Thank you, and welcome to the presentation of the Acea Group for the presentation of the results of the first 1/2 of 2022. The CEO, Mr. Gola, and the CFO, Mr. Paris, will illustrate the results. Thank you, Ira, and welcome to you all.
We're going to present the results of the first 1/2 of 2022. The results are, in my opinion, quite good and are in line with my expectations. In the first 1/2 of the year, we had a number of positive events which gave us greater results. EBITDA at the end of the 6 months period, plus 10% of EUR 602 million.
EBIT growing by 12%, EUR 348 million, and net profit, EUR 103 million, up 10%. Despite the extraordinary contribution that we had, this is a very good result. As to the net debt, it's in line with the guidance we gave. CapEx, EUR 462 million, -3% versus the same period of last year.
Net debt, EUR 4.212 billion, +6%. Net debt to EBITDA ratio, 3.2x. The EBITDA growth of 10% and the good results, considering the overall complex context, has allowed us to review the guidance upward. The previous guidance envisaged the EBITDA for the year growing by 2.4%.
Now the new guidance envisages the EBITDA growing by the end of the year by 4%-6%. CapEx growth in line with the 2021 and net debt between EUR 4.2 billion and EUR 4.3 billion. A very important piece of news in the past few days, Acea has committed to the Science Based Targets initiative to set near-term company-wide emission reductions in line with the science of SBTi.
Page 3 of the presentation, you see the main events of the first 1/2 of the year. Now, in March, we closed the sale to Equitix of the majority stake of the vehicle that owns photovoltaic assets. In March, again, 2022, Acea and SUEZ signed the final agreements for the partnership for design and commercialization of digital water metering systems.
April 2022, we closed the acquisition in consortium with Ascopiave and Iren of certain gas distribution concessions from A2A. May 2022, the first green bond allocation and impact report published the years 2019 and 2020. June 2022, Acea and NTT DATA Italia presented the Waidy Management System, a native cloud solution for protecting water resources.
We inaugurated the largest 20-MW photovoltaic plant in Basilicata. Moreover, in a legal auction, we were given the Polo Cersu business unit operating in Abruzzo in the waste treatment and storage. Again, in June, first climate disclosure report published in June.
In July, a few days ago, we published the authorization receipt for a photovoltaic plant to be the largest in Sardinia, and one of the biggest in Italy. Installed capacity, EUR 85 million. Ratings and certifications. In January 2022, we had the Gaia R ating assigned Acea a score of 82 out of 100, and then we improved or we were improved the Bloomberg Gender-Equality Index with a score of 80.67.
In July 2022, Standard Ethics confirmed the double E ratings, and Fitch Ratings then confirmed our rating of triple B plus with a stable outlook. Page four, we can see the main highlights.
Now, revenues, EUR 2,347.7 million, growing almost 29%, thanks to the growth, also the price of energies. EBITDA, EUR 682 million, growing by 10.3%. EBIT, EUR 348 million, growing by 12.4%. Pre-Tax profit, EUR 323 million, growing by 20%. Group net profit after minorities, EUR 183 million, growing by 10%. Well, here, you have the negative effect of the extraordinary windfall tax, EUR 29 million. Net debt, EUR 4,212 million, growing by 5.6% versus December and 7.1% versus June.
Now, as to the results, the effect of the tariff had an impact on all of the results. We had the EUR 19 million of the sale of minor stake in shares of photovoltaic assets. As I said, windfall tax as per Article 37 of Law Decree 21/2022, EUR 20 million. At this point, I'll hand you over to the CFO. Thank you, Giuseppe. Page 6 of the presentation, and we'll see the performance of the water business. Here, you can see an increase of the EBITDA by 8.4%. You can see the EBITDA EUR 353.7 million for the first part of 2022.
There are a number of elements which characterize the performance of the period. The payment and the price that we have received for technical quality, so technical quality bonus, EUR 26.9 million. Growth of Acea Ato 2, operational efficiency, technical quality bonus, EUR 25.8 million. The growth of Acea Ato 5, EUR 2.6 million with a contribution to the technical quality bonus of EUR 700 million, which makes up for the GORI issue related to an increase in the sludge disposal costs and absence of a tariff increase.
Now, let me point out, as we did already in the first 1/4 conference call, the closing of agreement between the consortium established by Ascopiave, Acea, and Iren, and the A2A Group for the acquisition of certain gas distribution concessions. The concessions of interest to Acea in 5 items, including 2 in Abruzzo, 2 in Molise, and one in Campania.
Acea and NTT DATA Italia presented a Waidy management system. It's a native cloud solution the group developed together with NTT DATA for the protection of water resources. Let me now move on to page 7, where we can see the performance of energy infrastructure business. Here you can see a stable performance with a reduction of EBITDA by 0.3%.
Let me remind you that the performance is characterized by the reduction of WACC of 70 basis points from 5.9% to 5.2%, equaling EUR 13.3 million. However, this was offset by greater operational efficiency and an increase in investments and in RAB and investments in resilience. For this period, we would like to point out the installation of 2G electricity smart meters, approximately 507,000 meters installed as at the thirtieth of June 2022. CapEx in the period are stable, slightly reducing, and they stand at EUR 135.9 million.
Now, the total of electricity distributed is increasing 5,565 GWh distributed in the period. The number of pots is stable. Page 9 of the presentation. I do apologize. Let me move on to page 8, where we find the performance of the generation business. Now, here again, we see an increase of the EBITDA, a considerable increase, EUR 52 million in the first 1/2 of 2022, which means up 46.9% versus the first 1/2 of 2021 when it was EUR 35.4 million.
The effect is basically related to the price effect of energy on the market, which partly makes up for the reduction of hydroelectric volumes recorded in the period amounting to 70.7 GWh. Let me give you an update of the development of the photovoltaic plants business. Total pipeline is 614 MW, 200 MW approved and authorized and partly under construction and 200 MW capacity, including the plants under construction and ready to build, 414 MW are waiting for approval. The deal with Equitix in March 2022, this is a piece of information which is well known.
The perimeter of the deal related to 105 MW, including 46 MW eligible for feed-in tariffs. In the Basilicata region, we launched the largest photovoltaic plant, an operation which is in partnership with Equitix, and which is already up and running. Moreover, Acea Solar has obtained the environmental impact assessment and the single consent from Autonomous Region of Sardinia for the construction of a photovoltaic plant in the municipality of Bonorva.
This is going to be the largest plant in Sardinia and one of the biggest in Italy, and it will be up and running in the first 1/2 of 2024. Production is expected to be 170 GWh, equal to 70,000 tons of avoided CO₂ emissions. Page 9, we can see the performance and the economic data of the commercial and trading area.
Here you can see that EBITDA is going down by 5% and stands at EUR 38.4 million versus EUR 40.4 million in the first 1/2 of 2021. Total of energy sold in the first 1/2 of 2022 is slightly going down, both on the free and on the protected market. We're speaking of 3,300 GWh in the first 1/2 of 2022.
The number of customers is slightly growing, mainly driven by the growth of the free market, despite the slight reduction on the enhanced protection market. The total of gas sold first 1/2 of 2022, 131 million cubic meters. The number of gas customers, 228,000 customers.
Now, the performance and the EBITDA is basically driven by the reduction of the unit margins on sales, EUR 7.8 million. This is affected by the loss of 18,000 customers because of the outcome of auctions on the enhanced protection market. This was partly made up for by operational efficiency, EUR 3.4 million, and also Acea Innovation and VAS, EUR 2.2 million as the contribution in the first 1/2 of 2022.
Page 10, we see the performance of the environment area or business, which records a considerable increase of EBITDA, 89.9%. This is driven mainly by the increase of WTE plant margins because of the greater price of energy equaling EUR 14.3 million. We have M&A deals.
For instance, the acquisition of 65% of Deco and the acquisition of 7% of Serplast and 60% of Meg. In overall, these acquisitions contributed EUR 7.6 million. CO₂ allowances, the release obligation for Terni plant to purchase CO₂ allowances, EUR 11.1 million. Waste treatment in the period, 1,093,000 tons, and the energy sold is basically stable.
Page 11 of the presentation, all of the items are growing. EBIT up 12.4%, EUR 348 million. Pre-Tax profit is growing by 20.2%, going up to EUR 323.7 million. Here, remember that we have a gain on sale of photovoltaic assets, EUR 19 million. The deal with Equitix that we mentioned already.
The net profit of the period growing by 10.4%, going up to EUR 183 million, which includes the windfall tax on profits, EUR 29 million. The tax rate of the period affected by this twenty-9 million is at 29.8%. Sorry, it would be 30% without the windfall tax is stable at 29.8%.
Depreciations are slightly growing 9.8%, which is in line, so to speak, with the change in the scope of consolidation and versus the previous period. Impairments, as you can see, are slightly decreasing. This is due to the loss rate and the cash flow performance recorded by the group, which continued to be positive on all of our business lines.
Then you see provisions, which are growing. This is due to a positive component recorded last year by EUR 1.8 million. Page 12 of the presentation, you see here the CapEx EUR 462 million. Water contribution, EUR 251 million. Here we have to record the growth in this period of investment, 12 million. Then energy infrastructure, 136, 20 million generation, commercial and trading, 21 million euros.
Here we have costs for customer acquisition and projects which were launched in 2021. Environment, EUR 18 million, going up by EUR 4 million the previous year. Other business lines, 16 million euros of overall investments. If we now go to page 13 of the presentation, you see the cash flow.
Total cash flow in the period absorbs EUR 224 million. Change in working capital, EUR 103 million. CapEx, EUR 462 million. Finance costs, dividends, EUR 181 million. M&A operations, positive data, EUR 8 million, due to the sale of the photovoltaic plant with Equitix. As you can see, the positive contribution of EUR 150 million. Page 14, you see, the financial position, EUR 4,212 million, growing by EUR 223.7 million versus December. The leverage of the group is constant, 3.2 times and debt over EBITDA.
The structure of the debt, 84% fixed rate, 1.4% the cost, 4.8 is the average duration. The ratings of Fitch, BBB+ stable outlook, and Moody's, BAA2 stable outlook. CDP, A- leadership confirmed. Standard Ethics improved its rating EE, outlook raised to positive. Bloomberg improved to 80.67, and the Gaia Rating improved its rating as well to 82 out of 100.
This is the end of presentation. Thank you very much, Fabio. We can now start the Q&A session. This is the conference call operator. We can now start the Q&A session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and 2.
We kindly ask you to use the handset when asking questions. Anyone who wishes to ask a question may press star and one on their touchtone telephone. The first question from the Italian conference, Enrico Bartoli with Mediobanca. Good evening. I have a few questions to ask the water business, first of all. Now, the drought that we are seeing in Italy further confirmed the need of investments within the water pipeline network.
Could you give us some information about the discussion that you probably have with the government? I know that we have a government crisis in this moment, but do you believe that the regulator intends to further accelerate the investments within water network? A second question about the authorization of the plant in Sardinia. Does this plant also is part of the partnership with the Equitix?
Are you seeing a simplification of the authorization processes? Can we expect also an acceleration of the authorization for your assets going forward. Another question about your guidance. Can you give us some information about the drivers behind the guidance increase? You mentioned the One-Off factors that led you to increase your guidance.
Are there any other factors, positive factors that led to your reviewing of the guidance upward? Now, thank you. As to the question about the water business and the related investments, it's clear that Acea is the demonstration, and especially Acea Ato 2 in Rome shows that there is a need to make investments following the experience in 2017 when we risked, you know, going to a rationing policy of water in Rome.
We almost doubled investments in Rome. For Ato 2, we are at around 100 EUR per citizen in Rome of investments. This allows us to improve the resilience of the ne2rk. This year, despite the severe drought, we do not see a danger of rationing water in Rome. We put in place some good work to reduce the water leaks to further digitalize the ne2rk, which allows us to manage the water network by also managing the pressures in the appropriate plan and reducing the water leaks and the water needs.
Now, in Rome, we have an average need of 14.5 cubic meters of water, thanks to the investments and the work that we have done within our ne2rk. Of course, investments are necessary in a city like Rome, where the structure of Acea and the financial soundness of Acea allows the company to make investments. In other parts of Italy, this is not possible because there are no big companies or there are no financial partners.
This is an issue that we have pointed out several times to the regulator. There will probably be the need to have a national approach so as to make sure that investments can be made, you know, without constantly leveraging on the local tariffs.
We believe the water network may go towards an approach similar to the one used for the distribution of electricity in the country. Of course, the PNRR plan may contribute to the improvement of the ne2rk. The plan in 4 years is worth EUR 10 of investments per inhabitant of the country.
It's a strong contribution to the sector, but it does not allow us, you know, to bring the average of the sector from EUR 50 to EUR 100 per inhabitant of all the country. As far as the question about the authorization of the plant in Sardinia. The plant is owned by Sardinia. Actually, I'm sorry.
We will build the plant, and when the plant is ready to operate, it will be moved on to the vehicle that will be managed by Equitix 6%, 40% Acea. At the moment, everything is in the hands of Acea. As to your question about the guidance, well, I have to say that we recorded a very good EBITDA performance in the first part of the year, and this is also due to a number of One-Offs, like the technical quality bonus for the water business or the One-Off we had in the environment business, the acceleration of, you know, the need to buy CO2 certificates for the Terni plant. This contributed to the overall performance.
We do not see or we do not expect negative events in the second part of the year, despite the complexity of the situation. Well, as far as energy in 2022, we are fully covered. Because of the lack of other One-Offs, the guidance that we are giving is a good stable performance of the year. A One-Off, or the One-Offs that we record in the first part of the year.
Second question by Stefano Gamberini with Equita. Now, good evening, and congratulation for the results of the first 1/2 of the year. Now, I have a question about the prices of power generation. Now, the cap of the government stand at 68, 66, 68 EUR.
Does that have an impact on your results? I'd like to know something about it. What can we expect for you know the whole year for this division which has performed so far very well? Second question, the EUR 11 million for the San Vittore del Lazio plant is a One-Off. I will not have this contribution in the second part of the year. The first trend of you know Q3, can we expect it to go forward for the whole year?
The working capital change, EUR 180 million difference, in the first 6 months. Is this related to receivables? If I remember well, we had regulations related issues in the past.
Now, at the moment, considering the prices of energy and the lack of recognition of the charges or costs of the system had an impact on the working capital. Is that what has happened? What can we expect from here to the end of the year? Costs of energy for the year, you say you're covered. Now, I remember that you said that the regulator has recognized a cost of energy for the execution, which is very low, but you're covered for 2022.
Going forward, considering the current prices of energy, what's going to happen going forward? What kind of discussions are you going to have with the local authorities that have to approve the tariff increase to make up for these higher costs?
Now, as to generation, the Law Decree has an impact only on one of the four hydroelectric power plants, specifically the Salto-Sant'Angelo plant, a negative impact of EUR 8 million. This is not a negative One-Off. This is an event which reduces the price of energy versus the previous year. We expect this to be a constant also for the second part of the year. Perhaps a little less, because we have the summer in between, when hydroelectric power production is limited. Now, the CO2 contribution is not a One-Off.
Since it starts being calculated in 2021, this should have a positive contribution because we resold onto the market the certificates of CO2 that we bought in 2021, and we are exempted in 2022. This improves our result. This is a Long-Term exemption. This relates to the WTE of Terni because the WTE of San Vittore was already exempted.
Now your question about the working capital. Let me remind you that the other hydroelectric power plants are exempted because they benefit from incentives. As far as the working capital is concerned, EUR 180 million of absorption, EUR 50 million are due to...
are due to charges of the system, which had an impact in the end of the 6 months, then EUR 60 million related to an increase of prices of energy that increased the revenues of sales that went up in the period by EUR 350 million. This has generated an increase of the working capital, which is around, as I said, EUR 60 million.
Then we had some other effects that relate to the absorption of the working capital, and which have to do with activities that are being developed especially at Acea Innovation, EUR 11 million. Now the effect of the price of energy for the next year.
Now the group has not had and is not having any impact from this. Well, this is due to the price management policy that we had adopted before, and we had been able to remain below the caps that were introduced afterwards. Now, we understand that this is a temporary measure introduced on the part of the authority which has not had an impact on our group.
We are not going to have any effect, nor did we have any effect that we have to, in some way, to recover. Well, perhaps if I can follow up here. What is the tariff increase in the waste business you expect in 2023?
What are the operating costs that we can expect in 2023, considering the current energy scenario and the current price increase? Did you say waste? Sorry. I meant the water distribution. Well, what I'm trying to understand, this year things went well. What's going to happen in 2023? Because I see, you know, tariff increase, but also OpEx, the price of energy can be a problem. How are you going to manage it?
We do not have a clear final visibility going forward because these elements, these aspects are still under discussion. The tariff increases relate to Acea Ato 2, which is the main company of the group. To give you an idea, tariff increases have already been set. Just a second.
I am looking for the piece of information so as to be precise. 5.7%, this is the growth which is assumed. The tariff setting process is still being discussed. We'll have the final figure when we have the confidence of the mayors. It should be closed by autumn. As to the prices of energy, as of today, we have not had any impact.
As to 2023, we are not in a position at the moment to give you know, ideas about measures which are going to be taken. Okay, thank you. Thank you very much. The next question by Emanuele Oggioni. Sure. Now, good evening. Thank you very much for your presentation, and congratulations for the results on my part as well.
I'd like to understand what kind of visibility do you have for your retail business division. Now you said that it's too soon to speak about 2023. There's no visibility. As to 2022, Q1 strongly decreasing, Q2 strongly going up as you anticipated in the previous conference call. Now in 2022, can we expect a year-on-year stability of the overall EBITDA?
Now, a second question is a Follow-up question really to better understand the waste business. Now you do not consider this EUR 11 million of CO2 a recurrent effect. But then what is the impact that we can expect in 2023? Are we going to have, you know, EUR 11 million every year?
I have a 1/3 question about when are you going to present the new business plan? You said you were going to, you know, make it after the summer because of auction of the waste-to-energy plant, which is still to be awarded. I want to have an idea about when you are going to present the new business plan, and also have an update on the award, you know, of the WTE plant in Rome.
No, let me clarify that. Before, we were not speaking about the retail business, but we were going to speak about the effect of the energy price increase on the water business. As to the waste business, let me try to explain the effect.
There was a discussion about the application of the obligation of a purchase of CO2 rights for the Terni plant. This discussion went on in the first part of the year, and in the same period, we obtained the exemption of the obligation to acquire CO2 rights to make up for the CO2 emissions of the plant. This effect is retroactive for 2021.
In the first part of the year, 2022, we recorded the sale of rights, CO2 rights, that we purchased in 2021, and we were in excess. We had a financial positive effect due to the sales onto the market of this CO2 rights.
The exemption is going to be lasting, and the plant will continue to operate until things change. For the time being, we consider this exemption as a lasting effect. As to the retail business, as we said before, in the second 1/4, we had a recovery of results versus Q1 because we had a greater visibility of the trend of the energy management.
For the rest of the year, we expect a further recovery. Conservatively, we can say that the result is going to be in line with that of the previous year, perhaps slightly growing, and I'm referring to the EBITDA of the commercial area. As to 2023, it's a bit more difficult to make a forecast at the moment.
Certainly, we are ready to manage the effect of the price increase of energy. For this reason, we changed our commercial policy. The customers that are on the free market, and which have a fixed tariff, have received a communication of, you know, tariff increases. For this reason, we hedged the energy increase. The other customers all have variable energy.
The new customers on the free market have a price which is going to be a proxy of the pool. Well, clearly, we have to reason on margins. Now, however, it's a bit too early to make forecasts on margins for 2023.
As to the retail market for 2023, starting in September, there will be an auction for the end of the enhanced protection market for the B2B market, the small and medium-sized companies. A result of that auction can have a meaningful impact on the result. In the case of Acea, that business segment includes 87,000 companies.
If Acea is awarded the lot of the city of Rome, it will see an increase in the number of customers. That is going to be a driver that is going to have an impact on the commercial and trading business results. As to the business plan, we've been working on this for some time now.
Now, this year has probably been the year of the perfect storm, you know, for a business plan preparation. The energy price scenario is already complex. Over and above this, the project of the WTE in Rome, where of course we want to play a major active role. This is a project that may have a considerable impact both in terms of investments and margins on our plan.
Before, you know, disclosing the business plan, we would like to have a more detailed view on this plan. We're working on presenting the business plan in the second part of the year, but I couldn't tell you when, however, at this moment. Thank you.
Now, the next question from Davide Candela, Intesa Sanpaolo. Good evening, and thank you very much for the presentation. All of the questions I had have been answered. I only have a curiosity. The windfall tax on extra profits, the EUR 8 million you mentioned for the water business, are they included in that tax? The remaining part, EUR 20 million, what is the nature of the extra profit?
Where do they come from, considering your profile of regulated assets between water and distribution businesses? Now, the EUR 8 million we mentioned before for theSalto- Sant'Angelo plant are not included in the EUR 29 million of the windfall tax on extra profit or, as it is called, the solidarity contribution.
You need to add this. When it comes to the EUR 29 million of the solidarity contribution, is related to Acea Energia, so the commercial business generation Acea Produzione, and Acea Ambiente. These are the companies which produce and generate energy and then as to the environment also for the production of energy. Basically, we have 2 macro effects.
One is a mere increase of volumes and prices applied to the world of energy. The other is related to an increase of the taxable base because of, you know, M&As deals in the period. The solidarity contribution is applied on the VAT taxable amount. Here, you also have to include M&As or extraordinary operations.
Now, for instance, the sale of the stake to Equitix is included within the volume that then leads to an increase of the taxable base, and therefore is calculated that solidarity contribution. Two effects, an increase in volumes and price, especially recorded in the period, and then the amounts received for the M&As, basically the sales of a stake that we made in the first part of the year.
I don't know whether I was clear. As a reminder, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question, a Follow-up question by Oggioni. Mr. Oggioni? Thank you, and I do apologize. I perhaps you talked about this, and I didn't hear it.
As to the worsening of the quality of credit, and possible impairments. We haven't yet seen what is going to happen in the future, negatively, I guess. Can you tell me something about this, if Acea has and runs this risk? Well, this is something we devote our attention to. I'm referring to performance of the first part of the year. Now, the performance of H1 are all positive for all businesses of Acea. They've been positive, both in terms of our expectation and, when compared to the same results of the previous year.
Because of what may happen, we introduced a mechanism of impairment to take into account something that may happen and which hasn't yet been or is not clear looking only at what we cash in. There may be a worsening in the commercial world. We believe that, you know, companies may be exposed to the risks that you were mentioning. Thank you.
Anyone who wishes to ask a question may press star and one on your touchtone telephone. Ladies and gentlemen, there are no other questions from the conference call. Well, thank you very much. Thank you for listening to our conference call and have a nice summer holiday, and hear from you next time. This is the conference call operator.
The conference is now over. You may disconnect your telephones. Thank you.