Edison's accounts are back to positive, in comparison between the first quarter of this year and that of 2017: in the period that ended on March 31 last year, the group recorded a positive net result of 42 million euros, against the loss for 19 million euros in the same period of 2017. A result made possible in particular by the good industrial performance of the electricity supply chain (+37% EBITDA for the period) and the rediscovered stability of commodity hedging activities.
From the quarterly published on Friday it also emerged that the net financial debt as at 31 March 2018 rose to €477m from €116m at the end of 2017 following the acquisition of Gas Natural Commercio Italia which, with approximately 500.000 customers, has allowed Edison to expand its customer base by consolidating its role as third operator on the retail market present throughout the country. A positioning strengthened at the end of April with the agreement for the purchase of Attiva, a company that operates in the market for the sale of methane gas to end consumers with a portfolio of approximately 30.000 customers located in Puglia.
Group management performance as at 31 March 2018
In the first quarter of 2018 there was a strengthening of the reference economic scenario which led to an increase in the consumption of electricity, gas and oil compared to the same period of the previous year.
In particular, the Italian demand for electricity increased by 1,8% compared to the first quarter of 2017, reaching 81,5 TWh. This increase was entirely covered by imports which recorded a significant increase (+47% to 13,5 TWh) compared to the same period last year, when there was an interruption of foreign production for maintenance. The increase in imports and hydroelectric generation, which has returned to normal conditions (8,6 TWh produced in the first quarter of the year, equal to an increase of 11% compared to the same period of 2017), has more than balanced the decline in thermoelectric production (-7% to 48,8 TWh). Renewable generation remained stable at 11,3 TWh. In terms of prices, the Single National Price (PUN) decreased by 5,4% to an average value of 54,3 euros per MWh from 57,4 euros per MWh in the first quarter of 2017 as a result of the greater availability of electricity at following the resumption of import flows.
Similarly, in the first quarter of the year, gas consumption grew by 1,4% to 26 billion cubic meters compared to the same period of 2017. Gas demand was supported by the civil sector, as a result of colder temperatures (+7% to 14,6 bcm), and industrial (+2% to 4,9 bcm). On the other hand, thermoelectric consumption decreased by 11% to 6,1 billion cubic metres. In terms of prices, we note the further appreciation of spot gas which in Italy settled at an average value for the quarter of 23,1 cents per cubic meter (+6,9% compared to the first quarter of 2017) with prices increasing during the quarter.
The increase in oil prices was more marked, with an average value of 2018 dollars a barrel in the first quarter of 67,1 compared to 54,7 dollars a barrel in the same period of 2017. This value is the result of the success of the extension of the agreements reached between OPEC and non-OPEC countries on production ceilings, the decline in Venezuelan production due to the country's difficult economic situation and fears of possible US sanctions on Iran which would affect its export capacity.
In this scenario, Edison closed the first quarter of the year with sales revenues of 2.631 million euros from 2.706 million euros in the same period of the previous year. The decrease was determined by the contraction in revenues from the electricity sector which amounted to 1.161 million euros (-10,3% compared to 1.295 million euros in the first quarter of 2017) mainly due to lower volumes sold on the market all wholesale. Revenues from the hydrocarbons business were essentially stable at 1.657 million euros (+1,3% compared to 1.636 million euros in the first quarter of 2017), benefiting from the increase in foreign production.
The Gross Operating Margin (EBITDA) amounted to 201 million euros in the first quarter of the year, recording a decrease compared to the 229 million euros of the same period last year. To weigh on the result
it was the performance of the hydrocarbons sector which saw the Gross Operating Margin fall to 133 million euros (181 million euros in the first quarter of last year). This change was mainly determined by the expected contraction in the margins of the gas purchase and sale activity, which was affected by a less favorable market scenario. The contribution to the profitability of the E&P activity was positive, benefiting from the higher volumes of foreign production. The EBITDA of the electricity business grew by 37% to 93 million euros (68 million euros in the first quarter of 2017) thanks to higher profitability from thermoelectric generation.
Operating income (EBIT) rose to 95 million euros from 8 million euros in the first quarter of 2017 benefiting from the net change in fair value relating to commodity and foreign exchange hedging activities which was positive by 2 million euros (-98 million euros in the same period last year) and the reduction in depreciation for the period, mainly due to lower exploration costs.
The Edison Group closed the first quarter of the year with a positive net result of 42 million euros (-19 million euros in the same period of 2017) as a result of the dynamics illustrated above.
Net financial debt at March 31, 2018 rose to 477 million euros from 116 million euros at the end of 2017 following the acquisition of Gas Natural Sale Italia which had an impact of 274 million euros including debt repayment.
Weather
Edison confirms the EBITDA forecast for the whole of 2018 in the range between 670 and 730 million euros.
