Consolidated EBITDA in 2008 amounted to EUR10 million compared to EUR18.4 million in 2007 (- 46%). This decrease, net of non-recurring items totalling EUR6.5 million, would have been 21%, as shown by the trend in adjusted EBITDA, which fell from EUR20.8 million in 2007 to EUR16.4 million in 2008.

Consolidated EBITDA in the fourth quarter of 2008 posted a negative result of EUR0.8 million compared to a positive EUR1.4 million achieved during the same period of 2007. Adjusted EBITDA during the period, net of non-recurring items, amounted to EUR5.7 million, showing a growth over the figure of EUR3.8 million for the corresponding period a year earlier.

Wind Italy

EBITDA in 2008 as regards the Wind Italy business, amounting to EUR13.3 million, was down by 41% compared to EUR22.7 million in 2007. In the fourth quarter of 2008 EBITDA was EUR1.1 million compared to EUR2.5 million for the corresponding period of 2007.

The trend in EBITDA is due to:

The decline of 6.4% in output

A lump-sum negative adjustment of EUR2.4 million on the selling price for electricity pertaining to 2007, which matured following Resolution no. 48/08 of the Italian Electricity and Gas Authority (Autorità per l’Energia Elettrica e il Gas).

Some factors of a non-recurring nature also contributed:

Allocation to the provision for liabilities and charges of EUR2.8 million, to cover the risk that a reservation fee may not be recovered from a wind-turbine supplier;

EUR3.7 million as credit write-down connected with wind farms no longer included in the new business plan, collection of which could be problematic.

However, it should be noted that, by neutralising the non-recurring components totalling EUR6.5 million, EBITDA for the Wind Italy business amounts to EUR19.8 million, with a decrease of 17% compared to 2007.

Wind France

In 2008 the contribution to consolidated EBITDA on the part of the Wind France business was EUR7.9 million. In the fourth quarter of 2008 the result was EUR1.8 million compared to EUR1.6 million for the corresponding period of 2007.

The 5 French companies, which were acquired in October 2007 and own a corresponding number of operational wind farms with a total of 55 MW, were included in the Group’s scope of consolidation starting from November 1, 2007. EBITDA just for the months of November and December 2007 came to EUR1.6 million.

Hydroelectric power plants

During the 2008 financial year, the hydroelectric power plants, which were consolidated from October 1, 2008 following the contribution to ERG Renew of the demerged ERG Power & Gas renewables business, generated an electricity output of 4,245 MWh. EBITDA for the hydroelectric power plant business amounted to EUR0.1 million. In the fourth quarter of 2008 the business posted a negative result of EUR0,1 million.

Water services

In 2008, the Water services business posted a negative EBITDA of EUR0,1 million, compared to a breakeven result for the previous year. EBITDA from the company SODAI Italia showed a substantial breakeven, compared to a negative result of EUR0.1 million in 2007. On the other hand, DSI S.r.l. made a negative contribution following the fire at the end of November 2008 that destroyed its solid-waste crushing and compacting plants. It was possible to recover the salvage value of the tangible assets, amounting to EUR0.3 million, which was then immediately written off.

The effects of the insurance indemnity claim have not been recognised in the 2008 financial statements as the indemnity has not yet been definitively quantified.

In the fourth quarter of 2008 a negative EBITDA of EUR0.2 million was posted; the same result was recorded for the corresponding period in 2007.

Holding division

EBITDA in 2008 was negative by EUR11 million, with a further decline of EUR5 million compared to the negative 2007 result of EUR6 million. The fourth quarter of 2008 posted a negative result of EUR3.5 million compared to the, again negative, result of EUR2.6 million achieved in the corresponding period of 2007.

This trend is a consequence of:

Non-recurring technical, legal and financial consulting expenses;

Staff-related costs, connected with exit incentives and the new hires necessary to implement the business plan, as well as the transfer of personnel from the Milan office to the new Genoa office;

The additional costs incurred due to maintaining two offices for the first six months of 2008: the Milan office, until expiry of the rental contract, and the Genoa office;

The staff and technical services provided by ERG S.p.A. and affiliated company ERG Power & Gas to support ERG Renew in the integration process.


EBIT in 2008 was negative by EUR16.6 million (compared to a positive result of EUR8.6 million in 2007), after amortisation and depreciation amounting to EUR17.4 million and write-downs and provisions totalling EUR9.2 million. More specifically, ERG Renew carried out write-downs of EUR7.2 million in relation to capitalised costs on projects that are not expected to be realised within the time span referred to in the new 2009-2012 business plan, in keeping with the new balance sheet policy. Moreover, the amount of EUR2 million was allocated to the miscellaneous risk provision to cover potential liabilities arising from disposal of the Waste-to-energy/waste management and Steel businesses.

The fourth quarter of 2008 posted a negative result of EUR16.2 million (negative result of EUR2.3 million for the corresponding period of 2007).

Consolidated net result

The result in 2008 was EUR24,4 million negative, compared to a positive result of EUR2,3 million in 2007. This negative result also reflects the write-down, by EUR5.8 million, of the 5.36% equity interest held in Ansaldo Fuel Cells S.p.A., whose research and development activity is no longer considered strategic. In the fourth quarter of 2008 the result was EUR19.9 million negative (EUR2.5 million negative for the corresponding period in 2007).

Net financial debt as at December 31, 2008 amounted to EUR254.3 million, up by EUR142.6 million compared to the figure of EUR111.6 million as at December 31, 2007. The increase stems above all from the granting of project financing loans in connection with the wind business, and from the consolidation of indebtedness pertaining to the demerged ERG Power & Gas renewables unit with effect from October 1, 2008.

Raffaele Tognacca, chief executive officer of ERG Renew, commented: “The 2008 results were heavily penalised by non-recurring factors, following the decision to adopt more stringent policies in evaluating the extent to which it is effectively possible to implement investments immediately, in view of the continuing difficulties inherent in the existing authorisation processes. With reference to the new 2009-2012 plan we therefore chose an extremely rigorous and realistic approach that takes into account a scenario made even more complex by the continuing regulatory uncertainty, above all with regard to authorisation procedures, and the current financial crisis: we shall focus our commitment above all on projects that are already approved and “cantierabili” (namely, where commencement of works is already authorised). Further consolidation as regards renewables in Italy and geographical diversification by expanding into new countries will be the main guidelines for our development strategy.”