Q3 2017 Enagas SA Earnings Call
Oct 17, 2017 AM CDT
ENG.MC - Enagas SA
Q3 2017 Enagas SA Earnings Call
Oct 17, 2017 / 07:00AM GMT
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Corporate Participants
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* Antonio Llarden Carratalá
Enagás, S.A. - Executive Chairman
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Conference Call Participants
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* Antonella Bianchessi
Citigroup Inc, Research Division - Director and Head of European Utilities Equity Research
* Fernando Lafuente Seseña
Alantra Equities Sociedad de Valores, S.A., Research Division - Research Analyst
* Javier Suarez Hernandez
Mediobanca - Banca di credito finanziario S.p.A., Research Division - Research Analyst
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Presentation
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Operator [1]
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Please be welcome to the Enagás results presentation corresponding to third quarter of 2017. Figures were released this morning before the opening bell. And as usual, they are available on our website at www.enagas.es. Mr. Antonio Llarden, the Chairman of Enagás, will host the presentation. We expect the call to last around 20 minutes. Afterwards, there will be a Q&A session during which we will try to answer any questions as fully as possible.
Thank you for your attention. I will now hand the floor to Mr. Antonio Llarden.
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Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [2]
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Good morning, ladies and gentlemen, and thank you for your attention. The results we're presenting today, corresponding to the first 9 months of 2017, are fully in line with our targets and the focus budget for the period. This means that we can reasonably calm because despite the current volatile environment, we are on the right track to meet the goals set for this year.
As you know, during times of high uncertainty in our country due to the political situation in Catalonia, an uncertainty that has warned by the International Monetary Fund despite the positive outlook of the Spanish economy, if it goes on for too long, could affect confidence and investment decisions in our country. For the time being, this is already being reflected in our country's risk premium, which, since our last presentation of results in July, in mid-July, has increased by more than 25%. At Enagás, we are obviously subject to being influenced by everything that affect the kingdom of Spain regarding uncertainty and volatility. We have been, however, very proactive with investors, analysts and rating agencies, analyzing the situation, and we're not being particularly affected as a company.
Our performance on the stock market has been somewhat better than on the Ibex as a whole and on the Madrid Stock Exchange Utilities Index. In any case, we were prepared. We're a solid company with a proven track record. If, on this topic, you have further questions afterwards, I'll be happy to give further opinions.
Before expanding the results in detail, I would like to point out 4 important milestones for Enagás in this third quarter of 2017. First, the confirmation of our A- rating by Standard & Poor's in July. Secondly, Enagás is a world leadership in the oil and gas storage and transportation industry on the Dow Jones Sustainability Index, where we remain for the 10th year in a row. Thirdly, within the framework of our efficiency plan, our organizational model has been adaptive to optimize resources and adapt even further our resources. Fourthly and lastly, we've continued to manage the Spanish gas system with a level of efficiency at the forefront of Europe and a demand growth of 9%, as we'll see later. In the first 9 months of the year, it is actually 9.3%.
I just had a quick breath break to have a sip of coffee. We'll start the results as explained in the first half of the year since 30 June. This year contributions of the equity accrual basis of our investees are recording the group's operating profit. This measure, in accordance with the applicable accounting regulations, has obviously been approved by the auditor and will not affect the company's net profit, the balance sheet, or the cash flow of the company.
I'll now briefly comment on the headline figures. For the first 9 months of the year, which are shown in detail in the presentation accompanying this conference call. (foreign language) After-tax profit amounted to EUR 375.7 million, that is 18.4% greater than the same period last year. This increase includes the accounting effect deriving from the global consolidation of GNL Quintero in Chile in stand-alone terms, that is, with GNL Quintero consolidating using the equity method, the growth of the after-tax profit has been 1.6%, which was forecast for the first 9 months of the year and which is in line with the forecast growth of 5% at the end of the year. These results have been possible, thanks to 3 key factors. First, the control of [both] operating, financial expenses. The company's efficiency plan is still a key lever to assuring the short-, medium- and long-term sustainability of the business. This plan includes our drive towards energy efficiency and the optimization of the main terms of our infrastructures as well as a new organizational model that I mentioned at the start.
The second key lever is the positive performance of our investees, which, at the closing of third quarter, very representative 15% of the stand-alone after-tax profit.
And lastly, the third lever is the global integration of GNL Quintero, which represents approximately 12% of the EBITDA.
During the first 9 months, we received from our investees dividends for the value of EUR 93.9 million, which is a substantial increase compared to the EUR 53 million received during the same period last year in 2016. This increase is in line with the dividends budget of EUR 120 million to be collected from the investees for the year as a whole. The creational value in investees is, therefore, one of our strategic cornerstones. Therefore, we have put a lot of work into developing an investee management model with the main aim of increasing the profitability of assets, creating value by promoting the 3 management levers.
We are talking about levers all the time, let's not forget I'm an engineer, and I love this. So firstly, guaranteeing the long-term sustainability of the assets, transmitting Enagás' experience, knowledge and best practices as an industrial partner.
Secondly, improving investee business plans, developing efficiency plans in OpEx and business initiatives to increase revenue.
And thirdly, and lastly, complementing our investees profitability by providing services and searching for and developing new investment projects.
Regarding the funds from operations, consolidating of the group, by the end of the quarter, this amounts to EUR 706.7 million, that is 15.6% greater than the same period from last year. This is a significant increase which has enabled us to reach a stand-alone leverage ratio funds from operations, net debt of 17.1%, which exceeds slightly our annual goal of 15%.
Regarding the operating cash flow, it has increased by 20.8%, due to the improved working capital. This is due to higher reinvoicing or turnover in the gas sector due to the increase in demand during the period, as we'll see later on.
In the first 9 months of the year, Enagás invested a total of EUR 253 million, which includes the sale of a 15% stake of GNL Quintero in April for EUR 140.6 million. That also includes investment in the Trans Adriatic Pipeline, or TAP, for EUR 123 million and the cash output for the payment of the GSP guarantees for EUR 213 million that were executed in January and were already included in the debt figure at the end of 2016.
As promised, I'll talk about GSP. As we committed in each quarterly results presentations, we inform of various stages of the Sur Peruano pipeline project. It's worth noting the changes in the Peruvian government that took place in the last quarter.
As regard, back in July, a new minister of Energy and Mines was appointed to the Peruvian government. In September, the government was fully remodeled due to changes in the Parliament and they kept in their place a new minister of Energy and Mines. The minister has confirmed the commitment of the Peruvian state to retender the concession in the first half of 2018 considering that the project is viable and beneficial for the country, that the country has enough gas reserves to carry it out.
Along these lines, the -- Mercedes Aráoz, the new Prime Minister of Peru, in her intervention last week in the congress of deputies, she talked about the retendering of the gas pipeline as a necessary project for Peru.
Furthermore, the concessionaire, GSP, with the agreement of all its partners, recently reached an agreement with the Ministry of Energy and Mines for the procedure to hand over the assets from the concession under the terms of the concession as a requirement to continue the retendering process.
This handover of assets is a very important milestone. It's probably the actual main milestone for the continuity of the new investment recovery procedure. Without this handover of assets, all the parties were being legal limbo because it would be virtually impossible to have a further tendering process. This took place very recently just last Wednesday, October 11. And as a result of this handover of assets, certain administrative discrepancies have come to light regarding the application and effects of the concession contract. GSP, [as I say], has shown an express reservation regarding these discrepancies, with operatives maintaining its collaboration with the Peruvian government in order to facilitate in any case the retender of the project and the recovery of the investment, therefore. If Enagás is right, including the contract are not suitably met as a result of the procedure set forth in the concession contract or due to any other reason, we will then take the necessary legal actions as stated in the concession contract.
Here at Enagás, we are still precisely monitoring and detailing the evolution of this process with our external financial and legal advisers.
Also on this topic, if you like more information in the Q&A session, I'll be happy to give you any information you deem appropriate.
Before moving on to the financial position, I would like to go into level of progress of the Trans Adriatic Pipeline, the TAP, which is very interesting in all the Investor Meetings we have. As you know, it is the largest greenfield project in which Enagás has participated with 16%. The current level of progress exceeds 50% fulfilling the plant level. The project is expected to be commissioned and working in 2020.
So we are along the right lines with expectations. Talks with multinational entities are now at advanced stage and the financial closure is expected in the first half of 2018.
In terms of Enagás' financial situation, the main data for the last 6 months are the stand-alone net debt as of 30th of September amounted to EUR 4,609 billion (sic)[EUR 4,609 million] This means that we have reduced our debt by EUR 480 million compared to that reported at the end of 2016, including the net debt of GNL Quintero, the total stands at EUR 5,276 billion (sic)[EUR 5,276 million] This deleveraging is the result of a strong cash regeneration during the period, especially significant during the second quarter.
Although the trend remains very positive, I would like to remind you that the complementary dividend was paid in the third quarter, charged to 2016, for the total amount of EUR 199 million.
Second, we have a stand-alone net financial cost of 2.3%, which is in line with our expectation and on track to meet the average net cost forecast for the close of 2017.
If we consider the effect of global consolidation of GNL Quintero, the net average financial cost is then 2.8%.
Third, our stand-alone leverage ratio, funds from operations on net debt of 17.1% and that net debt EBITDA of 4.6x. Our sources of funding are [diversified]. More than 80% of our net debt is fixed rates and we don't have any significant maturities until 2022.
Fifth, in terms of ratings, both Standard & Poor's and Fitch's annual revisions confirmed our rating at A- and they are the most important thing regarding the financial approach.
Regarding gas demand, the demand for natural gas in Spain, during these first 9 months, grew by 9.3% compared to the same period in 2016. This data is very positive for all consumer segments. Conventional demands remained strong and grew by 4.5%, mainly thanks to an increased industrial demand, which is very related to the Spanish economy, and it grew by 7.4%. On the other hand, demand for gas in the electronics industry, which used to be very low, grew by 33.2% so far this year influenced by 2 factors: increased hydraulic generation and decreased wind power generation. As you can see, the demand is due not so much because of a GDP aspect, but rather because of some developments in the system.
With the data we have today, we expect to close 2017 with a growth of total demand of around 5%. This figure improves the growth of 3% that we forecast at the end of the first half. We are at 9% more or less but we prefer to give you this figure because we don't know so far how the year is going to end in its last quarter.
It will be the third consecutive year that the total national demand in Spain has grown since the start of the economic crisis. This is a sign of this sector's good health, which confirms the current balance in the system and its future sustainability.
Speaking of which, speaking of sustainability, I would like to highlight that one of the key factors behind Enagás' success is our commitment to sustainability which we have made an integral part of the company's strategy and operations.
For the third year in a row, we are part of the Dow Jones Sustainability Index. So we have been included, again, among the 300 oil companies of oil sectors considered to be classified this way or runs this way.
We have also been classified or runs as a well leader in the oil and gas storage and transportation sector, which implies recognition of the company's firm commitment to sustainability as 1 of the 5 strategic priorities of its 2017-2020 outlook.
So before we finish, let me remind you very quickly the targets we set out at the beginning of the year: To pay a dividend of EUR 1.46 per share; to achieve the growth in stand-alone net profit of 5%; to carry out pledged investments of around EUR 650 million; to achieve a dividend volume for our affiliates of around EUR 120 million; to maintain a stand-alone funds from operations on net debt ratio of more than 15%; and finally, to keep an average financial cost of around 2.4%.
So to conclude, before we move on to the Q&A session, I would say the conclusions are as follow:
the results from this third quarter are very in line with the goals set for 2017. And I guess as in this case, there are not many surprises regarding the analyst consensus. Second, the cash flow generation during the period has enabled us to lower stand-alone debt by around EUR 480 million, like I said. Third, our financial position continues to be very solid. 80% of our debt is fixed rate, and we don't have any significant maturities until 2022.
The demand for natural gas is up by 9.3% as of the 30th of September, mainly driven by the growth of industrial demand, in line with a positive performance, the very positive performance of the Spanish economy and the gas demand from the power industry.
So thank you very much for your attention, and if you have any questions, feel free to ask them now. We will endeavor to answer them with our CEO, sitting by my side, as fully as we can. Thank you.
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Questions and Answers
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Operator [1]
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(Operator Instructions) First question, the first question will be asked by Fernando Lafuente from Alantra Equities.
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Fernando Lafuente Seseña, Alantra Equities Sociedad de Valores, S.A., Research Division - Research Analyst [2]
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I have 3 questions. The first one is on GPS -- GSP, sorry, on the discrepancies, on the dissent, you mentioned some dissent and I would like to know which kind of dissents you've had with the Peruvian government? Which new ways open now with a rebidding process and the investment recovery process? And within this framework, would there be any impact for the company in the short run? My second question is on international assets. Within the value-creation levers, are you thinking of asset rotations? In that case, what can we do with the stocks? And the last question is about rating. The Standard & Poor's outlook is negative. I would like to know how the discussions with them are going? And which might be your decision on this negative outlook? Is there any risk to lower the rating? And how can we prevent this? So that's my question.
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Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [3]
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(foreign language) So thank you, Mr. Lafuente. Let me answer to your question. First of all, let me start by GSP. I will elaborate a little bit my answer because all your 3 questions are interlinked. The first one is on the dissent. The Peruvian administration considers that the oil and gas rulebook is applied as a preference to the concession contract, which entails that if the Peruvian government persists in its position, that even if the procedure to determine the accounting net value of the concession asset for an ulterior new bidding are the same, that is it wouldn't change, the guarantee for the recovery in the general bidding will be lower than was forecast in the concession contracts. Enagás and all the partners have never renounced to this right, and we consider this right to be well grounded. And if applies, if the concession contract guarantees are open, we will do as it's suitable. And the company, we are waiting until the administration clarifies its position and the following interventions regarding the process. So there's been a radical change, a very positive change in this third quarter for the first 6 months after terminating the concession. To be honest, the Peruvian administration couldn't or didn't have a chance to unblock this issue. When the minister was changed within 2.5 months, the whole issue was unblocked. And now we have managed the handover of assets. It was not done by the investees. Had it been so, we would be in a legal limbo because there would be no possible legal or administration way to do the bidding process, which is the ultimate goal we are aiming at in order to recover. So our appraisal for this is a great breakthrough within a short period of time. So there was some dissent as shown. We are going to keep working with our lawyers because we understand that there is no legal foundation for all this. And we are not going to have a bad discussion with the Peruvian government or the Peruvian administration. We keep every channel open. And after the declaration of the Prime Minister and the Minister of Energy, their -- ultimate goal is the project bidding. So we are going to leverage this process to clarify all these issues. So let me clarify that last week, the administrator appointed by the government to take care of the concession will have deadline of 45 days to take care of all the assets and the annexed documents and literature, and we're going to use this period of time. Your second question was on the different alternatives to be presented. Like I said before, there will be breakthroughs leading to the expected results, and we will keep on cooperating with the Peruvian administration. However, if Enagás will not see their expectations met, we will use all the legal resorts acknowledged by the concession contract itself, and we might start a negotiation, a direct negotiation with the Peruvian administration. We are not there yet. So far, we have solved the main problem, which is the first one, and we are going to keep on going down this path to see where we come. And finally, you asked the impact in the short run. You have the chance to check the statements as of the 30th of September and there are no new things. And Enagás, regardless of the results of the conversations with the Peruvian administration, we considered that we are backed by the recovery guarantees as set forth by the concession contract, and we could enforce them as foreseen or as set forth in this contract following the criteria by the external advisers. So no accounting treatment was necessary for this circumstances. Let me say that by the third quarter of the year, and according to what I suggested to the board, we have now a specific counselor and a legal advice on our rights and our possible ways of doing, and we have also recruited accounting experts. And following our auditor's advice, we have hired one of the big force to supervise and monitor this work and give their opinion to the board. So based on this, as of the 30th of September, we didn't deem necessary to any kind of impact. But I am open to any questions you might have. Another question you had is on international assets and asset rotation. Well, so far, in this development period for the internationalization process, which is roughly 6 years, we are now present in 6 different assets. We are long-term investors, we are not strictly financial investors, and we mentioned this in the conference call and the presentation. We have a specific plan to have profitability from our activities. We haven't seen this so far in our participation. But if in one of our participations we obtain majority, majority meaning that the efficiency measures have reached its cap or its ceiling, then why not, we might enter asset rotation, selling assets that are mature to obtain other assets, other investments in more attractive assets. We are not there yet, but if it happens, we would not hesitate to apply this policy. I'm not saying that we are going to turn into an infrastructure investment fund rotating its assets regularly every few years. But if some of our assets are not growing anymore, they are working, but they are not growing anymore, well, in that case, we could move on to asset rotation. And finally, Standard & Poor's outlook is negative in the short run. We don't know anything yet for the longer term from the rating agency. We submit all of our reports to them, and we are aligned with not increasing our debt and a certain level of this leverage. We are committed to a perfectly well-known plan for 2020 and it's well known by yourselves and the rating agencies. And so what they have said is that as long as we do -- as we keep aligned with this, the general plan, our rating is not at risk. Rating agencies rate countries and sectors and industries and this might hit us in one way or another, but we could be assured with this.
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Operator [4]
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The next question will be made by Javier Suarez from Mediobanca.
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Javier Suarez Hernandez, Mediobanca - Banca di credito finanziario S.p.A., Research Division - Research Analyst [5]
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I also have 3 questions for you. First, regarding your domestic CapEx in Spain. The press stated that apparently the Spanish regulator may have not authorized the building or the regasification plant in Tenerife. Would you please be so kind as to give us your opinion on this as well as the possible implication this may have on the business plan of Enagás. Secondly, I have a question related to the quorum of questions by the possibility of having a spin-off of the international business. I read on the press that you may consider doing spin-off for company's international business, and I'd like to know whether this will make sense for you as well as the potential benefit that you might get from these new company structure? And the last question I have is regarding the regulatory review, the potential regulatory review. Could you please update us on any conversation with the regulator in this regard?
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Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [6]
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(foreign language) Thank you very much, Mr. Javier Suarez. I'll try to reply to the 3 questions. First of all regarding domestic CapEx, the report presented and that the CNMC gave to the media, first of all, let's say that that's a report that the CNMC gives to the Department of Energy that is not binding for the department, but it's just a detail. However, the Department of Energy, as a consequence of this report, this information, or later will give them to them, no problem in that area. However, we don't have a direct participation that they allow it as a report that the Department of Energy requests from the CNMC and now they get it, they'll start these things. As a general opinion, and reminding when the Spanish regulation includes in its planning the need of 2 plants in the Canary Islands, right now we're talking about the Tenerife one. The main reason here is a so-called [NEA] transition plan in the Canary Islands due to their geographical situation, there is no natural gas access so far. Therefore, all the energy generation is done by burning fuel and this is very polluting in comparison to the usage of natural gas. And the main objective of the regulator at the time when they talk about installing a regasification or regasification plants in the Canary Islands has the main objective of reducing this CO2 pollution effects and halving them. In fact, recently, the Canary Islands regional government has spoken in that regard with whatever the regulator says. But those different reports are delaying our CapEx in this regard from 2017. We were planning to begin investment. And I'm talking about EUR 70 million. It's not a massive amount. And since we do abide by everything the regulator says, if the regulator told us not to do this, we wouldn't do it, and we would allocate that money to other investments in other areas. That's all I can say. To sum up, this is a report for the Department of Energy and the Department of Energy will need to decide whatever they deem appropriate. It may be to request more data from us. And on the other hand, our reinvestment impact will affect -- it will be effective this year. Our planning maybe modified and maybe lower than the figure I gave. However, if at the end of the process -- and please excuse me, we might get -- all get old while we're witnessing it, this was simply in relation about 10, 15 years ago and the process was negative eventually, I don't think it will happen, but then we will allocate that investment capability to other investments, whoever appropriate. The second question was the potential international spin-off. I need to say that initially this is a topic that the other people in the room may remember about, when we began our [steel plant] 2007, 2012. We said it for the first time, that it would be feasible to begin a internationalization process of our investment. And then maybe not in the document but at least in the Q&A session we had, we're talking about that this process may have a first stage that may last for a few years to have particular investments in a particular framework, but whenever we've got a critical mass, it would be big enough, we could put all these into a company, maybe share that company with some specific partners in the long term. And this is where the media are rightly commenting on right now. And to be honest, they're just reflecting for the investment banks have been telling us for more than a year. And to sum up is the following: you are having very good track record of international investment; you have complied with the global objectives and you are now having critical mass of assets in the European and the American Pacific access, so do you think you could give value to this and look for some partners. This is what the media have said. Right now, we're not being proactive in this matter. And we have other daily tasks that take all of our time. But we're not forgetting about this. It could be a good way for the company in the future, maybe in the next 2 years or so. And we could look at this in detail and if there is a valuable opportunity, we might enforce it. If you allow me to repeat something that I said a few years ago when Mr. Sarkozy kept the hesitation of whether he would present himself to -- as a republic's candidate to be the President of the French government. And they asked him, do you think of this? And he said, (foreign language) So I think of this every day, even when I shave, but at the time, he wasn't the President, there were no elections planned. So we could just joke about it, saying, well, it seems sensible. Right now, it's not part of a project that we want to finish certain deadline but Javier, it could be a certain stage of our internationalization process that might be meaningful. And then the regulatory review. I'll try to be very transparent with you. And after all the news that have come out in the last month, such as analyst reports, media news about regulatory reviews, I've had a verbal communication with the Secretary of the State for Energy, a very amicable dialogue, when he told me and obviously we need to apply a reductive coefficient to this, because it's not a legal document. But we were chatting, and I told him about these topics. And he said, well, regarding the gas sector, it is true that the regulation is already planning that halfway through the period, that would be right now, that would be a report requested to CNMC to look at the CapEx, the OpEx and how the evolution of the regulatory system and the associative stage. And I fully agree with him, obviously. The particular case of the gas system is that, that there are 2 very important factors. First, the deficit is being eliminated quicker than expected. We had a plan, well the regulator have planned that it would be eliminated in 15 years and the latest calculations we've been making allows to think that these period could be halved. And the second element, he mentioned and he said, well, as you know, as well as they do, the evolution of demand is well above what we had planned initially when we made the relation. And he summed up saying, well, in this context, I don't see any short-term need to take measures. However, the regulator has a power of doing anything they want and they may want to implement changes for whatever reasons. But replying exactly to what you're asking, Javier, the last conversation I had with him about 10 or 12 days, went along those lines. Therefore, in the case of the gas system, we do not see the need or the urgency of having any regulatory review before 2020. Whenever we get to 2020, the regulator will do whatever is included in the regulation to analysis of the process development, the leisure paper about a year before with all the content those [summary adopt] to the critical report of the affected parties. And with this information and economic context of the time, they will take measures. I think that right now is actually soon to speculate about what the regulator will do in 2020. Having said that, if we're able to give these 2 gas sectors that tools, a steady global demand even lower than has governed at a current pace and a gradual illumination of deficit is quicker than planned. Everything in the case of the gas regulator in 2020 might be in much more comfortable situation than the one they had in 2013 or 2014. However, and I will explain, long explanation with this, let's not forget that this gas regulation is working since 2014 without having any toll increase or any tariff increase. We are working with the higher efficiency and the nominal efficiency. Every year, tariffs will go up by a certain percentage. And right now, we are using frozen tariffs. And we think that the regulator will keep this policy until 2020. And we think that the figures support this.
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Operator [7]
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(foreign language) Ladies and gentlemen, there are no further questions in Spanish. We now give the floor to the questions in English.
The first question comes from Antonella Bianchessi from Citi.
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Antonella Bianchessi, Citigroup Inc, Research Division - Director and Head of European Utilities Equity Research [8]
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Just a quick question on your planned investment for EUR 600 million by the end of the year, if you can give us a little bit of details of what we should see in the Q4? My second question is on your numbers. Basically, the gas demand is definitely well above your expectation and everybody's expectation. So this should support EBITDA, but you're not changing the target on a full year. So what is underperforming if given that the Spanish gas demand should compensate a little bit for other things? And then my third question is on your international business. How you track how successful you are in this expansion, in this internationalization? Are you looking at the return on equity of your investment? Your participation are rebooked for EUR 1.6 billion, you're thinking about spinning it off? Do you think that this is something that could be achieved in the market? Or do you see any risk of write-off or capital gain? Are you considering development when you are thinking about this important decision?
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Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [9]
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(foreign language) Thank you, Antonella, for your question. Antonella, I think I get it. Let me try and answer to all your 3 question with -- check this with the team. I don't see a millions investment set forth for the next year, there are EUR 600 million, like I said before, of delay of the implementation of the regasification plant in Tenerife and about a EUR 30 million for Trans Adriatic Pipeline. And rather than a delay, this was a little bit more of efficiency in a very long investment. That means that there is EUR 100 millions we are not going to invest this year. But let me remind you that the new business department keeps a range of 3, 4 well projects that are alive, that are being studied. And if we had a certain amount of non-implemented investments, we would always be able to find a project to invest on and I'm not saying for next months or in 2 months, but for the future. Our investment figure is to be considered in a 3, 4 years time, which is why we are committed. And it's hard to divide this period in 3, 4 smaller or shorter period. But this year, we are not going to do the EUR 650 millions. We're going to do EUR 100 millions less. This will leave breathing ground -- breathing space for next year. Regarding the demand, we tend to be very conservative at this regard. But if the gas demand is kept with 0.5% of increase, this is EUR 5 million or EUR 6 million more of income. If the increase is higher, the income will obviously be higher as well. The figures are quite modest. So this is why we say that we are independent from the demand evolution. If the demand rises, our increase -- our income also rises. If it falls, we would fall as well, but in 1 digits figures. Regarding the international evolution, let me say that, right now, we try to have about 2/3 of our stable investments on brownfield and 1/3 in greenfield. The brownfield is already producing dividends, which is EUR 1,300 million. And this year, we are going to have about EUR 120 million. So as you can see, we can assess return -- our investment returns quite appropriately. The rest of our investments are greenfields, which do not yield any benefits during the implementation process, but we're going to have it after 2020. The CapEx dividend is reasonably appropriate and it's in line with the goals set 5, 6 years ago when we started off down this path. We try to keep brownfield and greenfield balanced. However, it's not always possible. They are finite opportunities, they are not millions of projects. We have 5, 10, 15 projects coming to us. But in general terms, if we see our accrued investment, we do meet this ratio in quite a reasonable way. This is quite a conservative ratio, but it allows us to keep our yielding -- our investments that are going to yield in the future and the other investments that are going to yield right now, as we have discussed several times before.
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Operator [10]
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Ladies and gentlemen, there are no more questions for this conference. I return the floor to the company. Thank you.
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Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [11]
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Ladies and gentlemen, if you do not have any more questions, we end hereby the conference. Thank you.
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