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    Italy's Snam Sees Q1 Earnings Bump


Snam expects the pandemic to have only a limited impact on its 2020 targets, although it is too early to properly assess its effects.

by: Joseph Murphy

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Italy's Snam Sees Q1 Earnings Bump

Italy's transmission system operator Snam said on May 7 it had achieved a 5.3% yr/yr growth in net profits in the first quarter to €298mn ($323mn).

Core earnings (Ebitda) were up 4.6% at €567mn, whereas revenues increased by 8.1% to €691mn. Snam gained from tariff adjustments that led to a growth in its regulated revenues, but non-regulated revenues were also higher thanks to increased contributions from the company's international business and its energy transition activities.

Snam is set to expand its energy transition operations further through the purchase of a 50% stake in Iniziative Biometano, a company that manages biogas and biomethane plants fed with agricultural biomass in Italy. The deal, worth €10mn, is expected to close by the end of the year.

Snam said it expected the Covid-19 pandemic to have a limited impact on its 2020 targets, cautioning that it was too early to assess its effects properly. Italy imposed a lockdown in late February that is only now starting to be eased.

Gas demand in Italy was down 6.7% yr/yr in the first quarter at 23.94bn m3, and Snam forecasts a further decline in the second quarter. However, the maximum impact on its revenues will be €9mn, it said.

"The results of the first quarter demonstrate the solidity of Snam’s business and the significance of the development and efficiency measures launched in recent years, even in difficult market contexts," CEO Marco Alvera said.

Snam reaffirmed its €6.5bn 2019-2023 investment plan, and Alvera told investors in a conference call that there would be no adjustments to the group's dividend policy.