Il Hera Group has published its results for the first nine months of 2024, showing an overall positive economic and financial picture, despite a revenue contraction due to price reduction of energy commodities and a lower incentivized activity for energy saving. The period closed with revenues of 8.187,4 million euros, down by 25,3% compared to 10.955 million in 2023 but offset by growth in the electricity sector and a robust performance in regulated services. Commercial strengthening led to an increase in electricity volumes sold, while in the regulated network sectors higher tariff revenues supported the stability of results. TheNet income of relevance to the shareholders, instead, records a significant growth, reaching 282,9 million euros, with an increase of 20,1%.
Hera: gross operating margin (EBITDA) and operating profitability increase
Despite the drop in revenues, Hera recorded a organic growth of Gross Operating Margin (MOL), which reached 1.037,6 million euros, up 3,1% compared to the previous year. This result was driven by good performance in the water cycle, and in the environment and electricity areas, offsetting the drop in margins in energy efficiency activities. Also the net operating result rose to 522,5 million euros, up 3,5%, thanks to the stabilization of costs and the reduction of reserves needed in the face of the volatility of energy commodities.
The third quarter closed with a Hera's net profit increases, which stands at 312,1 million euros (+16,8%). Hera maintained a net financial debt stable, equal to 4.175 million euros, confirming a net debt/EBITDA ratio of 2,74x. Financial returns, represented by ROI and ROE, show an improvement, respectively at 9,5% and 11,7%, highlighting an optimal use of equity capital and investments made.
Hera: investments for 561 million euros
In the first nine months of 2024, Hera has 561,1 million euros allocated to operational investmentsa increase of 9,2% compared to 2023. Investments were mainly directed towards strengthening networks, upgrading plants and improving infrastructure resilience, which are key elements for dealing with extreme weather events. Important interventions were carried out for regulatory compliance and strengthening network capacity, supporting the path towards a green transition in line with the 2027 Industrial Plan.
Hera: business area performance
Gas Area
Il gas sector, which includes distribution and sales, recorded an EBITDA of €308,7 million, down from €334,1 million in the previous year, due to the reduction in incentives for energy efficiency. The decline was, however, partially offset by the increase in revenues in regulated and commercial activities. Hera continued to invest in the gas area, allocating €126,2 million to development projects, maintaining a solid contribution from the sector to the Group's EBITDA (29,7%).
Electricity area
The MOL of theelectric energy reached 200,7 million euros (+7,2%), driven by commercial expansion and greater efficiency in modulation costs. In July 2024, Hera acquired approximately 1 million new customers in the free market, strengthening its presence nationwide and positioning itself as the third largest Italian energy operator. Investments in infrastructure, such as the Smart Grid project financed by the PNRR to strengthen the Trieste electricity grid, reflect the Group's strategy to support the development of the communities served.
Integrated Water Cycle
In water sector, Hera recorded a EBITDA of 234,5 million euros (+12,1%). This result was supported by tariff adjustments that offset the increase in costs and contributed to the sustainability of the service. Investments in the water cycle area were aimed at improving infrastructure and responsible management of water resources, especially in response to the extreme events that hit some Italian regions.
Environment Area
As of September 30, 2024, the MOL ofambient area rises to 271,6 million euros (+5,3%), compared to 258 million in the same period in 2023. The EBITDA for waste treatment services reaches 223,2 million, while the EBITDA for environmental collection and street sweeping services rises to approximately 48,3 million, above all due to the progressive implementation of the new concessions.
Compared to the same period of the previous year, there is a increase in waste traded due to the increase in market waste, thanks to the consolidation of existing commercial relationships and the development of the customer portfolio, both in the industrial and utility sectors. Urban waste, on the other hand, normalized compared to the previous year, which included extraordinary deliveries following the 2023 flood. In the first nine months of the year, in this business area the Group continued its growth path thanks to the diversification of the offer, the breadth of the customer portfolio and the ability to respond with innovative and integrated services, despite a complex macroeconomic context with repercussions also in the markets served.
La environmental sustainability is a priority objective for the Hera Group, as is maximizing resource regeneration: this is demonstrated by the particular attention paid to the development of separate waste collection which, thanks to the strong commitment shown by the multi-utility in all managed areas, has increased by more than two percentage points compared to 2023 values, rising to 73,9%. Investments made in the environment area amount to 93,8 million euros and mainly concern maintenance and upgrading of waste treatment plants.
“The already positive performances at the operational level were accompanied by a significant contribution of financial management, which is progressively recording in 2024 the benefits of the liability management and debt rationalization activities launched from the second half of 2023 – commented the CEO Horace Iacono – Furthermore, also thanks to the contribution of the EIB financing line, the Group has continued to accelerate the path of green transition, decarbonization, circular economy and protection of water resources in the territories served.
Fabbri: “we accompany the positive results with attention to the sustainable growth of the territories”
"The gross operating investments are increasing by approximately 10%, which has been increasing for many years precisely to promote significant infrastructural development, with the aim of improving the quality of services and the resilience of all assets – added the CEO – The net debt to EBITDA ratio, which remains stable in the 2,74x area, guarantees the Group significant financial solidity and flexibility to successfully address growth opportunities through external lines, in line with the objectives of the industrial plan".
"To the positive economic and financial results" commented Cristian Fabbri, Executive Chairman of the Hera Group “it accompanies the continued attention to the sustainable growth of the territories in which we operate: a commitment that is confirmed by the shared value gross operating margin, equal to approximately 54% of the overall EBITDA. These results leverage the Group's ability to grow in both free market and regulated activities, continuing that path of sustainable 'structural' development in favor of the communities served. Following the start of the supply of Gradual Protection Service customers and the continuous commercial development, we now provide at least one service to over 7,5 million citizens.”
