Italgas: results as at 31 march 2019 approved

Milan, 14 May 2019 - Italgas’ Board of Directors, chaired by Alberto Dell’Acqua, met yesterday and approved the consolidated (unaudited) results for 2019 first quarter.

Key figures

Consolidated economic and financial highlights:

• Total revenue: €310.8 million (+9.9%)
• EBITDA: €219.2 million (+10.5%)
• EBIT: €123.6 million (+10.0%)
• Net profit: €86.3 million (+15.5%)
• Technical investments: €152.4 million (+43.6%)
• Cash flow from operating activities : €242.2 million
• Net financial debt : €3701.9 million

Operating highlights including investee companies:

• Municipalities in gas distribution concessions: 1,803
• Number of active meters: 7.57 million
• Gas distribution network: around 70,000 Km

The economic and financial results confirm the continuous growth process recorded by the Company since its return to the stock market in November 2016, inaugurating a new management cycle focused on further improvement in margins compared to the same period of 2018. With €152.4 million in organic investments in the first quarter, Italgas significantly exceeds the targets defined in the Business Plan, an increase in line with that already announced to the market. In particular, over 50% of the investments were allocated for the maintenance and extension of the network (170 km against 40 last year), while the installation of the smart meters continued, in line with last year, replacing traditional meters, and this replacement will be completed by the first half of 2020. With approximately 410.0 thousand meters installed in the first three months of 2019, the total, also considering investee companies, was around 5.4 million, equal to 63.9% of total meters . The installation of the smart meters is part of the digitalisation project of the network for which over 50 pilot projects have been already completed throughout the country, covering approximately 200 kilometres of distribution network and a total of 11,800 smart meters. The financial requirements related to the net investments in 1Q 2019 were fully covered by the positive cash flow from operating activities, amounting to €242.2 million, with a Free Cash Flow - before the M&A transactions - of € 112.7 million. Net financial position as at 31 March 2019 was equal to € 3,701.9 million (€3,814.3 million as at 31 December 2018). With regards to the economic results, operating profits in the first quarter of 2019 reached €123.6 million (+10.0% compared to 31 March 2018) and net profit reached €86.3 million (+15.5% compared to the same period of the previous year). Paolo Gallo, CEO of Italgas, commented: “The results of the first quarter 2019 also confirm the virtuous path undertaken by Italgas since November 2016, with all the indicators showing double-digit increases. In particular, compared to the same period of 2018, EBIT and net profit showed increases of +10% and +15.5%, respectively, demonstrating the effectiveness of the acquisitions made and the important efficiency improvement actions undertaken in the last two years. Investments for the period recorded an increase of 43.6%, and investments on the network (maintenance and extension) in particular, which are the most valuable investments for the Italian economy, grew by over 70%. We are continuing the process of installing smart meters, which will be completed in the first half of 2020, and the larger project of digitalisation of the networks, which will contribute to strengthening Italgas’ leadership in Italy and in Europe. In acknowledging our role, two important partnership agreements were signed in recent weeks: with State Grid Corporation of China, the largest utility in the world, and with the US company Picarro, a leader in providing smart software for monitoring networks”. [1]Net of the effects deriving from IFRS 16 and IFRS 15. [2]Net financial debt as at 31 March 2019 did not consider financial payables for operating leases pursuant to IFRS 16 of €65.7 million (€49.9 million as at 31 December 2018). [3]Excluding investee companies, in the first quarter of 2019, Italgas installed about 363.5 thousand new meters, bringing the total number of installed meters to about 4.8 million, equal to approximately 63.4% of the entire meter fleet.