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Lower Profits for Verbund´s Subsidiary Sorgenia

Published: October 18, 2011; 15:01 · (Vindobona)

Sorgenia, the Italian Subsidiary of the Austrian energy corporation Verbund, reports a drastic decrease in net income from € 61m to € 18m. Sales were down by 8.5%.

Lower Profits for Verbund´s Subsidiary Sorgenia / Picture: © Vindobona.org

The Board of Directors of Sorgenia SpA, the company controlled by the CIR group in which the Austrian provider Verbund has an interest, met today under the chairmanship of Rodolfo De Benedetti and examined the results of the first nine months of 2011.

Adjusted net income came in at € 18m (€ 61m in 2010). The difference was due mainly to an extraordinary item of a fiscal nature. During the quarter Sorgenia also reduced its net debt by over € 100m. The sales revenues of the Sorgenia group in the first nine months of 2011 came in at € 1,552.7m, down by 8.5% on the figure of the same period of 2010 (€ 1,697.3m).

The changes was due in particular to a decline in natural gas sales volumes – mainly because of lower availability under existing sourcing contracts caused by the temporary closure of the Libyan gas pipeline Greenstream – and to a different client mix.

Adjusted EBITDA for the first nine months came to € 128.1m, up by 18.7% compared to the figure for the corresponding period of 2010 (€ 107.9m). However EBITDA was € 125.7m, up by 16.8% from € 107.7m in the first nine months of 2010. The improvement on the figure for last year was due to the start of commercial operations at the Bertonico-Turano Lodigiano combined cycle power plant (Lodi), which took place half way through the first quarter, and to the development, construction and sale of photovoltaic plants by Sorgenia Solar. These factors made it possible to compensate for the reduction in generating margins which affected the whole market, the lower contribution of the investee Tirreno Power, the congestion charges on the electricity grid which negatively impacted the Modugno (Bari) and Termoli (Campobasso) power plants and reduced operations on the dispatch service market.

The adjusted net income of the group, came in at € 18m (€ 61m in 2010). The difference was determined mainly by an extraordinary item in the form of a tax credit for the investments in new production capacity made by the company. The net income of the group came in at € 13.5m, down from € 57.6m in the same period of 2010.

Consolidated net debt stood at € 1,661.9m at September 30 2011 and was down from the figure of € 1,767.5m reported at June 30 2011. The change was due to the sale of 19 MW of photovoltaic plants in Italy and of 50% of the holding in Sorgenia France, which is now an equal share joint-venture with the KKR fund. These factors, together with the cash flows from ordinary operations, more than compensated for the new investments in production capacity. The group had 455 employees at September 30 2011 (433 at June 30 2011).

As far as the advancement of the Business Plan 2011-2016 is concerned, in the first quarter the Bertonico- Turano Lodigiano power plant (Lodi) started commercial operations, while work is continuing on the construction of the Aprilia plant (Latina), the fourth and last combined cycle plant (CCGT) envisaged in Sorgenia’s plans which is scheduled to start operating in the early months of next year. Preliminary work has also begun for the construction of two new wind parks in Italy for a total of 20 MW. Activity is continuing in the area of hydrocarbon exploration and production (E&P), which holds exploration licenses in Colombia, the North Sea and Poland.

In line with Business Plan 2011-2016, on October 11 last Sorgenia announced the launch of new offers for the residential market, giving Italian consumers more choice four years on from the liberalization of the market for households. Sorgenia aims to reach 1.5 million new customers by the end of 2016, bringing its total number of customers to approximately 2 million.

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