Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ACEA SpA (ACEJF, Financial) reported a significant increase in recurring net profit, up 18% compared to 2023, driven by improvements in EBITDA and financial management.
- The company's revenues from regulated businesses grew, with Water Italy increasing by 5% and Grids and Public Lighting by 16%.
- ACEA SpA (ACEJF) maintained a sound financial structure with an NFP/EBITDA ratio of 3.54x, in line with their guidance.
- The company confirmed its 2024 guidance, expecting EBITDA to grow by 35% compared to 2023.
- ACEA SpA (ACEJF) is actively investing in infrastructure, with significant CapEx in water and grid projects, including the expansion of water and sewage pipes and the installation of 2G meters.
Negative Points
- The company faced challenges with the Terni waste treatment plant being down, impacting revenues and EBITDA.
- There was a reduction in hydroelectric power production due to drought conditions, negatively affecting the group's performance.
- Net debt increased from EUR4.847 billion to EUR5.130 billion, partly due to dividend payments.
- The working capital showed a negative trend in the first half of the year, mainly due to regulatory changes and tariff increases.
- The energy sector experienced a drop in revenues driven by a reduction in electricity generated and sold.
Q & A Highlights
Q: Can you break down the EUR130 million change in working capital and what do you expect for the second half of the year?
A: The change is mainly due to regulatory changes and tariff increases. We expect an improvement in the second half as tariffs will impact positively, allowing partial recovery of working capital. Overall, we are performing better than expected. (Sabrina Di Bartolomeo, CFO)
Q: What is the status of the waste-to-energy plant in Rome and the expected investment?
A: We are awaiting final confirmation from the municipality of Rome for the tender. We expect the work site to start by the end of this year or early next year. (Fabrizio Palermo, CEO)
Q: How significant are partnerships like the one with the Apulia Aqueduct for ACEA?
A: Such partnerships are crucial as they allow us to bid for tenders and potentially become part of the shareholding of aqueducts, which is strategic for operating in southern Italy. (Fabrizio Palermo, CEO)
Q: Can you provide guidance on the EBITDA for the energy supply in 2024?
A: The improvement in our commercial business results from an increased customer base and indexed contracts. We focus on the free market, which has led to an increase in customers and profitability. (Sabrina Di Bartolomeo, CFO)
Q: Is the Italian government considering consolidating the water industry, and what measures might they adopt?
A: Market consolidation is a possibility, but it's a long process. We are preparing to act as a market consolidator and are closely monitoring tenders. The high number of players in the water market may prompt regulatory considerations. (Fabrizio Palermo, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
