Genova - ERG closed the first half of 2017 with a growth in profits, and its shares experienced some appreciation, as the company is putting the finishing touches on the sale of its 51% stake in TotalErg, thus shedding the company’s last fuel oil related business, following the firm’s makeover as a player in renewable energy. The half-yearly report just approved by the Board of Directors, chaired by Edoardo Garrone, showed €87 million in net profits, an increase of 17% over the same period in 2016. Operating profit decreased by 8% to 133 million, and overall EBITDA dropped 6% to 258 million. The firm’s net debt amounted to €1,514 million, down 43 million on December 31 2016. The stock on the Milan Stock Exchange closed at €12.55, a gain of 2.2%.
According to Equita analysts, the accounts of the Genoa-based renewable energy group are “very positive”, as such results were produced “despite unfavourable hydro and wind conditions.” “Besides the predicted combined impact of a drop in incentive pay-outs for wind power and the changed regulatory environment in Sicily,” Luca Bettonte, ERG CEO pointed out, “there were lower wind and hydro output levels. These effects were almost completely offset by the positive outlook for prices in Italy, which benefited both the hydroelectric power plant at Terni thanks to that facility’s flexibility and the firm’s programmable thermoelectric output.” Bettonte confirmed the results were in step with company guidance for 2017, which forecasts EBITDA of €430 million and a net debt of €1,450 million, inclusive of investments totalling €140m in the development of wind power outside Italy, specifically in Northern Ireland where, at the end of the year, 48MW currently under construction will come on stream. New investments are scheduled following the sale of the 51% stake in TotalErg, worth an estimated €350-400 million. In Italy, TotalErg operates 2,580 service stations. The process of evaluating bids is currently under way, and the transaction could happen in the fall.
According to those familiar with the matter, among the names involved are the Anglo-Swiss company Glencore and Spain’s Intervias (which has already acquired 1,170 service stations in Italy from Esso), with the likes of API and Ugi Corporation also mentioned. Erg will present its business plan at the end of the year, but the current one already indicates the countries in which to target investment in wind power: Germany, the UK, France and Poland.