Terna raises the stakes on investments and intensifies efforts on the grid to fully take up the challenge of the energy transition. The 2020-24 Strategic Plan leads to 7,3 billion (+20%) investments for the Italian electricity grid “to favor the integration of renewable sources in an increasingly articulated and complex system” explains the press release released by the group. Of this amount, 4 billion will be invested in the development of the network. The most important projects are confirmed on Tyrrhenian Link – between Campania, Sicily and Sardinia – and the SA.CO.I.3, i.e. the strengthening of the connection between Sardinia, Corsica and the Italian peninsula. Another two billion will go to improve the efficiency and quality of service with a strong effort on digitization while 1 billion will go to security and defense to increase the stability of the network in the most critical points of the national backbone.
A remarkable effort that raises the bar by over 1 billion from the 6,2 billion of the previous Plan. The strategy pursued by CEO Luigi Ferraris in the previous mandate and which he himself confirmed for the next one by speaking in video conference with analysts, maintains and strengthens the development of the national transmission grid in terms of sustainability, further pushing on interconnections with the abroad to make Italy – with its geographical position in the center of the Mediterranean – a European energy hub. A strategy that goes hand in hand with the Green New Deal of EU President Ursula von der Leyen.
The global scenario is that of decarbonization on the one hand – “All European countries are moving in this direction” Ferraris said in a conference call and Terna is in line with the other European TSOs – and on the one hand increase in the electric vector on overall energy consumption. Terna's forecasts for 2040 indicate a 60% increase in electricity demand and a growth from 18 to 24% of the electricity component of global energy consumption. If we then add that the weight of renewables is expected to rise from 35 to 55% and that 60% of this energy will be concentrated in Southern Italy and the islands, it is clear how Terna - Ferraris explained to the analysts - needs to prepare for manage this epochal transformation. Finally, the need to face the growing risk of adverse climatic events will also have a non-secondary weight.
Luigi Ferraris is preparing to be reconfirmed for the second term, in ticket with the president Catia Bastioli, promising revenues of 2,9 billion and Ebitda of 2,17 billion at the end of the plan and an average annual growth (CAGR) of 5 and 4 respectively percent. This will allow you to carry earnings per share to 48 cents in 2024 and to push, in management's intentions, the value of regulated assets – Terna's core business – to a growth of 5% at the end of the period.
It is the numbers of the 2019 Budget - approved by the Board together with the new strategy for the five-year period - that allow the leap forward. The year ends with a consolidated net profit of 757,3 million, up 7,2% and with a dividend that is close to 25 cents (24,95 of which 8,42 already anticipated, the rest will arrive in June). Confirmed the data on revenues (2,3 billion +4,5%) and Ebitda 1,74 billion (+5,5%). Investments recorded a leap of 15,9% to 1,3 billion, thus financial debt exceeded 8,2 billion (compared to 7,9 as at 31 December 2018).
The new Strategic Plan also strengthens the dividend policy with an average growth of 8% between 2020 and 2022 compared to 29,5 cents in 2019 and a payout of 75% for 2023 and 2024 with a guaranteed minimum dividend on a of 2022.
Numbers that express a Luigi Ferraris the satisfaction for "the results achieved in 2019 at the end of a three-year period characterized by an epochal transformation of the energy sector in Italy, in Europe and in the world" .
“In this context – he continued – Terna is carrying out a profound transformation, placing itself at the center of the energy transition underway. Our efforts to develop the national electricity grid will continue with the 2020-2024 Strategic Plan. A 7,3 billion euro commitment which represents a record investment in line with the Green New Deal and the national decarbonisation strategy and which takes the form of important repercussions for local development and the generation of additional value for our shareholders".
Last updated at 16:43pm on Tuesday 10th March 2020.
