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Edited Transcript of ELI.BR earnings conference call or presentation 26-Jul-19 8:00am GMT

Half Year 2019 Elia System Operator SA Earnings Call

Brussels Aug 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Elia System Operator SA earnings conference call or presentation Friday, July 26, 2019 at 8:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Catherine Vandenborre

Elia System Operator SA - CFO

* Yannick Dekoninck

Elia System Operator SA - IR Officer

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Conference Call Participants

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* Bart Cuypers

KBC Securities NV, Research Division - Financial Analyst

* Bart Jooris

Banque Degroof Petercam S.A., Research Division - Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen. Thank you for holding, and welcome to the Elia Group First Half Year 2019 Results Presentation. (Operator Instructions)

I would like to hand over the conference to Mr. Dekoninck. Please go ahead, sir.

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Yannick Dekoninck, Elia System Operator SA - IR Officer [2]

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Good morning. Thanks for being present. It's my pleasure to welcome you to the half year results 2019 conference call for analysts and investors. Present in this call is our group CFO Catherine Vandenborre, here with me in the room. Catherine will first give you information on our figures and then answer all your questions.

Catherine, please go ahead.

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Catherine Vandenborre, Elia System Operator SA - CFO [3]

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Thank you, Yannick, and welcome to our half year conference call result. And let's start with an overview of our general performance. As announced in the press release issued this morning, we are posting sound financial and operational results. We have invested so far EUR 388 million in development of the electricity infrastructure in order to integrate an increasing number of renewable generation capacity in the electricity system and further interconnect neighboring countries.

In Belgium, we further accelerated our investment to a net amount of EUR 274 million, or 17% up compared to the same period last year. In Germany, we have invested EUR 114 million, which is 10% up compared to June 2018. Second, in terms of financial results, the reported net profit of the Elia Group share declined by 11.2% to EUR 126.2 million. This decrease comes from 2 elements: First, the lower contribution from 50Hertz mainly due to the bulk of the easement provision being released, of having been released in April 2018; and second, the higher accrued coupon for the hybrid securities contracted in the second half of 2018.

The normalized net profit is up by 8.2% to EUR 154.2 million. This is the consequence of 4 elements: First, the takeover of 50Hertz and the changing consolidation method; second, higher normalized reserves in Belgium; third, lower normalized results in Germany; and fourth, the contribution of Nemo Link. Finally, we succeeded in maintaining grid availability at a very high level of 99.999%, and this is despite a tense situation on the grid in the reserve.

Now let's have a look at the key realization of the year so far. I think we cannot honestly say that we have the highest acquired intern semester in all aspect of our core activities, which illustrates our strategy to transform Elia into a leading group of TSOs in Europe. We continued to upgrade and expand our infrastructure, focusing even more on delivering it on time, on budget and on quality, both onshore and offshore, as illustrated by the timely commissioning of the Nemo Link interconnector and the inauguration of the Arkona project in the Baltic Sea.

We also reinforced the balance sheet of the group by successfully raising additional equity in the first half of 2019. This will enable Elia Group to stay at the forefront of the ongoing energy transition towards decarbonized society by supporting the implementation of our ambition investment program.

We are also working towards the management of an energy system with more variable energy and where electricity demand will need to better realign with supply together within an ecosystem of diesel, start-ups, suppliers, telecom company, we are developing a new digital communication platform called Internet of Energy that will enable the development of new services by exchanging data between all energy market players.

Let's have a more specific look at the main highlight of the first half of 2019. First, as part of our legal obligation, we recently published an additional analysis on the adequacy and flexibility needs during the period 2020-2030 for Belgium. Through this study and based on our calculation, we note that the generation replacement capacity required to cope with the nuclear exit laid down by law in 2025 is now of around 3.9 gigawatts versus 3.6 gigawatts in our previous study. So the need for replacement capacity is becoming greater considering the bringing forward of the coal exit in the neighboring countries set to make it harder for Belgium to import electricity when it has shortages.

Elia is calling on the federal government to continue working on the development of the planned capacity remuneration mechanism, so that Belgium has a robust safety net in place to maintain its security of supply. Secondly, in the context of our initiatives in Internet of Energy, a panel of experts and academics selected a number of projects that are mature enough to progress to the test phase. All of them are intended to enable end users to become active participants in balancing supply and demand, projects whose test phase is proved successful can then be scaled up to commercial applications.

Third, Elia is progressing well on its internal restructuring project designed to separate its regulated activities in Belgium from activities regulated outside Belgium or from non-regulated activities. This will avert the risk of cross-subsidization arising from the new tariff methodology for 2020 to 2023. The restructuring will also provide appropriate framework for the further development of Elia's nonregulated activities. And as such, provides more transparent group structure. The planned structure may mean that Elia is converted into a holding company.

Next to that, all operational activity was intense for the first semester of 2019. In Belgium, we continued our investment program, driven by the realization of the market CapEx, the upgrade or replacement of existing infrastructure, and the integration of offshore energy into the grid. With that respect, the Modular Offshore Grid project is progressing well, with the planned commissioning later this year.

In Germany, both the Arkona and Wikinger wind farms are feeding in energy into the onshore transmission grid. Also, the construction of the Combined Grid Solution project is in its final stage. Finally, the Nemo Link Interconnector was put into operation in January. At the end of June, 2,742 gigawatt hours of commercial flows have been exchanged between Belgium and U.K., with an availability rate of the interconnector of 98.5%. It is the first offshore interconnector being built on time and on budget in Europe. However, the price difference between U.K. and Belgium is relatively small, negatively impacted the profitability of the interconnector.

In terms of regulation in Belgium, you will remember that the licenses for operating the grids are granted for a period of 20 years. Elia is pretty well licensed to operate Belgium high-voltage grid was renewed for a period of 20 years until 2042.

In Germany, we started the first year of the third regulatory period covering the years 2019 to 2023. Like you know, the regulator sets the return on equity applicable as from 2019 to 5.64% post tax. This return was just recently confirmed by the high court after a claim introduced last year by all TSOs and DSOs.

In addition, 50Hertz received end of January following the cost assessment, the regulator's decision on the individual efficiency factor, similar to the past regulatory period, 50Hertz is regarded as fully efficient, with an efficiency factor of 100% that exceeds the general productivity factor of the exchange for the energy sector, improved from 1.5% on the past period to 0.9% for this regulatory period.

With regard to the onshore remuneration, you will remember that already in 2018, the mechanism changed to a cost risk mechanism for offshore OpEx. Regarding Nemo Link, its specific regulations started as from the commissioning and has been fully confirmed after 16 days of continuous operation. Nemo Link is now in the final stage of discussing and agreeing the cap inflow levels with its regulators. Discussions with Ofgem and CREG are constructive and we expect thresholds to remain within the range of initial estimates.

On the financial side, solid financial performance has been realized over the first half of the year. The normalized results of Elia Group increased by 8.2% to an amount of EUR 154.4 million. This increase is mainly the results of good performance in Belgium, the positive contribution of Nemo Link and consolidation impact from last year's acquisition. The effect was partly offset by the lower results in Germany, driven by the one-off release of the easement provision that occurred in 2018.

This releasing provision as well as the accrued coupon for the hybrid bond issued in the second half of 2018 for financing the additional 20% stake in Eurogrid, resulted in a drop of the reported net profit Elia share by 11.2%.

In the first half of the year, we also concluded a capital increase of 7.6 million new shares, raising a total amount of EUR 434.8 million. The proceeds of the offering are used to finance Nemo Link. The regulated activities in Belgium, in accordance with the regulatory framework 2020-2023, and general corporate purposes. On the debt market, Elia successfully refinances a EUR 500 million bond, reaching maturity in May.

Over the first half of 2019, we continued our investment program in order to deliver investment infrastructure of the future. In Belgium, we further accelerated our investments in the grids. First, the ALEGrO project, the first interconnector between Belgium and Germany, is making good progress. The cable route is complete on the Belgium side, and the converter station is nearing completion. The project is scheduled for commissioning in 2020, depending on the progress of the works at the German side.

Then the Brabo project, which is part of the effort to upgrade the Belgian electricity grid and necessary to safeguard the supply to the Port of Antwerp area. Works are progressing well. We are currently erecting the tallest pylons in the Benelux to span the River Scheldt in the Port of Antwerp. This phase of the Brabo project would be completed in December 2020.

Thirdly, the Modular Offshore Grid has entered its final phase. The switchyard platform was successfully placed on the foundations in April, and cable-laying work has now begun. Elia's first plug at sea will bundle the export cables of future offshore wind farms in the North Sea and connect them to the mainland. The project is on track to go live in September of 2019, and become fully operational by the end of this year. This will be Elia's second offshore project this year after commissioning the Nemo interconnector in January.

Also, in Germany, good progress has been made on key investments. With regards to the offshore project, Ostwind 1, after 3 years of construction and a total investment volume of approximately EUR 1.3 billion, renewable energy is now flowing from the 2 offshore wind farms, Wikinger and Arkona, to the onshore transmission grids. Running parallel to Ostwind 1, Ostwind 2 will allow 733 megawatts of renewable capacity from 2 offshore wind farms in the Baltic Sea to feed in to the 50Hertz's high-voltage grid, representing another key step in the German energy transition. According to the current schedule, cable-laying should begin in late 2020, and the first pilot hubs in late 2022.

Last, works on the Kriegers Flack Combined Grid Solution project is progressing well. It entails constructing the world's first hybrid interconnector between 2 national offshore wind farms, with a planned transfer capacity of 400 megawatts. The trial runs of the Combined Grid Solution are scheduled to start at the end of this year.

Before looking in detail to group results for the first 6 months of the year, I would like to remind you that we have amended the 2018 financial in accordance with the segment reporting introduced at year-end 2018. As a result, the performance of Elia Transmission and 50Hertz transmission are more closely linked to the regulatory framework, and the nonregulated activities, including Nemo Link, are isolated into separate segments. This reporting is in line on the operating segments and in conformity to IFRS 8.

Now going to the results themselves. I already mentioned that the group normalized net profit increased by 8.2%. And I mentioned the reason explaining that. The normal results of Germany amounting to EUR 84.5 million is strongly affected by the one-off release of the easement provision that occurred in April 2018, which had a net profit impact of EUR 29.2 million. Consequently, the relative contribution of the German segment decreased from approximately 65% to 55%. If we take into account the nonrecurring elements, the reported net profit of the Elia Group decreased to EUR 152.1 million, the noncontrolling interest had been recognized amounting to EUR 16.4 million, lead to the full consolidation of Eurogrid.

Taking into account the accrued coupon for the hybrid security, the net profit attributable to ordinary shareholders decreased by 11.2% to EUR 126.2 million. As mentioned, the comparison with prior financial year is still affected by a change in consolidation since the acquisition of the additional 20% stake in Eurogrid. Therefore, and purely for comparative purposes, we have rebased the key figures of 2018 in order to present fully consolidated figures of Eurogrid for the year 2018.

Now first, looking at the actuals, and despite the one-off effect from the release of the easement provision, the reported EBIT increased by 28.5% compared to prior year, which is driven by the solid performance in Belgium, the contribution of Nemo Link and the higher EBIT in Germany as a result of the change in consolidation method. On a fee-based basis, the EBIT decreased by 12.6%. As illustrated on the graph on the left, this decrease is almost entirely attributable to the lower EBIT in Germany, following last year's release of the easement provision. Excluding this one-off effect, you will note that the EBIT of 50Hertz remains in line with prior year, thereby, attesting the solid operational performance of 50Hertz despite the drop in regulatory return on equity with the start of the third regulatory period. This drop has been offset by higher asset remuneration, following the realization of investment and the higher cost base approved by the regulator.

For half year, the Elia Group carried a total net financial debt slightly below EUR 4.5 billion. This decline in net debt is mainly driven by the 435 write-off in realized in June 2019. At entity level, the net debt for Elia Transmission decreased by 4.4% as the Elia's CapEx program was mainly financed by cash flows generated from operating activities and the proceeds from the capital increase.

At the level of Eurogrid, the first half of 2019 showed a positive free cash flow of EUR 34.3 million. The slight increase in the net debt is mainly related to the financing of the CapEx program and the dividend payment to Eurogrid. No new debt were issued in the first half of 2019.

The average cost of debt slightly increased by 12 basis points for the first half. This is linked to the prefinancing in January of 500 million Eurobond coming to maturity in May 2019, owing to a strong investor's interest. The bond has a coupon of 1.375%, and the rating is still BBB+ stable outlook.

Now let's take a more detailed look at the underlying performance of the different segments, starting with Elia Transmission. Half year revenues increased by 15.2% compared to prior year to EUR 499 million. It results from higher financing costs, depreciation and taxes that are passed through into revenues in accordance with the cost plus regulation. These increases were partially offset by slightly lower allowed regulated net profit, linked to lower interest rates, or lower OLO, and low operation costs mainly for ancillary services, which are also passed through into revenues.

Normalized net profit increased by 15.7% to EUR 65.0 million, driven by the realization of our investment program and one-off tariff compensation of the financial costs linked to the capital increase. In more detail, the key drivers are: First, the fair remuneration, which decreased by EUR 2 million compared to the same period last year, driven by a lower average OLO compared to the first half of 2018. The average OLO decreased by approximately 53 basis points, hereby impacted negatively the equity remuneration. The effect was partially offset by the increase in equity.

Second, the mark-up contributed for an amount of EUR 24.6 million, increasing by EUR 6.5 million, thanks to the full realization of the mark-up investment program since the start of the tariff period in 2016 and the progress realized on those investments during the first half of the year. You will remember that the mark-up compensation includes also protection for the drop in interest rates, the drop in OLO, but as long as the OLO is above the level of 50 basis points. As the OLO is currently below 50 basis points, the mark-up compensation is not fully compensating the lower fair remuneration.

Third, we realized incentives amounting to EUR 9.7 million. This represents a slight increase of EUR 0.3 million mainly driven by higher operational efficiency. Also, the IAS 19 provision increased slightly, driven by lower discount rates and a higher tax provision was accounted. Finally, as already mentioned, there was a one-off effect amounting to EUR 6.3 million from the tariff compensation of the financial cost linked to the right issue that are accounted through equity in IFRS. As a reminder, the financial costs are fully passed through under the Belgian regulatory regime. The reported net profit came in at EUR 65 million, given the absence of any non-recurrent items.

Now focusing on the balance sheet of Elia Transmission, we see that the regulated equity, which is the basis for the calculation of the sales remuneration, increased by 19.4% year-on-year at EUR 2.1 billion. The increase is, of course, mainly the result of the recent right offering, of which EUR 327 million was allocated to the Belgian regulated equity. As such, Elia strengthened its balance sheet and aligned its capital structure to the gearing ratio defined in new tariff methodology, applicable as from 2020. By aligning the actual gearing ratio with the regulatory one, Elia ensured that the capital increase will be remunerated at higher equity return as from January next year in accordance with the regulatory framework.

Now let's have a look at the half year result of 50Hertz's transmission. Revenues increased by 10.9%. This increase is mainly driven by higher revenues from system operations. For example, for dispatching measures and reserve power plants. For the latter, a new cost-sharing mechanism is in place since 2019, driving the revenues.

In the second quarter of 2019, 50Hertz reached a normalized net profit of EUR 84.5 million. As illustrated on the graph, the decline is almost fully attributable to the one-off revenues we had last year for the release of the easement provision that amounted to EUR 46.7 million post-tax at the level of 50Hertz. Additionally, the return in Germany was also impacted by the lower regulatory return on equity applicable as from 2019.

Looking at the key items of the results, we have remarked that first, and despite the lower regulated return on equity, the base year revenue increased by EUR 34.8 million, and is driven on the one hand by the growth of the regulatory asset base from previous years, and on the other hand, by higher cost base approved by the regulator. Secondly, the remuneration on offshore investment dropped by EUR 22.9 million as the commissioned assets of the offshore project have rolled over to the base year, and therefore, are remunerated through the base year revenues.

Thirdly, and with regard to the offshore business, mechanism is applied with a yearly update of the cost base. The offshore remuneration increased by EUR 7.2 million compared to previous period, and is driven by the asset growth offsetting the lower equity remuneration. Additionally, the results are also impacted by higher depreciation for EUR 18.1 million. It's mainly due to the commissioning of the 2 offshore cables in the platform for Ostwind 1 in late 2018. We have also higher cost with the financial results dropping by EUR 4.5 million mainly due to lower capitalized borrowing cost since the commission of many projects.

Considering nonrecurring cost of EUR 2.2 million linked to the regulatory settlement of the previous regulatory period, the reported net results came in at EUR 82.3 million. From a balance sheet perspective, equity remains strong and stable. The liquidity position remains very strong, partly linked to the EEG business, in the EUR 1.5 billion cash position, an amount of EUR 805 million of EEG cash is included and has to be given back to the consumers. The revolving credit facility and the bank overdraft facility remains fully undrawn.

In the first half of 2019, new debt capital transactions have taken place, and the investment program has been fully financed from operating cash flow. There has been no change to the rating of Eurogrid GmbH that remains BBB+ rating with a stable outlook.

Like mentioned before, we have said it in 2018, a new segment reporting in order to separate the nonregulated activities from the regulated operation. This segment regroups all the nonregulated activities like the financing of all additional stake in Eurogrid, EGI and Nemo Link. The nonregulated segment realized a normalized net profit of EUR 4.9 million mainly driven by Nemo Link's contribution. So since its commissioning, Nemo Link contributed EUR 3.8 million to the net result. We'll come back in the next slide on the operational performance of the cable during the first 5 months of operation.

Also, we have EUR 1.4 million tax credit on the interest charges, linked to the hybrid securities, partially offset by the senior bond interest contracted in the second half of 2018 to finance the Eurogrid's takeover, Finally, EGI and Eurogrid have a slight operational loss.

To close with this review, let's say a few words on the first months of operation of Nemo Link. The cable was commissioned end of January and is operating under cap and floor regulatory model. The commissioning of this interconnector will present an important new step in integration of the European electricity units. The overall availability of the interconnector for the first 5 months of operation was 98.5%, which is regarded as quite high for such an interconnector. The net contribution to the Elia Group result at the end of June is EUR 3.8 million. And so despite its high availability, Nemo Link's performance was negatively impacted by low spreads of the electricity commodity price over the first half of 2019, driven by higher CO2 prices in Continental Europe and lower gas prices in the U.K. due to the mild winter.

The exposure to the volatility of the spreads is enhanced to the nature of the investments and needs to be considered through the lifetime of the project for 25 years. Also higher than planned curtailments affected the revenues of Nemo Link for the first half of 2019.

Finally, regarding our outlook, we remain confident achieving at group level an adjusted return on equity between 7% and 8% in 2019. In Belgium, we remain confident on our ability to achieve the regulated return between 5% and 6%. And this despite the decrease in the Belgian 10-year OLO. Having invested EUR 273.6 million in the first half of the year, with good progress on strategic interconnection projects, such as Brabo and ALEGrO, and with the Modular Offshore Grid on schedule to be commissioned in the second half of 2019, we are on track to realize investments of around EUR 700 million.

Result forecasts for Germany remained also positive. And here, again, we remain confident about our ability to deliver a return on equity between 8% to 10%, with capital expenditures of EUR 114.1 million in the first 6 months, and a good progress of the Ostwind 2 project, we remain on track to achieve investment program of about EUR 420 million for 2019.

Based on the good progress of our investments in both Belgium and Germany, we remain positive to achieve a RAB of EUR 8.9 billion at group level and considering 80% of 50Hertz.

With this, I have covered, I think, a quite extensive presentation of the figures, and propose we start with your questions, if any. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from Mr. Bart Jooris, Degroof Petercam.

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Bart Jooris, Banque Degroof Petercam S.A., Research Division - Analyst [2]

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I have a question more on the medium, long-term CapEx plans. So you talked about the capacity plan for Belgium. In discussion before the Belgian government, the CREG stated that you severely overestimated the needed capacity. Is your medium-term CapEx plan dependent on the forecasts of that capacity plan? And if so, could that be influenced if the Belgian government decided to go with the CREG and install much less capacity.

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Catherine Vandenborre, Elia System Operator SA - CFO [3]

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Thank you for your question, Bart. Different elements, first, on the estimation of the capacity that is necessary for coping with the nuclear exit. It is an ongoing process. And so basically, there is a task force, which has been set by the Belgian government, together with the administration, together with CREG, together with Elia and together with representatives of the Energy Minister of Belgium. And the capacity, which is necessary for coping with the exit of the nuclear capacity will be determined exactly by the end of the year. So that's something that will be refined over the next months. To come on your question to which extent is the investment program of EUR 2.2 billion that we have announced, depending on the installment of new generation capacity, very few.

So basically, there are different drivers in the investment program, one driver is the renewable generation capacity that has been built in Belgium. Second driver is linked to the replacement of existing parts of the grid. And the third driver is linked to further interconnect in Belgium with other countries. Those are the main drivers behind the plan. For the next 4 to 5 years, especially, we will put in strategies on the replacement of existing grid infrastructure. And so in the EUR 2.2 billion that we have announced, you should not expect that it will be affected by possibly new generation capacity. To illustrate that, those new generation capacity will also may be built on sites that are already connected to the existing grid infrastructure.

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Operator [4]

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The next question is from Mr. Bart Cuypers, KBC Securities.

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Bart Cuypers, KBC Securities NV, Research Division - Financial Analyst [5]

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The share price has rallied strongly after the successful capital operation as well as strong expected regulated asset base growth in a low yield environment. Just going through the yields, which is, this year will still affect the Belgium results. But 2020 to 2023 will be fixed at 2.4%. In that framework, there was a clause which was included, where there could be new discussions to revise that should that in -- the foreseen yields fluctuate too much from the actual yield at that moment in time. Have you had, at this moment in time, indications that this could be called upon by the regulator?

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Catherine Vandenborre, Elia System Operator SA - CFO [6]

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We do not have any indication on this one. You have, of course, also to look to OLO rate which is fixed on the full regulatory period. So for the 4 years. But today, there is no single indication that the 2.4% could be revised.

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Bart Cuypers, KBC Securities NV, Research Division - Financial Analyst [7]

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Okay. That's clear. And yes, with the share price approaching the EUR 70 per share. Yes, the questions on the second wave of investments become more and more, let's say, more available. So I was wondering if, at this moment in time, it is beyond your 5-year regular guidance period, I understand. But are there perhaps updates you can share on the federal grid development planning in Germany at this moment in time or perhaps, additionally, in Poland, developments on the offshore wind, where you could contribute with the position of 50Hertz.

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Catherine Vandenborre, Elia System Operator SA - CFO [8]

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Thank you for your question. Honestly, it's a little bit too early to come with the figures for the time being because indeed there are many discussions, especially in Germany regarding a possible acceleration of the CapEx plan. So we announced a CapEx plan of EUR 3.3 billion -- EUR 3.4 billion, sorry, for Germany in the next 5 years. What we see is there was indeed demands coming both from the political side of the government, but also the society to accelerate the decarbonization. And if we want to go faster to a decarbonized society, transmission infrastructure and building transmission infrastructure is a necessary part of that. So there are currently discussion for first further allocating offshore part in the Baltic Sea. Second, for extending or expanding the onshore infrastructure in order to cope with the construction of the offshore farms.

And third, there are also currently discussion to expand the capacity of the corridor cable, that is in construction or at least the cable route is in discussion for the time being. So there are also discussions for extending this capacity, which is what we call entry tubes that is low in the second step, in the second phase to pull cables when even more offshore capacities will have to be built. Those are still discussions. We expect by the end of the year to have more clarity and to be able to give more concrete and more figures in terms of possible investment in Germany. But what we can have in mind is that the EUR 3.4 billion for the next year in Germany is certainly a level of investment that we will realize. And that's -- the likelihood that it will be revised upwards is quite significant. Now taking in consideration the time, which is necessary for making such investment, if there is a change in the development plan, it will not affect the first years of the development plan, but it will have impact at the end of the periods, so from 2022 to 2023.

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Operator [9]

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The next question is from Mr. [Tova Steele], (inaudible).

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Unidentified Analyst, [10]

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[Tova Steele] from (inaudible). I was wondering the normalized profit per share is falling by 17.1%. And I was wondering what the reason for that. Is it because of the capital increase? Or are there also other drivers of the lowering profit per share?

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Catherine Vandenborre, Elia System Operator SA - CFO [11]

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There are different elements. So the first element is that we have, of course, the capital increase. We have issued more shares. So if you do a computation of the number of cases by definition mechanically, you will see a decrease as the first element. Second element, you have also the high-impact linked to the development of the German results, which is like we mentioned, linked to the fact that we had last year a one-off takeover of the easement provision, the release of the easement provision, for which we had a significant portion last year, and there is only a very small amount in the first 6 months of 2019. So those are the 2 elements.

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Operator [12]

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The next question is from Mr. Bart Jooris, Degroof Petercam.

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Bart Jooris, Banque Degroof Petercam S.A., Research Division - Analyst [13]

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Follow-up question by the one of my colleague on the Deutsche Energiewende. There were some reports in Handelsblatt and taken over by Financial Tageblatt that TenneT would not be willing to invest that much money in the German Energy One Day any more. Have you seen any signs of that on the field? Or do you see anything affecting you, if that would be the case?

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Catherine Vandenborre, Elia System Operator SA - CFO [14]

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Of course, I will not comment on TenneT position. I can only comment on Elia's position. And I can confirm that the intention of Elia and the commitment of Elia regarding the delivery of the energy wind is very high.

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Operator [15]

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(Operator Instructions)

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Catherine Vandenborre, Elia System Operator SA - CFO [16]

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So if there is no more questions, I propose then to close the call. And I would like to thank you all for calling in, and to thank you also, you all, for your questions. Should you have any follow-up question, you can always contact the Investor Relations team. Thank you very much, and nice holiday for the ones that will take some days off afterwards. Bye-bye.

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Operator [17]

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Ladies and gentlemen, this concludes the conference call. You may now disconnect your lines. Thank you for joining, and have a very nice day.