Interim report at 30 June 2016 shows rising profits, positive cash flows and lesser borrowing.
Financial highlights
- Revenues at € 2,152.7 million (-2.7%)
- EBITDA at € 470.1 million (+2.4%)Net profits for shareholders at € 121.0 million (+12.8%)
- Net financial position reduced to € 2,624.4 million
Operating highlights
- Regulated revenues affected by lower return on invested capital (WACC)
- M&A initiatives contribute to results
- Energy market expands, with total customers reaching almost 2.3 million
Today, the Hera Group's Board of Directors unanimously approved the consolidated economic results for H1, whose main indicators show positive figures and growth through to net profits.
The gas business EBITDA, which includes services in natural gas and LPG distribution and sales, remote heating and heat management, settled in the first half of 2016 at € 162 million, down from the € 172.5 recorded at 30 June 2015, mainly due to lower margins in trading and the negative impact of the mild winter, as well as a resolution that modified the method used to calculate the rate of return on invested capital for infrastructure services in the gas sector. The results were also sustained by the recent acquisition of Julia Servizi, a company in the Abruzzo region operating in gas and electricity sales.
The gas business accounts for 34.5% of Group EBITDA.
In the first half of 2016, the water business, which includes aqueduct, purification and sewerage services, recorded a slight drop compared to the same period in 2015, with EBITDA passing from € 107.6 million in the first half of 2015 to € 106.6 million at 30 June 2016. The negative impact of the resolution on revenues and on EBITDA for the WACC effect and the redefinition of the restriction on revenue, came to € 11.1 million, almost entirely compensated by the operative efficiencies implemented over the six months in question and, in particular, a series of optimisations concerning general management costs.
The integrated water cycle accounts for 22.7% of Group EBITDA.
EBITDA pertaining to the waste business, which includes services in collecting, treating and disposing of waste, went from € 119.8 million in the first half of 2015 to € 116.5 million at 30 June 2016, an essentially stable result in spite of the reduced operating capacities of a few landfills, which are currently being enlarged. Activities related to treatment of special waste showed a 20.1% growth in volume and a further improvement in prices. One fundamental contribution came from the acquisitions, dating to late 2015, of Waste Recycling and the Geonova plants, which gave greater impetus to management of industrial waste and compensated for the temporary closure of landfills presently being expanded (the Ravenna landfill is due to be reopened shortly). Good results also came from sorted waste collection, which rose to 56.9% of the total, compared to the 55.4% seen in the first half of 2015, thanks to the wide range of projects implemented across all areas served.
The waste business accounts for 24.8% of Group EBITDA.
The electricity business, which includes services in electricity production, distribution and sales, showed an EBITDA that grew from € 49.6 million for the first six months of the previous year to € 76.3 million at 30 June 2016. The negative impact on electricity services of the resolution on revenues and EBITDA, regarding WACC alone (€ 1.4 million in the first six months), was more than compensated by the balance payments
involved in 654/15/R/eel, thanks to a revision of the criteria used for the treatment of investments made in previous years, and the continuous expansion of the customer base.
The electricity business accounts for 16.2% of Group EBITDA.
"The figures that appear in the 2016 interim report are once again positive, showing the extent to which the Group has been able to offer its shareholders a solid response in terms of both economic results and financial structure, which is all the more appreciable in light of a macroeconomic context still marked by instability. This outcome was also fuelled by M&A operations, that allowed waste treatment plants to be acquired and increased our customer base".
"We are highly satisfied, in that the operations introduced have led to the good results we expected, allowing us, in only six months, to compensate for the cut in regulated revenues. A good financial and fiscal performance also made it possible for us, in a difficult year, to close the first half with growth in net profits and other main indicators as well as a reduction in debt."
.jpg/19c3e9b6-361e-28ab-2201-b09cf74f2a5b "HERA_top-performer_110 (1).jpg")
