Significant margin growth and net profit as at September 30th, 2013

• Revenues of 46 million; +12.00%  compared to  September 30, 2012)
• EBITDA of Euro 9 million; +135% compared to September 30 2012; Ebitda Margin 20% ( 9.3% as at September 30, 2012)
• EBIT of Euro 4.4 million; +86%  compared to  September 30 2012)
• Net Profit of Euro 6 million; +116% compared to  September 30 2012)
• NFP of Euro 116.3 million of which current Euro 24.2 million (  Euro 124.8 million  as at 30/06/2013, of which current Euro 31.5 million)
• Net Equity of 52.2 million (48.7 million as at 31/12/2012)

The Board of Directors of TerniEnergia, a company active in the renewable energy fields, energy efficiency and waste management, listed on Star Segment of Borsa Italiana, approved today consolidated interim report as at September, 30 2013.

Stefano Neri, Chairman and CEO of TerniEnergia, commented as follows:

“ The results of the last period , which capture the start of the new strategic plan of TerniEnergia confirm the real possibility to achieve the ambitious goals set out in the business plan “Discover the New Green Era”. The new approach of business and of  industrial activities of the Group , which started in the second half of 2013 , will allow the Company to exceed the forecasted provision of Euro 7 million in net profit  for the current financial  year. .
The growth of activity in South Africa , with the agreements signed with a leading Italian utility for the construction of two photovoltaic plants for a total of 148.5 MWp , gives visibility to the majority of industrial targets for the financial years 2014 and 2015 , which will be marked by the stability of  customer  for the  EPC activity and full programmability of productive activity.

We also had  a positive feedback about favorable context of acceptance of the Common Fund investment real estate “RA – Renewable Assets” from investors. This tool aimed at integrating the  financial structure of the Group , will invest in operating assets for the production of energy from renewable sources and environmental management and  will be operational by the beginning of 2014 respecting the timeframe of the project and will make possible a new era of growth and final structure of the new strategic direction of TerniEnergia . This setting will allow the Company to intercept the new phase of growth of the PV market at global level, that the most recent outlook analysts predict for the future , starting from 2014”.

Consolidated results as at September 30, 2013

The Net revenues of Euro 46 million showed  an increase of 12% compared to  September 30, 2012 , (Euro 41 million). The increase is mainly attributable to the power generation activity, to the consolidation of investments in the contribution and to the  results of environmental activities.

The EBITDA amounted to Euro 9 million  a significant increase ( +134, 7) compared to September 30, 2012 (Euro 3.8 million) . The EBITDA Margin was 19.5%, an increase over the corresponding 2012 period (9.3%).

Net operating income (EBIT) increased by 86.4% and amounted to Euro 4.4 million (Euro 2.3 million at September 30, 2012) after amortization for Euro 4.6 million (Euro 1.5 million at September 30, 2012).

Net income amounted to Euro 6 million, with a significant increase of  +115.5% compared to September 30, 2012 (Euro 2.8 million) and includes the share of profit from the activity of JV of Euro 1.25 million.

The net financial position amounted to Euro 116.3 million (Euro 62.3 million as at 31/12/2012). Non-current net financial position amounted to Euro 92 million, while the net financial position in the short period amounted to Euro 24.2 million. NFP as at June 30, 2013 amounted to Euro 125.7 million.

Net equity amounted to Euro 52.2 million. The Fixed assets amounted to Euro 165.4 million. The NFP / short equity, equal to 0.46x, improves appreciably, remaining well below the unit in an area of ​​complete safety.

PRO-FORMA RESULTS AS AT SEPTEMBER 30, 2013

As at September 30, 2013, the Group had joint control – together with primary level partners – on some of the companies whose object was the identification, development, financing, design, construction, commissioning, operation and management in Italy of industrial sized photovoltaic plants, and the sale of electricity produced by them.

Pursuant to the provisions of IAS 31 – Interests in Joint Ventures, the investment in question can be accounted for in the consolidated financial statements under the equity method, which consists in the recognition of a portion of the income accrued by the same as a specific item of the income statement, or by the proportional method, which consists in detecting the relevant portion of all assets and liabilities, income and expenses arising from the financial statements of the joint ventures. The Group has opted for the equity method in accounting for joint ventures showing, therefore, the results of the Group in the consolidated income statement separate line “Share of income from joint ventures”.

The following table shows the Group’s financial results as at September 30 2013 if the results of the joint ventures were accounted by using the proportionate method:

This accounting method would not have resulted in any adjustment to the Group’s net profit in the period under review.

The variation in economic performance expressed by the proportional method is due to the different number of megawatts. In particular, the sale of the JV Energie Srl (that owns 13 plants totalling 16.7 MWp), which took place in late 2012, led to the non inclusion  of the plants in the proportional results for the first nine months of 2013. The effect was not offset by the acquisition of 100% of the assets of Energia Alternativa, that took place on 28 March 2013, that  owns 12 plants with a total capacity of 13.9 MWp.

Industrial results as at September 30 2013

The total number of photovoltaic plants built by TerniEnergia from the beginning of its activity to September 30, 2013 is equal to 270 plants with a total power of 272.8 MWp (of which 33.3 MWp in Full Ownership and 11.1 MWp in JV for the Power Generation business, taking into account the demerger operation of the JV Fotosolare Settima which will be effective within the end of the  2013’s financial year).  Two biomass plants, for an installed capacity of 1.5 MWe and 2 MWt, have also been connected to the national grid. The overall energy production plants in Full Ownership and in Joint Venture for the business of power generation, amounted in the first nine months to about 60 million kWh. For the full year 2013, it is estimated that the plants owned will ensure a production exceeding 70 million kWh.

Significant facts occurred after the end of the quarter

October 1st, 2013 The Board of Directors of TerniEnergia approved the industrial plan 2014-2016 and updated the 2013 target. The new industrial plan provides the strengthening the internationalization process, focusing on the segment of industrial size plants, and consolidating partnerships and synergy relationships with industrial and financial companies with high credit worthiness. The Plan highlights the importance of EPC activity, also thanks to the agreement reached with Prelios SGR and with Capital Power Advisor to set up the closed – end real estate fund called RA (Renewable Assets), intended to invest in new asset class which consists of energy production plants from renewable sources. Up to 2016 TerniEnergia is expecting within 2016  a significant increase in revenues and profitability and, simultaneously, a reduction in the NFP and an increase in cash flow. The forecast for the year 2013 includes a net profit target of approximately Euro 7 million, preserving the financial equilibrium. The Plan is expecting a production value (CAGR 2014-16 ) of 35% by reaching intermediate targets of Euro 136 million in 2014 to Euro 201 in 2015, up to 248 in 2016 . Total net income for the three years is expected of approximately Euro 43 million, with planned objectives of Euro 8 million in 2014, Euro 15 million in 2015 and Euro 20 Million in 2016.

Resignation of the Managing Director Eng. Paolo Ricci to ensure compliance with the gender quotas

October 17th, 2013 – The Board of Directors of TerniEnergia took note of the resignation of the managing director and Vice-Chairman Mr. Paolo Ricci, who resigned to ensure compliance with the so-called “Gender quotas” . The BOD  thanked him for the important and constructive contribution since the start of activity to date.
Mr Ricci will continue to operate within the corporate group, maintaining, by means of an appropriate proxy, all operational duties already assigned him by the Board of Directors on May 7, 2013. At the same time the Board of Directors, in compliance with the provisions introduced by Law 12 July 2011, No. 120 with regard to gender balance in the composition of the Board of Directors and Board of Statutory Auditors and taking account of the provisions of art. 13 of the bylaws, co-opted as a non-executive director Ms Francesca Ricci.
As a result of this requirement, Consob has taken steps to terminate the proceedings initiated by resolution no.18583/2013

October 31st, 2013 – TerniEnergia as part of the process of internationalization of photovoltaic EPC business, has signed two framework agreements with a primary European utility for the construction of industrial size PV plants for the total power capacity of 148.5 MWp in South Africa. In particular, the agreements – that became effective following the award of preferred bidder status of the relevant owner – provide for the installation by TerniEnergia Project PTY Ltd, the South African subsidiary of TerniEnergia, of two photovoltaic plants with “EPC Contract” (turnkey) with the supply of panels and inverters, respectively, in Paleisheuwel for 82.5 MW and in Tom Burke for 66 MW, for a total consideration of approximately ZAR 2 billion corresponding to the current exchange rate to approximately Euro 147 million.

Business outlook

TerniEnergia as at 30 September 2013 has achieved better results compared to the same period of 2012 and those of the previous quarter and substantially in line with expectations expressed in previous reports management.

With the introduction of new industrial plan “Discover the new green era”, TerniEnergia outlined the objectives of the strategic, industrial and financial, characterized by the stability of the client to the business of EPC and the programmability of productive activity. By the end of the year the end of the phase of funding, managed by Prelios SGR and the advisor with Capital Power, is expected to take place and it will lead to the full running of the  closed real estate fund, reserved for qualified investors “RA – Renewable Assets”. This integration tool of the financial structure of the Group, which will invest in operating assets to the production of energy from renewable sources and environmental management, will strengthen the process of internationalization of the company, which started in Europe and South Africa.

In particular, there are ongoing intensive scouting activities related to most interesting national  contexts and most attractive markets in several respects: the emerging countries characterized by strong growth in demand for energy, markets characterized by replacement demand of energy supply sources and efficiency of electrical systems, geographical areas are close to achieving grid parity or alternatively areas in which you can work through PPA (power purchase agreement). TerniEnergia expected to shortly launch major projects in Ukraine, is carrying out a careful analysis of the Central and South American markets and has received major industry recognition on the outcome of the third bid of the South African Government for the construction of large solar power plants. The Group has, in fact, signed two framework agreements with a leading Italian utility for the installation of photovoltaic systems of industrial size of the total power of 148.5 MWp in South Africa and an amount of approximately Euro 147 million.

This approach confirms the trend that will see the average growth of the size of individual projects and the choice to concentrate the market share of high-standing partners and customers to enable new ways of accessing capital.

TerniEnergia will benefit, on an international scale, of the expected recovery in Europe and worldwide of  photovoltaic industry after about 18 months of recession. The most recent studies of the international market, in fact, delineate an exponential growth in installations in the “driver” countries, with forecasts of new capacity for 40 total GWP in 2014, and only a gradual shift of the market outside the Eurozone, which will keep a market demand ranging between  25 and 30% of the installed capacity worldwide.

In this scenario TerniEnergia looks at the domestic market and the European market in general by way of strengthening its capacity for action in the field of energy efficiency and environmental industry (waste management and recovery of materials and energy), also entering in the wake of concrete measures for environmental sustainability issued by UER Climate Energy set of actions. In particular, the new plan includes substantial investments dedicated to ESCO activities through the formula of Third Party Financing (TPF), which can be realized thanks to the completion of the integration of the subsidiary Lucos Alternative Energies within the Group TerniEnergia.

The Company will continue, finally, the process of strengthening the scope of the environmental asset, completing a new facility for the treatment and recovery of ” secondary raw material ” of tires (PFU) in Northern Italy and enhancing a new plant in South Italy for energy recovery through anaerobic biodigestion and production of biogas and compost through the integration of a second phase of aerobic biodigestion of matter. Finally, the new plant will be completed for the treatment of industrial waste fluids in Nera Montoro (TR), at an advanced authorization phase, which will intercept a substantial demand in a market segment with high technological content and high growth prospects.

Declaration of the Officer responsible for preparing the corporate accounting documents

The Officer appointed for the preparation of accounting and corporate documents, Dott. Paolo Allegretti, states, pursuant to paragraph 2 of art. 154-bis of the consolidated Financial Act, that the accounting information that is contained in this press release corresponds to the results contained in the documents, books, and accounting records.

Deposit of documents

Please note that the Interim Financial Report as at September 30 2013 the Group TerniEnergia approved by the Board of Directors of TerniEnergia today, will be available to the public, together with the report of the independent auditors, in the manner and within the time provided by law.