Italgas (IG) H1 2024 earnings summary

Executive summary

• Achieved double-digit growth in adjusted EBITDA (+10.6%), EBIT (+12.0%), and net profit (+13.3%) for H1 2024, driven by strong Italian gas distribution and water sector contributions, despite a 6.4% revenue decline due to the end of the Superbonus impacting energy efficiency.

• Gas distribution benefited from increased allowed return, regulatory updates, and operational improvements, offsetting ESCO business slowdown.

• Acqua Campania and subsidiaries were fully consolidated from January 30, 2024, boosting water segment results and operational synergies.

• Operating cash flow increased by 66% year-over-year, supporting capex, dividend payments, and reducing Superbonus-related cash absorption.

• Environmental performance improved, with net energy consumption down 12.4% and progress in leak detection and emissions reduction.

Financial highlights

• Adjusted revenues declined 6.4% to €872.3 million, mainly due to lower other revenues, while regulated gas distribution revenues rose 12% to €809.1 million.

• Adjusted EBITDA reached €671.2 million (+10.6%), with core gas distribution in Italy contributing nearly €600 million.

• Adjusted EBIT grew 12% to €401.8 million; net profit after minorities rose 13.3% to €241.5 million.

• CapEx was €353.7 million, down 11.2% year-over-year, mainly due to lower digitization and centralized RAB investments.

• Net financial charges increased to €55 million, mainly due to new bond issuances and refinancing activities.

Outlook and guidance

• 2024 guidance confirmed: €1.8 billion revenues and €800 million EBIT, with robust gas distribution fundamentals offsetting ESCO headwinds.

• Net debt (excluding IFRS 16) expected at €6.6 billion by year-end, assuming no further M&A.

• New business plan to be presented by September/October, pending outcome of 2i Rete Gas acquisition.

• Investments expected to accelerate in H2 2024, focusing on innovation, sustainability, and value creation.

• The non-binding offer for 2i Rete Gas aligns with the strategy to consolidate sector leadership and advance decarbonisation.