Financial results in 2019
Financial flows within Alliander
Alliander’s income is made up of approximately 85% income from the regulated activities of network operator Liander and 15% other income, the latter being income from rental of large-user meters, income related to new activities, and income from activities outside the Netherlands and from the activities of other companies outside the regulated energy sector. In the second quarter of 2020, network operator Liander will publish its own, separate annual report on its performance in 2019.
The main expenditure relates to maintenance work on the electricity and gas networks and the operating expenses connected with all other activities. We invested in excess of €800 million in 2019, mainly for the replacement and expansion of our networks, as well as the installation of smart meters. This investment equates to roughly 35% 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 other financiers. The dividend and interest payments for 2019 together amounted to approximately 7% 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 9% of our outgoings approximately.
Cost-effective and efficient operations
Alliander is committed to reducing costs to ensure that we have sufficient financial scope to continue to invest responsibly in the future as well. In 2019 we continued with the company-wide cost-saving programme launched in 2018.
The foundation of the programme is to pay ongoing attention to increasing cost awareness throughout the organisation and to critically consider which activities are really necessary for performing the job we do – without compromising safety or quality.
Furthermore, the programme focuses on simplifying and improving processes, by standardising and digitising the activities for example. We also focus on refining procurement agreements and reducing indirect costs, by adjusting internal and external policies and reducing the deployment of contract staff for example.
These measures saved the company €65 million at year-end 2019 compared to 2017.