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Analysis of the Energy Segment

As a result of the merger of Meta and the acquisition of the former Enel network in the province of Modena, the Group’s Energy segment acquired a percentage-related dimension which, on the same basis as 2005, would have come to 6.5%, but with the consolidation of the Pesaro area which is not active in this business area, the increase was contained at 5.9%. It is noted that, before the acquisition of the Modena area, the percentage-based importance did not exceed 2.8%. 

(mln/€)

31-Dec-05

pro-forma

31-Dec-06

Change

Change %

Area EBITDA

22.5

25.2

+2.7

+12.2%

Group EBITDA

386.4

426.7

+40.3

+10.4%

Percentage

5.8%

5.9%

+0.1 p.p.

 

An increase in the raw material cost, having already been noted in the Gas area, was also seen in the Energy segment, but in relation to the limited availability of electricity it was considered appropriate to shift towards customers with a higher EBITDA margin as indicated previously.

An analysis of the results in the energy segment is presented as follows:

Income statement

(mln/€)

31-Dec-05

Pro-forma

Incr.%

31-Dec-06

Incr.%

Change

Change %

Revenues

396.7

 

389.4

 

-7.3

-1.8%

Operating costs

(369.6)

-93.2%

(362.1)

-93.0%

+7.5

-2.0%

Personnel costs

(9.2)

-2.3%

(16.0)

-4.1%

-6.8

+73.8%

Capitalized costs

4.6

1.2%

14.0

3.6%

+9.4

+205.6%

Ebitda

22.5

5.7%

25.2

6.5%

+2.7

+12.2%

Sales revenues decreased by 1.8%, passing from Euro 396.7 million in 2005 to Euro 389.4 in 2006; three main factors, which followed differing trends, affected this result: the afore-mentioned increase in the cost of the raw material transferred onto the sales price, an increase in volumes sold to non-eligible customers essentially linked to the acquisition of the former Enel network and to a substantial drop in volumes sold to eligible customers due to the commercial repositioning, as well as increased competitive pressure.

(mln/€)

31-Dec-05

pro-forma

Incr.%

31-Dec-06

Incr.%

Change

Change %

Sales revenues

280.1

50.0%

271.4

50.0%

-8.7

-3.1%

- of which non-eligible customers

55.9

10.0%

73.0

13.4%

+17.1

+30.5%

- of which eligible customers

224.2

40.0%

198.4

36.6%

-25.8

-11.5%

Distribution revenues

40.0

7.1%

43.4

8.0%

+3.4

+8.6%

Other

76.6

13.7%

74.6

13.7%

-2.0

-2.7%

Total revenues

560.2

100.0%

542.7

100.0%

-17.5

-3.1%

Operating costs decreased as a result of lower volumes sold and despite the additional work capitalised.

Personnel costs rose considerably both as a result of the acquisition of the former Enel network in the province of Modena and the additional work capitalised.

The quantitative data for the area by customer type illustrated below shows the trend in the volumes linked to the afore-mentioned management policies:

Quantitative data

31-Dec-05

pro-forma

31-Dec-06

Change

Change %

Number of customers (thousand units)

177.5

263.7

+86.2

+48.6%

of which non-eligible / only distribution

165.8

246.2

+80.4

+48.4%

of which eligible

11.6

17.5

+5.9

+50.5%

Volumes sold (Gw/h)

3,754.8

3,133.1

-621.7

-16.6%

Non-eligible customers

720.1

828.4

+108.3

+15.0%

Eligible customers

3,034.7

2,304.7

-730.0

-24.1%

The EBITDA rose in 2005, passing from Euro 22,5 million to Euro 25.2 million, +12.2%, despite the lower volumes sold, thanks to the contribution from the former Enel network, the synergies permitted by the incorporation of the Modena area and confirming the efficacy of the sales action adopted.

 
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