Financial results in 2018
Financial flows within Alliander
Alliander’s income is made up of approximately 85% income from the regulated activities of Liander and 15% other income, the latter being income from rental of large-user meters, income related to new activities, activities outside the Netherlands and from the activities of other companies outside the regulated energy sector. Network operator Liander will be publishing its own annual report on its performance in 2018 during the second quarter of 2019.
The main expenditure relates to maintenance work on the electricity and gas distribution networks and the operating expenses connected with all other activities. On top of that, we invest in excess of half a billion euros a year in capital projects, mainly concerned with replacing existing assets and expanding the networks, as well as the installation of smart meters. This investment equates to roughly 30% of our total expenditure. Additionally, there is the dividend payable to our shareholders and the interest payments to the holders of the subordinated perpetual bond loan and the providers of borrowed capital. The dividend and interest payments for 2018 together amounted to approximately 8% of our overall expenditure. Finally, we pay sufferance tax charges to municipal authorities and corporate income tax to the Dutch Tax & Customs Administration. This accounts for another 10% of our outgoings approximately.
Cost-effective and efficient operations
In order to continue being able to make responsible investments in the future, Alliander is trying hard to bring costs down. In 2018 we launched an organisation-wide long-term programme aimed at identifying potential savings and reducing the cost base going forward. We are encouraging greater cost-awareness throughout the organisation by critically focusing on what is really necessary for performing the job we do – without compromising safety or quality. We are also exploring how we can work as efficiently as possible so as to be able to do more as well as cut costs. Many initiatives are accordingly aimed at simplifying our organisation, processes and activities. We also stopped automatically filling vacancies in the corporate staff departments and support services in 2018, which has led to a drop in the number of indirect staff, and we are not so ready to take on temporary staff either.