Edison Exploration and Production manages all activities, mining titles and shareholdings of Edison and the Group in the hydrocarbons business in Italy and internationally.
On 4 July 2019, Edison announced the signature of an agreement with Energean Oil and Gas for the sale of 100% of Edison E&P (Exploration and Production), which manages all the EDF group’s hydrocarbons sector activities, mining titles and corporate shareholdings in Italy and abroad.
The EDF group consequently classified the sale of the E&P operations as a discontinued operation as defined by IFRS 5 in its financial statements at 31 December 2019 (see note 2 to the consolidated financial statements at 31 December 2019).
On 23 December 2019, Edison disclosed that the sale to Energean Oil and Gas was still awaiting government authorisations regarding its E&P assets in Algeria.
After the Algerian authorities refused to authorise the sale of those assets, on 2 April 2020 Edison’s Board of Directors approved the signature of an amendment to the disposal agreement, excluding the Algerian E&P assets from the scope of the agreement of 4 July 2019.
Then following the announcement by Energean on 19 May 2020 that the proposed sale of Edison’s E&P operations in Norway to Neptune Energy was to be terminated, a second amendment was signed on 28 June 2020, excluding the Norwegian subsidiary from the agreement. The acquisition process and its new scope was approved by Energean at an Extraordinary General Shareholders’ Meeting on 20 July 2020.
On 17 December 2020 Edison and Energean finalised the sale of Edison Exploration and Production S.p.A. in the hydrocarbons (oil and natural gas) exploration and production business. The sale price was based on an enterprise value of $284 million, with an additional consideration of a maximum $100 million upon commissioning of the Cassiopea gas project in Italy, depending on the PSV gas price at the time of the first delivery.
Edison also signed an agreement on 30 December 2020 for the sale of theNorwegian operations to Sval Energi. This operation requires the approval of the Norwegian authorities and should be completed during the first half of 2021 (see theEdison press release of 30 December 2020).
Due to this situation, in application of IFRS 5, at 31 December 2020 the amounts of Edison’s Algerian E&P assets and liabilities are presented in the consolidated balance sheet as continuing operations, while the Norwegian A&P operations are presented in the consolidated balance as discontinued operations.
The net income and the net change in cash for the Algerian and Norwegian E&P operations are reported in the specific line “Net income of continuing operations”and allocated to the relevant lines of the income statement and cash flow statement for the periods published, i.e. 2020 and the comparative figures for 2019.
The net income of discontinued operations, and the net change in cash of discontinued operations, corresponding to Edison’s E&P operations excluding the Algerian and Norwegian E&P operations, are still reported on a specific line in the income statement and cash flow statement for the periods published, until finalisation of the sale which took place on 17 December 2020. At 31 December 2020, the assets and liabilities of discontinued operations include the E&P operations in Norway and are presented in note 3.2.
In this new situation, the impacts on the Group’s income statement and cash flow statement of application of IFRS 5 at 31 December 2019 are presented below.
(in millions of euros) | 2019 as published | IFRS 5 adjustments | 2019 restated |
|---|---|---|---|
| Sales | Sales 2019 as published 71,317 | Sales IFRS 5 adjustments 30 | Sales 2019 restated 71,347 |
| Fuel and energy purchases | Fuel and energy purchases 2019 as published (35,091) | Fuel and energy purchases IFRS 5 adjustments - | Fuel and energy purchases 2019 restated (35,091) |
| Other external expenses | Other external expenses 2019 as published (8,619) | Other external expenses IFRS 5 adjustments (6) | Other external expenses 2019 restated (8,625) |
| Personnel expenses | Personnel expenses 2019 as published (13,793) | Personnel expenses IFRS 5 adjustments (4) | Personnel expenses 2019 restated (13,797) |
| Taxes other than income taxes | Taxes other than income taxes 2019 as published (3,798) | Taxes other than income taxes IFRS 5 adjustments - | Taxes other than income taxes 2019 restated (3,798) |
| Other operating income and expenses | Other operating income and expenses 2019 as published 6,692 | Other operating income and expenses IFRS 5 adjustments (5) | Other operating income and expenses 2019 restated 6,687 |
Operating profit before depreciation and amortisation | Operating profit before depreciation and amortisation 2019 as published 16,708 | Operating profit before depreciation and amortisation IFRS 5 adjustments 15 | Operating profit before depreciation and amortisation 2019 restated 16,723 |
| Net changes in fair value on energy and commodity derivatives, excluding trading activities | Net changes in fair value on energy and commodity derivatives, excluding trading activities 2019 as published 642 | Net changes in fair value on energy and commodity derivatives, excluding trading activities IFRS 5 adjustments - | Net changes in fair value on energy and commodity derivatives, excluding trading activities 2019 restated 642 |
| Net depreciation and amortisation | Net depreciation and amortisation 2019 as published (10,002) | Net depreciation and amortisation IFRS 5 adjustments (18) | Net depreciation and amortisation 2019 restated (10,020) |
| (Impairment)/reversals | (Impairment)/reversals 2019 as published (403) | (Impairment)/reversals IFRS 5 adjustments - | (Impairment)/reversals 2019 restated (403) |
| Other income and expenses | Other income and expenses 2019 as published (185) | Other income and expenses IFRS 5 adjustments - | Other income and expenses 2019 restated (185) |
Operating profit | Operating profit 2019 as published 6,760 | Operating profit IFRS 5 adjustments (3) | Operating profit 2019 restated 6,757 |
| Cost of gross financial indebtedness | Cost of gross financial indebtedness 2019 as published (1,806) | Cost of gross financial indebtedness IFRS 5 adjustments - | Cost of gross financial indebtedness 2019 restated (1,806) |
| Discount effect | Discount effect 2019 as published (3,161) | Discount effect IFRS 5 adjustments - | Discount effect 2019 restated (3,161) |
| Other financial income and expenses | Other financial income and expenses 2019 as published 4,606 | Other financial income and expenses IFRS 5 adjustments (3) | Other financial income and expenses 2019 restated 4,603 |
Financial result | Financial result 2019 as published (361) | Financial result IFRS 5 adjustments (3) | Financial result 2019 restated (364) |
Income before taxes of consolidated companies | Income before taxes of consolidated companies 2019 as published 6,399 | Income before taxes of consolidated companies IFRS 5 adjustments (6) | Income before taxes of consolidated companies 2019 restated 6,393 |
| Income taxes | Income taxes 2019 as published (1,581) | Income taxes IFRS 5 adjustments 49 | Income taxes 2019 restated (1,532) |
| Share in net income of associates and joint ventures | Share in net income of associates and joint ventures 2019 as published 818 | Share in net income of associates and joint ventures IFRS 5 adjustments - | Share in net income of associates and joint ventures 2019 restated 818 |
| Net income of discontinued operations | Net income of discontinued operations 2019 as published (454) | Net income of discontinued operations IFRS 5 adjustments (43) | Net income of discontinued operations 2019 restated (497) |
CONSOLIDATED NET INCOME | CONSOLIDATED NET INCOME 2019 as published 5,182 | CONSOLIDATED NET INCOME IFRS 5 adjustments - | CONSOLIDATED NET INCOME 2019 restated 5,182 |
EDF net income | EDF net income 2019 as published 5,155 | EDF net income IFRS 5 adjustments - | EDF net income 2019 restated 5,155 |
| Net income of continuing operations | Net income of continuing operations 2019 as published 5,597 | Net income of continuing operations IFRS 5 adjustments 42 | Net income of continuing operations 2019 restated 5,639 |
| Net income of discontinued operations | Net income of discontinued operations 2019 as published (442) | Net income of discontinued operations IFRS 5 adjustments (42) | Net income of discontinued operations 2019 restated (484) |
Net income attributable to non-controlling interests | Net income attributable to non-controlling interests 2019 as published 27 | Net income attributable to non-controlling interests IFRS 5 adjustments - | Net income attributable to non-controlling interests 2019 restated 27 |
| Net income of continuing operations | Net income of continuing operations 2019 as published 39 | Net income of continuing operations IFRS 5 adjustments 1 | Net income of continuing operations 2019 restated 40 |
| Net income of discontinued operations | Net income of discontinued operations 2019 as published (12) | Net income of discontinued operations IFRS 5 adjustments (1) | Net income of discontinued operations 2019 restated (13) |
