ERG's net profit falls 9% in 2018

Wind farm in Italy. Source: ERG SpA (www.erg.eu).

March 8 (Renewables Now) - Italian energy company ERG SpA (BIT:ERG), which operates over 1.8 GW of wind parks in Europe plus other power plants, saw its adjusted net profit for 2018 drop by 9% but said the year was good for wind and solar capacity additions.

The company’s bottom line came at EUR 107 million (USD 119.8m), down from EUR 117 million a year before. CEO Luca Bettonte said on Thursday that ERG acquired 89 MW of solar assets in Italy and added 55 MW of wind in France, in line with its green growth targets.

The company’s wind farms, having a combined capacity of 1,822 MW, produced 3,464 GWh in the past year. The output of its 90 MW of solar parks was 130 GWh, while generation from combined cycle gas turbine (CCGT) and hydroelectric power plants stood at 2,151 GWh and 1,740 GWh, respectively. While natural gas power output declined, hydropower production in the period increased from 1,144 GWh a year ago.

The Italian company closed 2018 with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR 491 million, rising 4% in annual terms, in line with guidance.

More details about ERG’s financial performance can be seen in the table below:

Amounts in EUR million	Q4 2018	Q4 2017	2018	2017
Adj. EBIT	38	52	216	220
Adj. EBITDA	109	116	491	472
-- of which wind	75	89	274	316
-- of which solar	4	N/A	32	N/A
-- of which hydroelectric	28	20	146	94
-- of which natural gas	5	16	53	78
Adj. net profit	15	29	107	117

ERG said it will now focus on developing its wind business through its overseas pipeline, as well as on repowering parks in Italy. For 2019 it guided for an adjusted EBITDA of between EUR 495 million and EUR 515 million for 2019, with net debt of EUR 1.36 billion-1.44 billion, as compared to EUR 1.34 billion in 2018. Capital expenditure is seen to be lower than the 2018 level of EUR 510 million, at between EUR 340 million and EUR 370 million.

(EUR 1.0 = USD 1.120)