ERG S p A : The Board of Directors of ERG S.p.A. ...

Consolidated adjusted^[1] EBITDA: €263 million, €273 million in the first half of 2019.

Adjusted Group net result: €70 million, €68 million in the first half of 2019.

· COVID-19 emergency - Site production activities in Italy and overseas went ahead without interruption, demonstrating the effectiveness of the measures adopted and resilience in combatting the pandemic emergency, positively assessed also by Fitch in its affirmation of the Investment Grade Rating. Recourse to smart working is being encouraged also during Phase 3.

· Quarterly results - Slight downturn in EBITDA, affected by the negative price scenario due to the impact of COVID-19 and penalised by the persistent lack of water availability. These effects were mitigated by hedging transactions and by the increase in overseas wind power production, which exceeded Italian output. Net profit showed an upward trend as regards both the quarter and the half year.

· Development - The growth plan continues, with construction commencing on 280MW outside of Italy and progress being made as regards the authorisation procedure for repowering in Italy. Confirmed delay of six months due to the impact of COVID-19, already reflected in the guidance.

· 2020 Guidance - The forecast revised at the end of the first quarter is confirmed, indicating EBITDA within a range of between 480 and 500 million Euro, investments between 150-180 million Euro, and net financial between debt 1,350 and 1,430 million Euro.

· EMTN (Euro Medium Term Notes) - Following the recent renewal of its EMTN Programme to 2 billion, the Board of Directors of ERG S.p.A has authorised the issuance of bonds, also eligible as 'green bonds', up to the overall maximum of 500 million Euro, to be placed no later than 1 July 2021.

Genoa, 31 July 2020 - At its meeting held yesterday, the Board of Directors of ERG S.p.A. approved the Half-Yearly Financial Report as at 30 June 2020. The figures for the second quarter, which are not subject to approval by the Board of Directors or to independent audit, are to be considered pro-forma numbers and are presented here for the sake of completeness and continuity of the information provided.

Consolidated adjusted financial results

2nd Quarter			Performance highlights (million Euro)	1st Half
2020	2019	Var. %		2020	2019	Var. %
107	110	-3%	EBITDA	263	273	-4%
32	36	-12%	EBIT	114	128	-11%
16	14	21%	Group net result	70	68	3%

	30.06.20	31.12.19	Variation
Net financial debt (million Euro)	1,503	1,476	+26
Leverage[2]	46%	45%

Luca Bettonte ERG's Chief Executive Officer, commented: 'The quarter just ended is the one most severely penalised by the effects of COVID-19, with the collapse of electricity prices and demand throughout Europe. In view of the situation our results, which are in line with those recorded a year ago, can be considered decidedly positive.

EBITDA for the period showed a slight downward trend and reflected the sharp reduction in the prices and margins of energy sales, as well as the low hydroelectric power output. The results for thermoelectric and hydroelectric power were therefore slightly lower than last year, compared on the other hand to the good performance recorded by solar power and wind power, where overseas output during the first six months exceeded Italian production. Lastly, a very important contribution towards stabilising profitability came from the hedging transactions carried out in previous years as part of the risk policy.

We therefore confirm the guidance revised at the end of the first quarter, with EBITDA forecast between 480 and 500 million Euro, net financial debt between 1,350 and 1,430 million Euro and investments estimated at between 150 and 180 million Euro'.

Download the PDF version - press release issued at 11.54 a.m. (CEST)

[1]In order to facilitate the understanding of business performance, the financial results are shown excluding significant income components of a non-recurring nature (special items): these results are indicated using the term 'adjusted'. For a definition of the indicators and reconciliation of the amounts in question, reference is made to the specific section of this Press Release 'Alternative Performance Indicators'

[2]The ratio of total net financial debt (including project financing) to net invested capital