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Ascopiave S p A : Half-Yearly Financial Report as at 30 June 2024
Ascopiave S p A : Half-Yearly Financial Report as at 30 June
About this update from Ascopiave S.p.a.
HALF-YEARLY FINANCIAL REPORT AS AT 30 JUNE 2024 A s c o p i a v e G r o u p Index GENERAL INFORMATION 4 Corporate bodies and corporate information 4 MANAGEMENT REPORT 7 Foreword 7 The structure of the Ascopiave Group 9 Gas distribution 10 The regulatory framework 10 Natural gas distribution sector 10 Renewable energy production sector 12 Efficiency and energy-saving obligations 13 Ascopiave S.p.A. share price trend on the Stock Market 15 Control of the company 16 Corporate Governance and Code of Ethics 17 Transactions with related and associated parties 18 Significant events during the first half of the financial year 2024 19 Other important events 21 Natural gas distribution 21 Stipulation of a proposed agreement with the municipalities for the adoption of a shared procedure aimed at the agreed quantification of the "Industrial Residual Value" of the networks 22 Efficiency and energy saving 23 Litigations 24 Relations with the Internal Revenue Service 31 Territorial areas 32 Significant events after the end of the first half of the financial year 2024 35 Dividend distribution 35 Treasury shares 35 Foreseeable development of operations 36 Inflationary trends and interest rates 37 Group objectives and policies and description of risks 37 Other information 43 Research and Development 43 Human Resources 45 Seasonality of operations 46 List of company locations 46 Commentary on the economic and financial results for the first half of the financial year 2024 47 Performance Indicators 47 Management Performance - Key Operational Indicators 48 Management Performance - The Group's Economic Results 49 Operating Performance - The Financial Situation 51 Operating Performance - Investments 53 Condensed Interim Consolidated Financial Statements 54 Consolidated Statement of Financial Position 55 Consolidated Statement of Comprehensive Income 56 Consolidated Statement of Changes in Equity 57 Consolidated Cash Flow Statement 58 EXPLANATORY NOTES 59 Corporate information 59 General Drafting Benchmarks and Attestation of Compliance with IFRS 59 __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|2 Financial Statements 59 New principles and amendments effective from 1 January 2024 60 New accounting standards, not effective and not adopted earlier than 30 June 2024 61 Evaluation Benchmarks 61 Consolidation Area and Benchmarks 62 Summaries of companies consolidated on a line-by-line basis 63 NOTES TO THE ITEMS IN THE CONSOLIDATED BALANCE SHEET 64 Non-current assets 64 Current Assets 71 Consolidated net equity 77 Non-current liabilities 78 Current liabilities 83 NOTES TO THE MAIN ITEMS OF THE CONSOLIDATED INCOME STATEMENT 87 Revenues 87 Financial income and expenses 91 Taxes 92 Net result from transfer /disposal of assets 92 Non-recurring components 93 Transactions arising from atypical and/or unusual operations 93 Commitments and risks 93 Risk factors and uncertainty 94 Capital Management 97 Representation of financial assets and liabilities by category 98 Financial statements presented in accordance with Consob Resolution 15519/2006 .................................................................................................... 102 Consolidated Statement of Financial Position 102 Consolidated Statement of Comprehensive Income 103 Consolidated Cash Flow Statement 104 Consolidated net financial debt 105 Significant events after the end of the first half of the financial year 2024 106 Group objectives and policies 106 Attachments: Declaration of the Manager in Charge - Attestation to the Consolidated Financial Statements pursuant to Article 81-ter of Consob Regulation No. 11971; Independent auditors' report on the limited audit of the condensed half-yearly financial statements as at 30 June 2023. __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|3 GENERAL INFORMATION Corporate bodies and corporate information Board of Directors and Board of Auditors Name Office Duration of office From To Cecconato Nicola* Chairman of the Board of Directiors and CEO 2023-2025 18.04.2023 Approval of budget 2025 Pietrobon Greta Directors 2023-2025 18.04.2023 Approval of budget 2025 Quarello Enrico Directors 2023-2025 18.04.2023 Approval of budget 2025 Novello Cristian Indipendet Director 2023-2025 18.04.2023 Approval of budget 2025 M onti Federica Indipendet Director 2023-2025 18.04.2023 Approval of budget 2025 Vecchiato Luisa Indipendet Director 2023-2025 18.04.2023 Approval of budget 2025 Zoppas Giovanni** Indipendet Director 2023-2025 18.04.2023 Approval of budget 2025 Cecconato Nicola was appointed Chief Executive Officer by the Board of Directors on 11 May 2023; (**) Zoppas Giovanni was appointed Lead Independent Director by the Board of Directors on 11 May 2023. Name Office Duration of office From To Salvaggio Giovanni President of the Board of Auditors 2023-2025 18.04.2023 Approval of budget 2025 M oro Barbara Statutory Auditor 2023-2025 18.04.2023 Approval of budget 2025 Biancolin Luca Statutory Auditor 2023-2025 18.04.2023 Approval of budget 2025 __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|4 Governance committees Control and Risk Committee Name Office From To Novello Cristian Independent director - President 11.05.2023 Approval of budget 2025 M onti Federica Independent director 11.05.2023 Approval of budget 2025 Vecchiato Luisa Independent director 11.05.2023 Approval of budget 2025 Remuneration Committee Name Office From To Vecchiato Luisa Independent director - President 11.05.2023 Approval of budget 2025 Novello Cristian Independent director 11.05.2023 Approval of budget 2025 Pietrobon Greta Non-executive director 11.05.2023 Approval of budget 2025 Sustainability Committee Name Office From To Pietrobon Greta Non-executive director - President 11.05.2023 Approval of budget 2025 M onti Federica Independent director 11.05.2023 Approval of budget 2025 Quarello Enrico Non-executive director 11.05.2023 Approval of budget 2025 Auditing Company Investor relations KPMG S.p.A. Tel. +39 0438 980098 Fax +39 0438 964778 e-mail : [email protected] Registered office and company data Ascopiave S.p.A. Via Verizzo, 1030 I-31053 Pieve di Soligo - TV Italy Tel: +39 0438 980098 Fax: +39 0438 964778 Share Capital: Euro 234,411,575 fully paid-in VAT 03916270261 __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|5 Key economic and financial data of the Ascopiave Group Economic Data First half (Thousands of Euro) 2024 % of revenues 2023 % of revenues Revenues 99,091 100.0% 83,897 100.0% Gross operative margin 48,711 49.2% 38,182 45.5% Operating result 23,711 23.9% 14,498 17.3% Result for the period 18,527 18.7% 13,473 16.1% Net result for the period 18,527 18.7% 13,529 16.1% It should be noted that EBITDA is defined as earnings before depreciation, amortisation, bad debts, financial management and taxes. Balance Sheet Data (Thousands of Euro) 30.06.2024 31.12.2023 Net working capital 35,572 33,702 Fixed assets and other non current assets (Non-financial) 1,276,189 1,273,692 Non-current liabilities (excluding loans) (63,983) (63,749) Net invested capital 1,247,778 1,243,645 Net financial position (405,605) (389,363) Total Net equity (842,173) (854,282) Total financing sources (1,247,778) (1,243,645) Please note that 'net working capital' is defined as the sum of inventories, trade receivables, tax receivables, other current assets, trade payables, tax payables (within 12 months) and other current liabilities. Monetary flow data First half (Thousands of Euro) 2024 2023 Total comprehensive income 17,815 (942) Cash flows generated (used) by operating activities 35,334 (41,740) Cash flows generated/(used) by investments (20,093) (16,714) Cash flows generated (used) by financial activities (40,099) (3,724) Variations in cash (24,858) (62,178) Cash and cash equivalents at the beginning of the period 52,083 76,917 Cash and cash equivalents at the end of the period 27,225 14,739 __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|6 MANAGEMENT REPORT Foreword The Ascopiave Group closed the first half of the 2024 financial year with a consolidated net profit of Euro 18.5 million (Euro 13.5 million as at 30 June 2023), an increase of Euro 5.0 million compared to the same period of the previous year. Consolidated shareholders' equity as at 30 June 2024 amounted to Euro 842.2 million (Euro 854.3 million as at 31 December 2023), and net invested capital to Euro 1,247.8 million (Euro 1,243.6 million as at 31 December 2023). During the first half of the year, the Group totalled investments of Euro 32.5 million (Euro 34.2 million in the first half of 2023), mainly in the development, maintenance and modernisation of gas distribution networks and plants, as well as in the installation of electronic meters, for Euro 27.3 million (Euro 25.1 million in the first half of 2023). At the end of the reporting period, investments were made in plants for the production of energy from renewable sources for Euro 3.9 million (Euro 8.4 million in the first half of 2023). It is herein stated that the economic results achieved by the Estenergy Group and Cogeide S.p.A. ., amounting to Euro 4.8 million (Euro 0.8 million in the first half of 2023), are recorded for the Group's share under the item "Net result of the companies accounted using the equity method". Operations The Ascopiave Group operates mainly in the natural gas distribution sector. It currently holds concessions and direct assignments for the management of gas distribution in 301 municipalities, operating a distribution network that stretches over 14,700 kilometres and providing service to approximately 872,000 users. The Group is also present in the renewable energy sector, owning 29 hydroelectric and wind power plants. The Group also operates in the field of cogeneration and heat management, as well as in the water sector, being a shareholder and technological partner of the company Cogeide, which manages the integrated water service in 15 municipalities, serving a basin of more than 100,000 inhabitants through a network of about 930 km. Strategic Objectives The Ascopiave Group intends to pursue a corporate strategy focused on creating value for its stakeholders, maintaining levels of excellence in the quality of services offered, respecting the environment and enhancing the social instances that characterise the context in which it operates. To this end, it intends to consolidate its leadership position in the gas sector at a regional level and aims to achieve significant positions also at a national level, taking advantage of the liberalisation process currently underway. The main guidelines of its development strategy are dimensional growth, diversification into other sectors of the energy sector synergic with the core business, and the improvement of operational processes. Operating Performance The volume of gas distributed through the networks managed by the Group amounted to 816.0 million cubic metres, an increase of 0.3% compared to the same period in the previous year . As of 30 June 2024, the distribution network had a length of 14,713 kilometres, a decrease of 17 kilometres compared to 31 December 2023. This change is mainly related to the transfer, effective 1 January 2024, of certain concessions in the ownership of Romeo Gas. The 29 plants producing electricity from renewable sources, with a total installed capacity of 84.1 MW, produced 126.5 GWh in the first half of the year, showing an increase of 77.6% over the same period of the previous year. The improvement compared to the comparable figure is due to both the commissioning of a new wind farm of the subsidiary Salinella Eolico S.r.l., which took place at the beginning of 2024, and the improvement in operating conditions compared to the first half of 2023, characterised by a significant drought. __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|7 Economic results and financial situation Consolidated revenues for the first half of 2024 amounted to Euro 99.1 million, compared to Euro 83.9 million in the first half of the previous year. The Group's operating profit amounted to Euro 23.7 million, an increase of Euro 9.2 million compared to the first half of the previous year. The consolidated net profit of Euro 18.5 million showed an increase of Euro 5.0 million compared to the first half of the previous year. The Group's Net Financial Position as of 30 June 2024 was Euro 405.6 million, up Euro 16.2 million from Euro 389.4 million as of 31 December 2023. The growth in financial debt is determined by the cash flow for the year (given by the sum of the net result, capital losses/gains, income from equity investments, the result of companies consolidated using the equity method and amortisation, depreciation and write-downs), which generated resources of Euro 35,3 million, by the management of net working capital, which absorbed financial resources of Euro 1,1 million, by investment activities, which absorbed resources of Euro 32.5 million, and by the management of assets , which absorbed net resources of Euro 17.9 million, mainly due to dividends. The ratio of Net Financial Position to Shareholders' Equity as at 30 June 2024 was 0.48 (0.59 as at 30 June 2023). __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|8 The structure of the Ascopiave Group The following table highlights the corporate structure of the Ascopiave Group as at 30 June 2024. It is herein stated that the consolidated companies Acantho, Hera Comm and Acinque are classified as investments in other companies and are not included in the scope of consolidation. The other companies summarised in the table are consolidated as subsidiaries or associated companies. It is also stated herein that the Group companies Estenergy and Cogeide are associated companies and are accounted using the equity method. __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|9 Gas distribution The distribution of natural gas, following the closing of the partnership between Ascopiave S.p.A. and the Hera Group on 19 December 2019, represents the core business of the Group's activities in terms of its contribution to the formation of the operating result. This is an activity carried out under a concession, subject to strong regulation by the public sector authority (ARERA), both with regard to the minimum standards of management and quality of service, and to the related tariff remuneration. As is well known, Legislative Decree No. 164/2000 introduced the obligation to entrust the gas distribution service by means of a public tender, wishing to implement the so-called 'competition for the market', on the assumption of the need for unitary management (therefore under a necessary monopoly regime) of the service and plants, as well as on the consideration that a competitive selection mechanism should favour a containment of costs for the end customer, an efficient development of the plants and an improvement in the quality of the service provided. Decree-Law 159/2007 (converted, with amendments, into Law 222/2007), with Article 46-bis, introduced, for the first time, the concept of Ambito Territoriale Minimo (Atem) for the management of the service, establishing that tenders must be announced with reference to the Atem, not to the individual municipality as was the case in the past. The Atem tender was definitively adopted as the basic rule with Legislative Decree 93/2011, which, among other things, sanctioned, as of June 2011, the ban on tenders for individual municipalities. As a result of various corporate transactions, at present, the Ascopiave Group, through seven gas distribution companies, manages concessions for the gas distribution service in a total of 301 municipalities, with about 872,000 Redelivery Points (PoR / Utilities) and more than 1,432 million cubic metres of smc vetted (on an annual basis). For more details, please refer to the section "Territorial Scope" of this Annual Financial Report. The regulatory framework Natural gas distribution sector Resolution 622/2023/R/com dated 28 December 2023 - Revision of the methods for updating social bonuses and amendments to Authority Resolution 63/2021/R/com The measure modifies the modalities for updating and quantifying social bonuses and revises, for the protection of customers/users, certain operating methods for recognising bonuses. Resolution dated 28 December 2023 631/2023/R/gas - Update of tariffs for gas distribution and metering services for the year 2024 The measure approves the mandatory tariffs for natural gas distribution, metering and marketing services for the year 2024. Resolution 636/2023/R/gas dated 28 December 2023 - Integration of Articles 91 and 92 of the RQDG on the subject of replacing traditional gas meters that are inaccessible or partially accessible where it is not possible to take at least one reading per year The measure provides for additions to Articles 91 and 92 of the RQDG on the subject of replacing traditional gas meters that are inaccessible or partially accessible where it is not possible to take at least one reading per year with gas smart meters. Resolution 30 January 2024 19/2024/R/gas - Update of the interest rate to be applied for the determination of the reimbursement, to outgoing operators, of the amounts relating to the one-off consideration for the coverage of tender charges for the entrusting of the natural gas distribution service The measure approves the values of the interest rate to be applied for the determination of the reimbursement to the outgoing operators of the amounts for the coverage of the tender charges mentioned in Decree 226/11, for the year 2024. Resolution 06 February 2024 35/2024/R/gas - Initiation of proceedings for the simplification and acceleration of procedures for carrying out tenders for the natural gas distribution service The purpose of the measure is to initiate proceedings for the simplification and acceleration of the procedures for carrying out tenders for the natural gas distribution service. __________________________________________________________________________________________________ Ascopiave Group - Half-Year Financial Report 2024|10