Sorgenia - assets depreciation Sorgenia - maxi svalutazione

Sorgenia – assets depreciation

The large depreciation continue to weigh on the accounts of Sorgenia, the energy company controlled by CIR and the Austrian Verbund, which ended the first nine months of 2013 with a loss of 434.3 million after the red 77.1 million in the same period last year.

These losses should be only partly covered by the Cir group through the collection of compensation received from Fininvest for the Lodo Mondadori following the judgment of the Supreme Court of 17 September last, that is 491.3 million euro.

In the income statement, net of legal fees and taxes, they have become 319.3 million .

The loss of 434.3 million of Sorgenia is mainly due to the maxi- devaluation from € 287.2 millions.

The devaluation, particularly on international investments and the share in the Italian Energy / Tirreno Power, amounted to 396.6 million during the period referred 232.8 million in the third quarter, and must be seen also in the context of the company’s plan to refocus on its core business of manufacturing and sale of energy .

Sorgenia says about the losses:

The Group net loss for the nine months , [...] is mainly due to write-downs of [...] in particular due to the adverse economic conditions and changes in regulatory frameworks .

Italian energy S.p.A. is the production company, buying and selling electricity jointly held with the Hera Group and capitalized for 26 million, of which 78% is under the control of Sorgenia .

Tirreno Power S.p.A. is one of the main energy producers in Italy, has a net worth of 495 € Millions according to the last published financial statements of Sorgenia with investments amounting to 292 € Millions.

Revenues also declined, down 1.4% to 1.73 billion compared to an EBITDA that, before devaluations, rose to 116.2 million from 49.6 million .

It should be noted that, over the years, the intangible assets of Sorgenia have increased up to 13.2% of the value of tangible assets and 45% of the value of the equity invested after touching the roof of the 50 % in 2011.

For a term of comparison, in 2006 the intangible assets were approximately 2 % of the value of the equity invested.

This figure appears, more than any other evaluation, really significant for a company  investing in infrastructure and energy.

We are facing the most important case of renewable asset depreciation after the cases of  Falck Renewable, depreciating Italian plants, and Italian ERG Renew, devaluating wind farms acquired in France a few years ago.

Falck Renew had closed 2012 with a net loss of EUR 85.5 million due to depreciations of approximately 100 million related to the race of 2002 for the construction of three incinerators in Sicily, then suspended, and for which it is act a civil and administrative litigation.

The Falck Group thus aims to sell up to 49 % of the assets Falck Renew a partner, entrusting the mandate , maturing within one year , in Rothschild .

On sale, there would be all the assets in the areas of wind, solar and biomass.

Incidentally, an investment fund and an industry group are interested in taking over 49% of the wind energy business of Falck Renew in England, (equal to 273 mw of installed capacity) with the closing of the deal expected by the end of the year.

Sorgenia had already arranged to sell some of its assets to the fund Terra Firma, the private equity fund and one of the leading European players in the industry.

The recent results may anticipate further divestments of assets.