Natural gas networks and renewable commitment to strengthen results – Yahoo Finance Spain

By Julien Toyer

MADRID (Reuters) – The Spanish group Gas Natural said Wednesday that strong bet by the regulated gas business and renewable energy production to ensure their model, improve between 6 and 8 percent its profit by 2020 and ensure a payout of 70 percent over the next four years.

the Catalan group wants to leverage its strong generating cash to invest 13,000 million euros, mainly to develop its gas networks in Spain and Latin America and to increase its capacity in renewables in about 2,500 megawatts.

the plan, designed taking into account the strong growth of global primary energy demand, especially in emerging markets, it is subject in all cases to risk by volatility in the currency markets (more than 30% of its operating income comes from Latam) and raw materials, which could affect projections for the next two years.

Regardless of these risks, the group expects its net profit to reach 1,600 million euros in 2018 and 1,800 million in 2020 while the result gross operating increase by five percent to 5,400 million euros in 2018 and 6,000 million in 2020

The gas, which will pay its shareholders. – led by Caixa and Repsol – 1,000 million euros, or one euro per share against the results of 2015, said it plans to spend about 7,000 million euros to remunerate shareholders until 2020, with a pay-out (percentage of profit destined to dividend) stable at 70 percent.

in a conference call with analysts, those responsible for the gas sidestepped a decision on the percentage of the dividend that will be offered in shares.

analysts said the plan announced Wednesday is in line with expected, although the price of the company fell sharply after a first-quarter results below expectations.

Between January and March the currency developments in its key markets in Latin America and the weakness of business liberalized reduced by 10 percent its ebitda to 1,216 million euros, below the 1.238 million expected by analysts.

the group net profit fell 18.6 percent to 329 million euros . against projections of 339 million