Italy's Snam reports 16% rise in H1 core profit, eyes hybrid bond
Adds context in paragraphs 2-5, CEO comment in paragraph 6, details
By Francesca Landini
MILAN, July 31 (Reuters) -Italy's state-controlled gas grid company Snam SRG.MI reported a 16% rise in first-half adjusted core earnings on Wednesday and said it could issue hybrid bonds worth up to 1.25 billion euros ($1.4 billion) to fund recent acquisitions.
The group last week announced a long-awaited deal to buy three gas storage sites from Edison EDNn.MI in a transaction that could be worth up to 630 million euros.
By the end of this year Snam will also have to fund the increase of its stake in Italy's biggest liquefied natural gas (LNG) terminal, acquired for an undisclosed amount.
Snam's shares reduced early gains after results and were up 0.3% at 1330 GMT while Milan blue-chip index .FTMIB was down 0.6%.
Snam said its board approved on Wednesday a potential issuance of hybrid bonds by the end of 2025 to finance recent strategic initiatives, including the acquisition of the storage assets and also relevant investments.
In the first half of the year, the group increased investments by nearly 60% year-on-year to 1.16 billion euros to press ahead with works to strengthen its gas transportation capacity and set up a new LNG terminal in the Adriatic Sea.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) excluding special items such as write offs booked in the same period last year came in at 1.42 billion euros between January and June, underpinned by the group's regulated activities including gas transportation.
"Despite a global volatile context, the first half results are solid and beyond expectations, with investments up by almost 60% and the main financial indicators up double-digit, allowing us to confirm the guidance, already revised upwards, for the end of 2024", Chief Executive Stefano Venier said.
The group has forecast adjusted EBITDA to rise above 2.75 billion euros in the whole 2024.
Net debt was up 1.08 billion euros to 16.4 billion euros mainly due to higher investments and 2023 dividend payment.
($1 = 0.9223 euros)
Reporting by Francesca Landini, editing by Gianluca Semeraro and Tomasz Janowski
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