Press Release

  • EBITDA €443.7m (up 25.6% on €353.3m of H1 2015)

  • EBIT €274.1m (up 35.2% on €202.7m of H1 2015)

  • Net profit €149.5m (up 50.6% on €99.3m of H1 2015)

  • Net debt €2,131.9m (€2,010.1m at 31 December 2015)

  • Investment €220.8m (up 31.8% on €167.5m of H1 2015)

     

    Rome, 28 July 2016 – The Board of Directors of ACEA SpA, chaired by Catia Tomasetti, has approved the interim report for the six months ended 30 June 2016 (“H1 2016”).

    “Implementation of a major investment programme continued in the first half of 2016,” commented Acea’s Chairwoman, Catia Tomasetti, “with the aim of expanding and maintaining our water and electricity networks. This is having a positive impact on the local area and on the quality of the services offered. Acea thus continues to be driving force for growth in the city of Rome and the other cities/other territories in which we operate.”

    “The innovation and technological transformation resulting from Project Acea 2.0,” stated Acea’s CEO, Alberto Irace, “has enabled us to boost organisational and operational efficiency at a faster pace and to optimise the management of working capital. As a result, the first half of the year has seen the Company once again beat the challenging objectives set in the Business Plan. These results allow us to confirm our previous EBITDA guidance for 2016, which we expect to be towards the upper end of the range previously announced to the market.”

    FINANCIAL HIGHLIGHTS

(€m)

H1 2015

H1 2016

%inc./(dec.)

Consolidated revenue

1,441.1

1,386.7

-3.8%

EBITDA

353.3

443.7

+25.6%

EBIT

202.7

274.1

+35.2%

Profit/(Loss) before tax

156.8

232.3

+48.2%

Group net profit/(loss) (before non-controlling interests)

103.6

154.3

+48.9%

Group net profit/(loss) (after non-controlling interests)

99.3

149.5

+50.6%

 

(€m)

30 June 2015

 

30 June 2016

 

%inc./(dec.)

Investment

167.5

220.8

+31.8%

 

(€m)

30 June 2015

(a)

31 Dec 2015

(b)

30 June 2016

(c)

% inc./(dec.)

(c/a)

% inc./(dec.)

(c/b)

Net debt

2,128.9

2,010.1

2,131.9

+0.1%

+6.1%

Equity

1,518.6

1,596.1

1,631.4

+7.4%

+2.2%

Invested capital

3,647.5

3,606.2

3,763.3

+3.2%

+4.4%

 

 

ACEA GROUP’S RESULTS FOR H1 2016

Revenue of €1,386.7m is down 3.8% on H1 2015. The reduction primarily reflects a decline in the volume of electricity sold on the free market, following the decision to take a more selective approach to our energy customer base. This has led us to focus attention on the more profitable small business and mass market segments.

Consolidated EBITDA is up 25.6% to €443.7m. The result includes recognition of income of €63.3m in the Grids segment (of which €36.0m due to investment carried out in previous years), linked to the regulatory change introduced by AEEGSI Resolution 654/2015, which has eliminated the so-called regulatory lag. This has resulted in recognition of non-recurring income of approximately €90m for the year. After stripping out this component, EBITDA is up 7.7%, continuing the positive trend witnessed in the first quarter of the year, thanks to the positive contribution from the Water and Energy segments, to the steps taken to boost operational efficiency and the re-engineering of operating processes.

Contributions to total EBITDA are as follows: Water 37%, Grids 41%, Energy 16% and Environment 6%.

Consolidated EBIT is up from the €202.7m of H1 2015 to €274.1m for H1 2016 (an increase of 35.2%). In addition to the improvement in EBITDA, this result reflects a reduction in bad debt provisions due to an overall improvement in the collection of receivables. Provisions, amortisation and depreciation have risen, the latter due to increased investment.

Finance costs are down €6.8m (12.0%) to €49.8m.

Net profit attributable to owners of the Parent, after non-controlling interests, amounts to €149.5m (up 50.6% on the €99.3m of H1 2015). The tax rate is 33.6% (broadly in line with H1 2015).

The Group’s investment in H1 2016 amounts to €220.8m (€167.5m in H1 2015), with 82% of this relating to our regulated businesses and focused on expansion and maintenance of the water and electricity networks. Investment breaks down as follows: Water €100.6m; Grids €80.1m; Energy €27.4m; Environment €8.0m; Parent Company €4.7m.

Net debt at 30 June 2016, amounting to €2,131.9m, is up €121.8m on the figure for the end of 2015. Net debt is substantially stable compared with 30 June 2015, despite the notable increase in investment and the increase in dividend, also thanks to rigorous management of working capital, which has declined by approximately €100m year on year.

 

SEGMENT INFORMATION FOR H1 2016
Environment
The Environment segment contributed EBITDA of €29.2m, up 7.7% on H1 2015 (€27.1m). The improvement reflects positive performances from ARIA and SAO.

ENVIRONMENT – operational highlights

H1 2015

H1 2016

Treatment and disposal (‘000 tonnes)

380

411

WTE electricity sold (GWh)

132

134


Energy
The Energy segment’s EBITDA is up 24.7% to €69.7m. The improvement reflects growth in earnings from enhanced protection market sales, thanks to an increase in the sale price. The effect of the reduction in the volume of electricity sold on the free market was partially offset by the improvement in the margin resulting from the strategy of boosting our presence in the small business and mass market segments.
EBITDA from production reflects falling energy prices and a decline in the volume of energy produced.

ENERGY – EBITDA (€m)

H1 2015

H1 2016

Energy segment

55.9

69.7

Production

18.3

17.5

Sales

37.6

52.2

 

ENERGY – operational highlights

H1 2015

H1 2016

Electricity production (GWh)

282

211

Electricity sold (GWh)

4,793

4,205

Enhanced protection market

1,526

1,364

Free market

3,267

2,841

Gas sold (million m3)

78

66


Water
The Water segment’s EBITDA is up from the €146.7m of H1 2015 to €164.5m for H1 2016 (up 12.1%). The improvement reflects the efficiencies achieved and tariff trends.


Grids
EBITDA for the Grids segment is up from the €123.3m of H1 2015 to €180.7m for H1 2016 (up 46.6%). The increase reflects recognition of the above income linked to the regulatory change introduced by AEEGSI Resolution 654/2015, which has eliminated the so-called regulatory lag.

GRIDS – operational highlights

H1 2015

H1 2016

Electricity distributed (GWh)

5,087

4,945

 

Parent Company
The Parent Company’s cost cutting drive is continuing, with the Company closing the first half with negative EBITDA of €0.4m.

 


EVENTS AFTER 30 JUNE 2016
As provided for in EU and Italian legislation and required by the energy industry regulator, from 1 July 2016, Acea Distribuzione has changed its name to Areti. Areti has been created in response to the obligation to establish separate identity, branding and communication policies, as required by paragraphs 23.3 and 38.2 of Legislative Decree 93/11.

On 27 July 2016, the Mayors’ Conference for the ATO2 concession areaapproved the tariff determinations for the period 2016-2019. The determinations establish that the tariff increases to be applied in 2016 are to be spread out over time, in return for recognition of a financial charge as compensation for the deferral.

Acea has entered into fruitful dialogue with Roma Capitale, starting from operational aspects where there is potential for increased cooperation.

 

OUTLOOK
Over the coming months, the Group will continue to pursue its commitment to rationalising and streamlining operating processes in all areas of business and its corporate departments. This will involve major changes to information systems that will enable us, by the end of this year, to introduce innovative methods of managing our grids and providing services. This process of change and modernisation will give us the competitiveness and customer-centric strategy that will be key to future growth.

We will also continue to focus on progressive improvements to the billing process, with the aim of boosting customer satisfaction and keeping working capital in check.

***

The Board of Directors has also today elected Mr. Angel Simon Grimaldos as an independent Director, to serve as a member of the Related Party Transactions Committee and as coordinator of this Committee, in place of Diane d’Arras, who has resigned. The members of this Committee are now as follows: Angel Simon Grimaldos (Coordinator), Massimiliano Capece Minutolo del Sasso and Roberta Neri.

 

The following schedules are attached:

  • CONSOLIDATED ACCOUNTS: STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2016, INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2016, ANALYSIS OF NET DEBT AT 30 JUNE 2016 AND STATEMENT OF CHANGES IN EQUITY.

     

    A conference call will be held at 5.00pm (Italian time) on Thursday, 28 July 2016 in order to present the results for the six months ended 30 June 2016. To coincide with the start of the conference call, back-up material will be made available at www.acea.it.

     

    The Executive Responsible for Financial Reporting, Demetrio Mauro, declares that, pursuant to section two of article 154 bis of the Consolidated Finance Act, the information contained in this release is consistent with the underlying accounting records.

 

To view the complete text open the attached pdf

Highlights

Discover the latest news and initiatives of the Acea Group