Hera touts 20% rise in investments as first half earnings edge higher

(Alliance News) - Hera Spa on Wednesday reported a rise in first half earnings, with the company "on track" to meet its growth targets despite a complex environment.

Shares in the Bologna, Italy-based utility company closed down 3.0% at EUR3.78 in Milan on Wednesday.

In the six months to June 30, net profit increased 5.1% to EUR249.4 million from EUR237.3 million. Earnings inched up to EUR0.157 from EUR0.152 on a diluted per-share basis.

Revenue was EUR6.79 billion, up 19% from EUR5.72 billion.

Chair Cristian Fabbri commented: "In the first half of the year, we continued to increase our creation of value by leveraging the Group's industrial growth and financial solidity. Cash generation allowed us to finance investments coming to over EUR400 million, up 20%, with the greatest increases going towards plant development in the waste management area and water cycle resilience. The solidity of our balanced business portfolio is reflected in the rise of Return on Equity, which stands at 11.5%. These results show that we are on track with our Business plan."

Chief Executive Officer Orazio Iacono added: "Good operating performance and financial optimisations supported a 5% increase in net profit attributable to shareholders, which reached EUR229.3 million. These results confirm our ability to continue our path of growth, even in a complex macroeconomic scenario, keeping our focus on resilience, sustainability and innovation. The positive cash generation contributed to a further reduction in net debt, bringing the net debt/Ebitda ratio to 2.49x, which gives us significant strength for targeting future growth opportunities."

Earnings before interest and taxes declined to EUR383.2 million from EUR385.1 million. This is due to lower provisions mainly related to last resort markets, which offset higher depreciation and amortisation for substantial capital expenditures in development, especially in the regulated sectors.

Ebitda slipped 1.5% to EUR721.7 million. Of this, Gas rose 1.5% and Water cycle 7.1%. Electricity declined 21%.

Looking ahead, Hera commented: "The Group's solid multi-business industrial model, balanced between regulated and free market activities, along with its efficient financial management, allow Hera to continue along its path of growth, both internally and through acquisitions, increasing the value and resilience of its assets and contributing to the sustainable development of served areas and the creation of value for all stakeholders."

By Aidan Lane, Alliance News reporter

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