A2A, results as at 30 june 2022

29 July 2022 - 11:06

A2A, growth in investments for the ecological transition and circular economy continues in the first half of the year economic and financial indicators hold strong the evolution of sustainable finance instruments continues.

EBITDA at 708 million euro, up 3% compared to H1 2021 thanks to the diversification of the Group's businesses.
Net Profit came in at 328 million euro: down 12 million euro on the first half of 2021 (340 million euro).
Revenues amounted to 9,788 million euro, up 141.5% year-on-year, mainly due to the increase in energy commodity prices, with a comparable effect on the growth of supply costs.
Capex amounted to 463 million euro, up 12% compared to the same period of the previous year.
Net Financial Position stands at 4,587 million euro (4,113 million euro at 31 December 2021). Net of changes in the scope of consolidation for the period, the NFP increased by 65 million euro, after investments of 463 million euro, dividend payments of 283 million euro and proceeds from the sale of certain real estate assets of 221 million euro.

Energy Transition

A2A consolidates its position among renewable energy operators in Italy and launches its activities abroad: the acquisition of wind and photovoltaic portfolios has been finalised. This transaction comes in addition to the one carried out in the first quarter concerning the acquisition of a platform dealing in renewable energy plants construction, development and management.
Further contribution to decarbonisation and flexibility of the Italian electricity system: A2A was awarded 5.4 GW of capacity, including 1.3 GW of new capacity in the capacity market auction for the delivery year 2024.

Sustainability

238 GWh of green energy, produced from photovoltaic and wind sources in the first half of 2022 (+58% compared to the first six months of 2021)
+25% green energy sold compared to the first half of 2021 (3TWh vs 2.4TWh)

Group's commitment to sustainable finance continues: in the first half of the year, A2A successfully issued two bonds for a total of 1.1 billion euro (a second Sustainability-Linked Bond for 500 million euro and a third Green Bond for 600 million euro).
Following these transactions, the portion of sustainable debt to the Group's total gross debt as at 30 June 2022 reached 55% (31% as at 30 June 2021). In addition, A2A subscribed to a new 410 million euro Sustainability-Linked revolving credit line linked to the achievement of three objectives in the Social and Governance spheres and purchased a Civil and General Liability insurance solution linked to the achievement of five sustainability targets concerning occupational health and safety.

The Board of Directors of A2A S.p.A. has examined and approved the Half Year Financial Report at 30 June 2022

Milan, 29 July 2022 – At today’s meeting of the Board of Directors of A2A S.p.A., chaired by Marco Patuano, the Board examined and approved the Half Year Financial Report at 30 June 2022.

In a scenario strongly characterised by the continuing effects of the geopolitical and economic crisis and the increasingly evident effects of climate change, the diversification of business activities has enabled the Group to confirm its solidity and capacity to react", commented Chief Executive Officer Renato Mazzoncini - "In the first half of the year, A2A further increased its investments in strategic infrastructure for the ecological transition in order to overcome the emergency and contribute to the country's energy independence. We confirm our goal of growth in renewables and the circular economy, counting on the potential offered by water, sun, wind and waste, our raw materials”.

The first half of 2022 saw the further exacerbation of continued bullish pressures on the energy commodities market, also fuelled by critical geopolitical scenarios and the worsening drought with a direct impact, among other negative effects, on hydropower production.

Amidst a complex and difficult framework, the A2A Group appropriately managed the effects of this juncture by monitoring commodity risks as well as financial and credit exposure, thus mitigating the impacts that the turbulence in the energy markets could have generated.

In the first half of 2022, the average value of the PUN (Single National Price) Base Load almost quadrupled compared to the same period in 2021 to €249/MWh (€67/MWh in 2021), driven by gas prices at all-time highs and CO₂. In fact, the average cost of gas at the PSV (Virtual Trading Point) in the period under review was €97.8/MWh, up 348% compared to the same period of the previous year, while CO₂ prices averaged €83.7/tonne (€43.8/tonne in the same period of 2021, +91%).

This strongly bullish price dynamic resulted in a turnover for the period of almost 10 billion euro, which more than doubled compared to the first half of the previous year (around 4 billion euro).
The A2A Group has continued to pursue a prudent strategy of stabilising margins and limiting the risk associated with price volatility, with total hedge of fixed-price electricity production and general recourse to advance contracting for both procurement and supplies to wholesale operators and end customers, while at the same time seizing opportunities on the market.
Thanks to this strategy and the diversification of its business, A2A achieved an operating margin that was higher than the previous year, albeit with different results among the Business Units in terms of sign and magnitude.

In the first half of 2022, despite the macroeconomic uncertainties, A2A continued its industrial growth, in line with its long-term strategy focused on energy transition and circular economy, increasing investments compared to the equivalent period of 2021 and concluding important growth transactions by external lines. In particular:

Capex for 463 million euro, representing an increase of 50 million euro (+ 12%) over the first half of last year. In detail, development investments of 287 million euro (+13% compared to the same period of 2021) were made, aimed at recovering energy and materials, improving the quality of distribution networks, upgrading water and sewage networks, developing purification plants, growing wind power and photovoltaic plants, and contributing to the adequacy and safety of the national electricity grid and the digitalization of the Group;
M&A transactions for 536 million euro and focused on the energy transition segment. In the six months under review, the Group accelerated the growth of its RES plants with the acquisition of:
- two wind and photovoltaic portfolios located in Italy and Spain. As a result of this transaction, A2A's total installed renewable power is now 2.6 GW;
- Volta Green Energy, a platform dedicated to the construction, development and management of renewable energy plants, with which A2A has acquired a pipeline of wind and photovoltaic projects with an expected installed capacity of around 800 MW. In this regard, it should be noted that contracts were signed by the Group through Volta Green Energy for the construction of a wind power plant in Sicily (Matarocco plant).

The Group also rationalised its gas distribution assets by selling non-strategic ATEMs for an amount of 127 million euro. The value of M&A transactions net of the sale of non-strategic assets is therefore 409 million euro.

Contacts:
Giuseppe Mariano Media Relations, Social Networking and Web Manager
Silvia Merlo - Silvia Onni
Press Office
ufficiostampa@a2a.eu
Tel. [+39] 02 7720.4583

Investor Relations:
tel. [+39] 02 7720.3974
ir@a2a

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