business plan for 2004 - EDP

2003 - Annual Report - EDP
The following chart shows the simplified structure of
HidroCantábrico:
Generation
Distribution
Supply
Trading
Special Regime
Gas
Telecommunications
HidroCantábrico
Elerebro
D.E. Bahia Cadiz
AIE Trillo
HC Distribuicion
HC Energia
>> 1.2.3 HidroCantábrico’s Business
Cantábrico Trading
Genesa
Sinae
Hidráulica de Santillana
Canal Energia
NaturCorp
Telecable de Asturias
Retecal
As determined in the merger project between
HidroCantábrico and Adygesinval, S.A., which came
about in December 2002, the effects of this merger on the
annual accounts were backdated to January 2002. In
practice, it was only in 2003 that the new corporate
structure came up to cruising speed, although the 2002
accounts were already based on the merged companies
from an economic and fiscal standpoint.
At corporate level, the main event of the year was related
to the acquisition of 62% of NaturCorp Inversiones
during the third quarter of 2003. This company wholly
owns NaturCorp Multiservicios, acquired in turn from
Ente Vasco de la Energia in the wake of the privatisation
process implemented by the regional government.
The acquisition of NaturCorp involved paying up about
€251 million in cash and 100% of the shares in Gas de
Astúrias, valued at €322 million.
In addition to the investments made in the gas sector, the
other priority growth area established for
HidroCantábrico was renewable energies. The focus on
this sector led to an increase of the holding in Sinae,
through the purchase of 14.3% of this company for
approximately €11 million. Following this acquisition the
HidroCantábrico Group now controls 80% of Sinae, a
company engaged in development, construction
management, operation and maintenance of assets in the
renewable energies area, with a particular focus on wind
farms.
Still in connection with Sinae, a strategic realignment was
undertaken in 2003 leading to a decision to increase its
share capital and to significantly reduce its staff as a
result of termination of non-core activities in the areas of
renewable energies consultancy, engineering and
installation projects. Following the implementation of
these measures, Sinae was left with the human and
financial resources required to pursue the Group’s
strategic goals in Spain where, in the wind farm business,
the intention is to achieve a market share in the coming
years equal to that held by the group in the production
and distribution of energy under the normal regime.
In the wake of a regulatory decision, HidroCantábrico
and the three other major electricity companies in Spain
reduced their holding in REE from 10% to 3% during
2003, by means of a public offering that provided a cash
inflow of €102.5 million. In keeping with a strategy of
concentration on core businesses, other assets considered
not strategic by the group were sold, particularly the
HidroCantábrico holding in CMG – Companhia
Mexicana de Gás and other minority holdings in projects
in the area of renewable energies in which
HidroCantábrico did not have a controlling interest.
At management level emphasis is given to the various
initiatives undertaken by the team responsible for the
management of the company, in particular:
• Implementation of a new strategic procurement
management model, which, through greater
centralisation and rationalisation, has provided major
economies without any reduction of the quality of the
service provided to internal customers;
• Introduction of a new competence and human
resources management model drawn up on the basis of
a diagnosis of the organisational environment with a
view to the preparation of the group, its senior staff in
particular, for the challenges inherent in providing
services in a free
market, through the
development of skills
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