Italian wind and solar power producer ERG SpA reported a decrease in net profit but growth in EBITDA for the first half of 2024, maintaining its full-year guidance despite mixed results.
For the first semester, ERG posted an adjusted net profit of EUR 106 million (USD 116 million), marking an 8% decline year-on-year. The decrease in net profit was attributed to higher amortisation, depreciation, and financial expenses linked to the consolidation of new assets, alongside a higher tax rate following the elimination of the aid for economic growth (ACE) tax benefit in Italy.
Despite these challenges, ERG's EBITDA rose by 4% to EUR 281 million, driven by increased electricity sales volumes from higher installed capacity. CEO Paolo Merli noted, “The volume effect, however, was largely eroded by the lower sales figures, in a context of sharply falling market prices for electricity in the countries in which the group operates compared to the particularly high values recorded in the same quarter of 2023.”
Adjusted operating profit for the period stood at EUR 154 million, a 3% decline from the previous year. Net financial indebtedness before IFRS 16 increased to EUR 1.91 billion at the end of June, up from EUR 1.45 billion at the end of December 2023.
During the reporting period, ERG entered the US market by acquiring a 75% stake in a 317-MW solar and wind portfolio. The company also advanced its wind farm repowering efforts in Italy and commissioned a solar plant and a wind farm in France, which it regards as its second-largest reference market.
Looking forward, ERG reaffirmed its guidance for 2024, targeting full-year EBITDA between EUR 520 million and EUR 580 million. The company expects net financial indebtedness before IFRS 16 to decrease to a range of EUR 1.75 billion to EUR 1.85 billion, with planned investments between EUR 550 million and EUR 600 million.
“The development of our portfolio continues in line with the new Business Plan, with almost 500 MW of installed capacity entering into service during the period. That will become 600 MW by the end of the year, with the completion of 3 wind farms under construction in Italy, France, and Germany,” Merli added.
