Income statement for 2017

The profit after tax for 2017 was €203 million (2016: €282 million). The decrease was due mainly to the book profit of €176 million included in the result for 2016 on the sale of the network company Endinet to Enexis.

Profit after tax from continuing operations excluding incidental items was €206 million, which is €74 million higher compared with 2016 (€132 million). This was mainly as a result of higher operating income.

Operating income in 2017 was up by €117 million compared with 2016, at €1,840 million. This was mainly because of an increase in regulated revenue resulting from an increase in regulated tariffs. This increase includes compensation for prior-year sufferance tax charges.

Total operating expenses for 2017 were €1,535 million, which is €19 million higher than in 2016. This increase was chiefly a consequence of higher employee benefits and higher costs passed on from the transmission network operator TenneT. Alliander continues to work towards increased effectiveness and efficiency.

The significant trends in income and expenses are discussed below in greater detail. The amounts presented included Endinet until 2015. As a result of the exchange of service areas on 1 January 2016, figures from that date onwards are presented including Friesland and the Noordoostpolder (FNOP) and excluding Endinet.

Operating profit
  • 1 There has been a change of view which results in the transfer of an amount of €46 million from other revenue to operating contributions and other operating income in the comparative figures for 2015.


Revenue in 2017 rose by €113 million compared with the previous year, from €1,584 million to €1,697 million. Higher tariffs and an incidental gain from catch-up sufferance taxes had a positive effect on revenue.

Most of our revenue is generated by regulated activities. Alliander also has non-regulated activities, such as those of Liandon and Kenter.

Maintenance costs and network investments
Operating expenses

Network investments and maintenance costs

The above graph shows the expenditure on maintenance costs and network investments, including meters, over the past five years. Total expenditure on network investments and maintenance costs, at €816 million, was an increase of €21 million compared with 2016 (€795 million). The increase came mainly from an expansion of the working package. Total expenditure on network maintenance costs and investment in district heating networks (€3 million) was also higher than in 2016.

Dilemma: effective investment, but also in good time

Network managers are assessed on the effectiveness of their capital expenditure. This means for example that when Liander decides on an investment, it looks carefully at how necessary it is. The energy transition makes it ever more difficult to predict when and where infrastructure needs to be expanded. There are, for example, many plans for solar farms but only those which receive an SDE+ grant are actually built. This is done within six months once the grant has been awarded. In general, strengthening and expanding infrastructure takes one to three years. To avoid infrastructure hindering the energy transition, it is important that the location of solar and wind farms is known sooner. Network managers and local authorities must draw up joint energy transition plans which underlie effective investment by the network manager. Grants should be awarded in line with this.

Operating expenses

Total operating expenses rose from €1,516 million in 2016 to €1,535 million in 2017. The increase was the net effect of:

  • increased costs of transport capacity and restrictions amounting to €13 million due to higher charges and an increase in volumes;

  • an increase of €51 million in employee benefits. This increase concerns both permanent and external employee benefits and came mainly from a rise in the number of FTEs and general pay rises;

  • the increase was partly offset by a fall of €12 million in sufferance taxes following new legislation preventing new municipalities from levying these taxes and stopping those already levying these taxes from raising them;

  • the cost of hiring contractors, materials usage and other costs fell by €11 million, mainly because of capacity shortages;

  • finally, own work capitalised as assets under construction rose by €29 million, mainly as a result of increased investment.

The significant trends in expenses are discussed below in greater detail.

Employee benefit expense (own and contract staff)
Sufferance tax

Employee benefit expense

The increase (€51 million) in employee benefit expense for permanent staff and external personnel compared with the preceding year was due mainly to general pay increases and a rise in staff numbers. The rise in staff numbers was concentrated in Liander and Liandon, where activity increased. Finally, employee benefit expenses rose with the increased use of external personnel, mainly because of capacity shortages.

Sufferance tax

The amount of sufferance tax charges fell by €12 million compared with 2016, to €137 million. The trend in the amount of sufferance tax payable over the past five years is illustrated in the graph above. The increase until 2016 was largely because more and more municipal authorities were levying sufferance tax on Liander and also that sufferance tax rates have risen. The fall of €12 million in sufferance tax charges in 2017 was mainly a result of a release from provisions related to successful legal proceedings.

Costs of grid losses - electricity
Transmission capacity costs

Transmission capacity costs

The costs of providing transmission capacity passed on by electricity transmission network operator TenneT showed a further increase of €13 million in 2017 to €188 million (2016: €175 million). This increase is mainly the effect of higher tariffs charged by TenneT and an increase in volumes.

Third-party interest charges


The depreciation charges and impairment losses on non-current assets amounted to €396 million, which is an increase of €1 million compared with the preceding year (2016: €395 million). The increase is a consequence of accelerated depreciation of traditional metering equipment as a result of the faster large-scale offering of smart meters. There was, however, a reduction in impairment losses.

The construction of energy networks is a long-term investment for us, based on an estimated useful life of 40 to 50 years. The Netherlands wants to become climate neutral by 2050 by replacing natural gas for heating with sustainable heating solutions over the next 35 years. Our question, therefore, is whether and, if so, which part of our gas distribution networks will remain important in the long term for the distribution of, say, alternative gases. Given the current useful life of 40 to 50 years, developments in the heat transition (such as gas-free districts) will also lead to part of the gas network being taken out of use prematurely. The regulator ACM is holding discussions on the financial implications of this with Liander and the other network operators.

Interest expense

Lower interest rates meant that the interest expense on loans from third parties was down by €3 million in 2017, at €48 million.

Results from associates and joint ventures

In October 2017, Alliander sold its shares in its associate The New Motion to Shell. The book profit on this sale was €11.8 million recognised in the financial statements as Result from associates. The shares in Redstack and Ziut were sold in 2017.