Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hera SpA (LTS:0NVV, Financial) reported a 16% increase in net profit, demonstrating strong financial performance.
- The company achieved a 2% growth in EBITDA, continuing the positive trend from the previous year.
- Hera SpA (LTS:0NVV) expanded its customer base by 125,000, with an additional 1 million customers from the Tutela market.
- The waste business saw a 9% growth, driven by increased volumes and prices, particularly in the industrial waste sector.
- The company maintained a stable net debt to EBITDA ratio, well below the threshold for financial soundness, indicating strong cash generation and financial stability.
Negative Points
- Revenues decreased by 33% due to lower energy prices and reduced intermediation activities.
- The energy supply business experienced a reduction in EBITDA due to the expiration of the super eco bonus.
- There is a natural migration of customers from the Tutela market to the liberalized market, which could impact customer retention.
- Financial charges were low in H1, but there is uncertainty about their impact in the second half of the year.
- The company faces challenges in maintaining margins in the industrial segment of the energy supply business due to increased competition.
Q & A Highlights
Q: What are the commercial policies driving the EUR30 million growth in the supply business despite moderation in commodity prices?
A: Cristian Fabbri, Executive Chairman, explained that the growth is primarily due to an increase in the customer base by 25,000, contributing to a EUR28 million growth. This growth is largely linked to reduced shipping costs and slight margin increases per customer. The company has also successfully managed the transition of 1 million customers from the Tutela market, aligning with their business plan expectations.
Q: Can you explain the dynamics in the waste business, particularly regarding special waste prices and volume growth?
A: Orazio Iacono, CEO, noted that prices are stable, with some increases in liquid waste and special waste from urban areas. The company has extracted synergies from acquisitions like ACR, enhancing site remediation activities. They are expanding geographically, as seen with the acquisition of TRS, to increase their market presence in regions like Lombardy.
Q: What is the outlook for the company's financial structure, particularly regarding net working capital and debt guidance for year-end?
A: Massimo Vai, Central Director of Administration, Finance and Control, stated that the year-end debt is expected to be around EUR4.1 billion to EUR4.15 billion. The company is managing working capital efficiently, considering the addition of 1 million new customers, and expects no major impacts on their financial structure.
Q: How is the company addressing customer migration from the Tutela market to the liberalized market?
A: Cristian Fabbri mentioned that the company anticipated a natural migration and had a conservative plan in place. They are ahead of schedule in managing these customers and expect to maintain or exceed their initial estimates, with positive signs and no criticalities observed so far.
Q: What are the company's strategic focuses for potential acquisitions, and are there any specific sectors of interest?
A: Cristian Fabbri highlighted that the company is always looking for M&A opportunities, particularly in the waste and energy sectors. They aim to create value and synergies with acquisitions that align with their business portfolio and offer consistent pricing with the assets they acquire.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
