In This Article:
Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hera SpA (STU:HE9) reported significant organic growth of EUR117 million, driven by both liberalized and regulated markets.
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The company achieved a 20% increase in net profit, demonstrating strong financial performance.
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Hera SpA (STU:HE9) successfully onboarded 900,000 new customers, expanding its customer base to 4.7 million.
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The waste management sector showed robust growth, with a 260,000-ton increase in special waste volumes.
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The company maintained a stable debt-to-EBITDA ratio of 2.7 times, indicating strong financial health and flexibility for future growth opportunities.
Negative Points
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Turnover decreased due to price effects and the reduction in Super Eco Bonus activities.
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There was a notable increase in net working capital absorption, impacting cash flow.
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The company faces challenges in maintaining customer loyalty amidst market churn and competitive pressures.
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Provisions linked to turnover and energy commodity prices could pose future financial risks.
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The competitive landscape in the energy sector remains intense, with over 500 players, potentially affecting market share and margins.
Q & A Highlights
Q: What are the expectations for networking capital absorption towards the end of the year and into 2025 and 2026? Is the negative networking capital structural after acquiring new customers? A: Massimo Va, CFO, explained that the networking capital absorption is not expected to change significantly for the rest of the year. The negative impact seen this year was due to one-off events. As commercial growth stabilizes, networking capital is expected to stabilize as well. Future forecasts will be more detailed after the new business plan is developed.
Q: How is Hera SpA able to increase its market share in the waste business despite economic difficulties, and what are the expectations for volume dynamics in the coming quarters? A: The company has been able to increase market share by focusing on sectors not affected by economic cycles, such as the agri-food and oil and gas sectors. The strategic location of waste treatment plants and a developed commercial network have also contributed to growth. Prices remain high, especially for liquid waste, and the company expects a positive outlook.
Q: Can you explain the dynamics behind the net growth of 900,000 energy customers and the expectations for shifting these customers to free market contracts? A: The initial estimate was 1.1 million customers, but the actual number acquired was slightly below 1 million. Some customers have been converted to free market contracts, and the company is offering different tariffs to encourage migration. The quality and loyalty of the customer base have been better than expected, and the company is optimistic about future conversions.