A2A, profits boom in the first half-year. Rising estimates for 2024

(Il Sole 24 Ore Radiocor) - Profit up 74%, ebitda close to 1.3 billion euro, investments up 12% and upward revision of guidance for 2024. This is the picture that emerges from A2a's income statement, which continues to focus on energy from renewable sources. In the first half of the year, green energy generation (hydroelectric, wind and photovoltaic) accounted for over 60% of production and amounted to 3.2 TWh. "I would be happy if we closed 2024 with renewables beating thermoelectric production, and I believe we will succeed in doing so," said CEO Renato Mazzoncini. Meanwhile, the company controlled by the municipalities of Milan and Brescia announced that it had received a non-binding offer from Ascopiave for gas distribution assets in some areas of Lombardy.

Coming to the numbers, A2A posted a net profit of 489 million euros in the first half of the year, up 74% compared to the same period in 2023. Ebitda was up 45% to EUR 1.28 billion, revenues dropped to EUR 6,091 million (-24%) compared to the first six months of 2023 mainly as a result of falling energy commodity prices. Net ordinary income amounted to EUR 478m (+86%). M&A's operations, net of disposals, amounted to €57 million, mainly attributable to the acquisition of Agesp Energia, a company selling electricity, gas and heat operating in the Busto Arsizio (Varese) area, by the Acinque group and the acquisition of 70% of Parco Solare Friulano 2, a company that obtained a permit to build and operate a photovoltaic plant with an authorised capacity of 112.1 MWp. The net financial position was €4,019 million (€4,683 million at 31 December 2023). Excluding the impact of changes in the scope of consolidation for the period (€57 million) and the issue of the Hybrid Bond (-€742 million), Pfn stood at €4,704 million thanks to an operating cash flow that ensured coverage of capital expenditure, in the amount of €553 million, and dividends, in the amount of €300 million. The Pfn/Ebitda rolling ratio was 1.7 times; excluding the impact of the Hybrid Bond, considered 100% equity for IFRS purposes, the ratio would be 2 times, down from 31 December 2023 (2.4 times). The ratio of sustainable debt to the Group's total gross debt was 77% (66% as at 30 June 2023). Investments made in the first half of 2024 amounted to €553 million (€494 million in the first half of 2023), 60% of which related to development work, mainly aimed at modernising electricity distribution networks to support the progressive electrification of consumption and the growth of renewable sources, the development of photovoltaic plants, ensuring flexibility and coverage of peak demand, the recovery of materials and the digitalisation of the Group.

"Thanks to this excellent performance, we have been able to revise the guidance for 2024 upwards," said CEO Renato Mazzoncini. In detail, the upward revision concerns ordinary profit and ebitda. "The excellent results of the first half of the year, in particular, the performance of the Generation and Market Bu, allow for a positive revision of the expectations for 2024," the company's note explained. The Group is expected to target an ebitda ofb>between EUR 2.18 and 2.22 billion and an ordinary Group net profitb>between EUR 700 and 720 million. According to the Life Company's number one, "the excellent results of this first half of 2024 underline the Group's path of significant continued growth, strongly supported by increased investments. Of the more than EUR 550 million invested in this first half of the year, 60% has been earmarked for industrial development and, in particular, for upgrading and making the grids more efficient to support decarbonisation, photovoltaics, ensuring flexibility and balancing of the energy system, and material and energy recovery. With over 60% of energy generation from renewable sources, we continue our commitment to the energy transition. We have confirmed our commitment to maintain our current rating, strengthening our credit metrics with the issuance of the first perpetual hybrid bond in a green format, and we are also pleased with our sustainable finance strategy, with Esg debt reaching 77% of total gross debt'.

As far as the energy transition is concerned, energy generation from renewable sources (hydroelectric, wind and photovoltaic) accounts for over 60% of production and amounts to 3.2 TWh. Noteworthy is the acquisition of 70% of the Friulano 2 Solar Park, which obtained the permit for the construction and operation of a photovoltaic plant with an authorised capacity of 112.1 MWp. With a total installed capacity of more than 150 MWp, this plant together with the one authorised in 2022 in the same municipality for a capacity of 59.1 MWp will represent the main photovoltaic pole in the North. In addition, the largest and most powerful photovoltaic plant in Italy built on roofs and among the top 10 in the world has come into operation. The facility was built in the Fiera Milano exhibition centre by A2A together with Fondazione Fiera through the joint venture Fair Renew. In terms of sustainability, carbon dioxide emissions (Scope 1 + Scope 2) are 41% lower than in the first half of 2023 and investments eligible for European Taxonomy are 72%. "I would be happy if we closed 2024 with renewables beating thermoelectric production and I believe we will succeed in doing so," Mazzoncini said during the conference call presenting the data.

A2A has received a non-binding offer from Ascopiave for the purchase of a compendium of assets consisting of approximately 490,000 gas distribution pdr in Lombardy (in the territorial areas of Brescia, Bergamo, Cremona, Pavia, Lodi), currently managed by companies wholly owned by A2A. The parties agree to continue the negotiation process and A2A grants Ascopiave an exclusive negotiation period, until 15 December next, to carry out the usual due diligence activities with the aim of possibly reaching the signing of a binding agreement by that date. Any completion of the transaction will be subject, among other things, to the positive outcome of the due diligence, the negotiation of contractual agreements to our mutual satisfaction, the obtaining of the necessary authorisations from the competent authorities, and the approval of the corporate bodies of A2A and Ascopiave.