Millions of euro | ||||
2019 | 2018 | Change | ||
Sale of electricity(1) | 40,045 | 39,278 | 767 | 2.0% |
Transport of electricity | 10,470 | 10,101 | 369 | 3.7% |
Fees from network operators | 866 | 1,012 | (146) | -14.4% |
Transfers from institutional market operators | 1,625 | 1,711 | (86) | -5.0% |
Sale of gas | 3,294 | 4,401 | (1,107) | -25.2% |
Transport of gas | 617 | 576 | 41 | 7.1% |
Sale of fuels(1) | 914 | 919 | (5) | -0.5% |
Connection fees to electricity and gas networks | 785 | 714 | 71 | 9.9% |
Construction contracts | 749 | 735 | 14 | 1.9% |
Sale of environmental certificates(1) | 36 | 36 | - | - |
Sale of value-added services | 343 | 390 | (47) | -12.1% |
Other sales and services | 1,295 | 1,305 | (10) | -0.8% |
Total IFRS 15 revenue | 61,039 | 61,178 | (139) | -0.2% |
Operating leases | 24 | 26 | (2) | -7.7% |
Sale of energy commodities under contracts with physical delivery (IFRS 9)(1) | 10,775 | 13,843 | (3,068) | -22.2% |
Gain/(Loss) on derivatives on sale of commodities with physical delivery (1) | 5,519 | (2,010) | 7,529 | - |
Reinsurance premiums | 6 | - | 6 | - |
Other revenue | 3 | - | 3 | - |
TOTAL REVENUE FROM SALES AND SERVICES | 77,366 | 73,037 | 4,329 | 5.9% |
(1)The 2018 figures have been adjusted to take account of the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) contained in the Agenda Decision of March 2019, which involved changes in the classification, with no impact on margins, of the effects of purchase and sales contracts for commodities measured at fair value through profit or loss (for more details, see note 4.3 of the consolidated financial statements).
The increase in revenue from energy sales (€767 million) is mainly attributable to the consolidation of Enel Distribuição São Paulo in June 2018.
Revenue from the transport of electricity came to €10,470 million in 2019, an increase of €369 million. This increase was mainly due to the acquisition of Enel Distribuição São Paulo and the greater distribution revenue in Italy, above all as a result of the regulatory change with Resolution no. 654/2015 of the Regulatory Authority for Energy, Networks and the Environment (ARERA) (related to “regulatory lag”).
Revenue generated by fees from network operators came to €866 million, a decrease of €146 million compared with the previous year due, above all, to lower fees for the remuneration of generation plants in Italy. Revenue from the sale of natural gas for 2019, which totaled €3,294 million, decreased by €1,107 million from the previous year (€4,401 million in 2018). The decrease reflects lower quantities sold and, above all, lower average prices applied for sales in Spain (€1,136 million) compared with the previous year. Other non-IFRS 15 revenue increased by €4,468 million due to the sale of commodities under contracts for physical delivery and adjustments to their fair value, including for the unsettled portion following reclassification as a result of application of the IFRIC Agenda Decision of March 2019 concerning the recognition of contracts on commodities with the physical delivery of energy within the scope of IFRS 9. Revenue from contracts with customers (IFRS 15) for 2019 totaled €61,039 million and can be broken down into point-intime and over-time revenue as shown in the table below:
Millions of euro | 2019 | |||||||||||||||
Italy | Iberia | Latin America | Europe and Euro-Mediterranean Affairs | North America | Africa, Asia and Oceania | Other, eliminations and adjustments | Total | |||||||||
Over time | Point in time | Over time | Point in time | Over time | Point in time | Over time | Point in time | Over time | Point in time | Over time | Point in time | Over time | Point in time | Over time | Point in time | |
Total revenue (IFRS 15) | 22,635 | 522 | 17,860 | 785 | 15,573 | 503 | 1,383 | 934 | 646 | 27 | 76 | 81 | 7 | 7 | 58,180 | 2,859 |
The table below gives a breakdown of revenue from sales and services by geographical area.
Millions of euro | ||
2019 | 2018 | |
Italy (1) | 26,420 | 27,385 |
Europe | ||
Iberia (1) | 18,265 | 18,379 |
France | 1,259 | 1,006 |
Switzerland | 217 | 1,039 |
Germany | 3,746 | 2,297 |
Austria | 173 | 155 |
Slovenia | 40 | 27 |
Slovakia | 1 | - |
Romania | 1,311 | 1,214 |
Greece | 73 | 62 |
Bulgaria | 8 | 9 |
Belgium | 26 | 320 |
Czech Republic | 152 | 113 |
Hungary | 418 | 399 |
Russia | 897 | 989 |
Netherlands | 6,553 | 2,139 |
United Kingdom | 726 | 1,685 |
Other European countries | (23) | 113 |
Americas | ||
United States | 501 | 466 |
Canada | 18 | 23 |
Mexico (1) | 233 | 519 |
Brazil | 7,752 | 6,518 |
Chile | 3,263 | 3,169 |
Peru | 1,261 | 1,275 |
Colombia | 2,243 | 2,242 |
Argentina | 1,323 | 1,265 |
Other South American countries | 169 | 14 |
Other | ||
Africa | 92 | 82 |
Asia | 249 | 133 |
Total | 77,366 | 73,037 |
(1)The 2018 figures have been adjusted to take account of the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) contained in the Agenda Decision of March 2019, which involved changes in the classification, with no impact on margins, of the effects of purchase and sales contracts for commodities measured at fair value through profit or loss (for more details, see note 4.3 of the consolidated financial statements).
Performance obligations
The following table provides information about the Group’s performance obligations arising from contracts with customers with reference to the main revenue streams only, with a summary of the specific judgments made and the related revenue recognition policies:
Type of product/service | Nature and timing of satisfaction of performance obligation | Accounting policies |
Sale/transport electricity/gas to end-users | An electricity/gas supply agreement signed with an end users includes a single performance obligation (sale and transport of the commodity) because the Group has determined that the contract does not provide distinct goods/services and the promise is satisfied by transferring control over the commodity to the customer when it is delivered at the point of delivery. In order to determine the nature of the promise included in such contracts, the Group carefully analyzes the facts and circumstances applicable to each contract and commodity. | Revenue from the sale and transport of electricity/ gas to end users is recognized when these commodities are delivered to the customer and is based on the quantities provided during the period, even if these have not yet been invoiced. It is determined using estimates as well as periodic meter readings. Where applicable, this revenue is based on the rates and related restrictions established by law or by the Regulatory Authority for Energy, Networks and the Environment (ARERA) and analogous foreign authorities during the applicable period. |
Network connection services | The network connection fees received from customers for connecting them to the electricity/ gas distribution networks require a specific Group assessment to take into consideration all terms and conditions of the connection arrangements. | Revenue from monetary and in-kind fees for connection to the electricity and gas distribution network is recognized on the basis of the satisfaction of the performance obligations included in the contract. The identification of distinct goods or services requires a careful analysis of the terms and conditions of the connection arrangements, which could vary from country to country based on the local context, regulations and law. In order to finalize this assessment, the Group considers not only the characteristics of the goods/services themselves (i.e., the good or service is capable of being distinct) but also the implied promises for which the customer has a valid expectation as it views those promises as part of the negotiated exchange, that is goods/services that the customer expects to receive and has paid for (i.e., the promise to transfer the good or service to the customer is separately identifiable from other promises in the contract). |
Construction contracts | The construction contracts typically include a performance obligation satisfied over time. For these contracts, the Group generally considers it appropriate to use an input method for measuring progress, except when a specific contract analysis suggests the use of an alternative method that better depicts the Group’s performance obligation fulfilled at reporting date. | For construction contracts that include a performance obligation satisfied over time, the Group recognizes revenue over time by measuring progress toward the complete satisfaction of that performance obligation. The cost-incurred method (cost-to-cost method) is generally considered the best method to depict the Group’s performance obligation fulfilled at the reporting date. |