Price Sensitive Press Release


·      EBITDA €214.4m (up 3.5% on €207.2m of Q1 2016; up 16.1% on adjusted figure for 2016).

·      EBIT €117.2m (down 5.2% on €123.6m of Q1 2016; up 15.9% on adjusted figure for 2016)

·      Net profit €65.7m (down 1.8% on €66.9m of Q1 2016; up 27.1% on adjusted figure for 2016)

·      Net debt €2,234.8m (€2,126.9m at 31 December 2016)

·      Investment €126.4m (up 30.3% on €97.0m of Q1 2016)

 

Rome, 26 April 2017 – The Board of Directors of Acea SpA, chaired by Catia Tomasetti, has approved the quarterly report for the three months ended 31 March 2017 (Q1 2017).

FINANCIAL HIGHLIGHTS

(€m)

Q1 2016

(a)

Q1 2016

adjusted* (b)

Q1 2017

(c)

inc./(dec.)

 (c/a)

inc./(dec.)

 (c/b)

Consolidated revenue

713.7

691.2

725.5

+1.7%

+5.0%

EBITDA

207.2

184.7

214.4

+3.5%

+16.1%

EBIT

123.6

101.1

117.2

-5.2%

+15.9%

Profit/(Loss) before tax

103.0

80.5

98.3

-4.6%

+22.1%

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

69.2

54.0

68.5

-1.0%

+26.9%

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

66.9

51.7

65.7

-1.8%

+27.1%

 

* Adjusted amounts for Q1 2016 do not include the positive impact of elimination of the ‘regulatory lag’’ (€22.5m pre-tax)

 

(€m)

Q1 2016

Q1 2017

% inc./(dec.)

Investment

97.0

126.4

+30.3

 

(€m)

31 Mar 2016

(a)

31 Dec 2016

(b)

31 Mar 2017

(c)

%inc./(dec.)

 (c/a)

%inc./(dec.)

 (c/b)

Net debt

2,173.9

2,126.9

2,234.8

+2.8%

+5.1%

Equity

1,656.4

1,757.9

1,838.2

+11.0%

+4.6%

Invested capital

3,830.3

3,884.8

4,073.0

+6.3%

+4.8%

 

 

ACEA GROUP’S RESULTS FOR Q1 2017

Revenue of €725.5m is up approximately 2% compared with the same period of the previous year. The performance benefitted from the change in the scope of consolidation described below and an increase in revenue from the integrated water service, reflecting the revised tariffs introduced from the second half of 2016. These components have more than offset the reduction in revenue from the sale and transport of electricity, resulting from a reduction in the quantity sold on the free market and changes in tariffs connected with the fifth regulatory cycle.

Consolidated EBITDA is up from the €207.2m in Q1 2016 to €214.4m in Q1 2017, marking an increase of 3.5%. After stripping out the positive impact of elimination of the regulatory lag in the Grids segment (€22.5m) from the figure for Q1 2016, EBITDA is up 16.1%, thanks above all to the contribution of the Water segment.

In addition, the following transactions have taken place during the first three months of 2017, resulting in a change in the scope of consolidation with respect to Q1 2016 and contributing approximately €3m to consolidated EBITDA:

-     the acquisition of 51% of Acque Industriali (Environment segment) from Acque (with effect from 1 January 2017, consolidated on a line-by-line basis);

-     completion of the transfer of the shares in GEAL (Water segment) held by Veolia Eaux Compagnie Generale Des Eaux. Following this acquisition, the Group owns 48% of GEAL (with effect from 8 February 2017, consolidated using the equity method);

-     acquisition of TWS (Technologies for Water Services, Water segment) from Severn Trent Luxembourg Overseas (with effect from 23 February 2017, consolidated on a line-by-line basis).

The change in the scope of consolidation also reflects the acquisition, occurred in Q4 2016, of 29.65% of Aguas de San Pedro, which adds to the 31% already held (consolidated on a line-by-line basis), and the consolidation of AguaAzul Bogotà using the equity method.

Consolidated EBIT of €117.2m is down 5.2% on the €123.6m of Q1 2016 (up 15.9% on adjusted Q1 2016). The change reflects increased depreciation linked to greater capital expenditure and takes into account the go-live of the Acea 2.0 technology platform at the Group’s principal companies.

Net finance costs, equal to €18.7m, are down €2.3m thanks to reduced interest on medium/long-term debt, partly due to the liability management transaction completed in October 2016.

Net profit, after non-controlling interests, is €65.7m, down 1.8% on Q1 2016 (up 27.1% on adjusted Q1 2016). The tax rate is down from the 32.9% of Q1 2016 to 30.4% for Q1 2017, following a reduction in IRES from 1 January 2017.

The Group invested €126.4m in Q1 2017 (€97.0m in Q1 2016), with 86% of this relating to our regulated businesses. Investment breaks down as follows: Water €57.8m; Grids €50.6m; Energy €9.1m; Environment €5.5m; Parent Company €3.4m. The Group’s investment in Project Acea 2.0 amounts to €11.3m.

Net debt at 31 March 2017, amounting to €2,234.8m, is up €107.9m on the figure for the end of 2016 and €60.9m compared with 31 March 2016. The performance of net debt partly reflects increased investment and the change in the scope of consolidation.

 

SEGMENT INFORMATION FOR Q1 2017

Environment

The Environment segment contributed EBITDA of €14.5m (up 9.0%), compared with €13,3m for Q1 2016. The performance benefitted from the greater quantity of electricity sold by the Terni and San Vittore plants.

ENVIRONMENT – operational highlights

Q1 2016

Q1 2017

Treatment and disposal (‘000 tonnes)*

197

274

WTE electricity sold (GWh)

66

82

                            * includes ash disposed of

Energy

The Energy segment’s EBITDA is up 9.8% to €35.8m. The improvement reflects growth in the quantity of electricity produced.

 

ENERGY – EBITDA (€m)

Q1 2016

Q1 2017

Energy segment

32.6

35.8

Production

9

13

Sales

23

23

 

ENERGY – operational highlights

Q1 2016

Q1 2017

Electricity production (GWh)

108

131

Electricity sold (GWh)

2,171

1,813

Enhanced protection market

737

730

Free market

1,434

1,083

Gas sold (million m3)

55

51

Water

The Water segment’s EBITDA is €95.9m, up €15.2m (18.8%) on Q1 2016. The increase essentially reflects revised tariffs introduced from the second half of 2016, including those relating to the quality of services. In this latter regard, the best estimate of Acea ATO2’s quality award for Q1 2017, amounting to €6.9m, has been recognised.

Grids

EBITDA for the Grids segment amounts to €70.6m, reflecting changes in tariffs connected with the fifth regulatory cycle. EBITDA is up 21.5% compared with the adjusted figure for Q1 2016 (€58.1m after the positive impact of regulatory accounting).

 

GRIDS – operational highlights

Q1 2016

Q1 2017

Electricity distributed (GWh)

2,536

2,509

 

Parent Company

The Parent Company reports negative EBITDA of €2.4m for Q1 2017.

 

MATERIAL EVENTS DURING THE FIRST QUARTER AND AFTER 31 MARCH 2017

On 20 February 2017, Acea Illuminazione Pubblica presented a binding offer as part of the auction, organised by Infratel Italia SpA, on behalf of the Ministry for Economic Development, in order to support the development of superfast broadband in so-called “white areas” in the regions of Marche and Umbria (Lot 3) and Lazio (Lot 4). The aim of the auction is to award a fixed-term concession to design, build, maintain and operate publicly owned passive superfast broadband infrastructure and to provide passive and active access on a wholesale basis. The Company had prequalified for the auction and was invited to take part on 5 December 2016.

On 4 April 2017, Acea announced that the lists of candidates for election to the Board of Directors – accompanied by the related documentation required by statute and filed by shareholders within the relevant deadline, in preparation for the Annual General Meeting called for 27 April and 4 May 2017, in first and second call, respectively – are available for inspection at the Company’s registered office, in the appropriate section of its website (www.acea.it, 2017 Shareholders’ Meeting) and in the authorised storage mechanism managed by 1info and available at www.1info.it.

 

OUTLOOK

The Acea Group’s results for Q1 2017 enable the confirmation of EBITDA guidance for 2017.

The Group is continuing to pursue its commitment to rationalising and streamlining operational processes in all its areas of business and at the Parent Company.

Work will also continue on improving the billing and sales process to reduce working capital and contain the Group’s debt.

 

The following schedules are attached:

·       CONSOLIDATED ACCOUNTS: INCOME STATEMENT FOR THE THREE MONTHS ENDED 31 MARCH 2017, STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2017, STATEMENT OF CHANGES IN EQUITY, ANALYSIS OF NET DEBT AT 31 MARCH 2017 AND THE STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED 31 MARCH 2017.

 

A conference call will be held at 5.45pm (Italian time) today, 26 April 2017, in order to present the results for the three months ended 31 March 2017. 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.

Acea SpA

Investor Relations                                                                                                                                                            
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Corporate website: www.acea.it

 

CONSOLIDATED INCOME STATEMENT

FOR THE THREE MONTHS ENDED 31 MARCH 2017

 

€000

 

 

Q1 2017

Q1 2016

Increase/

(Decrease)

% increase/

(decrease)

Sales and service revenues

707,122

704,115

3,007

0.4%

Other operating income

18,440

9,560

8,880

92.9%

Consolidated net revenue

725,561

713,675

11,887

1.7%

Staff costs

52,926

55,912

(2,986)

(5.3%)

Cost of materials and overheads

463,450

457,479

5,972

1.3%

Consolidated operating costs

516,376

513,390

2,986

0.6%

Net profit/(loss) from commodity risk management

0

0

0

0.0%

Profit/(loss) on non-financial investments

5,238

6,890

(1,652)

(24.0%)

Gross operating profit

214,423

207,174

7,249

3.5%

Amortisation, depreciation, provisions and impairment losses

97,270

83,584

13,685

16.4%

Operating profit/(loss)

117,154

123,589

(6,436)

(5.2%)

Finance income

3,173

3,787

(614)

(16.2%)

Finance costs

(21,848)

(24,806)

2,958

(11.9%)

Profit/(loss) on investments

(176)

473

(649)

(137.3%)

Profit/(loss) before tax

98,303

103,043

(4,741)

(4.6%)

Income tax expense

29,841

33,884

(4,043)

(11.9%)

Net profit/(loss)

68,462

69,160

(698)

(1.0%)

Net profit/(loss) attributable to non-controlling interests

2,727

2,281

446

19.5%

Net profit/(loss) attributable to owners of the Parent

65,735

66,878

(1,144)

(1.7%)

Earnings/(Loss) per share attributable to owners of the Parent (€)

 

 

 

 

Basic

0.3087

0.3140

(0.0054)

(1.7%)

Diluted

0.3087

0.3140

(0.0054)

(1.7%)

Earnings/(Loss) per share attributable to owners of the Parent after treasury shares (€)

 

 

 

 

Basic

0.3093

0.3147

(0.0054)

(1.7%)

Diluted

0.3093

0.3147

(0.0054)

(1.7%)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2017

 

€000

 

ASSETS

31 March 2017

31 December 2016

Increase/(Decrease)

Property, plant and equipment

2,232,494

2,210,338

22,156

Investment property

2,591

2,606

(15)

Goodwill

150,054

149,825

229

Concessions

1,695,341

1,662,727

32,613

Other intangible assets

163,634

158,080

5,555

Investments in subsidiaries and associates

268,033

260,877

7,156

Other investments

2,613

2,579

34

Deferred tax assets

265,341

262,241

3,100

Financial assets

42,965

27,745

15,220

Other assets

33,047

34,216

(1,169)

NON-CURRENT ASSETS

4,856,116

4,771,235

84,880

 

 

 

 

Inventories

46,176

31,726

14,450

Trade receivables

1,223,212

1,097,441

125,770

Other current assets

163,500

132,508

30,992

Current tax assets

73,165

74,497

(1,332)

Current financial assets

150,411

131,275

19,136

Cash and cash equivalents

531,167

665,533

(134,365)

CURRENT ASSETS

2,187,632

2,132,981

54,651

Non-current assets held for sale

497

497

0

TOTAL ASSETS

7,044,244

6,904,713

139,531

 

EQUITY AND LIABILITIES

31 March 2017

31 December 2016

Increase/(Decrease)

Equity

 

 

 

Share capital

1,098,899

1,098,899

0

Legal reserve

95,188

95,188

0

Other reserves

(332,304)

(351,090)

18,785

Retained earnings/(accumulated losses)

820,112

565,792

254,320

Net profit/(loss) for period

65,735

262,347

(196,612)

Total equity attributable to owners of the Parent

1,747,629

1,671,136

76,493

Equity attributable to non-controlling interests

90,556

86,807

3,749

Total equity

1,838,185

1,757,943

80,242

Staff termination benefits and other defined-benefit

obligations

111,339

109,550

1,790

Provisions for liabilities and charges

213,018

202,122

10,896

Borrowings and financial liabilities

2,785,581

2,797,106

(11,526)

Other liabilities

185,549

185,524

25

Deferred tax liabilities

88,822

88,158

664

NON-CURRENT LIABILITIES

3,384,309

3,382,460

1,850

 

 

 

 

Trade payables

1,300,372

1,292,590

7,782

Other current liabilities

282,774

273,782

8,993

Borrowings

170,895

151,478

19,417

Tax liabilities

67,609

46,361

21,248

CURRENT LIABILITIES

1,821,650

1,764,211

57,440

Liabilities directly associated with assets held for sale

99

99

0

TOTAL EQUITY AND LIABILITIES

7,044,244

6,904,713

139,531

 

STATEMENT OF CHANGES IN EQUITY

 

€000

 

 

Share

capital

Legal reserve

Other reserves

Net profit/ (loss) for period

Total

Non-controlling interests

Total equity

Balance at 1 January 2016

1,098,899

87,908

155,533

181,584

1,523,924

72,128

1,596,053

               

Net profit/(loss) in income statement

     

66,878

66,878

2,281

69,160

Other comprehensive income/(losses)

     

(8,600)

(8,600)

(69)

(8,669)

Total comprehensive income/(loss)

0

0

0

58,278

58,278

2,212

60,491

Appropriation of net profit/(loss) for 2015

   

181,585

(181,584)

 

0

0

Dividends paid

             

Change in basis of consolidation

   

(908)

 

(908)

734

(175)

Other changes

             

Balance at 31 March 2016

1,098,899

87,908

336,209

58,278

1,581,295

75,075

1,656,369

 

 

Share

capital

Legal reserve

Other reserves

Net profit/ (loss) for period

Total

Non-controlling interests

Total equity

Balance at 1 January 2017

1,098,899

95,188

218,040

259,009

1,671,136

86,807

1,757,943

Net profit/(loss) in income statement

 

 

 

65,735

65,735

2,727

68,462

Other comprehensive income/(losses)

 

 

 

1,489

1,489

(98)

1,391

Total comprehensive income/(loss)

0

0

0

67,224

67,224

2,629

69,853

Appropriation of net profit/(loss) for 2016

 

 

259,009

(259,009)

0

0

0

Dividends paid

 

 

 

 

0

 

0

Change in basis of consolidation

 

 

9,269

 

9,269

1,120

10,389

Other changes

 

 

 

 

0

 

0

Balance at 31 March 2017

1,098,899

95,188

486,318

67,224

1,747,629

90,556

1,838,185

 

RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 MARCH 2017

 

€000

 

Financial position

31 March 2017

31 December 2016

 

Increase/

(Decrease)

% increase/

(decrease)

31 March 2016

 

Increase/

(Decrease)

% increase/

(decrease)

Non-current assets and liabilities

4,217,714

4,161,430

56,284

1.4%

3,901,343

316,371

8.1%

 

 

 

 

 

 

 

 

Net working capital

(144,702)

(276,560)

131,858

(47.7%)

(71,123)

(73,579)

103.5%

 

 

 

 

 

 

 

 

Invested capital

4,073,012

3,884,871

188,141

4.8%

3,830,220

242,792

6.3%

 

 

 

 

 

 

 

 

Net debt

(2,234,827)

(2,126,927)

(107,900)

5.1%

(2,173,851)

(60,976)

2.8%

 

 

 

 

 

 

 

 

Total equity

(1,838,185)

(1,757,943)

(80,242)

4.6%

(1,656,369)

(181,816)

11.0%

 

 

 

 

 

 

 

 

Balance of net debt and equity

4,073,012

3,884,871

188,141

4.8%

3,830,220

242,792

6.3%

 

ANALYSIS OF CONSOLIDATED NET DEBT AT 31 MARCH 2017

 

€000

 

 

31 March 2017

31 December 2016

 

Increase/

(Decrease)

31 March 2016

 

Increase/

(Decrease)

Non-current financial assets/(liabilities)

2,697

2,074

623

3,035

(338)

Non-current financial assets/(liabilities) due from/to parent

40,268

25,671

14,597

29,144

11,124

Non-current borrowings and financial liabilities

(2,785,581)

(2,797,106)

11,526

(2,680,972)

(104,609)

Net medium/long-term debt

(2,742,616)

(2,769,361)

26,746

(2,648,793)

(93,823)

 

 

 

 

 

 

Cash and cash equivalents and securities

531,167

665,533

(134,365)

557,312

(26,145)

Short-term bank borrowings

(91,294)

(52,960)

(38,334)

(59,411)

(31,883)

Current financial assets/(liabilities)

(59,090)

(78,130)

19,040

(76,694)

17,604

Current financial assets/(liabilities) due from/to parent and associates

127,005

107,991

19,013

53,735

73,270

Net short-term debt

507,789

642,434

(134,646)

474,942

32,846

Total debt

(2,234,827)

(2,126,927)

(107,900)

(2,173,851)

(60,976)