(Alliance News) - Hera Spa published its new insutrial plan to 2027 on Wednesday, in which the company expects growth in key financial-economic indicators to be accompanied by a focus on financial balance, with a net debt/MOL ratio stably below 3x.

In detail, a positive performance of the group's industrial margins is expected for the year just ended, with EBITDA expected to exceed EUR1.48 billion, EUR185 million more than the EUR1.29 billion in 2022.

The company explains that this result achieves three years ahead of the target that had been set by the previous industrial plan for 2026 - EUR1.47 billion -, confirming the strategy undertaken by the group and the timing in seizing some market opportunities that arose in 2023.

With regard to the overall GOP, the planned projects will allow it to reach EUR1.65 billion as of 2027, an improvement of EUR355 million compared to the 2022 actual

In addition, the business plan envisages a balanced growth of the three main lines of business - networks, energy and environment -, "maintaining the balance between them and a development model that has ensured the strong resilience of the group's results in all the scenario situations experienced in the last two decades, allowing an uninterrupted growth of both sustainability targets and economic-financial and service performance," as stated in the note released by the company.

The investment plan is EUR4.4 billion, 48 percent of which is reserved for development and M&A initiatives. Fifty-five percent of the investments will be earmarked for regulated businesses while the remaining 45 percent will be reserved to fuel the growth of market-based businesses.

From a dividend perspective among the pre-consensus results, the company forecasts a dividend of 14 cents, up 12 percent from 2022 and higher than plan expectations. On 2027, the dividend is expected to grow by 28 percent to 16 cents per share.

Cristian Fabbri, executive chairman of Hera Group, commented, "EUR4.4 billion of investments for industrial development, sustainable growth and resilience will EURpermitting us to target an EBITDA of EUR1.65 billion by 2027, a 28% increase over 2022 and a dividend increase of the same size. The 40 percent investment will help make our infrastructure even more resilient to ensure quality and continuity of our services, even in adverse weather conditions as experienced in recent years."

"The 29 percent reduction in climate-changing emissions and the commitment to resource regeneration are concrete examples of our contribution to the ecological transition, just as the EBITDA generated by activities that simultaneously meet the targets set by the UN Agenda for Sustainable Development will rise to 64 percent. In addition, over the five years of the plan we will contribute to the development of local communities by distributing EUR10 billion of economic value to stakeholders in the territories in which we operate. It is, therefore, a plan that fully meets the group's purpose: to generate sustainable value by fostering a 'just' transition."

"The record growth of EBITDA in 2023, which we expect to exceed EUR1.48 billion, and the consistent decrease in debt, with the net debt to EBITDA ratio expected to fall below 2.6x, are the promising first building blocks of this industrial plan, to which is added the provisional award of more than one million customers from electricity protection, which accelerates the achievement of 4.3 million energy customers further consolidating our position as Italy's third largest operator in the sector."

Hera trades in the green by 3.1 percent at EUR2.96 per share.

By Claudia Cavaliere, Alliance News reporter

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