(Alliance News) - The board of directors of Snam Spa announced Thursday that it has approved the Strategic Plan to 2026, which calls for total investments of EUR10 billion, a 23 percent increase over the previous one for the period 2021-2025 for which they amounted to EUR8 billion.

Of this, EUR9 billion is earmarked for gas infrastructure. "Investments for the development and modernization of Snam's transportation and storage infrastructure are made with a view to H2 asset readiness, while certification activities continue on the existing network, which plans to reach 3,000 km by 2026, up from 750 km in 2022, and checks on storage, compressor stations and metering system," the company explained in a note.

Investments in the energy transition business amount to EUR1 billion.

"Snam's commitment to achieving the 2040 carbon neutrality target remains solid even in an extremely challenging context dictated by major changes in industrial set-up and changes in gas transportation flows in the country," the note said.

Complementary to the goals related to emissions reduction, "the commitment in the other dimensions of sustainability that are part of the Snam ESG Scorecard and in the action implemented also in collaboration with the Snam Foundation on the Just Transition dimensions remains confirmed."

SnamTEC is the Group's innovation and digitalization program to which approximately EUR450 million of investment will be allocated over the plan period. It is a program that groups 52 projects across 4 macro-areas (safety, asset resilience, process optimization, and activities to improve business sustainability) and enables predictive maintenance and optimization of interventions, among other functions, so as to minimize costs and downtime, contributing to the safety and continuity of supplies.

In the 2022-2026 period, Snam expects significant growth in key performance indicators while respecting financial soundness. Over the plan horizon, RAB is expected to grow by an average of more than 5 percent per year in 2022-2026, more than double the forecast in the previous Plan period due to higher investments and the deflator. In addition, average annual Ebitda growth of about 7 percent is expected, compared to 4.5 percent in the previous 2021-2025 plan, mainly due to growth in RAB (80 percent), higher remuneration from regulatory framework, increasing contribution from "output based" incentives, and energy transition businesses.

Together these factors will contribute to the expected Group Ebitda growth of about EUR2.85 billion to 2026, of which about EUR140 million will be related to the energy transition businesses.

Finally, average annual growth of 3 percent in net income is expected due to increased industrial profitability of the business and efficiency measures, offset by growth in financial expenses due to higher interest rates, which are assumed to average 2 percent over the plan period, compared to a forecast of 1.1 percent in the previous plan 2021-2025.

Compared to the 2022 net income guidance of at least EUR1.13 billion, the projection to the end of 2026 is EUR1.27 billion.

In addition, the dividend policy was confirmed and extended by one year: 2.5 percent minimum annual dividend growth extended to 2026, with confirmation of plus 5 percent per share in 2022.

Snam expects that for fiscal year 2022, a total dividend of EUR0.2751 per share of which 40% can be distributed as an interim dividend in 2023.

Over the plan period, Snam, with debt expected to rise to about EUR18 billion in 2026, expects to maintain credit ratios, both flow (FFO/Net Debt) and stock (Net Debt/Fixed Assets including subsidiaries) consistent with current creditworthiness and a mix between fixed and floating debt of about 2/3.

Snal opened Wednesday's trading in the red by 0.5 percent at EUR4.98.

By Claudia Cavaliere, Alliance News reporter

Comments and questions to redazione@alliancenews.com

Copyright 2023 Alliance News IS Italian Service Ltd. All rights reserved.