Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Iren SpA (FRA:TZ8, Financial) reported a 5% growth in EBITDA for H1 2024, driven by regulatory adjustments and a strong commercial strategy.
- The company successfully signed two green loans totaling EUR280 million to enhance the resilience of its electricity and water networks.
- Iren SpA (FRA:TZ8) achieved a 4% reduction in carbon intensity, supported by increased hydroelectric production and decreased thermoelectric production.
- The company recorded a 72% separate waste collection rate, with a 19% increase in material recovery at its waste treatment plants.
- Iren SpA (FRA:TZ8) confirmed its 2024 guidance, expecting a 4% increase in EBITDA and a net profit range of EUR260 million to EUR270 million.
Negative Points
- Net financial debt increased by 2% compared to the end of 2023, reaching EUR4 billion.
- The waste business unit experienced a 5% decrease in EBITDA due to lower plant availability and planned maintenance.
- The energy business unit saw a 30% reduction in EBITDA, impacted by lower electricity prices and reduced cogeneration plant margins.
- There was a temporary unavailability of waste treatment plants, leading to reduced efficiency and increased startup costs.
- The company faced a higher tax rate of 30.5% compared to 26.1% last year, affecting net profit growth.
Q & A Highlights
Q: Can you provide an update on the governance and the potential appointment of a new CEO?
A: The governance is currently managed by the Executive Chairman and Deputy Chairman. The majority shareholders have the right to appoint a CEO if deemed appropriate. No decision has been made yet, so the governance remains unchanged. (Luca Dal Fabbro, Executive Chairperson)
Q: What are the reasons for the significant change in net working capital absorption observed in H1, and what do you expect for H2?
A: We expect a reduction of about EUR150 million by year-end, driven by billing of tariff increases, issuance of invoices for energy efficiency, and renegotiated gas supply contracts with more favorable payment terms. (Giovanni Gazza, CFO)
Q: Can you update us on the strategy for renewable energy growth and the potential involvement of a minority financial partner?
A: We are exploring the possibility of transferring our renewable solar assets into a new company and selling 49% of it to finance further renewable developments. This will help us implement new projects without increasing debt levels. (Luca Dal Fabbro, Executive Chairperson)
Q: Could you explain the impact of maintenance and startup costs on the waste business unit's performance?
A: The reduction in performance is linked to maintenance and a failure impacting WTE generation, as well as startup costs for new plants. We expect to resolve these issues by 2025, with new landfill capacities contributing from 2026. (Unidentified Company Representative)
Q: What is your approach to gas distribution and why focus on this area?
A: We are interested in gas networks for potential synergies in neighboring areas, but it is not our top priority. Our main focus remains on renewables, which align more closely with our strategic goals. (Giulio Domma, Head of Investor Relations)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
