Financial review

The financial results(*) achieved in 2016 were in line with expectations, taking into account the revision of the Weighted Average Cost of Capital (WACC) for regulatory purposes prepared by the AEEGSI for 2016.

The period ended with a net profit, which includes the contribution from distribution sector activities of €861 million, down €377 million (-30.5% compared with 2015).

Taking into consideration the discontinuity featured in the period (separation of gas distribution activities), it was felt that the results should be represented in the adjusted configuration of continuing operations (with regard to the transportation, regasification, storage and corporate activities) to allow a better evaluation of performance and greater comparability with the data from previous years.

Adjusted net profit stood at €826 million, down €37 million (-4.3% compared with 2015).

Adjusted EBIT stood at €1,336 million, down €145 million (-9.8% compared with 2015). The reduction is mainly affected by the revenues from the revision of the WACC (-€114 million), partly offset by the improvement in financial management (+€69 million) and lower income tax (+€29 million).

In 2016, a free cash flow of €1.7 billion was generated thanks also to the fee cashed for the sale of 38.87% of the equity investment in Italgas Reti S.p.A. The net financial debt fell by €2.7 billion, standing at €11.1 billion.