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, digital transformation, and water sector expansion, despite a 6.4% revenue decline due to the end of the Superbonus impacting energy efficiency.

• Gas distribution benefited from increased allowed return, operational improvements, and regulatory updates, 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 investments, capex, and dividend payments.

• The Group advanced digital transformation, sustainability initiatives, and maintained robust financial structure.

Financial highlights

• 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.

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

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

• Net financial debt increased to €6,829.4 million as of June 30, 2024, up €195.1 million from year-end 2023, mainly due to investments, acquisitions, and dividends.

Outlook and guidance

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

• Focus remains on strengthening, developing, and digitising gas distribution assets to support the energy transition in Italy and Greece.

• The Group is pursuing the acquisition of 2i Rete Gas, with due diligence ongoing and financing options in place; new business plan to be presented by September/October.

• Investments are expected to accelerate in H2 2024, with continued emphasis on innovation, sustainability, and value creation.

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