Abstract
The Italian water sector, different from other utility-based businesses such as electricity and gas, has been characterized by an unclear regulatory framework for many years. The absence of a structured tariff scheme has discouraged foreign investment. The regulatory reform introduced by the Electric Power and Natural Gas Authority (AEEGSI) in 2011 has boosted interest in the industry. The introduction of a tariff scheme, centered on the full recovery cost principle, improved profitability, financial strength and investment capacity of the companies. The improved performance, in turn, is also attracting foreign and financial investors, who could play a key role in closing the infrastructure gaps that characterize the Italian water networks compared to other European countries.
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Notes
- 1.
Utilitatis is a foundation created with the aim of promoting and spreading best practises in the management of local Italian public services.
- 2.
Apart from A2A, characterized by small exposure to the water business compared to the other listed companies: Acea, Hera and Iren.
- 3.
Just for one company, Dolomiti Energia Holding, did the estimation require the use of the weight of revenues of the water business on its total revenues.
- 4.
The only exceptions are represented by A2A and EGEA. For those companies, the water business can be fully attributable to some of their subsidiaries: A2A Ciclo Idrico and Tecnoedil, Alta Langa Servizi, and Alpi Acque, respectively. In this case, data collection was based on their separated financial statements, basically following the same approach adopted for mono-utilities.
- 5.
It has been decided to exclude from the sample the data for Abbanoa and A2A Ciclo Idrico for the years 2013 and 2016, respectively. This is because of the presence of sizable extraordinary revenues that affected all income statement figures.
- 6.
Revenues from sales and services.
- 7.
Earnings Before Interests and Taxes.
- 8.
Net income has been adjusted in 2013 for Azienda Servizi Ambientali and Acquedotto Pugliese, because the figures were affected by extraordinary income.
- 9.
Earnings Before Interest, Taxes, Depreciation and Amortization.
- 10.
It has been decided to exclude data for Abbanoa and A2A Ciclo Idrico for the years 2013 and 2016, respectively, from the sample. This is because of the presence of sizable extraordinary revenues that affected all income statement figures.
- 11.
Interest-bearing liabilities minus cash and cash equivalents.
- 12.
Italian independent research institute.
- 13.
According to the latest available public data, it is estimated that there is more than 38% in water network loss and 60% of the networks are more than 30Â years old.
- 14.
The value does not include the investments financed with public funds, estimated at the national level, at nearly €9/inhabitant.
Reference
Berardi, D., Casarico, F., Traini, S. & Valle, N. (2017). Idrico e finanza: bond e mini bond per raddoppiare gli investimenti. Collana Acqua, 83. REF Ricerche, Laboratorio SPL.
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Cattozzi, M., Costigliola, G., Tomaiuoli, N. (2018). Economic and Financial Performance of the Leading Companies. In: Gilardoni, A. (eds) The Italian Water Industry. Springer, Cham. https://doi.org/10.1007/978-3-319-71336-6_4
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DOI: https://doi.org/10.1007/978-3-319-71336-6_4
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