Italian ERG reports stable 2019 profit despite low hydro

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

March 12 (Renewables Now) - Italian energy company ERG SpA (BIT:ERG), which operates nearly 2 GW of wind parks in Europe, almost doubled its fourth-quarter net profit but still its 2019 bottom-line result shrank by 3% to EUR 104 million (USD 117.5m).

The company registered adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR 504 million in 2019, which rose from EUR 491 million a year back thanks to favourable wind conditions, the contribution of the thermoelectric business and the addition of new power production capacity. The result was, however, negatively impacted by low hydropower reserves due to the dry weather and a weakening of power prices, CEO Luca Bettonte explained.

Adjusted revenues from ordinary operations came at EUR 1.02 billion, more or less at the level of the previous year. More details are available in the table.

Amounts in EUR million	Q4 2019	Q4 2018	2019	2018
Revenues	260	261	1,022	1,027
Adjusted EBITDA	124	109	504	491
-- of which wind	87	75	301	274
-- of which solar	7	4	63	32
-- of which hydroelectric	23	28	87	146
Adjusted EBIT	48	38	205	216
Adjusted net profit	29	15	104	107

At end-2019, ERG had 1,929 MW of installed wind, mainly in Italy, 480 MW of thermal power plants, 141 MW of solar and 527 MW of hydropower assets. Its wind farms produced 4,000 GWh of electricity in 2019, up from 3,464 GWh in 2018, while the output of its solar plants increased to 226 GWh from 130 GWh. Hydropower generation witnessed a 29% drop to 1,229 GWh.

The Italian power group continues work on its plan to add 850 MW of capacity between 2017 and 2022. It has so far installed 350 MW. Financially, it expects an EBITDA of EUR 500 million-520 million in 2020 and investments of between EUR 185 million and EUR 215 million that will go for greenfield projects in the UK, Poland and France.

(EUR 1.0 = USD 1.130)

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