Italgas may revise up investments for new water assets

ROME (Reuters) - Italy's biggest gas distributor Italgas may revise up its estimate for future investment in its newly-acquired water business, its CEO said on Wednesday during a post-results conference call.

The group finalised earlier this year the purchase of three Italian water businesses from France's Veolia as part of its diversification strategy, in a deal worth up to 115 million euros excluding debt.

Speaking with analysts, Italgas CEO Paolo Gallo said the group had already included 300 million euros ($317 million) of gross capital expenditures for the water business in the recent business plan covering 2024-29 period, but a more precise figure would be calculated soon.

"If a revision happens, it will be up," Gallo said, adding that water assets in Italy had been suffering from under-investment for decades.

On the other hand, the group can count on 140 million euros in funds already granted for modernising the water assets by the Italian government under the European Union's post-pandemic recovery plan.

Gallo also said that the deal to acquire Veolia's water assets included an earn-out that would be paid if Italgas achieved a reduction in the delinquency rate of the water businesses.

The group said earlier on Wednesday that its third-quarter core profits rose 10.3% year-on-year, pushed by investments in the digital transformation of the company's gas network.

"With almost 600 million euros invested in the first nine months, the company intensified its activities of extension and digital transformation of the gas networks, both in Italy and in Greece," Gallo said in a statement.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up to 303.5 million euros ($321.68 million) in the July-September period, from 272.1 million euros in the same period in 2022.

($1 = 0.9451 euros)

(Reporting by Francesca Landini and Giulia Segreti, editing by Alvise Armellini and Sharon Singleton)