Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the A2A First Quarter 2022 Results Conference Call. As a reminder, all participants are in listen only mode. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Renata Bonfiglio, IR Manager. Please go ahead, madam.
Thank you very much. Good afternoon, and Welcome to Our Conference Call. Today, the results will be presented by Renato Mazzoncini, CEO, and Filippo Torcetta, Head of Planning. The Q&A session will be based on the questions pre-sent by the financial analysts. I now hand you over to Renato Mazzoncini. Please go ahead.
Okay. Good afternoon, everyone, and thanks for joining our conference call for the first quarter results. It's a quarter very particular. 2022 started with the Russo-Ukrainian War with a huge increase in volatility in energy and raw material prices, and with a higher inflationary pressure. A little bit complicated, let's say. However, our group managed to cope with harsh times, showing once again the high resiliency in their overall economic results. Once again, because exactly two years ago, during the pandemic, the topic of the resilience was not approved. Let me briefly sum up our main achievements in the first quarter, which continue to set up the basis for our long-term goals.
We have an acceleration towards Energy Transition. You remember that we have two pillars. Our industrial planning is divided into Energy Transition and Circular Economy. Starting from Energy Transition, we have an acceleration aimed at ensuring more flexibility. In fact, we have been awarded 5.4 GW in capacity market with delivery in 2024, with a total expected revenue of EUR 220 million, including both existing capacity, so in our plant 4.1 GW, and new capacity, 1.3 GW. In particular, a couple of plants for us very important, Monfalcone from coal to gas and Cassano with a new plant of gas of high performance.
As part of our asset rotation plan, we completed the closing for the sale of non-strategic natural gas distribution asset with a regulated assets base of EUR 102 million. The cash is expected in second quarter. In addition, we obtained a crucial authorization for a new plant of Bedizzole for the treatment of 60,000 tons of organic fraction, so for the production of biomethane. Let's say it's very important for us. We have under construction two other plants for biomethane in Lacchiarella and in Cavaglià, in Piedmont. It seems that one indirect effect of the war and the problem of the energy autonomy of the country is that some dossiers can be unlocked.
This is one good example, exactly like the discussion that probably you know about, the waste-to-energy plant role. Okay, we arranged important collaboration with 5 S for water networks. Is new technology for water cycle. You know that, we are very committed in growing water, and the idea is to be partner of, a public, water cycle company, in particular using new technology. We finally closed, the sale of three of our building, and we issued, our second sustainability-linked bond related to, total renewable energy capacity installation for 2024. Well, looking at slide number number, the highlights of the period, as I mentioned, this quarter has been quite hard in market by relevant effect, on positive and negatives, effects.
First of all, we benefit from a robust performance of Ancillary Services MSD. Higher than the first quarter 2021. Much higher, EUR 52 million. The start of capacity market, the effect in this quarter is 35 million more, so in the full year, EUR 140 million. Our energy traders recorded an excellent result in trading portfolio, so about EUR 70 million vs the first quarter 2021, thanks, of course, to the high level of volatility. In addition, our waste-to-energy and distributed plants took advantage, of course, from the current energy scenario, with EUR 60 million of more better result. On the other hand, energy retail unitary margins were affected by contract timing and consumption profile. Later, we'll explain better this effect.
With a difference compared with 2021 of EUR 80 million. The drought caused a step reduction in hydroelectric production because you know that we had initially a lot of problems with rain this year, and the result is 35% less hydro production. At net financial position level, we recorded a significant cash in of over EUR 220 million related to the property disposal, some buildings with a positive impact also in our P&L. The extraordinary increase in accounts receivable related to energy retail, mainly due to higher energy prices. If you look at slide number five, we summarize all the effects.
As also showed in past crisis, you know, I remember the crisis during the pandemic, our group showed good resilience thanks to business diversification and solid financial structure. The massive increase in revenues is an incredible effect. We closed the quarter with EUR 5.5 billion of total revenue, driven of course by the huge increase of the price of energy and gas cost, that was not followed by an increase of EBITDA, of course, because it is traded every end of the day. The EBITDA is more or less stable, 2% less, but it is also an effect of the extraordinary decree that our government decided to take at the beginning of the year.
The ordinary net income is down 22% compared to the first quarter 2021, mainly due to as a consequence of extraordinary bad debt provision linked to the greater credit exposure to customers due to the exceptional increase in the turnover growth. The group net income instead is EUR 65 million higher than last year, thanks to capital gain on building disposal. The last figure is the net financial position increased by EUR 184 million, standing at EUR 4.3 billion, mainly due to significant net working capital absorption in energy retail. If you look at the breakdown in slide number six, it's very clear the effect due to, let's say also the hedging between an increasing EBITDA in generation, EUR 41 million, and the increasing in the result of waste business unit.
In this case, mainly due to the increase of price of energy, so EUR 32 million on EUR 37 milllion is due to the increasing of energy. This is offset with the reduction of the market EBITDA of EUR 88 million. The total result is EUR 9 million less than EUR 21 milllion, and there is an offsetting between our generation and our market. I leave the stage to Filippo Torcetta, our controller, to explain in detail our four business units. In particular, we'll come back on the market business unit to explain
What we are doing to recover the results of the market. Filippo?
Okay. Thank you, Renato. Starting from our generation, page seven, we achieved a favorable quarter compared to the first quarter 2021, EUR 31 million better on ordinary EBITDA. Main positive effects are higher MSD. We closed an extraordinary quarter, topping around EUR 90 million, EUR 52 million better compared to the last year. The start of a capacity market, resulting in a +EUR 35 million vs first quarter 2021, and a high level of volatility, as seen in fourth quarter that lead to great trading portfolio opportunities, +EUR 17 million. On the other side, a 35% contraction in hydro production, corresponding to around EUR 31 million of EBITDA reduction, and a negative effect on scenario on gas portfolio of about EUR 25 million.
We are currently hedged 51% on year to go, mainly on hydro production, about 80%, with an average selling price of 64 EUR/MWh. This may leave it upside, but at the moment, we don't expect higher volumes. On CCGT side, we hedge on year to go about 40% with a margin, in terms of clean spark spread, of around 88 EUR/MWh. On 2023, the hedge ratio is around 21%, 60% on hydro production. On page eight, we have the market. This is the only one with a minus. The reduction of EBITDA margins of EUR 88 million, of which about 50% already expected in our budget, is basically due to the temporary fall in the free market on unitary margin, both power and gas. The business outlook is still positive.
Positive customer growth, 50,000 new customers in free market compared to the end of 2021, and positive electricity and gas volumes sold, respectively, +18% and +6%. Focusing on the fall of unitary margin, main drivers are a different time distribution of the margin of a fixed price contract compared with the previous year, with the same overall contractual margin, accounting for about -EUR 40 million. This is a temporary effect, since we expect, all the rest being equal, to recover more than 1/2 within this year, and the remaining part within two years. Consumption profile different from those contracted due to the effect of an extraordinarily high and volatile price context, which account for about -EUR 30 million, and higher unbalancing costs for about -EUR 7 million.
In addition to unitary margin effect, we recorded higher operating costs for EUR 6 million. Moving to page nine, waste is up 43%. Excluding the positive contribution of M&A, which account for EUR 4 million, the organic growth is 38%. The energy scenario is the main positive effect impacting on WTE margin for EUR 32 million out of EUR 38 million on urban waste treatment plan. In addition, we recorded higher quantities disposed in our treatment plants, and the waste collection that is down EUR 4 million, mainly due to higher fuel cost and the end of the waste concession in Varese since January 2022. Page number 10, Smart Infrastructure.
Smart Infrastructure shows an increase of EUR 5 million, driven by positive scenario effect on district heating, which account for EUR 16 million, partially offset by lower regulatory cost of capital, both electricity and gas network, and lower volumes on integrated water cycle. RAB, both electric and gas, is increasing following to the important CapEx plan carried out. Now, let's have a look at profit and loss, page 11. Amortization and depreciation increased by EUR 20 million due to the important CapEx plan carried out in 2021, and the impact of Octopus and Agripower deals consolidated since the second half, 2021. Risk provisions equal to EUR 32 million, higher than corresponding figure in first quarter 2021.
The related change is mainly due to a bad debt provision, following the surge in revenues in energy retail to higher energy prices. In Q1, we sold some of our buildings with a capital gain pre-tax of around EUR 160 million. Taxes increased for capital gain, it include also the impact of the Italian pricing DL Aiuti. Thus, the group net income in the first quarter 2022 reach a value slightly higher, EUR 200 million. Renato, I leave you again the floor to present the CapEx plan.
Yeah. A quick overview on our CapEx program, and it's easy to see in the slide number 12, that we increase 20% of CapEx in 2022 compared to 2021, but confirm our CapEx plan included in our industrial plan. In particular, you can see that EUR 114 million are developments, the other maintenance, 80% linked to SDGs goals, so in huge part, and 60% in Energy Transition, 40% in Circular Economy.
Surely, the growth of another EUR 31 million compared with the last quarter or the first quarter of 2021 confirm that we are pushing a lot in investment, and with this strategy that guarantee the growth for the future and to catch the opportunity that we have in this period. Filippo, do you want to say something about net free cash flow?
Okay, yes, Renato, slide 13. Moving to our cash flow, the total absorption is equal to EUR 184 million, despite cash in of EUR 221 million, related to the property disposal, deriving from a significant increase of net working capital and other asset liabilities. In the first quarter of the year, the net working capital is usually affected by seasonality. The commercial receivable growth due to the sale of gas, electricity, and heat. This year, we experienced a temporary effect, about EUR 460 million from energy market, and one-off measure from government that will be reabsorbed. Considering that we have not seen any deterioration in our customer portfolio delinquency, all the movement in the net working capital should be considered temporary.
Now, if you turn to the following page, there is a focus on temporary items and their effect on our cash flow. By excluding change in perimeter and property disposal and the temporary items, the ordinary cash generation is positive and reached EUR 80 million. As said, government measure include installment plans for electricity, gas and district heating bills, and the cancellation of general system cost, leading to higher net exposure. On the other side, scenario and volumes include increase of trade receivable, primarily due to tariff growth for electricity, gas and district heating sales. Renato, if you want to show the guidance.
Yeah, the guidance, page number 15. We confirm our guidance, 2022, shared during the last strategic plan update with an EBITDA in a range of EUR 1.4 billion-EUR 1.45 billion, and a net ordinary income, excluding non-recurring items and extraordinary government measures, so below the DL Taglia Prezzi and below the DL Aiuti, in a range of EUR 330 million-EUR 370 million. As reflected in the first quarter results, the group benefited from business diversification and a solid financial structure. Despite all the problems of scenario and the problems linked with the different decree that arrived in the last month, we are able to confirm the guidance. That is truly good news.
Okay, guys, so I think that we can shift to.
Okay.
Question and answer, Renata.
Okay. Now we start with the Q&A session, but as I anticipated, it is based on questions which we have received from the financial analysts. I start with the first one. Renato, do you see any risk for A2A deriving from the potential interruption of gas supply from Russia impacting CCGT plants or gas retail sales?
First of all, A2A has no direct supply from Russia or from Russian counterparties. In a scenario, of course, very critical, of a full cut of Russian gas imports, the price of European gas will increase, surely. In this case, A2A have three main exposures. The first is A2A purchases gas for its CCGT power plants. But in this case, the high level of price will be reflected in the power price as usual, then there is absolutely no risk for A2A. The second is that A2A purchases gas for its customer portfolio. But since A2A does not currently have an open position to fix prices, the market price will also be reflected in the final price to clients. Let's say it's a pass. Also in this case, zero risk.
The third is A2A will be exposed to a variability of a daily volume profile, so probably intraday in case of meteorological condition different from the region, and however, the impact may be absolutely negligible.
Okay. Could you share your updated view about current energy prices level and market environment? What about 2023, 2024 outlook?
The current situation of high oil and gas prices is also exacerbated by the conflict of course. A2A expected oil and gas prices and the PUN to stay at high level also in the next year, also because it don't seems possible to see an end of the war in few weeks. TTF prices are expected at 83 EUR/MWh for 2023 and 65 EUR/MWh for 2024. PUN prices are expected at 218 EUR/MWh for 2023 and 173 EUR/MWh for 2024. It is in line with the forward curves. This is the number that we have in our forecast in our business plan and surely higher than our business plan assumption used in the industrial plan presented in January.
Potentially can be an upside.
A third question on geopolitical macroeconomic environment. How are you managing the procurement for the construction of renewable plants in the context of growing inflation? In addition, are you experiencing any supply chain issues?
A significant inflationary impact is occurring both in the sector in general. It's clear, it's enough to read the newspaper every day, and on photovoltaic panels in particular. However, in the first few years of our business plan, there are no significant plant construction. If you remember, in the first phase, we have more M&A, and in the second, greenfield construction. The hypothesis is that the inflation that we have today in this particular moment, probably also due to the huge demand, can change in the next years.
The only project included in our pipeline that we start shortly is a 30 MW wind power plant in Sicily, which has been already contracted with an EPC in accordance with the assumption included in the business plan. We was able to close this procurement at exactly the same price used for the evaluation of return on investment. We expected that this inflation level is not going to be structural because it would in this case be a very big problem for all the economic system. On other CapEx, the average increase during the negotiation with suppliers is about 5%.
Yes, 5% is not peanuts, but is not the 30% that sometimes is possible to read somewhere. However, we are discussing framework agreements with suppliers to mitigate the inflationary effect, also for suppliers can be an opportunity to stabilize the relation with us.
The following question is about the National Recovery and Resilience Plan. Could you please give us an update on the potential projects? What is the timing for them? In your opinion, is there any risk of under-allocation of the financial resources available?
Starting from the fact that A2A has identified a total of 43 target projects with a total allocation of EUR 57 billion as relevant for its activities. The timing for our participation in the projects is mostly dependent on when and how they are made publicly available. Generally, we adopt two different approaches based on the detail and the level of fit with our industrial plans. The first is prompt application from those that are ready, well-defined in the scope, and are highly compatible with our industrial plan. We are not looking for resources from PNRR out of scope for us, to be clear.
For those that are still a work in progress at a ministerial level and still have a substantial degree of fit with our business, we are adopting an active stance of our effort to influence the funds at the policymaker level. The risk of under-allocation of the financial resources available is real, as there are tenders that saw minimal or zero allocation on the available funds. However, the general understanding is that the policymaker will tweak the deadlines or the specific or both tender in order to achieve higher rates of authorization. The main problem that we see is achieving full allocation at the 2026 completion deadline, which is extremely tight for some infrastructure projects, requiring lengthy authorization processes and with fairly substantial construction time.
Plus the magnitude of some of the incentives, which are not necessarily enough to bring some project in the money. To conclude, talking only about the PNRR, the impact of the money from National Recovery and Resilience Plan is very, very marginal. I think that is more interesting for us, the money that can arise from research. Universities, we are closing a lot of agreements with more or less 10 very important universities in Italy because they have money, in particular for technology transfer. And so they need to build ecosystem with research center, university and companies.
Probably, the best effect of this money for us is to be able to push more, the research in some field, for example, battery, hydrogen and so on, that can be very interesting for the future.
After the interruption of the negotiations with Ardian, does A2A still look for a deal in the energy business as to accelerate growth, extract synergies, et cetera, without paying high multiples? Have you changed your strategy in renewables?
No, we have absolutely not changed our strategy of renewables. Also because what you can find in our Industrial plan is what we are able to do alone. Also the hypothesis of agreement with Ardian was linked to opportunities of acceleration of Industrial Plan, not hypothesis to do it. A2A is constantly reviewing several M&A opportunities and dossiers in line with the strategic lines of our business plan, which means mainly renewable energy and circular economy, of course. At the moment, we are not planning any partnership as we were evaluating with Ardian, mainly due to the current macroeconomic situation and highly volatile market conditions.
I think that in this particular moment, it's better to understand the evolution of a scenario before starting any new agreement. We do not have in place any plan to sell other parts of our gas network assets as well. Our growth strategy on this has not changed. We keep striving to raise our solar and wind capacity to 3.9 GW by 2030, as written in our industrial plan.
Okay. On hydroelectric concession tenders, could you please give us an update on the discussion on competition law, please?
Well, the topic is already under discussion. The Italian parliament is still discussing the draft of competition law. You know that inside the competition law, there is a particular topic about federal concession, Article 5 of the Competition Law. At the moment, the draft of Article 5 does not modify the current regulation, particularly considering that A2A plants are located in Lombardy, Friuli Venezia Giulia, and Calabria, which have already adopted their own regional laws. In 2021, Lombardy region has begun inspections of A2A hydro plants with expired concession. In April 2021, the concessionaire submitted it to Lombardy reports about above-mentioned concession. At the moment, Lombardy has not yet adopted the regulation needed to issue tenders.
In April 2022, Lombardy launched the proposal of regulation about evaluating on water use to determine if water deviation could or not contain. Definitely the regulation of water use has not been adopted yet. We are, let's say, ongoing, and I repeat that I imagine that for the income of hydro concession there will be opportunities to invest and to continue to operate this asset.
Okay. The following set of questions is for Filippo. We got many questions on details on 2022 guidance. Could you please tell us the risks regarding the different business units, the CapEx and the expected M&A, and the debt expected at the end of the year? Could you confirm the guidance given at the business plan of the level around EUR 4.4 billion, bond, hybrid bond included? Please go ahead.
Okay. Thank you, Renata. Focusing on risk, we can see three main risk. First of all, lower hydro volumes than expected in Q4. At the moment, we forecast a standard hydricity after lower snow level seen in Q1. The second one is the unexpected higher volume of sales to energy retail final customer to be covered on the spot market at an average purchase price higher than average selling price. And finally, impact of unbalancing cost in energy retail in a context of high spot prices. Relating to CapEx and expected M&A, we have already signed crucial M&As, acquiring Trenord and 3New. Cash out is expected in Q2, and the Volta Green Energy this deal was closed in March. We still keep looking for interesting target that fit with our long-term strategy.
We want to keep a high level of CapEx in line with our business plan commitment. However, in case of emergency, we are fully able to postpone some of them. Regarding guidance on debt, at this stage, given the high uncertainty on the current environment, commodities, market volatility and government measures impact, we will provide an indication on the debt evolution different from what included in the business plan.
Okay. Go ahead with the results and guidance. What are the effects of government measures on Q1 2022 results as EBITDA, EBIT and taxes, please?
Q1 results include the effects related to both Ristori Decree Law and Tagliaprezzi Decree Law on the extra profit extra contribution of 25%. In particular, related to Ristori Decree Law account for -EUR 6 million in first quarter 2022, and EUR 60 million on full year. This is classified among non-recurring EBITDA in the generation. The greater weight of the following quarter derives from the current lack of hedging on production in some months of the year, in particular July, November and December. Relating to Tagliaprezzi Decree Law account for about EUR 30 million, fully recorded in first quarter. This is classified among taxes in the income statement.
In addition, some recent government measures taken for the surge in commodity prices have introduced simplifications to build renewable plants, for instance, quicker authorization, enlargement of eligible building areas, which may support our efforts to grow in this area.
Okay. Now, could you please give us the updated level of electricity forward sales for full year 2022 and 2023, both hedge ratio and prices?
Okay. Group hedge ratio for the full year 2022 is equal to 57%, fixed price production, mainly hydro, and a hedge ratio equal to 82% at 69 EUR/ MWh, while CCGT production have a hedge ratio equal to 46% at 11 EUR/ MWh clean spark spread. Group hedge ratio for the full year 2023 is equal to 21%. Fixed price production have a hedge ratio equal to 55% at 141 EUR/ MWh, while CCGT production have a hedge ratio equal to 2% at 11 EUR/ MWh.
On 2022 guidance and for generation, how much is the hydroelectric production expected for 2022? Do you see room for further decrease of hydroelectric output due to the drought?
At the mo-
You prefer one by one? What are the implications on the sales of fixed price already closed, i.e. overhedging risk? What is the amount of hydroelectric fees expected in 2022 vs 2021?
Okay. At the moment, hydroelectric production implied in our forecast is about 3.4 TWh. If the drought continues and water supply remains very low, we can expect a further decrease in our hydroelectric production. If drought continues, there is an overhedging risk, and we may close our position, buying back volumes. Hydroelectric fees expected to increase by EUR 70 million in 2022 vs 2021.
Now we move to ancillary services. Do you consider sustainable the strong performance achieved in the MSD market following the implementation of a capacity market?
As you've seen in the first quarter 2022, we achieved a total Ancillary Services margin of about EUR 91 million, EUR 41 million euros in Q1 2021, thanks to some market opportunities. At the moment, according to the current market dynamics, we can foresee for the following quarters an overall margin for ancillary services in line with the normalized trend, more or less EUR 35 million per quarter, for a total amount of EUR 200 million for the full year. Better performance will depend on the market inefficiency. The new mechanism of capacity market only affects the price offered on MSD margin, which is kept at strike price.
Okay, 2022 guidance on business unit margin. How much is the impact on 2022 that will be reabsorbed in the following years? Do you see risks of volume imbalances for contracts at fixed price?
A large part of reduction in margins recorded in Q1 was already expected in our business plan, and will recover in the next quarter for yearly contracts or in 2023, 2024 for the contract exceeding 2022. Additionally, recovery actions are in place to reabsorb Q1 unexpected negative impact on margin due to extraordinarily high and volatile price context. Actions will be pursued both in terms of commercial strategy and leveraging on operating cost efficiency. Relating to the impact on 2022 that will be reabsorbed, considering current forward prices, the impact on 2022 to be reabsorbed in the following years amounts approximately to EUR 36 million. Risk of volume and unbalancing cost.
Risks are related to fixed price contracts themselves, properly hedged according to group policies, but to customer consumption profile, either fixed or variable, that could partially differ from contractualized volume in a context of extraordinarily high and volatile prices. The group will mitigate the risk by reducing the incidence of fixed contracts on our portfolio.
Offers at fixed prices have been proving to be really difficult to manage in a context of rising commodity prices. How does the company intend to modify its commercial strategy, both in electricity and gas?
The commercial action currently in place regards both markets, mass market and large customer segments. On the mass market, the group has interrupted the offer of a new 24-month contract at fixed price since the beginning of March. Current offer mix is composed more than 50% by variable index offer, and the rest by annual fixed price offers.
On large customer, fixed price sales have been interrupted since the end of February. Now on working capital. The first quarter saw negative movement in working capital. How much of a temporary effect could be reabsorbed during the remainder of 2022? May the working capital boost compromise your capacity to accelerate CapEx while paying growing dividends? Can you detect a risk of excessive leverage in the short term? What are the requests of the rating agencies to keep your current rating?
About temporary effect absorption, the bills installment plans and other government measures that hit the net working capital in first quarter should be reabsorbed before year end. However, other measures expected in the Tagliaprezzi will affect the net working capital in the second half of the year. The time recovery of the net working capital increase due to commodities prices depends on the energy scenario, excluding the effect of seasonality. If the price remains at the level of or lower, the effect will be reabsorbed. Conceivably, if the price goes up, the net working capital will increase absorbing cash. Anyway, any other increase in net working capital only due to prices will be temporary. Our commitment relating to the rating agencies is to maintain the current credit rating. We are closely monitoring the situation, working on strategies to mitigate the temporary impact from energy markets and one-off measures from government.
Each way can evaluate many options. In 2022, S&P's threshold for FFO to net debt is 20%, and Moody's request to be in the low 20s. Additionally, the group has a solid liquidity position, EUR 2.4 billion, made up by cash on hand and unused committed facilities, more than EUR 3 billion, to manage commodities market volatility and net working capital swings.
Question on hybrid bond issue, any news on that?
A2A is closely monitoring capital market conditions. In any case, hybrid issuance is expected to occur in second half. In March, we have successfully issued a six-year bond despite the volatile environment.
Okay, now I'll turn to Renato for the final questions. Can you please explain the poor performance of the gas supply business and your expectations by year end?
Yes. Well, the negative performance of the gas supply business is relating of course to increasing prices trend started last year that constantly affected the promptly hedging of sales. Therefore, the growing demand by energy retailers leads to additional purchases at an increase in spot prices. We expected a recovery in the following month, so between April to December closing more or less to EUR 1,050 million, better than 2021. However, the future performance may be of influence also by the unforecastable variables in temperature, like area, and volatility of the fuel volumes.
In addition, consider that the storage injection campaign has not been completed yet, and it could lead to positive effects on the result of the current year and of the first quarter 2023.
Could you please give us an update of authorizations for biomass and plants? What is the expected increase in capacity of up to 20% of plants?
Well, as I said before, if you remember during presentation, the construction of two plants is ongoing, in particular in Piemonte, Cavaglià, and Lacchiarella, between Lombardy and Liguria, for treatment of organic fractions, so wet waste, and for the production of biomethane. This plant will be completed surely by the end of 2022. The plants are newly built and therefore being dimensioned to capture the territorial and site synergy. The equipment has been sized to guarantee an additional 20% on top of the authorized capacity. If with the new law that liberates 20% more of capacity in every plant, the IRR of this plant can be absolutely better than forecast.
Is the capital gain from the real estate disposal eligible for dividend payments?
Oh, yes. The capital gain from real estate is theoretically eligible for dividend, but we confirm absolutely the dividend growth envisaged in the strategic plan. We have no idea to change it using dividend from this disposal.
The last question is, what are the pro soluto commercial credits reported in Q1 2022?
This is an easy answer, Renata, because we did not sell pro soluto commercial credits in the first quarter 2022, so.
Okay. The call is over now. Thank you for your time and attention. The investor relations team is available for any follow-up. Thanks for joining us, and until next time, goodbye.
Okay.
Bye.
Thank you. Bye-bye.