It transmits high-voltage power throughout Italy and it has the largest grid in Europe, leading to significant synergies with economic and environmental benefits for the electricity system, companies and families in Italy, not to mention design and environment
The strategy –and the challenge– involves performing optimally in two different ways. First and foremost, Terna must guarantee maximum quality, stability and innovation in the core service that it provides for Italy, which makes it the almost exclusive operator of the national electricity transmission grid, supplying high-voltage power throughout the country. It is a job that it has done to an ever higher standard in recent years, including since Matteo Del Fante was appointed as the Ceo. It now sets international benchmarks for reliability.
Secondly, Terna must guarantee interesting levels of profitability for its shareholders. Cassa Depositi & Prestiti is by far the most prominent and it plays a guiding role, but there are also tens of thousands of shareholders with small stakes and 1,200 foreign institutional investors who rate the company highly and trust in its strategies but still expect sizable profits every year, along with a constantly increasing enterprise value. In this and many other respects, Terna really is the top player in its field, as the ongoing stream of international plaudits confirm. It is the industry leader in electric utilities according to the Dow Jones Sustainability Index, while in 2015 it received a RemTech award for the Chignolo Po-Maleo power line’s exemplary blend of innovation and environmental sustainability.
On the financial front, demand was four times greater than supply for the €1 bn in bonds on offer in Terna’s latest issue, enabling it to set the lowest ever coupon rate for Italian corporate bonds. Furthermore, the dividend of €0.20 per share that was paid in 2015 underlined the profitability of the company. As for development and growth, it ended 2015 by buying the high-voltage grid spanning more than 8,000 km owned by Ferrovie dello Stato. Consequently, Terna now has the largest grid in Europe at 72,000 km, paving the way to significant synergies with economic and environmental benefits for the electricity system, companies and families in Italy.
There are four pillars in the strategic plan launched by Del Fante: reinforcing the grid in Italy and integration with the European market; selective investments with even lower impacts on energy tariffs and debt; development of non-regulated activities; and more efficient operations. It will entail restructuring of the company to make it more efficient and rationalize costs, also bearing in mind that a new regulatory period began on 1 January 2016.
Meanwhile, ordinary business has continued at Terna in a quite extraordinary manner: in the last 12 months the share price has increased by 20% and by the end of November the net profit had already reached €454.9 mn (up by 8.9% on 2014), leading to the distribution of a €0.07 interim dividend per share.