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NEWS
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29/07/2020

Hera BoD approves 1H 2020 results

Although feeling the impact of the Coronavirus emergency, the half-year report shows operating-financial indicators rising, thanks to increased efficiency achieved in the Group’s various business areas and the recently enlarged scope of operations.

 

 

Financial highlights

  • Revenues at 3,402.3 million euro (+0.9%)
  • Ebitda at 559.7 million (+2.5%)
  • Net profit at 174.9 million (+0.6%)
  • Net financial position improves to 3,083.6 million

Operating highlights

  • Good contribution coming from both internal growth and the recently enlarged scope of operations, which more than offset the negative effects of the nationwide emergency
  • Further activities introduced to support all stakeholders
  • Solid customer base in energy sectors, with customers increasing sharply to 3.3 million thanks to the recent Ascopiave partnership

Today, the Hera Group’s Board of Directors, chaired by Tomaso Tommasi di Vignano, unanimously approved the consolidated operating results for the first half of 2020. The positive trend shown by our multi-utility was confirmed, with main operating-financial indicators improving, in spite of a few inevitable negative impacts caused by the health emergency that broke out across the country.

In general, the good results reached confirm once again the Group’s valid business model, which balances regulated and free-market activities, along with internal and external growth, creating value for the areas served. Relying on its own financial solidity, Hera continued to proactively introduce, in the second quarter as well, a range of measures aimed at guaranteeing service continuity even while the emergency was still fully underway. Furthermore, support and protection were ensured for all main stakeholders, first and foremost employees, suppliers and customers, through means including favourable conditions for bill payments.

Among the major changes in the Group’s scope of operations compared to the first half of 2019, note the acquisition in July of the waste treatment plants belonging to Pistoia Ambiente in Tuscany and, in December, the closing of the partnership between Hera and Ascopiave. This latter transaction led, through EstEnergy, to the birth of the largest energy operator in North-Eastern Italy while at the same time redistributing the respective activities in gas distribution. In recent weeks, lastly, Hera stock was included in the FTSE4Good Index Series, a set of ethical indices conceived by FTSE Russell to bring together the best companies who, around the world, are actively committed to sustainable development. This important recognition came just over one year after Hera was listed on the FTSE MIB.

Revenues rise to over 3.4 billion euro

In the first half of 2020, revenues amounted to 3,402.3 million euro, up 30.7 million (+0.9%) over the 3,371.6 million seen in the same period of 2019. This growth was mainly due to the changes in the scope of operations, which offset the fall in revenues for trading, production and sales of electricity and gas, heat management and district heating. Revenues also fell in the waste management sector, owing to lower revenues in electricity generation and lower volumes of waste treated.

Ebitda increases to 559.7 million euro

Ebitda settled at 559.7 million euro, up 13.8 million (+2.5%) compared to the 545.9 million seen at 30 June 2019. In the first half of the year, the health emergency impacted all business areas, bringing about an overall decrease in margins coming to roughly 30 million euro, entirely due to non-recurring effects and in line with the projections communicated in late March, when the year-end report was approved. In spite of this, the changes in the scope of operations, especially the entry of the companies belonging to the EstEnergy Group following the partnership with Ascopiave, along with the numerous measures introduced to enhance efficiency, allowed Hera to offset the negative effects and keep growing, above all in the energy areas.

Net profit rises to 174.9 million euro

Profits at 30 June 2020 came to 174.9 million, up slightly (+0.6%) compared to the 173.9 million seen at 30 June 2019, while profits pertaining to Group shareholders amounted to 166.2 million euro, in line with the same period in the previous year. These results benefitted from a tax rate coming to 27%, a clear improvement with respect to the 28.7% recorded in the first half of 2019, thanks in particular to the Group’s efforts in sustaining significant investments supporting a technological, digital and environmental transformation, in addition to the positive effects of the measures introduced by the government in the Relaunch Decree.

Over 240 million invested, improvement in financial position

In the first six months of 2020, the Group’s overall investments amounted to 240.6 million euro, up 16.2% compared to the 207.0 million recorded at 30 June 2019. Operating investments mainly concerned interventions on plants, networks and infrastructures, in addition to investments involved in an intensive meter substitution and in the purification and sewerage area. Total investments also included financial investments coming to 45.5 million.
The Group’s net financial position, which reached 3,083.6 million euro at 30 June 2020, showed a 190 million (5.8%) decrease compared to the 3,274.2 million seen at 31 December 2019. This was due to a positive cash generation that entirely financed investments and M&A transactions, and that would also have been able to cover the annual dividend payment, which was postponed by a few weeks simply as a precautionary measure and regularly paid on 8 July.

Statement by Executive Chairman Tomaso Tommasi di Vignano

“We are satisfied with our ability to protect these half-year results from the negative impact of the Coronavirus emergency. Continuing efforts will be made in pursuing growth during the second half of the year as well, in line with the targets set out in our Business plan, hoping that the external context also moves in the direction of a complete recovery. Our solid growth levers (internal growth and M&As) have allowed us to continue creating value for our shareholders, by paying more than 160 million euro in overall dividends in early July, entirely covered by the cash generation achieved over the period”.

Statement by CEO Stefano Venier

“Thanks to the numerous initiatives introduced and our growth strategy, we have succeeded in containing the negative financial impact of the Coronavirus emergency within the limit foreseen, at the same time confirming our profitability and financial solidity, as witnessed by the positive figures in the income statement and the decreased net financial position. In addition to meeting our commitments with shareholders and providing continuity in all main services, producing positive effects for our network of service suppliers as well, this solidity allowed us to sustain our stakeholders experiencing difficulty, including customers and suppliers, confirming our close relations with local communities”.

 

 
Profit & Loss
(mln €)
30/06/2020Inc. %30/06/2019Inc. %Var. Ass.Var.%
Sales3,402.3 3,371.6 +30.7+0,9%
Other operating revenues222.6 6.5%249.0 7.4%(26.4)(10.6%)
Raw material(1,605.1) (47.2%)(1,699.2) (50.4%)(94.1)(5.5%)
Services costs(1,151.0) (33.8%)(1,075.1) (31.9%)+75.9+7.1%
Other operating expenses(32.5) (1.0%)(29.8) (0.9%)+2.7+9.1%
Personnel costs(290.9) (8.5%)(286.6) (8.5%)+4.3+1.5%
Capitalisations14.3 0.4%16.0 0.5%(1.7)(10.6%)
Ebitda559.7 16.5%545.9 16.2%+13.8+2.5%
Depreciation and provisions(264.0) (7.8%)(257.0) (7.6%)+7.0+2.7%
Ebit295.7 8.7%288.9 8.6%+6.8+2.4%
Financial inc./(exp.)(56.2) (1.7%)(44.9) (1.3%)+11.3+25.1%
Pre tax profit239.5 7.0%244.0 7.2%(4.5)(1.8%)
Tax(64.6) (1.9%)(70.1) (2.1%)(5.5)(7.9%)
Net profit174.9 5.1%173.9 5.2%+1.0+0.6%
Attributable to:        
Shareholders of the Parent Company166.2 4.9%166.2 4.9%+0.0+0.0%
Minority shareholders8.7 0.3%7.7 0.2%+1.0+13.1%

 

 
Balance Sheet (mln €)30/06/2020Inc.%31/12/2019Inc.%Var. Ass.Var.%
Net fixed assets6,893.2 113.3%6,846.3 108.9%+46.9+0.7%
Working capital(172.3) (2.8%)87.0 1.4%(259.3)     (298.0%)
(Provisions)(638.7) (10.5%)(649.1) (10.3%)+10.4(1.6%)
Net invested capital6,082.2100.0%6,284.2100.0%(202.0)(3.2%)
Net equity2,998.6 49.3%3,010.0 47.9%(11.4)(0.4%)
Long term net financial debt3,370.1 55.4%3,383.4 53.8%(13.3)(0.4%)
Short term net financial debt(286.5) (4.7%)(109.2) (1.7%)(177.3)+162.4%
Net financial debts3,083.6 50.7%3,274.2 52.1%(190.6)(5.8%)
Net invested capital6,082.2100.0%6,284.2100.0%(202.0)(3.2%)
 
 
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