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Analysis of the Electricity Area

The Electricity Area contributes about 40% to the overall Group turnover with a contribution to overall profit bordering on 10%, as shown in the table below:

(Euro millions)30-jun-0830-jun-09Abs. ChangeChange %
Area EBITDA25.126.0+0.9+3.6%
Group EBITDA257.6271.3+13.7+5.3%
Percentage9.7%9.6%-0.1 p.p. 

At the end of the first half of 2009 the area registered growth of Euro +0.9 million of the EBITDA, going up from Euro 25.1 million in 2008 to Euro 26.0 million in 2009.

An analysis of the electricity segment results is given below:

Income Statement
(Euro millions)
30-jun-08Inc.%30-jun-09Inc%Abs. ChangeChange %
Revenues662.3 931.6 +269.4+40.7%
Operating costs(637.7)-96.3%(906.3)-97.3%+268.6+42.1%
Personnel costs(10.9)-1.6%(11.6)-1.2%+0.7+6.6%
Capitalised costs11.41.7%12.31.3%+0.9+7.8%
EBITDA25.13.8%26.02.8%+0.9+3.6%

Revenues went up from Euro 662.3 million in the first half of 2008 to 931.7 million in 2009, with a 40.7% increase. This was due to the greater intermediate volumes and the higher cost of energy raw material.

The following table gives a detailed breakdown of the revenues by type:

(Euro millions)30-jun-08Inc.%30-jun-09Inc%Abs. ChangeChange %
Revenues from sales263.739.8%327.635.2%+63.9+24.2%
Revenues from distribution22.23.4%22.92.5%+0.7+3.1%
Trading / other376.456.8%581.262.4%+204.8+54.4%
Total revenues662.3100.0%931.6100.0%+269.4+40.7%

Sales revenues increased by +24.2% as a result of greater volumes deriving from the strengthening of the trade action and the increase in average energy price on the market. The significant increase in trading revenues on the electricity market is in line with the developed business.

The quantitative data for the area, which do not include trading activities, demonstrate the trend in the volumes linked to the afore-mentioned management policies:

Quantitative data30-jun-0830-jun-09Abs. ChangeChange %
Volumes sold (Gw/h)2,438.33,190.3+752.0+30.8%
Volumes distributed (Gw/h)1,121.11,063.6-57.5-5.1%

The fall in distributed volumes in connection with the lower consumption associated with the economic crisis in progress is to be pointed out. As far as the volumes sold are concerned, the increase is instead the result of the good sales campaign performance.

The increased activities and prices explains the proportional increase in operating costs, due to the purchase of raw material, and the percentage margins that dropped from 3.8% of the first half of 2008 to 2.8% of 2009.

Labour costs increased compared to the first half of 2008 due to the higher sales costs, while capitalised costs for investments on Group networks are up over the previous year by 7.8%, rising from Euro 11.4 million for the first six months of 2008 to Euro 12.3 million for 2009. The increase is to be mainly attributed to the electronic meter replacement programme.

As at 30 June 2009, the EBITDA recorded an increase compared to the first half of 2008, from Euro 25.1 million to Euro 26.0 million, with a 3.6% increase.

 
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