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        • Regulatory Result

    Cost-efficiency - Hungary

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    Terminal charging zone

    Unit cost (KPI#1)

    Actual and determined data
    Total costs - nominal (M€) 2020-2021 2022 2023 2024
    Actual costs 35 24 27 NA
    Determined costs 36 25 28 31
    Difference costs −1 0 −2 NA
    Inflation assumptions 2020-2021 2022 2023 2024
    Determined inflation rate NA 3.5% 3.3% 3.0%
    Determined inflation index NA 118 121.9 125.5
    Actual inflation rate NA 15.3% 17.0% NA
    Actual inflation index NA 133.4 156.1 NA
    Difference inflation index (p.p.) NA +15.4 +34.3 NA
    Focus on unit cost

    AUC vs. DUC

    In 2023, the terminal AUC was -24.2% (or -27 181.05 HUF2017, -87.97 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-21.3%, or -1 650.5 MHUF2017, -5.3 M€2017) and higher than planned TNSUs (+3.9%). It should be noted that actual inflation index in 2023 was +34.3 p.p. higher than planned.

    Terminal service units

    The difference between actual and planned TNSUs (+3.9%) falls outside the ±2% dead band, but does not exceed the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional terminal revenues is therefore shared between the ANSP and the airspace users.

    Terminal costs by entity

    Actual real terminal costs are -21.3% (-5.3 M€2017) lower than planned. This is the result of lower costs for the main ANSP, HungaroControl (-21.7%, or -5.3 M€2017) and the MET service provider (-22.4%, or 0.04 M€2017) and higher costs for the NSA (+0.5%, or +0.002 M€2017).

    Terminal costs for the main ANSP at charging zone level

    Significantly lower than planned terminal costs in real terms for HungaroControl in 2023 (-21.7%, or -5.3 M€2017) result from:
    - Significantly lower staff costs in real terms (-18.7%), but higher in nominal terms (+4.2%), due to a higher than expected inflation which led to an increase in ATCO and non-ATCO salaries above the plan, albeit partially offset by lower-than-expected headcount;
    - Significantly lower other operating costs in real terms (-17.7%), but higher in nominal terms (+5.4%), due to higher energy prices, external service charges, local business taxes and liability insurance premiums;
    -Significantly lower depreciation costs (-56.1%), due to the postponement or late implementation of investments such as the mirTWR project;
    - Significantly higher cost of capital (+52.2%) mainly due to the recognition of the pension related obligations towards the ATCO’s in the employed capital.

    Actual unit cost incurred by the users (AUCU) (PI#1)

    AUCU components (€/SU) – 2023
    Components of the AUCU in 2023 €/SU
    DUC 333.83
    Inflation adjustment 59.88
    Cost exempt from cost-sharing −50.43
    Traffic risk sharing adjustment −4.07
    Traffic adj. (costs not TRS) −0.28
    Finantial incentives 1.61
    Modulation of charges 0.00
    Cross-financing 0.00
    Other revenues −5.24
    Application of lower unit rate 0.00
    Total adjustments 1.46
    AUCU 335.29
    AUCU vs. DUC +0.4%
    Cost exempt from cost sharing by item - 2023 €'000 €/SU
    New and existing investments −3,617.6 −50.46
    Competent authorities and qualified entities costs 1.8 0.03
    Eurocontrol costs 0.0 0.00
    Pension costs 0.0 0.00
    Interest on loans 0.0 0.00
    Changes in law 0.0 0.00
    Total cost exempt from cost risk sharing −3,615.7 −50.43
    Focus on AUCU

    The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (127 810.68 HUF or 335.29 €) is +0.4% higher than the nominal DUC (127 252.59 HUF or 333.83 €). The difference between these two figures (+558.10 HUF/SU or +1.46 €/SU) is due to:
    - the positive inflation adjustment resulting from higher than planned inflation (+22 826.46 HUF/SU or +59.88 €/SU);
    - the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-19 225.13 HUF/SU or -50.43 €/SU);
    - the deduction of the traffic risk sharing adjustments (-1 552.06 HUF/SU or -4.07 €/SU);
    - the deduction of the traffic adjustment (-107.55 HUF/SU or -0.28 €/SU) for the costs not subject to traffic risk sharing;
    - financial incentives (+612.66 HUF/SU or +1.61 €/SU); and
    - the deduction of the other revenues (-1 996.27 HUF/SU or -5.24 €/SU).
    The share of the regulatory result in the AUCU (before the deduction of other revenues) is 23.3%.

    Regulatory result (RR)

    Focus on regulatory result

    HungaroControl net gain on activity in the Hungary terminal charging zone in the year 2023

    HungaroControl reported a net gain of +1 012.6 MHUF, as a combination of a gain of +749.3 MHUF arising from the cost sharing mechanism, with a gain of +219.4 MHUF arising from the traffic risk sharing mechanism and a gain of +43.9 MHUF relating to financial incentives.

    HungaroControl overall regulatory results (RR) for the terminal activity

    Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+1 012.6 MHUF) and the actual RoE (+1 142.2 MHUF) amounts to +2 154.8 MHUF (23.7% of the terminal revenues). The resulting ex-post rate of return on equity is 13.5%, which is higher than the 8.0% planned in the PP.

     
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