Notes to the Consolidated Financial Statements
1 Overview
1.1 Basis of preparation of the consolidated financial statements
1.1 Basis of preparation of the consolidated financial statements
The consolidated financial statements of the Alpiq Group have been prepared in accordance with IFRS Accounting Standards and Interpretations (IFRIC and SIC) issued by the International Accounting Standards Board (IASB), and comply with Swiss law. The consolidated financial statements give a true and fair view of the financial position, financial performance and cash flows of the Alpiq Group. They have been prepared on a historical cost basis, except for certain items such as financial instruments, which have been measured at fair value in some instances. The consolidated financial statements were authorised for issue by the Board of Directors of Alpiq Holding Ltd. on 27 February 2024 and are subject to approval by shareholders at the Annual General Meeting on 30 April 2024.
1.2 Adoption of new and revised accounting standards
1.2 Adoption of new and revised accounting standards
Amendments, standards and interpretations adopted for the first time in 2023
At 1 January 2023, the following amendments to the International Financial Reporting Standards (IFRS) entered into force and were applied by the Alpiq Group:
- Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
- Amendments to IAS 8: Definition of Accounting Estimates
- Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
- Amendments to IAS 12: International Tax Reform Pillar Two Model Rules
- Amendments to IFRS Practice Statement 2: Making Materiality Judgements
These amendments and improvements had no significant impact on the Alpiq Group.
IFRS effective in future periods
The IASB has published the following standards and interpretations of relevance for Alpiq:
Standard / interpretation |
Effective at |
Adoption planned from |
Amendments to IAS 1: Classification of Liabilities as Current or Non-current |
1 Jan 2024 |
1 Jan 2024 |
Amendments to IAS 1: Non-current Liabilities with Covenants |
1 Jan 2024 |
1 Jan 2024 |
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements |
1 Jan 2024 |
1 Jan 2024 |
Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
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Based on our analysis, Alpiq does not expect the above-mentioned changes in standards to have any significant effect on the consolidated financial statements of the Alpiq Group.
1.3 Significant uncertainity in estimation and judgement
1.3 Significant uncertainity in estimation and judgement
The preparation of the consolidated financial statements requires the management to exercise judgement and make estimates and assumptions. These may significantly affect recognised assets and liabilities, reported income and expenses and disclosures. Estimates and assumptions are based on historical experience and expectations of future events that are believed to be reasonable under the circumstances. Actual amounts may differ from these estimates. Any revisions to estimates and assumptions are recognised and disclosed in the period in which they are identified.
The explanations on significant estimation uncertainties and judgements are highlighted in colour. They are contained in notes 2.2 Net revenue, 2.7 Income tax, 3.2 Financial instruments, 4.1 Property, plant and equipment, 4.2 Intangible assets, 4.7 Provisions, 4.8 Contingent liabilities and guarantees and 6.3 Employee benefits.
1.4 Change in the presentation of the financial statements
1.4 Change in the presentation of the financial statements
A substantial portion of the energy contracts entered into by the Alpiq Group include a netting arrangement. Such arrangements are common in energy trading to reduce the volume of cash flows between counterparties.
In 2022, derivative financial instruments were presented net in the balance sheet if the netting arrangement entered into by Alpiq and the counterparty contained a legally enforceable right to offset the recognised amounts and Alpiq had the intention of settling the derivatives on a net basis. However, the maturity of the cashflows were not taken into account when calculating the offsetting amount. In addition, in the balance sheet, all derivative financial instruments were presented as current.
The prior period error was corrected by consideration of the timing of the future cashflows for netting purposes and classification of the derivative financial instruments in current and non-current. Due to the two changes described above the balance sheet and the note 3.1 were adjusted (see impact below). As a result, the adjusted equity ratio amounts to 23.4% as of 31 December 2022 (previously 24%).
CHF million |
31 Dec 2022 (reported) |
Correction Current / Non-current |
Correction Netting |
31 Dec 2022 (restated) |
Assets |
|
|
|
|
Derivative financial instruments |
|
1,072 |
|
1,072 |
Other non-current assets |
4,213 |
|
|
4,213 |
Non-current assets |
4,213 |
1,072 |
0 |
5,285 |
Derivative financial instruments |
4,702 |
– 1,072 |
376 |
4,006 |
Other current assets |
5,786 |
|
|
5,786 |
Current assets |
10,488 |
– 1,072 |
376 |
9,792 |
Total assets |
14,701 |
0 |
376 |
15,077 |
|
|
|
|
|
Liabilities |
|
|
|
|
Derivative financial instruments |
|
1,163 |
|
1,163 |
Other non-current liabilities |
1,496 |
|
|
1,496 |
Non-current liabilities |
1,496 |
1,163 |
0 |
2,659 |
Derivative financial instruments |
5,130 |
– 1,163 |
376 |
4,343 |
Other current liabilities |
4,546 |
|
|
4,546 |
Current liabilities |
9,676 |
– 1,163 |
376 |
8,889 |
Total liabilities |
11,172 |
0 |
376 |
11,548 |
Total equity and liabilities |
14,701 |
0 |
376 |
15,077 |
There is no material impact on the consolidated income statement or the consolidated statement of cash flows of the previous year.
2 Performance
2.1 Segment information
2.1 Segment information
Alpiq Group segment reporting is based on the Group’s internal management structure and the internal financial information provided to the chief operating decision maker. Since 1 January 2023, the reportable segments at Alpiq consists of three elements along the company’s value chain: Assets, Trading, and Origination. The Executive Board evaluates each of these elements separately for the purposes of performance assessment and resource allocation. Segment results (EBITDA and adjusted EBITDA) are the key performance indicators used for internal management and assessment purposes at Alpiq. For more information about adjusted EBITDA, please refer to the unaudited explanations in the Financial Review. In addition to energy procurement and production costs, operating costs comprise all costs of operations, including personnel and service expenses. No value chain elements have been aggregated in the presentation of reportable segments. The prior-year segment results have been restated for comparability.
- The Assets segment covers the production of electricity by Alpiq’s Swiss and international power plants through different technologies such as hydro (including small-scale hydropower), nuclear, thermal, wind and solar, as well as the operation and optimisation of these power plants. It also comprises several wind farm projects in Switzerland and abroad. The Alpiq Swiss power plant portfolio includes run-of-river power plants, storage and pumped storage power plants (including Nant de Drance), as well as interests in the Gösgen and Leibstadt nuclear power plants. In addition, the Assets segment manages shares in HYDRO Exploitation SA and Kernkraftwerk-Beteiligungsgesellschaft AG (KBG). It also covers the production of electricity and heat at thermal power plants in Hungary, Italy and Spain. The power plant portfolio is made up of gas-fired combined-cycle power plants and gas-fired turbine power plants. Power is sold on the European electricity trading market, and the power plants are used by the respective grid operators to balance the grids.
- The Trading segment covers proprietary trading activities with standardised and structured products for electricity and gas, as well as emission allowances and certificates. The Trading segment also includes foreign exchange and liquidity management.
- The Origination segment covers activities to optimise electricity production from third-party renewable energy and direct marketing and energy management for industrial and business customers. This includes the trading and sale of standardised and structured products in various countries, with the aim of helping partners to achieve their cost efficiency and sustainability goals, thereby creating value and increasing customer benefit. The Origination segment also covers the company’s Swiss sales and origination activities as well as retail activities in France.
The segment results are carried over to the Alpiq Group’s consolidated figures by including the units with limited market operations (Corporate), Group consolidation effects and other reconciliation items. The latter comprises reallocations totalling CHF 14 million (previous year: CHF 13 million) between external net revenue and other income due to differences in account structures used for internal and external reporting purposes. This column also includes the foreign currency effects of using alternative average exchange rates for management reporting purposes that differ from those pursuant to IFRS. Corporate includes the financial and non-strategic investments which cannot be allocated directly to the value chain, as well as the activities of the Group headquarters, including Alpiq Holding Ltd. and the functional units.
2023: Information by segment
CHF million |
Assets |
Trading |
Origination |
Corporate |
Consoli- dation |
Reconcili- ation |
Alpiq Group |
Net revenue from third parties |
2,754 |
1,161 |
5,018 |
32 |
|
5 |
8,970 |
Inter-segment transactions 1 |
1,321 |
1,993 |
1,493 |
– 31 |
– 4,788 |
1 |
– 11 |
Net revenue |
4,075 |
3,154 |
6,511 |
1 |
– 4,788 |
6 |
8,959 |
Other income |
32 |
1 |
|
21 |
– 16 |
– 14 |
24 |
Total revenue and other income |
4,107 |
3,155 |
6,511 |
22 |
– 4,804 |
– 8 |
8,983 |
Energy and other costs |
– 2,605 |
– 3,021 |
– 6,262 |
– 97 |
4,804 |
4 |
– 7,177 |
EBITDA 2 |
1,502 |
134 |
249 |
– 75 |
0 |
– 4 |
1,806 |
Depreciation, amortisation and impairment |
– 100 |
|
– 3 |
– 9 |
|
|
– 112 |
EBIT |
1,402 |
134 |
246 |
– 84 |
0 |
– 4 |
1,694 |
|
|
|
|
|
|
|
|
Net capital expenditure on property, plant and equipment and intangible assets |
69 |
|
1 |
7 |
|
|
77 |
|
|
|
|
|
|
|
|
Property, plant and equipment |
1,652 |
|
4 |
92 |
|
|
1,748 |
Intangible assets |
50 |
|
4 |
19 |
|
|
73 |
Investments in partner power plants and other associates |
2,153 |
|
|
2 |
|
|
2,155 |
Non-current assets |
3,855 |
0 |
8 |
113 |
0 |
0 |
3,976 |
|
|
|
|
|
|
|
|
Number of employees at 31 December |
393 |
94 |
193 |
541 |
|
|
1,221 |
1 The net effect of CHF -11 million results from currency effects on intragroup energy transactions.
2 Earnings before depreciation, amortisation and impairment losses, share of results of partner power plants and other associates, finance costs, finance income and income tax expense
2022: Information by segment (restated)
CHF million |
Assets |
Trading |
Origination |
Corporate |
Consoli- dation |
Reconcili- ation |
Alpiq Group |
Net revenue from third parties |
3,429 |
2,813 |
8,309 |
26 |
|
60 |
14,637 |
Inter-segment transactions 1 |
1,601 |
3,662 |
1,688 |
– 15 |
– 6,922 |
– 20 |
– 6 |
Net revenue |
5,030 |
6,475 |
9,997 |
11 |
– 6,922 |
40 |
14,631 |
Other income |
41 |
|
1 |
25 |
– 16 |
– 13 |
38 |
Total revenue and other income |
5,071 |
6,475 |
9,998 |
36 |
– 6,938 |
27 |
14,669 |
Energy and other costs |
– 4,528 |
– 6,504 |
– 10,107 |
– 89 |
6,938 |
– 33 |
– 14,323 |
EBITDA 2 |
543 |
– 29 |
– 109 |
– 53 |
0 |
– 6 |
346 |
Depreciation, amortisation and impairment 3 |
– 79 |
|
– 3 |
– 15 |
|
|
– 97 |
EBIT |
464 |
– 29 |
– 112 |
– 68 |
0 |
– 6 |
249 |
|
|
|
|
|
|
|
|
Net capital expenditure on property, plant and equipment and intangible assets |
71 |
|
2 |
8 |
|
|
81 |
|
|
|
|
|
|
|
|
Property, plant and equipment |
1,684 |
|
6 |
92 |
|
|
1,782 |
Intangible assets |
54 |
1 |
4 |
21 |
|
|
80 |
Investments in partner power plants and other associates |
2,180 |
|
|
3 |
|
|
2,183 |
Non-current assets |
3,918 |
1 |
10 |
116 |
0 |
0 |
4,045 |
|
|
|
|
|
|
|
|
Number of employees at 31 December |
408 |
75 |
201 |
496 |
|
|
1,180 |
1 The net effect of CHF -6 million results from currency effects on intragroup energy transactions.
2 Earnings before depreciation, amortisation and impairment losses, share of results of partner power plants and other associates, finance costs, finance income and income tax expense
3 Including reversals of impairment losses
2023: Information by geographical area
|
|
|
|
|
|
|
|
|
|
|
CHF million |
Switzerland |
Germany |
France |
Italy |
Spain |
Slovakia |
Luxembourg |
Netherlands |
Other countries |
Alpiq Group |
Net revenue 1 / 2 from third parties |
1,841 |
2,288 |
1,426 |
1,990 |
433 |
– 890 |
1,426 |
– 309 |
765 |
8,970 |
Property, plant and equipment |
1,382 |
1 |
112 |
196 |
33 |
|
|
|
24 |
1,748 |
Intangible assets |
59 |
|
8 |
6 |
|
|
|
|
|
73 |
Investments in partner power plants and other associates |
2,151 |
|
|
|
1 |
|
|
|
3 |
2,155 |
Non-current assets |
3,592 |
1 |
120 |
202 |
34 |
0 |
0 |
0 |
27 |
3,976 |
1 The difference to net revenue in the income statement results from currency effects on intragroup energy transactions of CHF – 11 million.
2 Negative net revenue is attributable to the change in the fair value measurement of energy derivatives, which are presented in net revenue (see note 2.2).
2022: Information by geographical area
|
|
|
|
|
|
|
|
|
|
|
CHF million |
Switzerland |
Germany |
France |
Italy |
Spain |
Slovakia |
Luxembourg |
Netherlands |
Other countries |
Alpiq Group |
Net revenue 1 / 2 from third parties |
1,342 |
2,147 |
4,011 |
4,271 |
646 |
– 147 |
2,638 |
679 |
– 950 |
14,637 |
Property, plant and equipment |
1,395 |
1 |
117 |
210 |
33 |
|
|
|
26 |
1,782 |
Intangible assets |
64 |
|
9 |
7 |
|
|
|
|
|
80 |
Investments in partner power plants and other associates |
2,178 |
|
|
|
1 |
|
|
|
4 |
2,183 |
Non-current assets |
3,637 |
1 |
126 |
217 |
34 |
0 |
0 |
0 |
30 |
4,045 |
1 The difference to net revenue in the income statement results from currency effects on intragroup energy transactions of CHF – 6 million.
2 Negative net revenue is attributable to the change in the fair value measurement of energy derivatives, which are presented in net revenue (see note 2.2).
Net revenue from external customers by country is allocated based on the customer’s country of domicile. Those countries in which Alpiq generated the most net revenue in the reporting period are presented separately in this segment information. There were no transactions with any single external customers that amounted to 10% or more of the consolidated net revenue of the Alpiq Group. Non-current assets consist of property, plant and equipment (including right-of-use assets), intangible assets and investments in the respective countries.
2.2 Net revenue
2.2 Net revenue
The Alpiq Group’s net revenue comprises revenue from contracts with customers (IFRS 15) and income from energy and financial derivatives (IFRS 9).
The internal management structure was adjusted in 2023, see note 2.1. The disaggregation of net revenue for 2022 has been adjusted for comparability.
2023: Disaggregation of net revenue
CHF million |
Asset |
Trading |
Origination |
Corporate |
Total |
Revenue from energy and grid services |
2,082 |
1,183 |
5,300 |
|
8,565 |
Revenue from other services |
13 |
|
|
|
13 |
Total revenue from contracts with customers |
2,095 |
1,183 |
5,300 |
0 |
8,578 |
(Loss) / income from energy and financial derivatives |
668 |
– 23 |
– 285 |
32 |
392 |
Net revenue from third parties 1 |
2,763 |
1,160 |
5,015 |
32 |
8,970 |
1 The difference to net revenue in the income statement results from currency effects on intragroup energy transactions of CHF -11 million.
2022: Disaggregation of net revenue (adjusted)
CHF million |
Asset |
Trading |
Origination |
Corporate |
Total |
Revenue from energy and grid services |
3,423 |
3,277 |
8,662 |
|
15,362 |
Revenue from other services |
13 |
|
|
|
13 |
Total revenue from contracts with customers |
3,436 |
3,277 |
8,662 |
0 |
15,375 |
(Loss) / income from energy and financial derivatives |
22 |
– 462 |
– 324 |
26 |
– 738 |
Net revenue from third parties 1 |
3,458 |
2,815 |
8,338 |
26 |
14,637 |
1 The difference to net revenue in the income statement results from currency effects on intragroup energy transactions of CHF -6 million.
Accounting policies
Alpiq generally satisfies its performance obligations as principal. However, for performance obligations related to the transmission of energy, Alpiq acts as agent in all represented markets. Where Alpiq acts as agent, revenue is recognised net of the corresponding costs.
Revenue from energy and grid services
Revenue from energy supply from contracts with customers (“own use exemption” pursuant to IFRS 9) is generally recognised over the period agreed for completion of performance. However, for energy supplies, Alpiq has a right to consideration that directly corresponds to the value to the customer of the energy already supplied. For such cases, Alpiq exercises the practical expedient and recognises revenue in the amount that can be billed. In some contracts, Alpiq sells the proportionate right in energy production of a power plant. Revenue from these contracts is recognised over the period that corresponds to the timing of the costs.
Revenue from stand-ready obligations to deliver ancillary services is recognised on a straight-line basis during the period in which Alpiq is available to render these services. Revenue for called ancillary services is recognised when the energy is delivered.
Contractual penalties – for example, for deviations between the delivered and contractually agreed quantity of energy – represent variable components in energy sales. They are included in the estimation of the transaction price only when they become highly probable. This is normally the case towards the end of the delivery period. Estimation of the point in time when such variable price components are recognised requires significant judgement.
Revenue from other services
Revenue from other services from contracts with customers is recognised generally over the time period over which the performance obligation is satisfied on a straight-line basis. However, Alpiq applies the following practical expedient: if Alpiq has a right to consideration that directly corresponds to the value to the customer, then revenue is recognised in the amount that can be billed.
Practical expedients applied regarding revenue from contracts with customers
Alpiq exercises the practical expedient provided in IFRS 15 and, wherever possible, opts not to disclose the remaining performance obligations at the end of the reporting period. After application of this practical expedient, the remaining performance obligations disclosed by Alpiq at the end of the reporting period are not significant.
Alpiq applies the practical expedient and does not capitalise incremental costs of obtaining a customer contract, as far as these costs would be amortised within one year. Due to the application of this practical expedient, Alpiq did not disclose any significant costs of this type.
Income from energy and financial derivatives
Energy and financial derivatives are measured at fair value through profit or loss. Changes in value in energy derivatives are disclosed in net revenue in the period in which they occur. Revenue from trading in energy and financial derivatives comprises net realised gains and losses from settled contracts and unrealised changes in the fair value of unsettled contracts. For more information on measurement, please refer to note 3.2.
2.3 Other operating income
2.3 Other operating income
Other operating income includes income from government grants such as the market premium for large-scale hydropower plants in Switzerland, gains from sales of non-current assets or business disposals, insurance claims received and payments received from litigations. This item also includes income that does not arise in the course of ordinary activities of the Alpiq Group and is therefore generally not of a predictable or recurring nature.
CHF million |
2023 |
2022 |
Market premiums |
|
11 |
Gain on disposal of companies |
|
1 |
Gain on sale of non-current assets |
|
1 |
Income from operating leases |
2 |
2 |
Miscellaneous 1 |
17 |
16 |
Other operating income |
19 |
31 |
1 Includes variety of service charges, reimbursements
Market premium for large-scale hydropower plants in Switzerland
In accordance with the Energy Act (EnA), operators of large-scale hydropower plants in Switzerland with a mean mechanical gross output of more than 10 MW that sell their energy on the market at prices below production cost are eligible to receive a market premium.
In 2022, Alpiq recognised market premiums in the amount of CHF 2 million for the 2022 financial year and CHF 9 million for the 2021 financial year. Since 2022, the amounts claimed for market premiums have been significantly lower due to higher prevailing market prices. In 2023, Alpiq decided to voluntarily waive its entitlement to the market premium. This waiver has no impact on the entitlement for the coming years.
Accounting policies
The market premium for large-scale hydropower plants in Switzerland relates to government grants as defined by IAS 20. Government grants may not be recognised until there is reasonable assurance as to the entitlement. Alpiq deems reasonable assurance of the claim for a market premium in the amount of the prospective payment to be given within the meaning of IAS 20 as soon as the order is legally binding or when Alpiq decides to accept the order. At this point in time, 100% or 80% of the provisional amount assigned will be recognised, depending on the amount of the payment. Any residual amount will be recognised as soon as the second order is legally binding.
Income from operating leases
Alpiq has several operating leases that relate in particular to the rental of commercial premises that it owns. The leased assets are recognised in property, plant and equipment in the balance sheet, and lease payments are recognised on a straight-line basis over the lease term. Undiscounted lease payments expected in the future amount to CHF 9 million (previous year: CHF 8 million).
2.4 Energy and inventory costs
2.4 Energy and inventory costs
CHF million |
2023 |
2022 |
Electricity purchased from third parties |
– 4,661 |
– 9,775 |
Electricity purchased from partner power plants |
– 475 |
– 774 |
Gas procurement and CO 2 certificates |
– 1,593 |
– 3,648 |
Other energy and inventory costs |
– 80 |
– 74 |
Energy and inventory costs before provisions |
– 6,809 |
– 14,271 |
Movement in provisions for onerous contracts |
16 |
298 |
Energy and inventory costs |
– 6,793 |
– 13,973 |
The item “Other energy and inventory costs” comprises mainly water taxes, concession fees and plant maintenance costs.
2.5 Employee costs
2.5 Employee costs
CHF million |
2023 |
2022 |
Wages and salaries |
– 186 |
– 171 |
Defined benefit pension costs 1 |
– 10 |
– 43 |
Defined contribution pension costs |
– 2 |
– 1 |
Social security costs and other employee costs |
– 30 |
– 25 |
Employee costs |
– 228 |
– 240 |
1 For further details, see note 6.3.
Number of employees at the reporting date
|
31 Dec 2023 |
31 Dec 2022 |
Employees (full-time equivalents) |
1,210 |
1,169 |
Apprentices |
11 |
11 |
Total |
1,221 |
1,180 |
2.6 Finance costs and finance income
2.6 Finance costs and finance income
CHF million |
2023 |
2022 |
Finance costs |
|
|
Interest expense |
– 52 |
– 48 |
Net interest on pension plans and provisions |
– 2 |
– 11 |
Other finance costs 1 |
– 33 |
– 22 |
Net foreign exchange losses 2 |
– 57 |
|
Total |
– 144 |
– 81 |
|
|
|
Finance income |
|
|
Interest income |
42 |
6 |
Other finance income |
5 |
1 |
Total |
47 |
7 |
Financial result |
– 97 |
– 74 |
1 Of which an amount of CHF 20.6 million (previous year: CHF 6.6 million) was recognised as a commitment fee for the federal bailout fund.
2 Of which an amount of CHF - 27 million relate to the recycling of accumulated exchange rate differences recognised in equity in the course of the liquidation of a foreign subsidiary.
2.7 Income tax
2.7 Income tax
Reconciliation
CHF million |
2023 |
2022 |
Earnings before tax |
1,574 |
116 |
Expected income tax rate (Swiss average rate) |
15% |
15% |
Income tax at the expected income tax rate |
– 236 |
– 17 |
Tax effects from: |
|
|
Difference in expected income tax rate compared to locally expected income tax rates |
– 43 |
1 |
Income exempt from tax 1 |
21 |
10 |
Non-deductible expenses for tax purposes |
– 27 |
– 12 |
Valuation from tax loss carryforwards and use of unrecognised tax loss carryforwards |
44 |
– 3 |
Effect of changes in tax rates |
1 |
– 3 |
Previous years |
2 |
31 |
Other effects |
|
– 12 |
Total income tax expense |
– 238 |
– 5 |
Effective income tax rate |
15% |
4% |
1 Predominantly relates to income from participations.
Income tax expense charged to the income statement
CHF million |
2023 |
2022 |
Current income tax |
– 121 |
– 41 |
Deferred income tax |
– 117 |
36 |
Income tax |
– 238 |
– 5 |
Change in deferred tax assets and liabilities
CHF million |
Deferred tax assets |
Deferred tax liabilities |
Net deferred tax liabilities |
Balance at 31 December 2021 |
77 |
321 |
244 |
Deferred taxes recognised in the income statement |
66 |
30 |
– 36 |
Deferred taxes recognised in other comprehensive income |
– 2 |
– 15 |
– 13 |
Other |
6 |
|
– 6 |
Reclassified to “Liabilities held for sale” |
|
– 2 |
– 2 |
Currency translation differences |
– 4 |
– 1 |
3 |
Balance at 31 December 2022 |
143 |
333 |
190 |
Deferred taxes recognised in the income statement |
– 24 |
93 |
117 |
Deferred taxes recognised in other comprehensive income |
|
9 |
9 |
Currency translation differences |
– 8 |
|
8 |
Balance at 31 December 2023 |
111 |
435 |
324 |
Deferred tax assets and liabilities by origination of temporary differences
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Tax losses and tax assets not yet used |
18 |
38 |
Property, plant and equipment |
23 |
22 |
Other non-current assets |
8 |
12 |
Current assets |
36 |
92 |
Provisions and liabilities |
69 |
96 |
Total gross deferred tax assets |
154 |
260 |
Property, plant and equipment |
118 |
122 |
Other non-current assets |
165 |
170 |
Current assets |
152 |
83 |
Provisions and liabilities |
43 |
75 |
Total gross deferred tax liabilities |
478 |
450 |
Net deferred tax liabilities |
324 |
190 |
Tax assets recognised in the balance sheet |
111 |
143 |
Tax liabilities recognised in the balance sheet |
435 |
333 |
At 31 December 2023, individual subsidiaries held tax loss carryforwards totalling CHF 207 million (previous year: CHF 638 million), which are available for offsetting against future taxable profits. Of these, the Alpiq Group has not recognised tax benefits on tax loss carryforwards of CHF 133 million (CHF 397 million) in the balance sheet item “Deferred tax assets”, as these are recognised only to the extent that realisation of the related tax benefit is probable. The average tax rate on tax loss carryforwards not eligible for capitalisation is 19% (17%). These tax loss carryforwards expire in the following periods:
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Within 1 year |
|
14 |
Within 2 – 3 years |
54 |
16 |
After 3 years |
54 |
250 |
Unlimited use |
25 |
117 |
Total unrecognised tax loss carryforwards |
133 |
397 |
In addition, there are unrecognised deductible temporary differences totalling CHF 11 million (CHF 167 million).
Global minimum corporate taxation
Under an OECD Inclusive Framework, more than 140 countries agreed to enact a two-pillar solution to address the challenges arising from the digitalisation of the economy. Pillar Two introduces a global minimum Effective Tax Rate (ETR), where multinational groups with consolidated revenue of more than EUR 750 million are subject to a minimum ETR of 15% on income arising in low-tax jurisdictions.
The Swiss constitutional amendment providing the legal basis for the implementation of Pillar Two was approved in a public vote on 18 June 2023. The Swiss Federal Council decided to implement a Qualifying Domestic Minimum Top-up Tax (QDMTT) as of 1 January 2024, ensuring that the Pillar Two ETR applies to all domestic entities within the scope of Pillar Two. By the end of 2024, the Swiss Federal Council may decide on the implementation of the other elements of Pillar Two, i.e. the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR).
Alpiq is within the scope of the OECD Pillar Two model rules. Since the Pillar Two legislation was not effective at the reporting date, Alpiq has no related current tax impact for the year ended 31 December 2023. Alpiq applies the temporary mandatory exception from deferred tax accounting for the impact of the top-up tax as provided in the amendments to IAS 12 issued in May 2023, and will account for it as a current tax when it is incurred.
The group is in the process of assessing its future exposure to the Pillar Two legislation. Due to the complexities in application of the legislation and calculation of the GloBE ETR, the quantitative impact of the enacted or substantively enacted legislation is not yet reasonably estimable.
Assumptions are made based on local legal principles in calculation of current income tax. Income taxes that are actually payable may deviate from the values originally calculated, as in some cases the definitive assessment is not finalised until years after the end of the reporting period. The resulting risks are identified, assessed and recognised where necessary. Deferred tax assets are calculated in part using far-reaching estimates. The underlying forecasts pertain to a period of several years and comprise, inter alia, a forecast of future taxable income and interpretations of the existing regulatory framework.
Accounting policies
Income tax expense represents the sum of current and deferred income tax. Current income tax is calculated on taxable earnings using the tax rates that have been enacted by the end of the reporting period. Deferred income tax is calculated using the tax rates enacted or substantively enacted at the reporting date.
Deferred taxes are recognised due to the differing recognition of certain income and expense items in the Group’s annual internal accounts and annual tax accounts. Deferred tax arising from temporary differences is calculated applying the balance sheet liability method. Deferred tax is not recognised for differences associated with investments in group companies, which will not be reversed in the foreseeable future and where the timing of the reversal is controlled by the Group. Deferred tax assets are recognised when it is probable that they will be realised.
Furthermore, definitive clarification of the taxation issue at the partner power plants in canton Graubünden is still pending.
2.8 Earnings per share
2.8 Earnings per share
|
2023 |
2022 |
Earnings after tax attributable to equity investors of Alpiq Holding Ltd. (CHF million) |
1,333 |
109 |
Interest on hybrid capital attributable to the period (CHF million) |
– 31 |
– 29 |
Share of Alpiq Holding Ltd. shareholders in earnings (CHF million) |
1,302 |
80 |
Weighted average number of shares outstanding |
33,110,364 |
33,110,364 |
Earnings per share in CHF, basic and diluted |
39.32 |
2.41 |
No circumstances exist that would lead to a dilution of earnings per share.
3 Risk management, financial instruments and financing
3.1 Financial risk management
3.1 Financial risk management
General principles
The Alpiq Group’s operating activities are exposed to strategic, operational and financial risks, in particular liquidity, credit and market risks (energy price risk, foreign currency risk and interest rate risk). The principles of the Group’s risk management policy are established by the Board of Directors. The Executive Board is responsible for their development and implementation. The Risk Management Committee monitors compliance with the principles and policies.
The principles for managing risks in the Alpiq Group are set out in the Group Risk Policy. They comprise guidelines for entering into, measuring, managing and mitigating business risks, and specify the organisation of and responsibilities related to risk management. The responsible units manage their risks within the framework of the risk management policy and the limits defined for their areas of activity. The objective is to maintain a reasonable balance between the business risks incurred, earnings and risk-bearing equity.
The Group Risk Policy comprises a Group-wide Business Risk Policy, an Energy Risk Policy specifically for the energy business, and a Financial Risk Policy. The Business Risk Policy governs the annual risk mapping process, the definition and monitoring of measures to reduce exposure to operational and strategic risk, as well as integral security management. The Energy Risk Policy defines the processes and methods to manage market and credit risk in the energy business. It also regulates the management of liquidity fluctuations caused by trading activities on stock exchanges and under bilateral arrangements (over-the-counter; OTC) to settle margin differences. Furthermore, it defines the principles of the hedging strategy for energy production trading books. The Financial Risk Policy defines the substance, organisation and system for financial risk management within the Alpiq Group. It defines the management of liquidity, foreign currency and interest rate risks.
The Risk Management functional unit is responsible for risk assessment and reports to the CFO. It provides methods and tools for implementation of risk management, and ensures timely reporting to the Board of Directors, Executive Board and the Risk Management Committee.
During the annual business risk assessment process, strategic and operational risks throughout the Group are recorded and assessed, and then assigned to the identified risk owners for management and monitoring. The Risk Management functional unit monitors the implementation of the measures. Exposure limits are set for market, credit and liquidity risks, which are adjusted in the context of the company’s overall risk-bearing capacity and with compliance monitored on an ongoing basis.
Capital management
Across the Alpiq Group, capital is managed in line with the Group’s overall financial strategy. During the budgeting and planning process, the Board of Directors takes note annually of the projected figures that are critical for capital management. In addition, it receives regular reports on current developments.
Alpiq Holding Ltd. procures a significant portion of financing centrally for the Alpiq Group. The Swiss capital market remains the main source of financing. The aim pursued in financing the Group is that the level of financial liabilities contributes to a solid credit rating in line with industry standards.
The capital management strategy is in principle focused on the Group’s reported consolidated equity and net debt-to-EBITDA ratio. In 2023, Alpiq sourced additional non-current financing during the year amounting to CHF 375 million by means of two bonds that will be used for corporate purposes, including refinancing.
At 31 December 2023, the Group reported an equity ratio of 45.9%, which is significantly above the 23.4% of the previous year. The two main factors for this increase were the good result, which lead to higher equity, and decreased total assets due to lower energy derivatives and receivables as a consequence of lower energy prices.
The net debt-to-EBITDA ratio before non-operating effects ratio is calculated and compares with the previous year as follows:
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Non-current financial liabilities |
1,192 |
1,075 |
Non-current financial liabilities under liabilities held for sale |
1 |
|
Current financial liabilities |
404 |
526 |
Financial liabilities |
1,597 |
1,601 |
Current term deposits |
371 |
7 |
Cash and cash equivalents |
1,573 |
1,474 |
Cash and cash equivalents under assets held for sale |
|
13 |
Financial assets (liquidity) |
1,944 |
1,494 |
Net debt (cash) |
– 347 |
107 |
Adjusted EBITDA 1 |
1,184 |
473 |
Net debt (cash) / adjusted EBITDA |
– 0.3 |
0.2 |
1 For more information about adjusted EBITDA, please refer to the unaudited explanations in the Financial Review.
The Alpiq Group has the following credit lines from banks:
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Non-earmarked credit lines committed by banks and financial institutions |
859 |
963 |
Of which, utilised |
30 |
220 |
Of which, still available |
829 |
743 |
In addition to the credit lines provided by the banks, Alpiq also has a committed credit facility from its shareholders amounting to CHF 300 million.
The Alpiq Group has the following covenants from finance agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial covenants |
Other covenants |
|
Agreement |
Maturity |
In CHF million |
Utilisation at 31 Dec 2023 in CHF million |
Utilisation at 31 Dec 2022 in CHF million |
Equity |
Net debt / EBITDA |
Bank rating |
Syndicated loan line 2 |
Feb 25 |
205 |
|
|
|
x |
x |
Syndicated loan line 3 |
Mar 25 |
360 |
|
200 |
x |
|
x |
Bilateral term loan 1 |
May 25 |
30 |
30 |
50 |
x |
|
|
Bilateral credit line |
Dec 24 |
50 |
|
|
x |
|
|
Bilateral credit line 2 |
indefinite |
20 |
|
|
|
|
x |
1 Amortising credit line
2 Can be terminated by either party within 364 days
The counterparties have the right to terminate the agreement if covenants are breached. As in the previous year, all covenants were met at 31 December 2023.
Credit risk management
Credit risk management deals with potential losses arising from business partners’ inability to meet their contractual obligations to the Alpiq Group.
Credit risk management in the energy business encompasses all business units and subsidiaries that transact significant business volumes with external counterparties. It entails regular monitoring of outstanding receivables from counterparties and their expected future changes, as well as an analysis of the creditworthiness of new and existing counterparties. In addition to energy derivatives recognised as financial instruments on the balance sheet, credit risk management also covers physical receipt or delivery contracts. Credit risk is managed primarily by application of rating-based credit limits. The Alpiq Group classifies counterparties or groups of counterparties (with similar risk characteristics) in risk categories (AAA to CCC) based on probability of default. Once established, these ratings are applied as the basis for setting credit limits. Such limits may be increased if collateral (such as guarantees, advances or insurance cover) is provided. The ratings of active counterparties are reviewed periodically and credit limits are adjusted where appropriate. The policy in the energy business is to enter into contracts only with counterparties that meet the criteria of the Group Risk Policy. Outstanding credit exposures are monitored and managed on an ongoing basis using a formalised process.
The maximum credit risk corresponds to the carrying amount of the financial assets and was calculated at CHF 6’104 million at 31 December 2023 (previous year: CHF 10’477 million). The replacement values of energy derivatives and receivables, and thus the credit risk associated with several counterparties in various countries, are much lower due to the decreased energy prices compared with the previous year, which results in credit risk becoming a less significant input factor in fair value measurement.
In addition to the strict monitoring and management of credit risk by means of internal rating-based credit limits per counterparty and the retention of collaterals, Alpiq has a variety of counterparties and customers in different countries, which prevents a concentration of risk. Thus for derivatives and receivables credit risk is broadly diversified and there was no concentration of risk with any counterparty at year end (previous year: three counterparties). Information about the effect of credit risk on receivables is disclosed in note 4.5.
Offsetting of financial assets and liabilities
A substantial portion of the energy contracts entered into by the Alpiq Group is based on agreements containing a netting arrangement. Netting arrangements are used widely in energy trading to reduce the volume of effective cash flows. Items relating to the same counterparties are presented on a net basis in the balance sheet only if a legally enforceable right to offset the recognised amounts applies under the netting arrangement and there is an intention to settle on a net basis.
|
|
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 (restated) |
||||
CHF million |
Gross |
Offsetting |
Net (balance sheet) |
Gross |
Offsetting |
Net (balance sheet) |
Financial assets |
|
|
|
|
|
|
Trade receivables |
2,361 |
– 1,105 |
1,256 |
4,815 |
– 2,662 |
2,153 |
Energy derivatives 1 |
4,494 |
– 2,226 |
2,268 |
13,888 |
– 8,817 |
5,071 |
Currency and interest rate derivatives |
35 |
|
35 |
5 |
|
5 |
Derivatives designated for hedge accounting |
36 |
|
36 |
2 |
|
2 |
Financial liabilities |
|
|
|
|
|
|
Trade payables |
2,070 |
– 1,105 |
965 |
5,125 |
– 2,662 |
2,463 |
Energy derivatives 2 |
3,985 |
– 2,226 |
1,759 |
14,269 |
– 8,817 |
5,452 |
Currency and interest rate derivatives |
2 |
|
2 |
11 |
|
11 |
Derivatives designated for hedge accounting |
25 |
|
25 |
43 |
|
43 |
1 Of which a net amount of CHF 3 million (previous year: CHF 9 million) originates from own-use contracts designated at fair value on initial recognition.
2 Of which a net amount of CHF 24 million (previous year: CHF 94 million) originates from own-use contracts designated at fair value on initial recognition.
Financial collateral
Additional collateral such as guarantees, variation margin payments or insurance cover is obtained where necessary in order to hedge the risk of one party failing to fulfil its part of the deal and defaulting on its contractual obligations. The amounts to be provided change according to the net obligation calculated every day on the basis of price fluctuations. As a rule, the collateral held by the Alpiq Group covers both unrecognised energy transactions involving physical delivery and transactions recognised as financial instruments. Financial collateral received and issued in connection with bilateral agreements to settle margin differences is presented as follows:
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 |
||
CHF million |
Collateral received |
Collateral issued |
Collateral received |
Collateral issued |
Cash collateral 1 |
10 |
77 |
316 |
1,076 |
Guarantees 2 |
59 |
231 |
64 |
325 |
Total |
69 |
308 |
380 |
1,401 |
1 Contained under “Receivables” or “Other current liabilities” respectively
2 Guarantees to third parties in favour of third parties are presented in note 4.8.
Liquidity risk
Margin agreements are commonly used on energy commodity exchanges and among energy traders to reduce counterparty risk. A margin agreement is a collateralisation agreement to ensure both parties’ performance. Consequently, Alpiq has to provide or can demand significant collateral in the form of cash or bank guarantees due to energy price movements and depending on the value of the net obligation. In addition, these can result in significant changes in liquidity, as both Alpiq and its counterparties are in most cases contractually entitled to replace cash collateral with bank guarantees in the short term and vice versa. The Alpiq Group manages such variable liquidity requirements by means of an early warning system, continuous balancing of the underlying positions, maintenance of sufficient liquidity resources and committed credit lines from banks. The role of liquidity management is to plan, monitor, provide and optimise liquidity of the Alpiq Group on a monthly rolling basis.
The anticipated cash flows of financial liabilities and derivative financial instruments are disclosed in the table below. Where the intention exists to refinance loans at the end of the contract term but refinancing has not yet been contractually secured, a cash outflow on maturity is assumed. Accordingly, actual cash flows can differ significantly from the contractual maturities. The cash flows from derivatives are presented net when netting arrangements are in place with counterparties and the amounts are expected to be settled net. Depending on the future changes in value of the derivatives until maturity, the effective cash flows may deviate significantly from the amounts reported. In order to demonstrate the effective liquidity risk from derivative financial instruments, the cash inflows and outflows from contracts with positive and negative replacement values are shown in the following table.
2023: Maturity analysis of financial liabilities and derivative financial instruments
|
|
|
|
|
|
|
|
|
Carrying amount |
Cash flows |
|||||
CHF million |
|
Total |
< 1 month |
1 – 3 months |
4 – 12 months |
1 – 5 years |
> 5 years |
Trade payables |
965 |
– 965 |
– 762 |
– 126 |
– 77 |
|
|
Bonds |
1,085 |
– 1,179 |
|
|
– 289 |
– 724 |
– 166 |
Loans payable |
476 |
– 516 |
|
– 6 |
– 173 |
– 300 |
– 37 |
Lease liabilities |
35 |
– 40 |
– 1 |
– 1 |
– 4 |
– 24 |
– 10 |
Other financial liabilities |
140 |
– 141 |
– 81 |
– 44 |
– 16 |
|
|
Cash outflows from non-derivative financial liabilities |
|
– 2,841 |
– 844 |
– 177 |
– 559 |
– 1,048 |
– 213 |
Energy derivatives |
509 |
|
|
|
|
|
|
Cash inflows |
|
3,970 |
|
801 |
1,881 |
1,192 |
96 |
Cash outflows |
|
– 3,052 |
– 15 |
– 575 |
– 1,731 |
– 724 |
– 7 |
Currency / interest rate derivatives |
44 |
|
|
|
|
|
|
Cash inflows |
|
4,358 |
441 |
556 |
3,241 |
120 |
|
Cash outflows |
|
– 4,338 |
– 440 |
– 552 |
– 3,227 |
– 119 |
|
Net cash inflows / (outflows) from derivative financial instruments |
|
938 |
– 14 |
230 |
164 |
469 |
89 |
2022: Maturity analysis of financial liabilities and derivative financial instruments
|
|
|
|
|
|
|
|
|
Carrying amount |
Cash flows |
|||||
CHF million |
|
Total |
< 1 month |
1 – 3 months |
4 – 12 months |
1 – 5 years |
> 5 years |
Trade payables |
2,463 |
– 2,467 |
– 2,119 |
– 338 |
– 10 |
|
|
Bonds |
850 |
– 882 |
|
|
– 159 |
– 723 |
|
Loans payable |
710 |
– 745 |
– 120 |
– 168 |
– 121 |
– 290 |
– 46 |
Lease liabilities |
41 |
– 50 |
– 1 |
– 2 |
– 5 |
– 26 |
– 16 |
Other financial liabilities |
479 |
– 486 |
– 420 |
– 10 |
– 56 |
|
|
Cash outflows from non-derivative financial liabilities |
|
– 4,630 |
– 2,660 |
– 518 |
– 351 |
– 1,039 |
– 62 |
Energy derivatives |
– 411 |
|
|
|
|
|
|
Cash inflows |
|
9,172 |
32 |
1,753 |
4,530 |
2,717 |
140 |
Cash outflows |
|
– 9,190 |
– 8 |
– 2,114 |
– 5,115 |
– 1,944 |
– 9 |
Currency / interest rate derivatives |
– 17 |
|
|
|
|
|
|
Cash inflows |
|
6,035 |
1,570 |
1,970 |
2,135 |
360 |
|
Cash outflows |
|
– 6,060 |
– 1,569 |
– 1,973 |
– 2,148 |
– 370 |
|
Net cash inflows / (outflows) from derivative financial instruments |
|
– 43 |
25 |
– 364 |
– 598 |
763 |
131 |
Market risk
The Alpiq Group’s exposure to market risk comprises primarily energy price risk, foreign currency risk and interest rate risk. These risks are monitored on an ongoing basis and managed using financial instruments. Market risk is measured in accordance with the Group Risk Policy, which sets out rules on taking, measuring, limiting and monitoring risks. Compliance with the risk limits is monitored on an ongoing basis by the Risk Management Committee based on regular reporting by the Risk Management functional unit.
Energy price risk
Energy price risk refers to potential price fluctuations that could have an adverse effect on the Alpiq Group. These fluctuations may arise from factors such as market price movements, variations in price volatility or changing correlations between markets and products. Market liquidity risks also belong to this category. They occur when an open energy position cannot be closed out or can be closed out only on very unfavourable terms due to a lack of market bids. Future own-use energy transactions are normally not reported as financial instruments unless the fair value option or hedge accounting for firm commitments are applied in accordance with IFRS 9. Energy transactions are also conducted to optimise Alpiq’s power plant portfolio. A large proportion of the replacement values for energy derivatives shown at the reporting date are attributable to optimisation positions, with positive and negative replacement values generally cancelling each other out. Alpiq also engages in energy derivatives trading. The energy derivatives concluded by the Alpiq Group are usually forward contracts or futures. The fair values are calculated on the basis of the difference between the contractually fixed forward prices and current forward prices applicable at the reporting date. The risks associated with trading and optimisation transactions are managed via clearly defined responsibilities and stipulated risk limits in accordance with the Group Risk Policy. Risk Management reports regularly on compliance with these limits to the Risk Management Committee and the Executive Board, using a formalised risk reporting system. Risk positions are monitored in accordance with the Value at Risk (VaR) industry standards.
Foreign currency risk
The Alpiq Group seeks wherever possible to mitigate foreign currency risks through natural hedging of operating income and expenses denominated in foreign currencies. The remaining foreign currency risk is hedged by means of forward transactions in accordance with the Group’s Financial Risk Policy. Foreign currency risk arising from energy generation or purchasing is contractually transferred to the counterparty wherever possible. Where this is not possible or is only partly possible, forward currency contracts with a medium-term hedging horizon are deployed to manage exposure centrally on the market in line with the Group’s Financial Risk Policy. Hedge accounting is used to avoid fluctuations in results. The foreign currency derivatives are all OTC products. The fair values are calculated on the basis of the difference between the contractually fixed forward prices and forward prices applicable at the reporting date. Net investments in foreign subsidiaries are also exposed to changes in foreign exchange rates, although the difference in inflation rates should offset these changes in the long term. Investments in foreign subsidiaries (translation risks) are therefore not hedged.
Interest rate risk
The risks arising from volatility in interest rates relate to the interest-bearing financial assets and liabilities of the Alpiq Group. According to the Group’s Financial Risk Policy, liquidity is invested for a maximum of two years. However, the funding required for the business is obtained on a long-term basis at fixed interest rates. Financing instruments with variable interest rates, particularly those that are long-term, are generally hedged by means of interest rate swaps. This means that a change in interest rates applied to interest-bearing assets has an impact on financial income. The interest rate derivatives are all OTC products. The fair value is determined by discounting the contractually agreed payment streams with current market interest rates.
Sensitivity analysis
To illustrate the sensitivity of market risks to the Alpiq Group’s financial results, the effects of reasonably possible changes in the market risks listed above are set out below. The sensitivities are based in each case on financial instruments recognised on the reporting date. The possible annual percentage changes in the fair value of energy derivatives are derived from the commodity market prices for electricity, gas, coal and oil over the past year. The sensitivities are calculated by applying maximum deviations from the mean with a 99% confidence level. Taking into consideration the historical fluctuations, the reasonably possible changes in foreign currency prices are estimated at 5%. Interest rate swap sensitivity is shown as the effect on the change in fair value that would arise from a 1% parallel shift in the yield curve. Alpiq quantifies each type of risk assuming that all other variables remain constant. The effects are shown before tax.
|
|
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 |
||||
CHF million |
+ / – in % |
+ / – effect on earnings before income tax |
+ / – effect on OCI before income tax |
+ / – in % |
+ / – effect on earnings before income tax |
+ / – effect on OCI before income tax |
Energy price risk |
84.7 |
448 |
|
403.3 |
1,275 |
|
EUR / CHF currency risk |
5.0 |
47 |
37 |
5.0 |
60 |
14 |
EUR / CZK currency risk |
5.0 |
1 |
|
5.0 |
1 |
|
EUR / PLN currency risk |
5.0 |
1 |
|
5.0 |
1 |
|
Interest rate risk |
1.0 |
7 |
0 |
1.0 |
6 |
1 |
3.2 Financial instruments
3.2 Financial instruments
Carrying amounts and fair values of financial assets and liabilities
The fair values of financial assets and financial liabilities are summarised in the following table. Not included therein are cash and cash equivalents, trade receivables and trade payables, as well as miscellaneous receivables and liabilities whose carrying amounts differ only insignificantly from their fair values.
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 (restated) |
||
CHF million |
Carrying amount |
Fair value |
Carrying amount |
Fair value |
Financial assets at fair value through profit or loss |
|
|
|
|
Financial investments |
1 |
1 |
1 |
1 |
Positive replacement values of derivatives |
|
|
|
|
Energy derivatives 1 |
2,268 |
2,268 |
5,071 |
5,071 |
Currency and interest rate derivatives |
35 |
35 |
5 |
5 |
Derivatives designated for hedge accounting |
36 |
36 |
2 |
2 |
Financial liabilities at amortised cost |
|
|
|
|
Bonds |
1,085 |
1,105 |
850 |
835 |
Loans payable |
476 |
474 |
710 |
697 |
Financial liabilities at fair value through profit or loss |
|
|
|
|
Negative replacement values of derivatives |
|
|
|
|
Energy derivatives 2 |
1,759 |
1,759 |
5,452 |
5,452 |
Currency and interest rate derivatives |
2 |
2 |
11 |
11 |
Derivatives designated for hedge accounting |
25 |
25 |
43 |
43 |
1 Of which a net amount of CHF 3 million (previous year: CHF 9 million) originates from own-use contracts designated at fair value on initial recognition.
2 Of which a net amount of CHF 24 million (previous year: CHF 94 million) originates from own-use contracts designated at fair value on initial recognition.
Fair value hierarchy of financial instruments
The fair value hierarchy shown below was used to classify the financial instruments:
Level 1:
Quoted prices in active markets for identical assets or liabilities
Level 2:
Valuation model based on prices quoted in active markets that have a significant effect on the fair value
Level 3:
Valuation models utilising inputs that are not based on quoted prices in active markets and which have a significant effect on the fair value
At the reporting date, the Alpiq Group measured the following assets and liabilities at their fair value or disclosed a fair value.
CHF million |
31 Dec 2023 |
Level 1 |
Level 2 |
Level 3 |
Financial assets at fair value through profit or loss |
|
|
|
|
Financial investments |
1 |
|
1 |
|
Energy derivatives |
4,494 |
|
4,385 |
109 |
Currency and interest rate derivatives |
35 |
|
35 |
|
Derivatives designated for hedge accounting |
36 |
|
36 |
|
Financial liabilities at amortised cost |
|
|
|
|
Bonds |
1,105 |
1,105 |
|
|
Loans payable |
474 |
|
474 |
|
Financial liabilities at fair value through profit or loss |
|
|
|
|
Energy derivatives |
3,985 |
|
3,930 |
55 |
Currency and interest rate derivatives |
2 |
|
2 |
|
Derivatives designated for hedge accounting |
25 |
|
25 |
|
CHF million |
31 Dec 2022 (restated) |
Level 1 |
Level 2 |
Level 3 |
Financial assets at fair value through profit or loss |
|
|
|
|
Financial investments |
1 |
|
1 |
|
Energy derivatives |
13,888 |
|
13,610 |
278 |
Currency and interest rate derivatives |
5 |
|
5 |
|
Derivatives designated for hedge accounting |
2 |
|
2 |
|
Financial liabilities at amortised cost |
|
|
|
|
Bonds |
835 |
835 |
|
|
Loans payable |
697 |
|
697 |
|
Financial liabilities at fair value through profit or loss |
|
|
|
|
Energy derivatives |
14,269 |
|
13,889 |
380 |
Currency and interest rate derivatives |
11 |
|
11 |
|
Derivatives designated for hedge accounting |
43 |
|
43 |
|
The energy, currency and interest rate derivatives comprise only OTC products, the majority of which are to be classified as Level 2. Fair value of energy derivatives is determined using a price curve model. The observable input factors (market prices) in the price curve model are supplemented by hourly forward prices, which are arbitrage-free and compared with external price benchmarking on a monthly basis.
The fair value of the loans payable corresponds to the contractually agreed interest and amortisation payments discounted at market rates.
Energy derivatives disclosed under Level 3 are measured using methods that in some cases use input factors, such as long-term energy prices or discount rates, that cannot be derived directly from an active market. In complex cases, a discounted cash flow method is used for measurement. The determination of these input parameters and the application of specific valuation models for non-standardised products require significant management estimates.
Level 3 energy derivatives
The following table shows the development of Level 3 energy derivatives:
|
|
|
|
|
|
2023 |
2022 (restated) |
||
CHF million |
Assets |
Liabilities |
Assets |
Liabilities |
Fair values at 1 January |
278 |
380 |
105 |
152 |
Purchases |
11 |
|
55 |
1 |
Sales |
|
|
– 45 |
|
Settlements |
– 82 |
– 108 |
– 67 |
– 119 |
Fair value changes of derivatives still held at period end |
– 24 |
– 147 |
202 |
263 |
Fair value changes of derivatives settled / sold / transferred |
– 49 |
– 62 |
– 17 |
14 |
Transfer to Level 3 |
|
|
56 |
75 |
Transfer from Level 3 |
– 20 |
– 11 |
– 9 |
|
Currency translation differences |
– 5 |
3 |
– 2 |
– 6 |
Fair values at 31 December |
109 |
55 |
278 |
380 |
Transfers from Level 2 to Level 3 relate to energy derivatives measured on the basis of input factors that are no longer observable in an active market due to decreased market activity. Transfers out of Level 3 relate to energy derivatives measured on the basis of input factors that became observable in the financial year. Alpiq always applies reclassifications between Level 2 and Level 3 at the end of the reporting period. Both in the reporting year and during the previous year, no transfers between Level 1 and 2 took place.
A change in the price of EUR 1 of the underlying commodity would lead to an increase/decrease in the fair value of Level 3 instruments of CHF 5 million. The sensitivity analysis does not include any interdependencies between different commodities. In order to hedge contracts assigned to Level 3, Alpiq enters into hedges that may be classified as Level 2 or Level 1. It is also possible that the Level 3 instrument is a hedge for an own-use contract. Thus, the sensitivity analysis of Level 3 instruments does not include the offsetting effect from the hedging position or the own-use contract. More information about the credit risk associated with Level 3 energy derivatives can be found in note 3.1.
Development of day one gains and losses
Measuring financial instruments with valuation inputs that are not entirely based on quoted prices in active markets may result in deviations between the fair value and the transaction price at the time of entering into the contract. These deviations are recognised as day one gains or losses and are amortised on a straight-line basis until the markets of the valuation inputs used become active.
The following table shows the reconciliation of the change in deferred day one gains and losses. These items relate entirely to Level 3 energy derivatives.
|
|
|
|
|
|
2023 |
2022 |
||
CHF million |
Day one gains |
Day one losses |
Day one gains |
Day one losses |
Balance at 1 January |
21 |
12 |
18 |
17 |
Deferred profit / loss arising from new transactions |
11 |
|
55 |
1 |
Profit or loss recognised in the income statement |
– 8 |
– 3 |
– 53 |
– 5 |
Currency translation differences |
– 1 |
– 1 |
1 |
– 1 |
Balance at 31 December |
23 |
8 |
21 |
12 |
Expense/income related to financial assets and liabilities
|
|
|
|
|
|
2023 |
2022 |
||
CHF million |
Income statement |
Other comprehensive income |
Income statement |
Other comprehensive income |
Net gains / losses (excluding interest) |
|
|
|
|
Financial assets and liabilities at fair value through profit or loss |
326 |
|
– 541 |
|
Own use contracts designated at fair value on initial recognition |
73 |
|
– 227 |
|
Financial assets at amortised cost |
– 23 |
|
– 5 |
|
Financial instruments designated for hedge accounting |
– 2 |
15 |
24 |
9 |
Interest income and expense |
|
|
|
|
Interest income for financial assets at amortised cost |
42 |
|
6 |
|
Interest expense for financial liabilities at amortised cost |
– 52 |
|
– 44 |
|
Interest expense for financial liabilities measured at fair value and designated for hedge accounting |
|
|
– 4 |
|
For information on the impairment of trade receivables, see note 4.5.
Accounting policies
Financial investments, securities and derivatives are measured at fair value through profit or loss. All other financial assets and liabilities are measured at amortised cost. The Alpiq Group does not have financial instruments measured at fair value through other comprehensive income.
Financial assets and liabilities at fair value through profit or loss
Financial assets and financial liabilities in this category are initially recognised at fair value. The corresponding transaction costs are recognised immediately in the income statement. Changes in value of the financial instruments measured at fair value are recognised through profit or loss in the financial result with the exception of energy derivatives and currency derivatives concluded in connection with the hedging of energy transactions. Changes in the fair value of derivatives in connection with the energy business are presented in net revenue.
In principle, future own-use energy transactions are not reported in the balance sheet. This also includes contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments. By way of exception, Alpiq irrevocably designates some of these transactions as contracts measured at fair value through profit or loss if otherwise an accounting mismatch would occur.
Financial assets and liabilities at amortised cost
With the exception of trade receivables, financial assets and financial liabilities at amortised cost are initially recognised at fair value plus or minus direct transaction costs. Trade receivables are measured at transaction price.
For the subsequent measurement of financial assets at amortised cost, any impairments are calculated using the expected credit loss model according to which losses on unsecured financial assets expected in future are also recognised. Impairment losses expected in the future are determined using publicly available probability of default, which takes into account forward-looking information and historical probabilites of default. For financial assets, losses that are expected to occur in the next 12-month period are generally recognised. If the credit risk increases significantly for specific counterparties, impairment is recognised on the assets affected over the entire residual term of the asset. In accordance with IFRS 9, the simplified approach is applied for trade receivables for the measurement of the expected losses by recognising the lifetime expected credit losses (see note 4.5).
Alpiq analyses historical credit losses and derives a forward-looking estimate of expected credit losses taking, into account the economic conditions and information obtained externally. The estimates are reviewed and analysed periodically. However, actual results can differ from these estimates, resulting in adjustments in subsequent periods.
Hedge accounting
Alpiq uses foreign currency and interest rate derivatives to hedge the exposure to fluctuations in cash flows of highly probable forecasted transactions (cash flow hedges). Cash flow hedge accounting is applied to certain foreign currency and interest rate derivatives. In general, hedge accounting is not applied to energy derivatives. However, for selected energy purchase contracts, Alpiq introduced fair value hedge accounting in 2022.
Cash flow hedge accounting
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 |
||
|
Foreign currency hedges |
Interest rate swaps |
Foreign currency hedges |
Interest rate swaps |
Derivative financial instruments in current assets (in CHF million) |
36 |
|
2 |
|
Derivative financial instruments in current liabilities (in CHF million) |
25 |
|
12 |
1 |
Nominal amount (in CHF million) |
1,104 |
|
1,377 |
|
Nominal amount (in EUR million) |
1,713 |
39 |
897 |
69 |
Change in cash flow hedge reserves
|
|
|
|
|
|
2023 |
2022 |
||
CHF million |
Foreign currency hedges |
Interest rate swaps |
Foreign currency hedges |
Interest rate swaps |
Cash flow hedge reserves at 1 January |
34 |
– 5 |
32 |
– 10 |
Recognition of gain / loss |
13 |
|
25 |
4 |
Reclassification of realised gain / loss to net revenue |
2 |
|
– 24 |
|
Reclassification of realised gain / loss to financial result |
|
|
|
4 |
Income tax expense |
– 2 |
|
1 |
– 3 |
Cash flow hedge reserves at 31 December |
47 |
– 5 |
34 |
– 5 |
Foreign currency hedges
Foreign currency positions from the sale of Swiss production capacity in euros are hedged with forward transactions on the basis of the expected transaction volumes. Each spot component is designated as a hedging instrument for hedge accounting. The unrealised gains/losses of the spot components are included in other comprehensive income taking deferred taxes into account. Changes in the forward components are recognised through profit or loss. There were no ineffective portions of the hedge from the foreign currency hedges at the reporting date. The underlying transactions will be recognised in the income statements 2024 to 2028.
Interest rate swaps
At 31 December 2023, interest rate swaps were in place in order to fix interest rates on variable-interest project financing facilities in Italy. The project financing facilities have a remaining maturity of between two and six years.
CHF million |
2023 |
2022 |
Negative replacement values of interest rate swaps at 1 January |
1 |
8 |
Realised interest payments |
– 1 |
– 3 |
Change in fair value |
|
– 4 |
Currency translation differences |
|
|
Negative replacement values of interest rate swaps at 31 December |
0 |
1 |
Fair value hedge accounting
Since 1 July 2022, Alpiq applies fair value hedge accounting to selected fixed-priced, physical energy purchase contracts (firm commitments). Changes in fair value of firm commitments result mainly from commodity price fluctuations. To mitigate the exposure to these market price changes, Alpiq hedges the fair value of such transactions in accordance with its hedging strategy and risk management objectives either with physical contracts or financial derivatives (see note 3.1). The introduction of fair value hedge accounting allows the fair value changes of the hedged item to be recognised in the IFRS financial statements, thereby eliminating the accounting mismatch for the effective part of the hedge. Beside prospective effectiveness testing, a half-yearly own use eligibility test is conducted to ensure that no over-hedging exists that would lead to significant ineffectiveness.
Hedged item
The fair value changes of the hedged items are recorded in net revenue and reflected in the balance sheet line items “Other non-current assets” and “Other current liabilities”. The following table shows the carrying amount of the hedged items that represents the accumulated amount of fair value hedge adjustments on the hedged items since inception of the hedge relationship.
|
|
|
|
|
Other non-current assets |
Other current liabilities |
Net hedged item |
Carrying amount of the hedged item at 1 July 2022 |
|
|
0 |
Fair value movement included in the hedge relationship |
2 |
37 |
35 |
Carrying amount of the hedged item at 31 December 2022 |
2 |
37 |
35 |
Fair value movement included in the hedge relationship |
– 2 |
25 |
27 |
Release of fair value adjustment due to matured hedge relationship |
|
– 37 |
– 37 |
Carrying amount of the hedged item at 31 December 2023 |
0 |
25 |
25 |
Hedging instruments
The maturity profile and the average price of the hedging instruments used for hedging a layer of a firm commitment are shown in the table below.
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 |
||
|
Futures 2024 |
Futures 2023 |
Futures 2024 |
Forwards 2023 |
Nominal amount in CHF million |
62 |
18 |
6 |
10 |
Nominal amount in MWh |
489,669 |
245,280 |
70,272 |
175,200 |
Average forward price in CHF |
132.79 |
73.44 |
83.32 |
55.31 |
Forwards are recorded under the “Derivative financial instruments” balance sheet line item (either as assets or liabilities). Futures are cash settled daily and therefore no open exposure is recognised in the balance sheet. The following table provides an overview of the hedging instruments:
|
|
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 |
||||
|
Nominal amount in MWh |
Nominal amount in CHF million |
Carrying amount in CHF million |
Nominal amount in MWh |
Nominal amount in CHF million |
Carrying amount in CHF million |
Forwards |
|
|
|
175,200 |
10 |
– 30 |
Futures 1 |
489,669 |
62 |
|
315,552 |
24 |
|
1 No carrying amount for futures is disclosed in the balance sheet, as they are settled in cash as part of the daily margining.
Hedge effectiveness
At each reporting date, or when circumstances change significantly, a quantitative hedge effectiveness assessment is performed. The fair value of the hedged items and hedging instruments are measured and the net difference of the changes represents the amount of hedge ineffectiveness. Specific factors that may cause ineffectiveness are timing differences (i.e. mismatch between the designated hedge period and the maturity period of the hedging instrument) and location differences. Hedge ineffectiveness is recorded under net revenue in the income statement.
|
|
|
|
2023 |
2022 |
Change in fair value of hedging instruments |
55 |
33 |
Change in fair value of the hedged items |
– 55 |
– 35 |
Year to date hedge ineffectiveness |
0 |
– 2 |
Lifetime hedge ineffectiveness |
– 2 |
– 2 |
3.3 Other non-current assets
3.3 Other non-current assets
CHF million |
Financial investments |
Loans receivable |
Hedged firm commitments |
Other non-current assets |
Total |
Carrying amount at 1 January 2023 |
1 |
10 |
2 |
12 |
25 |
Additions |
|
3 |
|
|
3 |
Reclassifications |
|
– 5 |
|
|
– 5 |
Disposals |
|
– 1 |
|
|
– 1 |
Revaluation |
|
|
– 2 |
|
– 2 |
Carrying amount at 31 December 2023 |
1 |
7 |
0 |
12 |
20 |
CHF million |
Financial investments |
Loans receivable |
Hedged firm commitments 1 |
Other non-current assets |
Total |
Carrying amount at 1 January 2022 |
1 |
10 |
|
12 |
23 |
Additions |
|
1 |
2 |
|
3 |
Disposals |
|
– 1 |
|
|
– 1 |
Carrying amount at 31 December 2022 |
1 |
10 |
2 |
12 |
25 |
1 Application of fair value hedge accounting as of 1 July 2022 (see note 3.2)
3.4 Financial liabilities
3.4 Financial liabilities
CHF million |
Bonds |
Loans payable |
Lease liabilities |
Total |
Non-current financial liabilities at 1 January 2023 |
709 |
331 |
35 |
1,075 |
Current financial liabilities at 1 January 2023 |
141 |
379 |
6 |
526 |
Financial liabilities at 1 January 2023 |
850 |
710 |
41 |
1,601 |
Proceeds from financial liabilities 1 |
375 |
163 |
4 |
542 |
Repayment of financial liabilities |
– 140 |
– 388 |
– 7 |
– 535 |
Unwinding of discount |
|
1 |
|
1 |
Reclassified to “Liabilities held for sale” |
|
|
– 1 |
– 1 |
Currency translation differences |
|
– 10 |
– 2 |
– 12 |
Financial liabilities at 31 December 2023 |
1,085 |
476 |
35 |
1,596 |
Non-current financial liabilities at 31 December 2023 |
825 |
337 |
30 |
1,192 |
Current financial liabilities at 31 December 2023 |
260 |
139 |
5 |
404 |
1 Lease liabilities in amount of CHF 4 million not cash effective.
CHF million |
Bonds |
Loans payable |
Lease liabilities |
Total |
Non-current financial liabilities at 1 January 2022 |
400 |
189 |
38 |
627 |
Current financial liabilities at 1 January 2022 |
275 |
665 |
6 |
946 |
Financial liabilities at 1 January 2022 |
675 |
854 |
44 |
1,573 |
Acquisition / disposal of subsidiaries |
|
|
– 1 |
– 1 |
Proceeds from financial liabilities 1 |
450 |
2,259 |
8 |
2,717 |
Repayment of financial liabilities |
– 275 |
– 2,396 |
– 8 |
– 2,679 |
Unwinding of discount |
|
|
2 |
2 |
Adjustment of lease agreements |
|
|
– 2 |
– 2 |
Other changes |
|
– 1 |
|
– 1 |
Currency translation differences |
|
– 6 |
– 2 |
– 8 |
Financial liabilities at 31 December 2022 |
850 |
710 |
41 |
1,601 |
Non-current financial liabilities at 31 December 2022 |
709 |
331 |
35 |
1,075 |
Current financial liabilities at 31 December 2022 |
141 |
379 |
6 |
526 |
1 Lease liabilities in amount of CHF 8 million not cash effective.
Bonds outstanding at the reporting date
CHF million |
Maturity |
Earliest repayment date |
Effective interest rate % |
Carrying amount at 31 Dec 2023 |
Carrying amount at 31 Dec 2022 |
|
|
|
|
|
|
Alpiq Holding Ltd. CHF 141 million nominal amount, 2.13% fixed rate |
2015 / 2023 |
30 Jun 2023 |
2.12 |
|
141 |
Alpiq Holding Ltd. CHF 260 million nominal amount, 2.63% fixed rate |
2014 / 2024 |
29 Jul 2024 |
2.71 |
260 |
259 |
Alpiq Holding Ltd. CHF 200 million nominal amount, 1.63% fixed rate |
2022 / 2025 |
30 May 2025 |
1.69 |
200 |
200 |
Alpiq Holding Ltd. CHF 250 million nominal amount, 1.75% fixed rate |
2022 / 2026 |
24 Jun 2026 |
1.63 |
250 |
250 |
Alpiq Holding AG CHF 220 million nominal amount, 3.13% fixed rate |
2023 / 2027 |
29 Apr 2027 |
3.03 |
220 |
|
Alpiq Holding AG CHF 155 million nominal amount, 3.38% fixed rate |
2023 / 2030 |
29 Apr 2030 |
3.32 |
155 |
|
The weighted interest rate on the bonds issued and listed on the SIX Swiss Exchange based on the nominal value at the reporting date is 2.43% (previous year: 2.04%), and that on the loans payable is 2.61% (2.25%). The latter also includes project financing denominated in euros. The weighted average interest rate of the bonds and the loans payable is 2.48% (2.11%).
Accounting policies
The accounting policies for financial liabilities are disclosed in note 3.2 and note 3.5.
3.5 Leases
3.5 Leases
Alpiq is lessee in various contracts particularly in connection with power plants, land, building and IT infrastructure rentals. These leases are concluded for a fixed term of one month to 20 years and may contain renewal or termination options. The table below shows the change in net carrying amounts of the right of use assets capitalised in the balance sheet line item “Property, plant and equipment”:
CHF million |
Rights of use buildings |
Rights of use power plants |
Rights of use others |
Total |
Net carrying amount at 1 January 2023 |
17 |
18 |
1 |
36 |
Investments |
4 |
|
|
4 |
Reclassified to “Assets held for sale” |
– 1 |
|
|
– 1 |
Depreciation |
– 3 |
– 2 |
– 1 |
– 6 |
Currency translation differences |
– 1 |
|
|
– 1 |
Net carrying amount at 31 December 2023 |
16 |
16 |
0 |
32 |
Of which, cost value |
27 |
34 |
4 |
65 |
Of which, accumulated depreciation |
– 11 |
– 18 |
– 4 |
– 33 |
CHF million |
Rights of use buildings |
Rights of use power plants |
Rights of use others |
Total |
Net carrying amount at 1 January 2022 |
16 |
21 |
2 |
39 |
Acquisition / disposal of subsidiaries |
– 1 |
|
|
– 1 |
Investments |
8 |
|
|
8 |
Divestments / early termination |
– 2 |
|
|
– 2 |
Depreciation |
– 3 |
– 2 |
– 1 |
– 6 |
Currency translation differences |
– 1 |
– 1 |
|
– 2 |
Net carrying amount at 31 December 2022 |
17 |
18 |
1 |
36 |
Of which, cost value |
26 |
35 |
4 |
65 |
Of which, accumulated depreciation |
– 9 |
– 17 |
– 3 |
– 29 |
The change in carrying amounts of the lease liabilities included under financial liabilities can be seen in note 3.4. The total cash outflow from leases amounted to CHF 7 million in 2023 (previous year: CHF 8 million).
Accounting policies
The Alpiq Group applies a uniform approach for the recognition and measurement of leases. It does not make use of the practical expedients for short-term and low-value leases permitted under IFRS 16. At inception of a contract, Alpiq assesses whether the contract is or contains a lease. A lease exists if a contract grants Alpiq the right to control a certain asset over a period of time in exchange for consideration. The right of use assets and the lease liabilities representing Alpiq’s obligation to make lease payments are recognised in the balance sheet at the time when the lease asset becomes available. The right of use assets are included under “Property, plant and equipment” in the balance sheet. They are measured at amortised cost and depreciated on a straight-line basis over the lease term or the lifetime of the asset, taking into account any impairment losses. Acquisition costs include the amount of recognised lease liabilities plus any dismantling obligations, directly attributable acquisition costs, and one-off payments made at or before the start of the contract, less any lease incentives received.
The lease liabilities are recognised initially at the present value of the expected future lease payments. The present value is calculated with the lessee’s incremental borrowing rate applicable for the country, the term and the currency. In subsequent periods, the lease liabilities are measured at amortised cost by application of the effective interest method. The lease liabilities are recognised in current or non-current financial liabilities as appropriate.
3.6 Equity
3.6 Equity
Share capital
The share capital of CHF 0.331 million (previous year: CHF 0.331 million) consists of 33’110’364 registered shares at a par value of CHF 0.01 each and is fully paid in. The shareholder structure breaks down as follows:
|
Stakes in % at 31 Dec 2023 |
Stakes in % at 31 Dec 2022 |
EOS HOLDING SA |
33.33 |
33.33 |
Schweizer Kraftwerksbeteiligungs-AG |
33.33 |
33.33 |
EBM (Genossenschaft Elektra Birseck) |
19.91 |
19.91 |
EBL (Genossenschaft Elektra Baselland) |
6.44 |
6.44 |
Eniwa Holding AG |
2.12 |
2.12 |
Aziende Industriali di Lugano (AIL) SA |
1.79 |
1.79 |
IBB Holding AG |
1.12 |
1.12 |
Regio Energie Solothurn |
1.00 |
1.00 |
WWZ AG |
0.96 |
0.96 |
At the Annual General Meeting on 30 April 2024, the Board of Directors of Alpiq Holding Ltd. will propose distributing a dividend of CHF 3.50 per share (totalling CHF 116 million) for the 2023 financial year. An extraordinary dividend of CHF 2.80 per share (totalling CHF 93 million) was distributed for the 2022 financial year in September 2023.
Hybrid capital
In 2013, Alpiq placed a CHF 650 million public hybrid bond on the Swiss capital market. It has no maturity date and qualifies as equity under IFRS. Alpiq is entitled to repay the public hybrid bond at 15 November of each year. As in the previous years, Alpiq opted not to exercise this option in the financial year 2023.
Every five years, the interest rate is adjusted to reflect prevailing market conditions. In 2018, the interest rate was adjusted to 4.5325% for the first time. On 15 November 2023, the interest rate was adjusted to 6.2541% for the second time including an increase by an additional 25 bps. In 2043, the interest rate will be increased by an additional 75 bps. Interest payments on the public hybrid bond can be suspended at Alpiq’s discretion. In this case, the payment of interest lapses after three years.
The interest after tax attributable to 2023 was CHF 31 million (previous year: CHF 29 million). Interest from the public hybrid bond that is attributable to the reporting year meets the criteria of a preference dividend, irrespective of whether the interest was paid or a legal obligation for the payment exists and is deducted from the “Net income attributable to equity investors of Alpiq Holding Ltd.” for the calculation of the basic earnings per share. The accrued interest after tax totalled CHF 5 million at 31 December 2023 (CHF 4 million). As no legally enforceable payment obligation exists, the accrued interest was not accrued as a financial liability, and was not deducted from equity. Interest payments totalling CHF 29 million were made in 2023 (CHF 29 million). Due to the equity character of the hybrid capital, these distributions were deducted from retained earnings.
4 Operating assets and liabilities
4.1 Property, plant and equipment
4.1 Property, plant and equipment
CHF million |
Land and buildings |
Power plants |
Others 1 |
Assets under construction and prepayments |
Right-of-use assets 2 |
Total |
Net carrying amount at 1 January 2023 |
111 |
1,525 |
22 |
88 |
36 |
1,782 |
Investments |
|
|
13 |
66 |
4 |
83 |
Own work capitalised |
|
|
|
2 |
|
2 |
Reclassifications |
2 |
70 |
1 |
– 72 |
|
1 |
Reclassified to “Assets held for sale” |
|
|
|
– 3 |
– 1 |
– 4 |
Depreciation |
– 2 |
– 88 |
– 4 |
|
– 6 |
– 100 |
Currency translation differences |
– 1 |
– 12 |
|
– 2 |
– 1 |
– 16 |
Net carrying amount at 31 December 2023 |
110 |
1,495 |
32 |
79 |
32 |
1,748 |
Of which, cost value |
176 |
4,755 |
75 |
96 |
65 |
5,167 |
Of which, accumulated depreciation |
– 66 |
– 3,260 |
– 43 |
– 17 |
– 33 |
– 3,419 |
1 Includes transmission assets, machinery, equipment and vehicles as well as decommissioning, restoration and maintenance costs
2 For details, see note 3.6
Investments in the category “Others” in the amount of CHF 13 million relate to an increase in decomissioning provision of CHF 5 million and a revalution of an already existing decomissioning provision of CHF 8 million. These transactions were non-cash effective.
CHF million |
Land and buildings |
Power plants |
Others 1 |
Assets under construction and prepayments |
Right-of-use assets 2 |
Total |
Net carrying amount at 1 January 2022 |
113 |
1,623 |
26 |
58 |
39 |
1,859 |
Acquisition / disposal of subsidiaries |
|
|
|
– 2 |
– 1 |
– 3 |
Investments |
|
2 |
|
65 |
8 |
75 |
Own work capitalised |
|
|
|
1 |
|
1 |
Reclassifications |
|
30 |
2 |
– 32 |
|
|
Reclassified to “Assets held for sale” |
|
– 47 |
– 1 |
|
|
– 48 |
Disposals |
|
|
|
|
– 2 |
– 2 |
Depreciation |
– 2 |
– 89 |
– 4 |
|
– 6 |
– 101 |
Reversals of impairment |
|
18 |
|
|
|
18 |
Currency translation differences |
|
– 12 |
– 1 |
– 2 |
– 2 |
– 17 |
Net carrying amount at 31 December 2022 |
111 |
1,525 |
22 |
88 |
36 |
1,782 |
Of which, cost value |
175 |
4,771 |
62 |
92 |
65 |
5,165 |
Of which, accumulated depreciation |
– 64 |
– 3,246 |
– 40 |
– 4 |
– 29 |
– 3,383 |
1 Includes transmission assets, machinery, equipment and vehicles as well as decommissioning, restoration and maintenance costs
2 For details, see note 3.6
Impairment and reversals of impairment 2022
The integration of Nant de Drance (NdD) into the Production Switzerland CGU as of 1 July 2022 constituted a triggering event. The impairment test of the Production Switzerland CGU was performed at half-year closing and did not lead to any impairment losses. For further information see note 4.7.
In the second half of 2022, the management initiated the sale of the three Bulgarian companies. As a result, the corresponding assets and liabilities were classified as “held for sale” (see note 5.2). Before this reclassification, Alpiq tested the assets of the cash-generating unit Vetrocom for impairment and determined the recoverable amount based on the fair value less cost to sell which was calculated on the basis of the non-binding offers (Level 2) received. The assessment led to the reversal of impairment losses recognised in previous years in the amount of CHF 23 million in the Asset segment, of which CHF 18 million was attributable to windpark assets and CHF 5 million to intangible assets.
Contractual obligations
At the reporting date, the Group had contractual commitments of CHF 78 million (previous year: CHF 66 million) for the construction and acquisition of property, plant and equipment.
Accounting policies
Property, plant and equipment is stated at cost, net of accumulated depreciation and any impairment losses. Obligations to restore land and sites after licence expiry or decommissioning are accounted for individually in accordance with the contract terms.
Depreciation is applied to property, plant and equipment on a straight-line basis over the estimated useful life, or to the expiry date of power plant licences. Assets under construction and prepayments are not subject to depreciation until they are completed or in working condition and have been reclassified to the corresponding asset category. The estimated useful life of the various classes of assets range as follows:
- Power plants: 20 – 80 years
- Transmission assets: 15 – 40 years
- Buildings: 20 – 60 years
- Machinery, equipment and vehicles: 3 – 20 years
- Land: only in case of impairment
- Assets under construction and prepayments: if impairment is already evident
The residual value and useful life of an asset are reviewed regularly, but at least at each financial year end, and adjusted where required. At every reporting date, a test is performed to determine whether there is any indication that items of property, plant and equipment are impaired.
The calculation of the useful life, residual value and recoverable amount involves estimates. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs of disposal and its value in use. If an asset does not generate cash inflows that are independent of those from other assets, the recoverable amount of the individual asset is estimated for the cash-generating unit to which the asset belongs. Value in use is calculated by discounting the estimated future cash flows based on budget figures approved by management, business assumptions as well as other relevant factors. These assumptions are based on historical empirical data and current market expectations and therefore contain significant estimation uncertainties. These assumptions relate largely to wholesale prices on European forward markets and forecasts of medium-term and long-term energy prices, foreign currencies (in particular EUR/CHF and EUR/USD exchange rates), inflation rates, discount rates, regulatory conditions and investment activities relating to the company. The estimates made are reviewed periodically using external market data and analyses. To calculate the terminal values, the cash flows were extrapolated by a growth rate of 2.0% (previous year: 2.0%). This growth rate corresponds to the long-term average growth that Alpiq expects and represents a forecast. The discount rates that have been applied reflect the current market estimate for the specific risks to be allocated to the assets and represent a best estimate. Actual results may differ from these estimates, assumptions and forecasts, resulting in significant adjustments in subsequent periods.
4.2 Intangible assets
4.2 Intangible assets
CHF million |
Energy purchase rights 1 |
Other intangible assets |
Assets under development and prepayments |
Total |
Net carrying amount at 1 January 2023 |
25 |
49 |
6 |
80 |
Investments |
|
|
4 |
4 |
Own work capitalised |
|
|
3 |
3 |
Reclassifications |
|
10 |
– 10 |
|
Amortisation |
– 1 |
– 10 |
|
– 11 |
Impairment |
|
– 1 |
|
– 1 |
Currency translation differences |
– 1 |
– 1 |
|
– 2 |
Net carrying amount at 31 December 2023 |
23 |
47 |
3 |
73 |
Of which, cost value |
1,484 |
521 |
3 |
2,008 |
Of which, accumulated amortisation |
– 1,461 |
– 474 |
|
– 1,935 |
1 Include prepayments for rights to purchase energy in the long term, including capitalised interest, as well as long-term energy purchase agreements acquired in business combinations.
CHF million |
Energy purchase rights 1 |
Other intangible assets |
Assets under development and prepayments |
Total |
Net carrying amount at 1 January 2022 |
26 |
62 |
4 |
92 |
Investments |
|
|
5 |
5 |
Own work capitalised |
|
|
6 |
6 |
Reclassifications |
|
8 |
– 8 |
|
Reclassified to “Assets held for sale” |
|
– 8 |
|
– 8 |
Amortisation |
– 1 |
– 15 |
|
– 16 |
Impairment |
|
– 2 |
– 1 |
– 3 |
Reversals of impairment |
|
5 |
|
5 |
Currency translation differences |
|
– 1 |
|
– 1 |
Net carrying amount at 31 December 2022 |
25 |
49 |
6 |
80 |
Of which, cost value |
1,490 |
523 |
6 |
2,019 |
Of which, accumulated amortisation |
– 1,465 |
– 474 |
|
– 1,939 |
1 Include prepayments for rights to purchase energy in the long term, including capitalised interest, as well as long-term energy purchase agreements acquired in business combinations.
Impairment and reversals of impairment
Impairment losses of CHF 1 million (previous year: CHF 3 million) were recognised in the Trading segment, because internally developed software could not be used as originally planned.
More information on reversals of impairment losses is disclosed in note 4.1 and note 5.2.
Accounting policies
Intangible assets are stated at cost, net of accumulated amortisation and any impairment losses. Assets with a limited useful life are generally amortised on a straight-line basis over their estimated useful economic lives. The amortisation period and amortisation method are reviewed at each financial year end. The useful life of the intangible assets recognised ranges from 1 to 74 years. Assets under development and prepayments are not subject to amortisation but are tested annually for impairment.
For significant estimation uncertainties and assumptions, see note 4.1.
4.3 Investments in partner power plants and other associates
4.3 Investments in partner power plants and other associates
CHF million |
Partner power plants |
Other associates |
Total |
Carrying amount at 1 January 2023 |
2,154 |
29 |
2,183 |
Dividends |
– 23 |
– 1 |
– 24 |
Share of profit / (loss) |
– 22 |
– 1 |
– 23 |
IAS 19 effects recognised in other comprehensive income |
22 |
1 |
23 |
Investments |
|
1 |
1 |
Reclassifications |
– 5 |
|
– 5 |
Carrying amount at 31 December 2023 |
2,126 |
29 |
2,155 |
CHF million |
Partner power plants |
Other associates |
Total |
Carrying amount at 1 January 2022 |
2,266 |
35 |
2,301 |
Dividends |
– 23 |
|
– 23 |
Share of profit / (loss) |
– 58 |
– 1 |
– 59 |
IAS 19 effects recognised in other comprehensive income |
– 43 |
– 5 |
– 48 |
Investments |
24 |
|
24 |
Reclassifications |
– 12 |
|
– 12 |
Carrying amount at 31 December 2022 |
2,154 |
29 |
2,183 |
Summarised financial information
Under the partner agreements in force, the shareholders of partner power plants are required to take on the energy and pay the annual costs allotted to their ownership interest throughout the concession period. Furthermore, nuclear power plant owners are required to pay limited additional contributions to the decommissioning and waste disposal fund, in case a primary contributor is unable to fulfil payments. The partner agreements run through the useful life of the power plant, or through the concession period, and cannot be terminated. For individual partner power plants, Alpiq assigned a portion of the energy to be granted to it due to its ownership interest, as well as the associated obligation to pay its annual costs to another company. In such cases, the reported interest relevant from an economic perspective may differ from the interest held pursuant to corporate law. The Alpiq Group’s share of the annual costs of all partner power plants in 2023 amounted to CHF 475 million (previous year: CHF 774 million). This amount is included in energy and inventory costs.
The merger of Atel and EOS, which formed Alpiq in 2009, led to fair value adjustments being made on the acquired assets in the course of the business combination. These fair value adjustments are amortised over the concession periods of the corresponding assets, which results in a negative impact on the share of profit and loss. In the summarised financial information the fair value adjustments are included and calculated on the basis of a weighting.
Material partner power plants
|
|
|
|
|
|
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 (adjusted 1 ) |
||||||||
CHF million |
Grande Dixence SA |
Nant de Drance SA |
Kernkraftwerk Gösgen-Däniken AG |
Kernkraftwerk Leibstadt AG |
Total |
Grande Dixence SA |
Nant de Drance SA |
Kernkraftwerk Gösgen-Däniken AG |
Kernkraftwerk Leibstadt AG |
Total |
Non-current assets |
2,014 |
2,062 |
3,565 |
4,985 |
12,626 |
2,063 |
2,097 |
3,357 |
4,912 |
12,429 |
Current assets |
27 |
80 |
418 |
639 |
1,164 |
14 |
– 4 |
469 |
554 |
1,033 |
Non-current liabilities |
675 |
1,413 |
3,401 |
4,197 |
9,686 |
736 |
1,660 |
3,325 |
4,125 |
9,846 |
Current liabilities |
219 |
320 |
196 |
216 |
951 |
157 |
41 |
166 |
126 |
490 |
Total equity |
1,147 |
409 |
386 |
1,211 |
3,153 |
1,184 |
392 |
335 |
1,215 |
3,126 |
Equity share |
60.0% |
39.0% |
40.0% |
27.4% |
|
60.0% |
39.0% |
40.0% |
27.4% |
|
Alpiq's share of total equity |
688 |
160 |
154 |
317 |
1,319 |
711 |
153 |
133 |
317 |
1,314 |
|
|
|
|
|
|
|
|
|
|
|
Income |
168 |
123 |
433 |
538 |
1,262 |
166 |
103 |
800 |
887 |
1,956 |
Expenses |
– 194 |
– 106 |
– 403 |
– 534 |
– 1,237 |
– 189 |
– 106 |
– 888 |
– 900 |
– 2,083 |
Net income |
– 26 |
17 |
30 |
4 |
25 |
– 23 |
– 3 |
– 88 |
– 13 |
– 127 |
Other comprehensive income |
1 |
|
38 |
14 |
53 |
– 6 |
1 |
– 54 |
– 48 |
– 107 |
Total comprehensive income |
– 25 |
17 |
68 |
18 |
78 |
– 29 |
– 2 |
– 142 |
– 61 |
– 234 |
Alpiq's share of total comprehensive income |
– 15 |
7 |
28 |
5 |
25 |
– 18 |
– 1 |
– 56 |
– 17 |
– 92 |
|
|
|
|
|
|
|
|
|
|
|
Dividends received |
7 |
|
7 |
6 |
20 |
8 |
|
7 |
6 |
21 |
1 In the previous year, Kernkraftwerk-Beteiliungsgesellschaft AG (KBG) was reported under "Material partner power plants"; from the current year, KBG is disclosed under "Other immaterial partner power plants". In addition, the tables have been adjusted slightly to enhance the information provided.
The associates classified as material by Alpiq comprise only strategically significant partner power plants. Market values are not available for any of these companies.
Total partner power plants and other associates (Alpiq share)
|
|
|
|
|
|
|
|
|
|
31 Dec 2023 |
31 Dec 2022 (adjusted 1 ) |
||||||
CHF million |
Individually disclosed partner power plants |
Other immaterial partner power plants |
Other associates |
Total |
Individually disclosed partner power plants |
Other immaterial partner power plants |
Other associates |
Total |
Non-current assets |
4,734 |
1,194 |
40 |
5,968 |
4,675 |
1,232 |
33 |
5,940 |
Current assets |
380 |
21 |
16 |
417 |
337 |
20 |
14 |
371 |
Non-current liabilities |
3,405 |
339 |
22 |
3,766 |
3,489 |
315 |
12 |
3,816 |
Current liabilities |
390 |
69 |
5 |
464 |
209 |
97 |
6 |
312 |
Total equity |
1,319 |
807 |
29 |
2,155 |
1,314 |
840 |
29 |
2,183 |
|
|
|
|
|
|
|
|
|
Income |
463 |
146 |
32 |
641 |
691 |
125 |
33 |
849 |
Expenses |
– 458 |
– 173 |
– 33 |
– 664 |
– 743 |
– 137 |
– 34 |
– 914 |
Net income |
5 |
– 27 |
– 1 |
– 23 |
– 52 |
– 12 |
– 1 |
– 65 |
Other comprehensive income |
20 |
2 |
1 |
23 |
– 40 |
– 3 |
– 5 |
– 48 |
Total comprehensive income |
25 |
– 25 |
0 |
0 |
– 92 |
– 15 |
– 6 |
– 113 |
1 In the previous year, Kernkraftwerk-Beteiliungsgesellschaft AG (KBG) was reported under "Material partner power plants"; from the current year, KBG is disclosed under "Other immaterial partner power plants". In addition, the tables have been adjusted slightly to enhance the information provided.
Accounting policies
An associate is a company over which the Alpiq Group is in a position to exercise significant influence through participation in the financial and operating policy decisions of the investee, and that is neither a subsidiary nor a joint arrangement. Significant influence is generally presumed with a share of voting rights ranging from 20% to 50%. Where appropriate, companies may likewise be accounted for as associates in the consolidated financial statements by applying the equity method, even if the ownership interest is less than 20%. This applies especially where the Alpiq Group is represented in the authoritative decision-making bodies, such as the Board of Directors, or participates in operating and financial policymaking. The equity method is also applied to assess companies over which Alpiq, despite having a related ownership interest of 50% or greater, has no control, as a result of restrictions in articles of association, contracts and organisational rules.
With regard to associates, Alpiq makes the distinction between partner power plants and other associates. The partner power plants are companies that construct, maintain or operate nuclear power plants or hydropower plants or manage the energy purchase rights. Goodwill may also arise through purchase of investments in associates and corresponds to the difference between the cost of investment and the Group’s share of the fair value of the identifiable net assets. Such goodwill forms part of the carrying amount at which the associate is recognised.
The reporting date of a few partner power plants (hydrological year) and other associates differs from that of the Group. The most recent available financial statements of these companies are used to prepare the consolidated financial statements of the Alpiq Group. Significant transactions and events that occur between the end of the most recent reporting period and 31 December are taken into account in the consolidated financial statements. To be included in the consolidated financial statements, the financial statements of the associates are prepared applying uniform accounting policies. Reconciliation statements are prepared for companies that have no IFRS financial statements.
4.4 Inventories
4.4 Inventories
CHF million |
31 Dec 2023 |
31 Dec 2022 |
CO 2 and other certificates |
11 |
25 |
Gas |
10 |
15 |
Consumables, supplies and fuels |
12 |
11 |
Total |
33 |
51 |
Accounting policies
Inventories held for own use mainly comprise gas used for electricity generation at thermal plants, materials for providing operating services, and certificates. Gas is initially recognised at the lower of weighted average cost and net realisable value. Certificates for own use are initially recognised at cost of purchase and further carried at amortised costs. Any surplus certificates no longer needed for own use are reclassified and measured at their fair value. The other inventories are stated at the lower of cost (calculated applying the FIFO method or the average cost method) and net realisable value. Certificates held for trade with the purpose of generating profit from price fluctuations or dealer’s margins are recognized at fair value through profit and loss and are presented in the line item “inventory at fair value”.
4.5 Receivables and other current assets
4.5 Receivables and other current assets
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Trade receivables 1 |
1,256 |
2,153 |
Prepayments to suppliers |
12 |
12 |
Other current receivables |
546 |
1,716 |
Total |
1,814 |
3,881 |
1 Of which an amount of CHF 0,750 million (previous year: CHF 1,187 million) originates from contracts with customers pursuant to IFRS 15.
Alpiq usually grants its customers a payment term of no longer than 30 days. In certain cases, the payment term may be 60 days. Trade receivables and trade payables with the same counterparty are offset, provided that a netting agreement exists and payment is made on a net basis. For more information, see note 3.1.
Age analysis of trade receivables
|
|
|
||||
|
31 Dec 2023 |
31 Dec 2022 |
||||
CHF million |
Gross |
Allowance for ECL |
Net (balance sheet) |
Gross |
Allowance for ECL |
Net (balance sheet) |
Not past due |
1,213 |
|
1,213 |
2,032 |
– 5 |
2,027 |
1 – 90 days past due |
36 |
– 2 |
34 |
186 |
– 74 |
112 |
91 – 180 days past due |
2 |
– 1 |
1 |
8 |
|
8 |
181 – 360 days past due |
5 |
– 1 |
4 |
20 |
– 18 |
2 |
Over 360 days past due 1 |
213 |
– 209 |
4 |
141 |
– 137 |
4 |
Total |
1,469 |
– 213 |
1,256 |
2,387 |
– 234 |
2,153 |
1 Overdue trade receivables mainly related to the years 2021 and 2022
Allowance for expected credit loss (ECL) on trade receivables
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Carrying amount before impairment |
1,469 |
2,387 |
Of which, impaired |
– 213 |
– 234 |
Impairment at beginning of year |
– 234 |
– 216 |
Impairment charge for the year 1 |
– 4 |
– 65 |
Amounts written off as uncollectible |
10 |
27 |
Unused amounts reversed |
1 |
10 |
Currency translation differences |
14 |
10 |
Impairment at end of year 2 |
– 213 |
– 234 |
1 Of which an amount of CHF – 3 million (previous year: CHF – 2 million) originates from contracts with customers pursuant to IFRS 15.
2 Of which an amount of CHF – 27 million (previous year: CHF – 29 million) originates from contracts with customers pursuant to IFRS 15.
The impairment comprises specific bad debt allowances of CHF 213 million (previous year: CHF 234 million) that were recognised for receivables with concrete indications of a default risk (e.g. insolvency). In accordance with the expected credit loss model, it also includes general bad debt allowances of CHF 0 million (CHF 1 million) due to the inherent default risk for receivables. For this, individual probabilities of default are calculated for each counterparty amounting to between 0.0% and 3.56% (previous year: between 0.0% and 19.0%), depending on the maturity of the trade receivables.
Trade receivables classified by credit rating
|
|
|
|
31 Dec 2023 |
|
|
in CHF million |
in % |
Counterparties with credit rating AAA |
12 |
0.9% |
Counterparties with credit rating AA |
3 |
0.3% |
Counterparties with credit rating A |
298 |
23.7% |
Counterparties with credit rating BBB |
490 |
39.0% |
Counterparties with credit rating BB |
169 |
13.5% |
Counterparties with credit rating B |
13 |
1.1% |
Counterparties with credit rating CCC |
12 |
0.9% |
Counterparties not rated 1 |
260 |
20.7% |
Total |
1,256 |
100.0% |
1 Comprises unrated counterparties (i.e. mainly end consumers)
Accounting policies
The accounting policies for financial receivables are disclosed in note 3.2.
4.6 Cash and cash equivalents
4.6 Cash and cash equivalents
CHF million |
31 Dec 2023 |
31 Dec 2022 |
Cash at bank and in hand |
1,236 |
1,374 |
Term deposits with a maturity of 90 days or less |
337 |
100 |
Total |
1,573 |
1,474 |
Cash at bank and in hand include foreign subsidiaries’ bank accounts with a total balance of EUR 25 million, converted CHF 24 million, (previous year: EUR 72 million, converted CHF 71 million), which is pledged in accordance with regulations in local finance agreements. These funds are therefore not freely available in full for the Alpiq Group.
4.7 Provisions
4.7 Provisions
CHF million |
Onerous contracts |
Decommis- sioning own power plants |
Other |
Total |
Non-current provisions at 1 January 2023 |
14 |
49 |
23 |
86 |
Current provisions at 1 January 2023 |
8 |
|
9 |
17 |
Provisions at 1 January 2023 |
22 |
49 |
32 |