VISION 2050 - Fluvius path to climate neutrality
Moody's Corporate Rating
of Fluvius
Credit Strengths:
•
A3 (stable)
robust credit quality of the DSOs that own the company
low business risk profile of regulated E & G distribution network operations in
Flanders
Implementation of measures mitigating the impact of lower allowed returns in
the 2021-2024 regulatory period, including an new dividend policy
transparent and generally supportive regulatory framework, albeit relatively
new and untested in the context of European regulated network peers
two-notch uplift for potential state support based on high dependence
between Fluvius and its shareholding 300 municipalities
Credit Challenges:
relatively weak position in rating category with financial profile at the bottom
of A3 range
decreasing return over time on revaluation surpluses over 8 years
cost savings target of EUR 150 million by 2024 imposed by regulator will trigger
additional efficiency requirements from 2021
MOODY'S
INVESTORS SERVICE
Rating Action: Moody's changes Fluvius' outlook to stable, affirms A3 ratings
29 Oct 2021
Paris, October 29, 2021 - Moody's Investors Service ("Moody's") has today changed the outlook of Fluvius
System Operator CV ("Fluvius") to stable from negative. Concurrently, the rating agency has affirmed Fluvius's
backed (P)A3 senior unsecured MTN programme ratings, and its A3 backed long-term issuer rating and
backed senior unsecured ratings.
RATINGS RATIONALE
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook reflects Moody's expectation that Fluvius will maintain financial metrics above the minimum
guidance for its A3 rating, namely Funds from operations (FFO)/net debt above 8% and net debt / fixed assets
less revaluation surpluses not above 80%, over the 2021-24 regulatory period. This follows decisions by the
Boards of Fluvius and its shareholders to implement measures mitigating the impact of lower allowed returns in
the 2021-24 regulatory period, including a new dividend policy, and the allowance of c.EUR22 million of
advances for smart meter investments in 2022 by the Flemish energy regulator, the VREG. Nevertheless,
Fluvius is expected to remain relatively weakly positioned in its rating category, with a financial profile at the
bottom of the range expected for an A3 rating during the regulatory period.
The mitigating measures voted by the Boards of Fluvius and its shareholders include a dividend policy for
regulated electric and gas activities whereby each of Fluvius'shareholders with an equity/Regulated Asset
Base ratio above 40% (in Belgian GAAP) will receive up to 120% dividend payout while those shareholders
with equity/RAB (in Belgian GAAP) below 40% will receive an 80% dividend payout. Other mitigating measures
include additional financial criteria for sanital aunandition which un aumant to he shout 150/ lower than mur
Rating history:
12 Oct 2011 - 13 Mar 2014: A1 (negative)
13 Mar 2014 - 2 Dec 2014: A1 (stable)
•
2 Dec 2014 - 14 Dec 2016: A1 (negative)
.
14 Dec 2016 - 29 Jun 2018: A3 (stable)
•
29 Jun 2018-25 July 2019: A3 (positive)
•
25 Jul 2019 - 10 Sep 2020: A3 (stable)
fluvius.
from: Moody's Press Release
(29 October 2021)
10 Sep 2020 - 29 Oct 2021: A3 (negative)
since 29 Oct 2021: A3 (stable)View entire presentation