Good afternoon. This is the Chorus Call operator. Welcome to the presentation on the 30 September 2024 results of the ACEA Group. I'd like to remind all participants that you are in the listening mode only. After the presentation, a Q&A session will follow. To be assisted by an operator during the conference call, press star followed by zero. Now, I'd like to hand you over to Mr. Dario Michi, Head of Investor Relations at ACEA. Please go ahead, sir.
Thank you, and good afternoon. Welcome to the presentation of the ACEA Group on the 30 September 2024. Fabrizio Palermo, CEO and General Manager, and Mr. Ragni, CFO and Deputy General Manager at ACEA, will be reporting on the key financials of the first nine months of 2024. After the presentation, a Q&A session will follow, and I'll hand you over to Mr. Palermo. Good afternoon. Good afternoon, everyone.
Thank you very much, Dario. The group's results were achieved within a regulatory framework that was characterized, first of all, by the positive consultations that have been carried on to approve a new tariff. To date, ARERA has been submitting all the proposals about tariffs by the group, and to date, the only tariff already approved by ARERA is an ATO 2 tariff that was approved on the 24th of September 2024. As for grids, I'd like to remind you that the resolution on the temporary tariff for 2024 was published in May 2024 already, and it's based on the ROSS tariff rules, that is, the total spending mechanism for the sixth regulatory period with a WACC increased to 6%. As for commodity prices, commodity prices were lower than in 2023.
Finally, as for interest rates, the average interest rates at the 30th of September, actually, short-term interest rates were 3.7% versus 3.6% in the same period of 2023. In other words, in line with last year, while the long-term interests are dropping vis-à-vis the same period of 2023 and stand at 2.7% versus 3% of the first nine months of 2023. Short-term interest rates have been cut only in June for the first time by the ECB, and then again in September. The group has operated in a regulatory framework that has been characterized by some new factors and by trends that were already there and that show an improvement of tariffs, all of which has driven up our revenues. Revenues amounted to EUR 3.1 billion, 1.9 of which are related to regulated business, up by approximately 7% compared to September 2023, so growing EUR 124 million.
This is mainly due to the investments carried out in the previous years and also as a result of the tariffs approved. Hybrid is improving. As for waste and environment, the trend is slightly downward. EBITDA net is growing 12% on 2023, which accounts for a growth of €123 million, 107% related to regulated businesses. The growth has been driven mainly by the water business, by grids, and especially by the growth of tariffs. Net profit, not including one-offs, grew by 31%, €165 million on the previous year. The growth is actually mainly thanks to good financial management that has enhanced investments on regulated business. CapEx, net of public grants, is growing 13% on 2023, and this is mainly thanks to investments in regulated businesses.
All CapEx in the first nine months of the year amounted to €952 million, exceeding by €169 million the investments made in the first nine months of 2023. The operating cash flow amounted to €16 million, so a negative figure, mainly because of the capital absorption due to investments. The group managed to improve the NFP/EBITDA ratio, standing at 3.39 times down compared to 3.49 times in the year of 2023. Moving on to the results, as I said, revenues are growing, amounting to €3.1 billion. €1.9 billion referred to water, public lighting, environment, growing 7% vis-à-vis 2023. As for EBITDA, EBITDA is growing by €123 million thanks to the growth of revenues of public lighting, grids, water, and environment. As for CAPEX, we can say that net CapEx were up by €96 million approximately on 2023, so a growth of 13%.
But including the CapEx of the first nine months of the year, the total CapEx amounts to EUR 952 million, including the grant funded, exceeding by EUR 169 million the investments made in the first nine months of 2023. Net profit, one-off, growing substantially. It grew EUR 65 million on 2023 thanks to the EBITDA growth and efficient financial management that offsets higher depreciations and amortizations. So we considered appropriate to review our guidance. As this slide shows, we expect an EBITDA guidance ranging between 3% and 5%, I mean, 3.5% higher than 2023. So our idea is that of increasing this guidance to + 7%, + 9% on 2023. And we would like to provide new guidance and improve the guidance for our NFP/EBITDA ratio, dropping from 3.5 times to 3.4 times. As for CapEx, we confirm our guidance of EUR 1.5 billion gross CapEx and EUR 1.1 billion net of subsidies.
The main drivers leading to this reviewed guidance are mainly the increase of profitability and the higher tariffs for water and the substantial operating efficiency plan that we have been implementing and that is generating the first good results. And now I would like to hand you over to Mr. Pier Francesco Ragni, our CFO, who will be reporting on the main financial highlights. As for EBITDA growth in Q3 2024, as pointed out by the CEO, was mainly driven by the organic development of our regulated businesses. Then on the slide, you see that the regulated business, water, grids, and environment account for the largest share of the group's EBITDA, 86%.
If you look at the evolution of EBITDA in the first nine months, €161 million to reach €1,161 million at the end of September 2024, you see that the evolution was mainly driven by organic growth, €136 million, deriving from the increase of tariffs by €122 million. Water grew €74 million, of which €50 million as a result of MTI-4, that is the new tariff scheme. As for grids, we grew €48 million, of which €25 million related to the tariffs update. Then the energy scenario had a negative impact of roughly €13 million. As for the one-off impact reported in Q3 2024, €31 million, the key element is accounted for by €24 million due to the recovery of inflation for 2022 and 2023.
As for our net profit evolution, in the first nine months of 2024, again, you see from EUR 209 million, we have reached EUR 285 million, and the evolution amounts to EUR 65 million organic. And these EUR 65 million are EUR 63 million related to operational management and so the growth of EBITDA, in other words, and EUR 2 million to the improvement of financial charges, net financial charges. We have seen opposite signs for financial charges. We've seen financial charges increasing slightly and other financial charges that have dropped because of a reimbursement of a bond that has been replaced with funding at a higher rate. As for one-off impacts, we can refer to the one-off items, EUR 24 million and net of the tax impact, plus EUR 15 million. Then, of course, there are some provisions, risk provisions.
As for CapEx, as already pointed out, in the first nine months of 2024, the group invested €952 million mainly in regulated businesses, €870 million of which were invested in water, grids, and environment. Out of these €952 million CapEx, €123 million were funded with public subsidies, mainly going to water, that accounted for almost all the subsidies received. Then you see that regulated businesses are mainly water investments to expand the water network and to increase the efficiency of the network. As for grids and public lighting, we are focusing our investments on low and mid-tension networks. As you might know, we have achieved an agreement with Terna for the high-voltage network, and the other investments that we are making on grids refer to primary and secondary substations.
As for investments in environment, as you might know, we are investing on the fourth line of the San Vittore waste-to-energy plant and the revamping of the fumes line at the Terni plant. As for the cash flow in the first nine months of 2024, as you can see, our cash flow dropped by EUR 16 million, mainly driven by two factors: one, capital absorption or cash absorption of working capital. In this regard, we have completed our activities as far as the building Superbonus concerned. So the difference of EUR 133 million in working capital, this is mainly referred to receivables that are actually related to our exit from this type of regulatory activity. And then you see cash absorbed by, again, other regulatory receivables.
Compared with September 2023, our cash flow dropped by EUR 40 million, but as you can see, it is due to higher investments amounting to roughly EUR 96 million. The total cash flow is down EUR 386 million, which accounts for the increase of our net debt versus the 31st of December 2023. As for our financial structure, as you can see, the breakdown of our net financial position slightly changed between long-term, short-term, and cash and cash equivalent. As already pointed out on the 15th of July 2024, we reimbursed a EUR 600 million bond using cash that was available to optimize our financial management, and we used short-term debt, and last month, we signed for a new long-term funding for the regulated business amounting to roughly EUR 320 million.
The transaction that was done in July, namely to reimburse the bond, and then another funding that was agreed upon offset and balanced the situation. The average cost of debt is slightly higher than €2.08 at December 2023, and this is because the new funding has higher margins, sorry, higher interest than the ones that were repaid. As for our rating, our rating is a triple B plus with a stable outlook by Fitch and Baa2 with stable outlook by Moody's. As the CEO pointed out, our net debt/EBITDA ratio has improved from 3.49 to 3.39 and better than the first half of 2024 when it was down by seven times. Moving on to the various businesses. As for water, revenues reached €1.161, growing €67 million in 2023, net of non-recurring events and changes in the scope.
This is mainly thanks to tariff growth related to investments made and the approval of new tariffs. As for EBITDA, EBITDA took organically by 13% on the first nine months of 2023, amounting to € 69 million, mainly thanks to the tariff growth, as already pointed out. € 74 million are accounted for by the growth of EBITDA in the water business, then € 50 million related to the adoption of the new tariffs, and € 20 million thanks to the investments made last year that generated growth. € 24 million referred to the recovery of inflation in 2022-2023 as a one-off item. CAPEX reported an overall growth of € 26 million on the previous year and an increase, net of public subsidies, of € 26 million, 9%. As for grids and public lighting, revenues amounted to € 522 million, up by € 53 million in 2023.
Again, this result is mainly driven by the increase of regulated tariffs. WACC has increased from 5.2%- 6%, and thanks also to the increase of the RAB. As for the EBITDA of this business, it grew 15% organic growth, growing €43 million. This is mainly the result of the growth of tariffs. As already pointed out, the increase of tariffs has generated €48 million, of which €25 million referred to or related to the increase of the regulatory WACC and the rest to the investments made in the past years. The one-offs that are positive, unlike water business, so positive €5 million, that is the release of funds. As for CapEx, net of public subsidies, CAPEX increased by €24 million in 2023. Now move on to the environment. Net revenues amounted to €228 million, down compared to 2023 by €11 million.
This is the combined effect of lower revenues coming from the treatment of liquids, roughly €8 million, and balance €3 million. EBITDA is down 8%, mainly due to the energy scenario, namely the reduction of the Single National Price, and then this energy scenario has been offset by better margins on WTE by €4 million, but the waste-to-energy is negatively impacted by €3 million because of the downtime of the fume line at the Terni plant that impacted by €5 million. CapEx are increasing as compared to 2023 by €49 million investments on the fourth line at San Vittore plant and the fume line at the Terni plant, then production, €79 million revenues, down by €31 million mainly because of the energy scenario, minus 18%, and lower production, minus €9 million.
Compared with our peers, our hydroelectric plants are all located in the center of Italy, and this year in Abruzzo, a substantial reduction of rainfall was recorded, and production was down 60% on the previous year, same nine months. And then, of course, the drop is also related to the lower single national price. As for one-off non-recurring items, EUR 2 million related to the revamping of the photovoltaic plants. Lower CapEx than 2023, down EUR 15 million, less investments on photovoltaic plants. As for commercial, revenues have reached EUR 1,350, down by EUR 463 million compared to 2023 as a consequence of price reduction and also lower volumes. As for EBITDA, EBITDA grew by EUR 42 million versus the first nine months of 2023, and this is mainly the result of a higher margin on the free market and thanks to the energy management activity.
CapEx amounted to € 48 million, up by € 14 million in 2023, and this is mainly due to the higher costs to acquire new customers. This is it. As far as the presentation is concerned, we can therefore start the Q&A session. Thank you very much. This is the Chorus Call operator. We can now start the Q&A session. Participants wishing to ask questions can press star followed by one. To leave the waitlist, please press star followed by two. Please ask your questions using your headsets. If you wish to ask a question, you can press star followed by one now. The first question by Roberto Letizia at Equita. Good afternoon, and thank you very much for your presentation and for taking my questions. My first question refers to the tariff approval in ATO 2. I'd like to move on from the P&L to the balance sheet.
I would like to know how you're going to collect the tariffs in the next few months and to what extent do you expect the new tariffs will have an impact on your working capital in the next few months. So if you can elaborate on this. And then can we also now focus on 2025 for a moment, only from a qualitative point of view, to know what the moving parts are in your opinion next year, focusing particularly on when do you expect the approval of new tariffs in the other areas? And then a question on balance sheet flexibility and all the transactions you have implemented. You recently actually completed a deal on electric production assets. So I would like to know whether you are in the position to grasp extraordinary opportunities and what kind of asset rotation can we expect going forward.
Thank you very much. I'll be answering your question about the tariffs. Our business plan that was released in March of this year provided for a tariff increase. What we have assumed in our plan is perfectly in line with the tariffs increase that has taken place. ARERA so far has approved ATO 2 only, but we know that local authorities have already approved new tariffs. Our companies have already adjusted the P&L considering the new tariffs starting the 1st of January 2024, which implies a growth of revenues on regulatory businesses that are mirrored in the working capital, which had been factored in in our business plan. Once the tariff increase becomes fully operative starting 2025, we expect such volumes to drop. The so-called settlements have to be repaid by or within the regulatory period, and ARERA was absolutely clear about this.
As for the disposal of assets or the high voltage, so how much resources will be released by this deal? Well, the binding agreement we signed with Terna and the closing expected for the first stage of 2025 will generate €247 million of available resources. And for the use of such resources that will be released, well, you know that we are focused on investing in the regulated businesses. We are considering high voltage because high voltage is a business that we do not manage directly because transmission is managed by Terna, also because of the regulators' requests. So we'll be using these resources to strengthen our investments in our regulated businesses and in low and mid voltage. Today, high voltage has generated €23 million EBITDA, so we do not expect any major impact on the earnings per share.
Also because these released resources will enable us to invest in regulated businesses, and so that will replace the missing part, let's say, of high voltage. Then as for the moving parts for 2025, that was mainly settlements. So settlements account for the main moving part for 2025, and I've already answered the question about this. So I imagine that your question was mainly about the reduction of WACC. No, no, no, no. I was referring to the moving parts of your P&L, and you already answered my question. But in the light of the evolution of experience this year in terms of tariffs and in terms of commercial activity, what do you expect the moving parts in 2025 will be from a qualitative point of view?
Well, as I already pointed out, considering that the tariff scenario is now clear and considering that the tariff scenario that has materialized is in line with the assumptions of our business plan, we believe we will be sticking to the trajectory we have been following. So I do not expect anything that may lead us to change our trajectory in terms of growth and growth of our EBITDA. As for non-regulated businesses, well, production is impacted upon by climate, so water, rainfall, and the electric market. As for the commercial business, the growth of the first nine months of the year, considering that we see substantial competitive pressure, we expect to go back to normal in 2025. And by normal, I mean the results of the past few years. Thank you very much. Next question by Francesco Sala at Banca Akros. Good afternoon.
Thank you very much for taking my questions. My first question is about the supply business. Do you expect asset rotation in this business, if not in the short, in the mid-term? And then can you update about the consolidation of the water industry? And will you be bidding for new coastal bids in the mid-term? And then as for the waste business, can we expect a recovery in the next quarters, considering the one-off items that you factored in in Q3? I can start with a waste question. About waste, we had the Terni plant that was not operative and will go back to being operative in 2025. Then we have the San Vittore plant where we are developing a fourth line. As for our environment business, we are currently managing volumes at best.
We plan to strengthen our business in other areas as well to increase the current volumes. We expect that we'll be able to recover margins in 2025 on waste. As for water, well, we bid in the Siracusa tender. We have been temporarily awarded the Siracusa tender. We bid also at the Imperia tender, and then we are temporarily awarded at the Imperia tender as well. Of course, we'll be bidding all coastal bids that will be held next year. This is our core business. I mean, as for asset rotation, I've repeatedly commented on this in the past. We definitely take into consideration if the conditions are there and if asset rotation contributes to our strategy, it fits with our strategy. That is to say, growing the most in the regulated businesses. Thank you very much. Next question, Emanuele Oggioni, Kepler Cheuvreux. Good afternoon.
Thank you very much for your presentation. I got a couple of questions. Actually, I would like you to specify some points that were raised by other participants. For instance, the net working capital in 2025 and the so-called settlements, conguagli. I understood that in the first half of 2024, you didn't factor in MTI-4, which means that you may still have a positive impact in 2025 year on year by MTI-4, and that in the first part of 2025, we'll see a slight deterioration of working capital, but then in the second part of 2025, with flat tariffs year on year, we should see a recovery of the net working capital. This is my reasoning. I would like to know from you whether this is correct. Then second question about the disposal of the high-voltage grid in Terni.
Can you give us an idea about the capital gain that will be realized in 2025? And then all my other questions have already been answered. In 2025, we do expect improvement of our net working capital. In the first half, we will have a cash in deriving from the tariff upgrade on the first nine months of 2024. So in other words, the impact will be felt in 2025. About the high-voltage grid, I am not willing to disclose any number because the calculations we have made were based on provisional RAB that still has to be confirmed by ARERA. There is the ARERA premium that will depend on the closing of the transaction. We will do our best with Terna, of course, and we expect closing to take place within H1 2025. At that point, we will be receiving a 4% premium based on the ARERA regulation.
Such a premium would drop to 3% if the deal is closed in 2026, which is, however, not our case because we expect it to be closed by H1 2025, and the other adjustments that have to be taken into consideration, investments that will be made between the 1st of January 2025 to the closing date, have a price of the final price, but once we have everything in order and the signed SPA, I will be disclosing the related capital gain that we expect. Next question by Javier Suarez, Mediobanca. Good afternoon. Thank you very much for your presentation. I've got a couple of questions. As for the guidance, you have updated your guidance with EBITDA at EUR 1.5 billion. Do you think this is consistent with the net income between EUR 340 million and EUR 350 million? Is that correct?
If yes, do you consider this net income eligible for dividend policy? I'm telling you because the net income is increasing markedly more than the market expected, and your dividend payout based on the current dividend policy would be below 50%, which looks a bit low. Then a follow-up on Roberto's question about 2025. So 1.5 billion EBITDA and 340 to 350 of net income. Do you expect any growth in 2025? Because the 24 million that you mentioned, that is to say the payment of the tariffs increased over the past months. So what impact do you expect in 2025? And then the waste-to-energy plant in Rome, can you please update us about it? When do you think works will start? When do you expect the works to be completed? And when do you think your stake in this project will become remunerative? Thank you very much.
I can't remember your first question. Sorry. Can you please remind me of the first question? All right. Net income. We do not provide a guidance on net income. So for the time being, I cannot answer this question. As for the next question, namely 2025 growth, will be definitely impacted upon by lower WACC. So we expect a reduction of WACC on electricity distribution from 6%- 5%. We expect a drop in EBITDA because of the disposal of the high-voltage grid. Should this be completed in H1 2025? As I said, high-voltage generates a four-year EBITDA of EUR 23 million. So if we dispose of it in the first half of 2025, we'll be losing, let's say, EUR 12 million in terms of EBITDA. And then again, as for the tariff increase of the past month, well, this was factored in in our business plan.
Then we expect growing competition going forward and therefore growing pressure. We do not provide any specific guidance for 2025, but we are perfectly on track with the business plan that we announced in March of this year. As for the WTE plant in Rome, well, I think the numbers are well known. Investment of roughly EUR 1 billion, works should start in spring 2025. According to the time schedule, the works would take 36 months. We are still waiting for the concessionaire to complete all its activities. And then, of course, we wait for the project to be formally awarded to us. So only at that point will we be able to say more on the final economics of the project and the share of the CapEx and the impact that this will have on our financials.
I can tell you, however, right now that this is a project financing project and therefore will be non-recourse for our shareholders. Are there any other questions? Next question by Davide Candela at Intesa Sanpaolo. Good afternoon. Thank you very much for your presentation and thanks for taking my questions. I've got three, in fact. First two refer to the water tariffs. First is more a request for clarification. What is included in the new EBITDA guidance for 2024? So I wonder whether this new guidance includes the approval of all the concessions you have or whether it considers only ATO 2. And therefore, this means that in 2025, we may expect an impact of the still pending tariff renewal. And then about the regulatory receivables. Consider that in your plan, you announced that most of the regulatory receivables will be recovered.
Whether the growing tariffs by 0.1%, as was the case with ATO 2, is what will enable you to, again, recover the regulatory receivables. I would like to know whether my reasoning is correct or not, or if I'm missing something. Then a final question about the water concessions. I would like to know, if possible, what is the rationale that led you to bid in the small tenders in Lombardy for two very small plants? So what was the rationale that you followed and how this rationale fits with your strategy? I'll answer the first question. Probably I wasn't clear enough during the presentation. Currently, we are factoring in tariffs increase by MTI-4 for all our concessions. So the various bodies have already approved of them. We're still pending ARERA's. But we have already factored in all the tariffs increase.
As for the regulatory receivables, we expect them to be half what they are now by 2028. Also because ARERA wants all the regulatory receivables to be settled by 2029. As for our bidding for tenders on hydroelectric plants, we currently have hydroelectric plants which are important for our sustainability goals. So whenever the opportunity exists, we can grasp it because strengthening our hydroelectric production is definitely important for us, together with the photovoltaic energy that is the other area of renewables that we are currently focusing in and investing on.