(Adds details, comments, 2017 earnings)
MILAN, March 14 (Reuters) - Italian gas grid company Snam on Wednesday raised its investment and profit targets to 2021 after a strong 2017, helped by healthy demand in Europe and efficiency gains.
Snam, which makes most of its revenue from gas transport, is keen to play a leading role in integrating Europe’s grids and making Italy a European gas hub.
Europe’s biggest gas pipeline operator plans to invest 5.2 billion euros ($6.4 billion) between 2017 and 2021, up 10 percent from a previous target, and expects net profit to grow 4.5 percent on average per year, compared with a 4 percent goal disclosed previously.
Chief Executive Marco Alvera said in a statement that investment would be tilted toward Italy’s grid system, “which on several occasions over the last few months has shown greater reliability compared to other European countries.”
Snam, controlled by Italian state lender Cassa Depositi e Prestiti (CDP) through a vehicle that also includes the State Grid Corporation of China, extended to 2019 its dividend policy which projects annual increases of 2.5 percent. For last year, the company proposed a dividend payment of 0.2155 euros per share.
The planned investments and dividend policy will be entirely financed through cash, Alvera said.
It said it would seek approval at its ordinary shareholder meeting for a share buyback plan worth up to 500 million euros.
Last year Snam’s adjusted net profit rose 11.2 percent to 940 million euros, broadly in line with a Thomson Reuters SmartEstimate of 934 million euros. For this year, Snam expects net profit to rise to around 975 million euros.
$1 = 0.8068 euros Reporting by Giulio Piovaccari; Editing by Susan Fenton