues consist of the sale of the available transport capacity and transport-related services. Over the winter months, customers book considerably more capacity than over the summer period. As a result, revenue is higher in the winter months than in the other months of the year. One part of the costs of network operations depends on actual volumes of gas transported, while the other part is fixed. Larger gas transmission volumes in the winter months lead to higher costs over that period compared to the rest of the year.
Management judgements and estimates
In preparing the interim financial statements, management has used estimates and assessments that could affect the assets and liabilities presented as at the balance sheet date and the result for the first six months of the financial year. The actual results may differ from these estimates. Management reviews the estimates and underlying assumptions on a periodic basis. Revisions to estimates are recognised in the period in which the estimate is revised and in future periods that are affected by the review.
The effect of management’s judgements and estimates is significant for the:
- measurement and determination of the service life of fixed assets;
- measurement of other participating interests;
- measurement and determination of the provision for abandonment costs and redevelopment;
- measurement of deferred tax assets;
- measurement of pension obligations;
- classification of equity interests.
Basis for preparation
Statement of compliance
The interim financial statements capture the company’s periodic interim information and were prepared in compliance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union. Since these interim financial statements do not contain all notes that are normally included in the financial statements for a full year, they must be read in conjunction with N.V. Nederlandse Gasunie’s 2021 consolidated financial statements.
The interim financial statements have been reviewed by an independent auditor (PwC Accountants N.V.). The auditor’s review report is included after the interim financial statements.
Accounting policies for the consolidation, measurement of assets and liabilities and the determination of the results
The company prepares its consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union. In this context, IFRS comprises the International Accounting Standards (IAS) published by the International Accounting Standards Board and the interpretations of IFRS and IAS published by the IFRS Interpretations Committee (IFRIC) and Standing Interpretations Committee (SIC) respectively.
The accounting policies used in preparing the 2022 interim financial statements are the same as those used to prepare the 2021 consolidated financial statements, except for the new and amended standards detailed in the next section.
New and amended standards for financial reporting
The following amendments to standards became effective at the start of the 2022 financial year:
- Amendments to IFRS 3 Business Combinations
- Amendments to IAS 16 Property, Plant and Equipment
- Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
- Annual Improvements 2018-2020
The following amendments to standards will become effective at the start of the 2023 financial year:
- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies
- Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates
- IFRS 17 Insurance Contracts; including Amendments to IFRS 17
Furthermore, the standards or amendments to them listed below are expected to become effective in the near future. EU endorsement has not yet been given for these standards:
- Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current – Deferral of Effective Date
- Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
- Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information
An analysis by the company revealed that the already adopted standards and those still to be endorsed have or will have no material impact on the company’s equity and result and that there are no significant additional disclosures required. For that reason, the consequences of these amendments for the company have not been described in detail in these interim financial statements.
Further notes to the condensed consolidated financial statements
1. Significant matters and transactions in the first half of 2022
Nord Stream valuation
On 30 June 2022, the fair value of Gasunie’s 9% participating interest in Nord Stream was revised. The risk profile of Nord Stream’s activities has changed, mainly as a result of uncertainty caused by the Russian invasion of Ukraine, the sanctions imposed on Russia in response, and the measures proposed to reduce dependence on Russian gas. The change in the risk profile has consequences for the relevant discount rate that Gasunie uses to calculate the fair value of the 9% interest in Nord Stream. The higher discount rate as at 30 June 2022 leads to a downward adjustment of the fair value amounting to € 267.8 million. This adjustment has been recognised in other comprehensive income. As at 30 June 2022, the fair value of Gasunie’s 9% participating interest in Nord Stream stood at € 240.3 million. Gasunie’s activities in respect of Nord Stream are fully in compliance with the European and Dutch sanctions policy.
For more detailed information about the adjustment in the fair value of Nord Stream, see note 9 ‘Financial instruments’.
EemsEnergy Terminal B.V.
One of the measures taken to reduce dependence on Russian gas is to facilitate natural gas supplies to the Netherlands and Europe from other countries. Gasunie is helping to reduce dependence on Russia through its newly founded group company EemsEnergy Terminal B.V. (EemsEnergyTerminal). EemsEnergyTerminal will do so by deploying two LNG FSRUs (floating storage and regasification units) for a period of five years. These FSRUs are expected to be ready for operation at the port of Eemshaven from the second half of 2022 and will be used to store and regasify LNG shipped in by third-party LNG tanker ships. After having been returned to a gaseous stage, the natural gas can be fed into GTS’s gas transport network. Gasunie is also exploring the option to build a permanent LNG terminal at Eemshaven. Such a terminal could in the long term be repurposed to process green hydrogen. In preparation for all of this, Gasunie has leased a number of sites at Eemshaven.
The present value of the leases for the two FSRUs totals approximately USD 400-500 million for a period of five years. These liabilities were not yet recognised in the balance sheet as at 30 June 2022 because Gasunie does not yet have the FSRUs under its control. Control will be obtained once the FSRUs have moored at Eemshaven and all protocols for transfer to EemsEnergyTerminal have been completed. The present value of the leases for the sites for a period of 40 years totals approximately € 75.0 million. Gasunie has control over the leased sites as at 30 June 2022. The underlying leases have been recognised in the balance sheet as per 30 June 2022 as right-of-use asset and right-of-use liability.
The fixed costs involved in the USD-denominated liabilities for the chartering of the two FSRUs have been hedged using forward exchange contracts for the full lease term as per the treasury statute. The average forward price compared to the euro is approximately $ 1.10.
Trend in energy costs
Gasunie faces substantial prices for the gas and electricity it buys for its gas transport operations, balancing actions in the gas transport network, and the internal and external production of nitrogen for quality conversion. Current energy prices far exceed the levels from early 2021 and continue to be volatile in today’s tense energy markets.
On 1 January 2022, the Methodebesluit GTS 2022-2026 [2022-2026 methodology decision for GTS] came into effect, meaning that certain energy costs incurred by Gasunie’s group company GTS can no longer be offset (in full) in future tariffs. GTS has filed an appeal against this decision with the Dutch Trade and Industry Appeals Tribunal (CBb), which is expected to look at the substance of this appeal in the second half of 2022. GTS holds the view that it should be able to offset volume and price changes for all energy costs that GTS has no influence over.
The outcome of this appeal may have consequences for the valuation of the gas transport network in the Netherlands. More information about the valuation of the gas transport network in the Netherlands and the appeal lodged with the Dutch Trade and Industry Appeals Tribunal (CBb) is provided in note 4 ‘Tangible fixed assets’.
In Germany, current regulations do allow for costs relating to energy price trends to be passed on through future tariffs.
Dividend payment and transactions with related parties
In the first half of 2022, Gasunie paid out € 217.5 million (first half of 2021: € 262.3 million) in dividend to its sole shareholder, the Dutch State. This was the appropriation of the result for the 2021 financial year following a decision by the General Meeting of 29 March 2022.
The nature of other transactions with related parties in the first half of 2022 is the same as reported in the 2021 consolidated financial statements. Transactions with related parties in the first half of 2022 were on an arm’s length basis.
2. Financial information by operating segment
Segmentation
The financial information is segmented in line with the Group’s activities. The operating segments reflect the Group’s management structure and the business units. Gasunie differentiates between the following segments:
-
Gasunie Transport Services
This segment covers network operations in the Netherlands and is responsible for managing gas transport, developing the network and related plants, and promoting market forces.
-
Gasunie Deutschland
This segment covers network operations in Germany and is responsible for managing gas transport, developing the network and related plants, and promoting market forces.
-
Participations
This segment focuses on developing energy transition projects, utilising existing participating interests to the full and facilitating new gas flows to north-western Europe using an LNG connection and long-distance pipelines. This segment also includes a number of joint arrangements for pipelines that connect the Gasunie transport network with markets outside the Netherlands.
The accounting policies for measurement of assets and liabilities and the determination of the results of the operating segments used to prepare the 2022 interim financial statements are the same as the accounting policies used in preparing the 2021 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 the financing of Gasunie mainly takes place at group level, liabilities are not segmented and not reported on separately. Transactions between companies which belong to the segments are on arm’s length basis. Transactions between the segments have been eliminated in the financial information by operating segment.
Information on revenue and results by operating segment
Each operating segment’s revenue and result are as follows:
| In millions of euros | Revenue | Result | ||
|---|---|---|---|---|
| First half-year of 2022 | First half-year of 2021 | First half-year of 2022 | First half-year of 2021 | |
| Operating segments | ||||
| - Gasunie Transport Services | 658.0 | 518.6 | 218.2 | 211.2 |
| - Gasunie Deutschland | 171.4 | 142.7 | 68.2 | 72.8 |
| - Participations | 121.3 | 76.9 | 20.4 | 12.2 |
| Inter-segment adjustments | -53.8 | -21.0 | - | - |
| Operating segments total | 896.9 | 717.2 | 306.8 | 296.2 |
| Unallocated financial income and expenses | -2.0 | -19.4 | ||
| Result before taxation | 304.8 | 276.8 | ||
| Income taxes | -77.3 | -69.7 | ||
| Revenue and result after taxation for the year | 896.9 | 717.2 | 227.5 | 207.1 |
Consolidated net revenue rose by 25.1% compared to the first half of 2021 (first half of 2021: increase of 0.8%). The significant increase in revenue generated by the GTS segment came primarily on the back of growth in revenue from the auction of transmission capacity and a rise in entry tariffs for 2022. However, these developments did not result in a substantially higher result because network and energy costs were also up considerably. GTS will have to settle the higher revenue with market parties in 2024. The Gasunie Deutschland segment also saw its revenue rise, primarily due to changing gas flows and slightly higher tariffs. The result, however, was down due to significantly higher network and energy costs. Gasunie Deutschland is allowed to pass the increase in network and energy costs on to the market through higher tariffs in the future. The Participations segment also saw its revenue affected considerably by higher network and energy costs. In many cases, these increased network and energy costs are borne by customers, which leads to higher revenue. The Participations segment’s revenue and result were also pushed up by increased capacity sales.
Inter-segment services represented a total value of € 53.8 million in the first half of 2022 (first half of 2021: € 21.0 million). During the first half of 2022, the Gasunie Transport Services segment provided inter-segment services to the value of € 18.8 million (first half of 2021: € 7.0 million), the Gasunie Deutschland segment provided inter-segment services to the value of € 0.1 million (first half of 2021: € 0.2 million) and the Participations segment provided inter-segment services to the value of € 34.9 million (first half of 2021: € 13.7 million).
Information on assets by operating segment
Each operating segment’s assets are as follows:
| In millions of euros | Assets | |
|---|---|---|
| 30 June 2022 | 31 Dec. 2021 | |
| Operating segments | ||
| - Gasunie Transport Services | 6,612.8 | 6,591.9 |
| - Gasunie Deutschland | 1,637.3 | 1,644.0 |
| - Participations | 1,531.4 | 1,641.3 |
| Operating segments total | 9,781.5 | 9,877.2 |
| Unallocated assets | 654.5 | 602.6 |
| Total consolidated assets | 10,436.0 | 10,479.8 |
Unallocated assets comprise deferred tax assets and current assets. Assets held for sale are recognised under the Participations segment. The main investments are described in note 4 ‘Tangible fixed assets’.
3. Revenue recognition
In addition to note 2 ‘Financial information by operating segment’, the following will provide further details and analysis of revenue.
Information about operating activities
The company categorises its revenues according to the way in which economic factors influence the nature, amount, timing and uncertainty of the cash flows. A distinction can be made between two categories in the case of Gasunie. The first revenue stream is revenue from regulated transport and related services, as generated by the Gasunie Transport Services and Gasunie Deutschland segments. The Dutch and German regulatory authorities set the permitted income for this revenue stream for the long term.
The second revenue stream relates to non-regulated services and/or those exempt from regulation. Income from these services is determined by the market forces of supply and demand. Revenue from the non-regulated services and/or those exempt from regulation is almost completely generated by the Participations segment.
Revenue for each operating activity is as follows:
| In millions of euros | Revenue | |
|---|---|---|
| First half-year of 2022 | First half-year of 2021 | |
| Regulated services | 786.6 | 640.3 |
| Non-regulated and/or exempt services | 110.3 | 76.9 |
| Total revenue | 896.9 | 717.2 |
Information on products and services
Revenue can be divided into revenue from gas transport and related services and from other activities. Gas transport and associated services covers revenue from regulated gas transport and from non-regulated or exempt gas transport. Other activities includes revenue from gas storage services.
The breakdown is as follows:
| In millions of euros | Revenue | |
|---|---|---|
| First half-year of 2022 | First half-year of 2021 | |
| Gas transport and related services | 849.2 | 666.8 |
| Other services | 47.7 | 50.4 |
| Total revenue | 896.9 | 717.2 |
Geographical information
Revenue per geographical area is determined on the basis of the area where the activities take place (in or outside the Netherlands). The geographical distribution of the revenue is as follows:
| In millions of euros | Revenue | |
|---|---|---|
| First half-year of 2022 | First half-year of 2021 | |
| Netherlands | 675.1 | 548.0 |
| Outside the Netherlands | 221.8 | 169.2 |
| Total revenue | 896.9 | 717.2 |
4. Tangible fixed assets
Investments
Investments in tangible fixed assets in the first half of 2022, not including additions on account of right-of-use assets, represented a total value of € 132.5 million (first half of 2021: € 126.3 million). These investments relate primarily to the construction of Gasunie Transport Services’ nitrogen installation in Zuidbroek, as well as the creation of the WarmtelinQ heat transport pipeline. Gasunie entered into conditional investment obligations amounting € 120.3 million as of 30 June 2022 (year-end 2021: € 168.0 million). These obligations relate mainly to the Zuidbroek nitrogen installation, development of the WarmtelinQ heat grid, LNG activities at Eemshaven, regular replacement investments in the Netherlands, and several expansion investments in Germany.
Investments in right-of-use assets totalled approximately € 77.7 million (first half of 2021: € 4.3 million) and consist predominantly of lease of a number of plots of land at Eemshaven for the intended operations of EemsEnergyTerminal (see note 1 ‘Significant matters and transactions in the first half of 2022’).
Impairment of fixed assets
At regular intervals, management determines whether there is any incidence or indication of impairment of fixed assets. The following will provide further analysis of impairment tests for each significant cash-generating unit.
Gas transport network in the Netherlands
The valuation of the gas transport network in the Netherlands partly depends on the company’s regulated income. In early 2021, the company analysed the valuation of the gas transport network following the 2022-2026 methodology decision for GTS published on 1 February 2021. The outcomes of this analysis were already recognised in the 2020 financial statements.
In early 2021, both Gasunie’s group company GTS B.V. and market parties filed a pro forma appeal against the methodology decision with the Dutch Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven [CBb]). The grounds for this appeal were further detailed in December 2021 in a notice of appeal filed with the Trade and Industry Appeals Tribunal. GTS’s objections relate to the robustness of the benchmark analysis, including how static efficiency is determined, how the regulated return is determined, and the regime of offsetting energy procurement costs in future tariffs. The first written round of the process has meanwhile taken place; further oral proceedings are scheduled for September 2022 through to January 2023. The outcome of this appeal may have consequences for the valuation of the gas transport network in the Netherlands.
The company’s assessment does not show any other incidence or indication of impairment of the gas transport network in the Netherlands as at 30 June 2022.
Gas transport network in Germany
The valuation of the gas transport network in Germany partly depends on the company’s regulated income. The German regulatory authority (Bundesnetzagentur) is currently working on regulatory legislation for the fourth regulation period covering 2023 to 2027. By 30 June 2022, only a limited number of relevant details from this legislation had been published. An analysis conducted in late 2021 showed that the developments were having a relatively minor impact up to that time. In the first half of 2022, no new details regarding the fourth regulation period were published. Further information is expected in the second half of 2022.
The company’s assessment has not revealed any other incidence or indication of an impairment of the gas transport network in Germany as at 30 June 2022.
BBL Company
Management’s assessment has not revealed any incidence or indication of an impairment of BBL Company’s tangible fixed assets as at 30 June 2022.
EnergyStock
Management’s assessment has not revealed any incidence or indication of an impairment of EnergyStock’s tangible fixed assets as at 30 June 2022.
Other tangible and financial fixed assets
Management’s assessment has not revealed any incidence or indication of an impairment of other tangible and financial fixed assets as at 30 June 2022.
5. Investments in joint ventures
Joint ventures
The movements in joint ventures over the first half of 2022 were as follows:
| In millions of euros | First half-year of 2022 | 2021 |
|---|---|---|
| Balance as at 1 January | 284.0 | 241.2 |
| Acquisitions | 25.8 | - |
| Investments | 39.9 | 19.9 |
| Changes in equity | 14.0 | 11.4 |
| Result from joint ventures | 18.1 | 29.3 |
| Dividend received | -24.3 | -17.8 |
| Classified as 'assets held for sale' | -24.9 | - |
| Closing balance as at 30 June and 31 December respectively | 332.6 | 284.0 |
| Loans to joint ventures | 2.6 | 2.6 |
| Total investments in joint ventures as at 30 June and 31 December respectively | 335.2 | 286.6 |
The main investments and acquisitions in the first half of 2022 relate to Porthos (a project to store CO2 produced by industry in the port of Rotterdam in empty gas fields below the North Sea bed) and German LNG (a project to build a permanent LNG terminal in Brunsbüttel, Germany).
Geopolitical developments in the first half of 2022 led to a change in German LNG’s shareholding structure. Gasunie acquired all shares in the consortium from the former shareholders Royal Vopak and Oiltanking. Gasunie has signed a Memorandum of Understanding with Kreditanstalt für Wiederaufbau (KfW, on behalf of the German government) and RWE for the construction of an LNG terminal. Gasunie is the envisioned operator of the terminal and plans to transfer the majority of its shares to KfW and RWE in the second half of 2022, whereby the three parties will still have joint control of the entity after the share transfer. Given that Gasunie did not obtain full control of German LNG, the remaining shareholding still qualifies as a joint venture and measurement based on the equity method has been maintained. The shareholding to be transferred has been recognised as assets held for sale.
The direct movements in equity relate to the remeasurement of the interest in Gate terminal as a consequence of the change in fair value of one of Gate terminal’s cash flow hedges. Gasunie has recognised this change in equity in other comprehensive income.
6. Interest-bearing loans
On 30 June 2022, the nominal amount of € 3,009.2 million (year-end 2021: € 3,009.2 million) in non-current loans comprised € 2,119.2 million (year-end 2021: € 2,119.2 million) in bond loans and € 890.0 million (year-end 2021: € 890.0 million) in private loans. The transaction costs and discount still to be amortised amounted to € 8.3 million (year-end 2021: € 9.0 million).
Movements in interest-bearing loans are as follows:
| In millions of euros | First half-year of 2022 | 2021 |
|---|---|---|
| Principal amount as at 1 January | 3,140.0 | 3,300.0 |
| Total repayments as at 1 January | -130.8 | -197.6 |
| Remaining principal amount as at 1 January | 3,009.2 | 3,102.4 |
| Costs and discounts on loans to be amortised | -9.0 | -9.1 |
| Balance as at 1 January | 3,000.2 | 3,093.3 |
| Movements in the first half-year and the financial year respectively | ||
| Repayments | - | -733.2 |
| Loans and bonds issued | - | 640.0 |
| Amortisation of costs and discounts on loans | 0.7 | 1.3 |
| Addition of costs and discounts | - | -1.3 |
| Total movements in the first half-year and the financial year respectively | 0.7 | -93.2 |
| Principal amount as at 30 June and 31 December respectively | 3,140.0 | 3,140.0 |
| Total repayment as at 30 June and 31 December respectively | -130.8 | -130.8 |
| Remaining principal amount as at 30 June and 31 December respectively | 3,009.2 | 3,009.2 |
| Costs and discounts on loans to be amortised | -8.3 | -9.0 |
| Balance as at 30 June and 31 December respectively | 3,000.9 | 3,000.2 |
| Included under current liabilities | -494.2 | -494.2 |
| Total | 2,506.7 | 2,506.0 |
In the first half of 2022, the company did not repay any interest-bearing loans (first half of 2021: € 300.0 million). In the first half of 2022, the company did not take out any new loans (first half of 2021: € 240.0 million).
N.V. Nederlandse Gasunie provided no security to its credit providers for the interest-bearing loans and other facilities. The existing loan conditions remained unchanged compared to 2021. The repayment schedule is as follows:
| In millions of euros | First half-year | Second half-year | Total |
|---|---|---|---|
| Repayment in | |||
| 2022 | - | 494.2 | 494.2 |
| 2023 | - | 225.0 | 225.0 |
| 2024 | - | 175.0 | 175.0 |
| 2025 | - | 125.0 | 125.0 |
| 2026 | 650.0 | - | 650.0 |
| after 2026 | 1,340.0 | ||
| Total repayment obligations | 3,009.2 |
The company has a non-committed overdraft facility of € 45.0 million (year-end 2021: € 45.0 million), a committed credit facility of € 600.0 million (year-end 2021: € 600.0 million), a € 750.0 million Euro Commercial Paper programme (year-end 2021: € 750.0 million) and a € 7.5 billion EMTN programme (year-end 2021: € 7.5 billion). The committed credit facility was extended by one year in March 2022 and now has a term until April 2027. No funds were drawn on the committed credit facility over the past half year. However, as part of its normal operational activities, Gasunie has regularly raised short-term loans on the money market in the form of deposit loans and debt securities under the ECP.
Under the EMTN programme, € 2,119.2 million was issued in loans as at 30 June 2022 (year-end 2021: € 2,119,2 million). The EMTN programme was renewed in June 2022 and will run through to 17 June 2023. Further information about a sustainability-linked bond issued in July 2022 is provided in note 10 ‘Events after the balance sheet date’.
The long and short-term credit ratings by S&P and Moody’s did not change over the first half of 2022.
7. Current financing liabilities
Current financing liabilities are as follows:
| In millions of euros | 30 June 2022 | 31 Dec. 2021 |
|---|---|---|
| Repayment obligation on non-current loans | 494.2 | 494.2 |
| Short-term loans | 15.0 | 250.0 |
| Total current financing liabilities | 509.2 | 744.2 |
More detailed information about non-current interest-bearing loans can be found in note 6 ‘Interest-bearing loans’.
By June 2022, the company had drawn € 15.0 million (year-end 2021: € 250.0 million) in current interest-bearing loans at prevailing market rates. This concerns deposits taken and commercial paper issued with terms of less than one year (in practice ranging between one and ninety days). Further details of the lower balance of deposits taken and commercial paper issued are provided in note 8 ‘Contract liabilities, corporate income tax, and trade and other payables’.
8. Contract liabilities, corporate income tax, and trade and other payables
As a result of volatility in the energy markets, Gasunie has asked for and received additional security from its customers as necessary to mitigate the credit risk on trade and other receivables. On the whole, this additional security was provided in the form of interest-bearing security deposits. The balance of security deposits received is up € 267.2 million on year-end 2021. As a result, trade and other payables are also up considerably on year-end 2021.
Due to the security deposits received, the company’s liquidity increased over the first half of 2022, meaning that the company needed less short-term financing. The balance of deposits taken and commercial paper issued with terms of under one year had dropped to € 15.0 million by the end of June 2022 (year-end 2021: € 250.0 million).
9. Financial instruments
In these interim financial statements, the following financial instruments are recognised:
- Other participating interests
- Interest-bearing loans
- Other primary financial instruments
- Derivative financial instruments
Gasunie uses the following hierarchy of measurement methods to determine the fair value of financial instruments:
| Level 1: | Based on quoted prices on active markets for the same instrument. |
| Level 2: | Based on prices on active markets for comparable instruments, or based on other valuation methods, with all required key data being derived directly or indirectly from publicly available market information. |
| Level 3: | Based on measurement methods, with all the required key data not being derived from publicly available market information. |
Other participating interests
The other participating interests are as follows:
| Company name | Registered office | Interest | |
|---|---|---|---|
| 30 June 2022 | 31 Dec. 2021 | ||
| Energie Data Services Nederland (EDSN) B.V. | Arnhem | 12.5% | 12.5% |
| Nord Stream AG | Zug, Switzerland | 9.0% | 9.0% |
| PRISMA European Capacity Platform GmbH | Leipzig, Germany | 12.7% | 12.7% |
| SCW Systems B.V. | Schoorl | 5.5% | 5.5% |
The fair value of the other participating interests was € 247.4 million as at 30 June 2022 (year-end 2021: € 515.2 million). The € 267.8 million decrease in the fair value of the other participating interests (first half of 2021: increase of € 15.6 million) is recognised in Gasunie’s other comprehensive income and is entirely the result of a downward remeasurement of the interest in Nord Stream.
The measurement of the fair value of other participating interests is based on the present value of projected future cash flows. This concerns fair value measurement according to level 3 (year-end 2021: level 3). In measuring the fair value of the aforementioned other participating interests, Gasunie applies a discount rate based on the risk-free market interest rate, plus various risk premiums.
The measurement of the participation in Nord Stream is based on the present value of projected future cash flows. Use was made of a Nord Stream calculation model, which is annually updated in line with the most recent business plan. This model is presented for assessment and approval to the shareholders of Nord Stream. The model is additionally assessed by Gasunie at regular intervals on the basis of Nord Stream’s interim financial reports.
Geopolitical developments in the first half of 2022 necessitated a revision of previous relatively fixed assumptions in the measurement model. The company has looked into which scenarios might materialise in the short and the long term and what impact they may have on Nord Stream’s cash flows, as well as on the risk profile and, consequently, on the discount rate for the interest in Nord Stream. This assessment took into consideration that:
- Sanctions have been imposed on Russia and Russian companies and Nord Stream’s majority shareholder and its sole customer are Russian companies. As a result, the country risk premium increased significantly. As at 30 June 2022, the country risk premium had a greater bearing on the calculation of the relevant discount rate than other relevant variables did;
- Initiatives have been launched to reduce dependence on Russian gas in the short term and even stop using Russian gas altogether in the medium term. These developments were offset against the term remaining on the contract of Nord Stream’s sole customer, factoring in the usual and expected lead times of such projects. The valuation model assumes a situation of cash flows from capacity sales through to the 2032 financial year;
- The current gas transport contract is based on a ship-or-pay obligation and Nord Stream’s sole customer has always fulfilled its payment obligations up to the balance sheet date of this half-year report.
Given currently visible market data and actual circumstances, fair value measurement is based on the assumption that the current gas transport contract will be seen out and that Nord Stream will not go into a (financing) default. Given the increased geopolitical uncertainty, the risk estimate with respect to Nord Stream has, nevertheless, gone up. As at 30 June 2022, this led to an upward adjustment of the relevant discount rate from 6% to 20%. This adjustment was largely the result of the increased country risk premium, as shown by the relevant market data. The fair value of Nord Stream was € 240.3 million as at 30 June 2022 (year-end 2021: € 508.1 million). The movement in fair value has been recognised in other comprehensive income as per the provisions of IFRS 9.
As an indication, all things being equal, if the discount rate changes by 1.0% point, this will result in a change in the fair value of approximately € 12.5 million.
The assumption for the interests in PRISMA, EDSN and SCW Systems is that, partly on account of their relatively small size, the carrying amount is an estimate of the fair value. A fair value calculation and sensitivity analysis have not been included in the interim financial statements for these interests.
Interest-bearing loans
The interest-bearing loans comprise 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 concerns fair value measurement according to level 1 (year-end 2021: 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. Account has been taken of the company’s risk profile. The determination of the fair value took place according to level 2 (year-end 2021: level 2).
The carrying amount and the fair value of the interest-bearing loans as at 30 June 2022 were:
| In millions of euros | 30 June 2022 | 31 Dec. 2021 | ||||
|---|---|---|---|---|---|---|
| Carrying amount | Fair value | Difference | Carrying amount | Fair value | Difference | |
| Bonds | 2,110.9 | 1,885.8 | -225.1 | 2,110.2 | 2,161.3 | 51.2 |
| Private loans | 890.0 | 882.2 | -7.8 | 890.0 | 960.3 | 70.3 |
| Total interest-bearing loans | 3,000.9 | 2,768.0 | -232.9 | 3,000.2 | 3,121.6 | 121.5 |
The drop in the fair value of loans in the first half of 2022 came as a result of a rise in market rates of interest.
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 balance of cash and cash equivalents as part of current assets was € 96.5 million as at 30 June 2022 (year-end 2021: € 38.3 million).
Derivative financial instruments
The derivative financial instruments that the company uses are forward exchange contracts that it has entered into. As at 30 June 2022, these contracts were almost exclusively used to hedge the currency risk involved in the contracts for chartering two FSRUs. Further information about this point is provided in note 1 ‘Significant matters and transactions in the first half of 2022’. The fair value of the forward exchange contracts was less than € 0.5 million as at 30 June 2022 (year-end 2021: less than 0.5 million).
10. Events after the balance sheet date
On 11 July 2022, Gasunie raised € 500.0 million in the capital markets to refinance a bond loan that expired on 13 July 2022. This sustainability-linked bond has a term of 12 years at an issue price of 98.821%. The effective rate of interest is 3.64%. The loan was issued in compliance with the sustainability-linked bond framework. This framework is in line with the 2020 version of the sustainability-linked bond principles (SLBPs) of the International Capital Markets Association (ICMA). The sustainability targets linked to this sustainability-linked bond are identical to those of the previously issued sustainability-linked bond, as detailed in the 2021 consolidated financial statements.
No further significant events occurred between the balance sheet date and the date of these interim financial statements that should be recognised or noted in the interim financial statements.
