Italy's ERG posts higher net profit in Q3

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

Italy-based renewables and gas power producer ERG SpA (BIT:ERG) on Wednesday reported a 27% year-on-year increase in its third-quarter adjusted net profit, to EUR 9 million (USD 10.6m).

The Italian firm operates close to 2 GW of wind farms and 141 MW of solar parks, in addition to several hydro and natural gas-fired power plants in Europe. Its CEO Luca Bettonte said in the interim management report that the market environment is burdened by the COVID-19 crisis, with operating results showing “a limited downturn”. Nevertheless, thanks to the reduced cost of debt following a green bond placement and liability management transactions, net profit improved. Hedging transactions also contributed to the increase.

Eearnings before interest, tax, depreciation and amortisation (EBITDA) fell to EUR 99 million from EUR 107 million due to adverse water conditions, decreased wind power output outside of Italy and a drop in energy prices.

Further details on ERG’s performance can be seen in the table.

Amounts in EUR million	Q3 2020	Q3 2019	9mo 2020	9mo 2019
Adjusted net profit	9	7	79	75
Adjusted EBIT	25	29	139	157
Adjusted EBITDA	99	107	362	380
-- from CCGT	21	25	51	59
-- from solar	23	22	57	56
-- from hydro	18	20	58	64
-- from wind	42	43	208	214

The Italian firm had 360 MW of projects under construction outside of Italy at end-September.

ERG confirmed its forecast for 2020 EBITDA of EUR 480 million-500 million, investments of EUR 150 million-180 million, and net financial debt of EUR 1.35 billion-1.43 billion.

(EUR 1.0 = USD 1.178)

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