Keeping his Foot on the Gas

How Enagás is riding out the crisis

25/01/2013

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"By keeping our promises we have been able to attract foreign capital at a difficult time and we are changing the company to be more open-minded and to operate outside Spain," Antonio Llardén, executive chairman of Enagás, told a meeting in the Global Leadership Series in Barcelona today.

The session, titled "New Strategic Challenges in the Energy Industry: the Case of Enagás" was opened by Dean Jordi Canals who talked about the measures Enagás had taken to adapt to the crisis in the difficult and closely regulated energy sector.

Enagás is the leading natural gas transmission company in Spain. It has been a listed company since 2002 and in 2011 recorded a net profit of €364m. Some 75 percent of its shareholders are not Spanish.

When he took over as executive chairman six years ago, Llardén said he was asked to double the company’s investment. He has managed to double its value, in spite of the crisis which forced the company to scale back investments which are the main driver of revenue. Energy companies are capital intensive and it became very difficult to raise finance, he said. Furthermore, many institutional investors were forced to sell their stake because of their own difficulties. The company’s credit ratings also suffered, along with Spain’s, but the company now has better ratings than the nation.

Llardén said he designed a new strategy to confront the crisis, built on six pillars: an efficiency drive; a tight grip on operating costs and increased productivity; unlocking the value of the company’s know-how with training and support along with the acquisition of core business assets; developing international activity; a change in the financial structure with diversification of financial sources and a new debt structure – making it less dependent on banks, more on capital markets; and finally, adaptation of corporate governance policy.

Llardén emphasised the importance of a revamped corporate governance in helping the company to weather the crisis.