Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Italgas SpA (ITGGF, Financial) reported a double-digit growth in EBITDA and net income for the first nine months of 2024.
- Operating cash flow nearly doubled compared to the previous year, indicating strong cash generation.
- The company achieved significant progress in its digitization program, with 90% completion expected by year-end.
- Environmental performance improved with a 11% reduction in net energy consumption and a 10% decrease in scope 1 and 2 emissions.
- The acquisition of Acqua Campania contributed positively to revenues, offsetting declines in other areas.
Negative Points
- Overall revenues saw a slight reduction due to the disappearance of the super bonus.
- Net debt increased compared to both the previous year and the first six months of 2024, attributed to seasonal revenue fluctuations.
- Capital expenditures were 6.7% lower than the previous year, primarily due to reduced spending on digitization.
- The ESCo business experienced a decline, partially offsetting gains from other segments.
- Higher net financial expenses were reported due to the impact of new bond issuances.
Q & A Highlights
Q: Given the nine-month results, do you see upside to your full-year guidance, particularly at the EBITDA level? Also, can you provide details on the full-year CapEx guidance?
A: We confirm the guidance given two weeks ago. We may be slightly below the €900 million CapEx target, but we are on track with our physical targets, such as digital equipment connections and kilometers of network laid. Regarding antitrust disposals, we have filed the documentation and await feedback.
Q: Are there any updates on the rumors about changes in the rules for tenders, particularly regarding technological developments? Also, can you provide insights into non-regulated energy efficiency projects?
A: We are not aware of any recent changes in tender rules. Any modifications that facilitate tenders are welcome. For energy efficiency, we are focusing on industrial clients and leveraging our internal expertise to offer solutions that reduce energy consumption. We expect better results in 2025 but cannot provide specific figures yet.
Q: Can you provide guidance on working capital for the full year and the use of fiscal tax assets related to the super bonus? Also, is the ESCo business still considered core, especially in light of the 2i Rete Gas deal?
A: We expect a positive working capital impact by year-end, with around €130 million from the super bonus tax credit. The ESCo business remains core due to its strategic alignment with our energy efficiency goals and regulatory obligations.
Q: What is the status of your activities in Greece, and where do you see the EBITDA margin by year-end? Also, what is the expected working capital absorption by year-end?
A: In Greece, we are on track to align with Italian standards within 3-4 years. We have already achieved significant progress and expect to exceed €100 million in EBITDA by year-end. We anticipate a positive working capital contribution by year-end.
Q: Are there any updates on the Rome concession, and what is the timeline for the next regulatory period?
A: The Rome concession expires in November 2024, but we have no updates from the municipality. The next regulatory period starts in 2026, with consultation documents expected in late spring 2025. It's too early to discuss potential changes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
