In the first half of 2020, EBITDA grows by 6.6% even in a challenging context

IG Focus


Despite the first half of 2020 has been affected by the new regulatory framework and the severe restrictive measures adopted to contain the spread of Covid-19, Italgas continues to show solid fundamentals.

The 6.6% growth at EBITDA level, with an acceleration especially in the second quarter, has been driven by new efficiencies and broader scope of consolidation.




First-quarter 2020 P&L proves Italgas ability to react to changes in the operating scenario. The new regulatory context, following ARERA Resolution no. 570/2019/R/gas, resulted in a cut of metering WACC from the former level of 6.8% to 6.3% for the 2020-2021 two-year period; the new regulation has also envisaged a reduction of OpEx allowed per Redelivery Point. Moreover, Italgas could not benefit from capital gains from asset disposals as it did in 2019; lastly, the replacement of meters decelerated, as expected. Nevertheless, Italgas achieved a 3.7% growth in EBITDA, partly through the contribution of Toscana Energia. The EBITDA Margin shows a slight decrease, from 70.5% in Q1 2019 to 69.5%, as operating costs grow at a higher (+9.0%) pace than that of Total Revenues (+5.2%). New efficiencies continue to be achieved, anyhow. The change in operating costs reflects the wider Group consolidation scope; on the contrary, on a like-for-like basis, costs decrease by 2.7%.

EBIT shows a slight decline (-0.6%) due to the increase (+9.2%) of Depreciation & Amortisation. Such change reflects higher depreciation for the capex carried out over the last year and the full consolidation of Toscana Energia.

The 11.4 million euro decrease (-13.2%) in Net Profit, which stands at 74.9 million euro, reflects:
• the slight decline in EBIT (-0.7 million euro) due also to the absence of capital gains from asset disposals (9.2 million euro in 2019).
• higher Net Financial Expenses (-1.2 million euro) due to the higher average debt in the Q1
• the decrease in Net Income from Equity Investments (-4.9 million euro), as Toscana Energia is no more consolidated with the equity method


Investments increasing by 16%, entirely covered by the cash generation

Despite the restrictive measures related to the health emergency and supported by the new technology tools created in the Digital Factory, Italgas was able to reopen many sites of network constructions in the beginning of May.

In the first half 2020, the capex grew by 16.3%, reaching a total amount of 369.5 million euro.




Over three-quarters of the investments were dedicated to distribution, especially to network development & renewal and digitization. In the first six months of 2020, 486 km of new pipes have been laid down, compared to 379 km in first-half 2019. A considerable portion of the works was focused on Sardinia, where a 216 km expansion allowed for reaching 680 km of networks already in place, out of a total planned of around 1,100 km. 


The program for the replacement of traditional meters continued also during the lockdown. With 555 thousand new smart meters installed in the first half of 2020, including affiliates, of which 411 thousand related to the replacement of first-generation meters, today the total reached 7.1 million. The completion of the program for the digitization of the entire meter pool is therefore confirmed by the end of the year. Since 1st January 2020, the number of new redelivery points connected to the Italgas network increased by 14.7 thousand, of which more than half (51.7%) related to the newly-acquired companies. 


During the first half 2020, the Cash Flow from Operations, equal to 388.8 million euro, fully funded Net Investments of 387.3 mn€. Free Cash Flow before M&A activities was therefore 1.5 mn€. In first-half 2020, M&A operations absorbed 10.7 mn€, while the payment of 2019 dividend resulted in a disbursement of 206 mn€. Net Financial Debt as of 30 June 2020 therefore reached 4,625.8 million euro, up by 215.2 million euro compared to the 4,410.6 million euro at 2019 year-end, excluding the effects ex IFRS16 (75.5 million euro). 

At the end of June 2020, Italgas continues to have a solid and efficient debt structure, with no need for debt refinancing before 2022 and a 92.3% weight of fixed-rate debt, increasing as a result of the bond issued in June for a nominal value of 500 million euro. Italgas also has bank deposits of 336 million euro and can count on undrawn committed credit lines of 500 million euro, maturing in October 2021. The cost of debt around 1.1% is among the lowest in the industry.


ultimo aggiornamento 14 April 2021 09:40 UTC