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Waste management segment

The EBITDA in waste management is up, confirming last year's trends, and the percentage influence on Group results has lessened due to the growth in other segments.

(mln/€)31-Dec-'0631-Dec-'07ChangeChange %
Area EBITDA150.4156.3+5.9+3.9%
Group EBITDA426.7453.4+26.7+6.3%
Percentage weight35.3%34.5%-0.8 p.p. 

For some time now, the Hera Group has been the most important integrated operator in the sector due to the fact that it has over 70 treatment and disposal plants for municipal and special waste.

The Group operates through 7 Aato's in the provinces of Ravenna, Forlì-Cesena, Rimini, Bologna, Ferrara Modena and Pesaro in the area of urban sanitation services including, sweeping, collection, and disposal of municipal waste, just as for the water cycle services. The definition of agreements pursuant to current legislative provisions has also been finalised for this sector.

An analysis of the operating results achieved in the Waste Management segment is shown below:

Income statement
(mln/€)
31-Dec-2006Inc%29-Jun-2005Inc%ChangeChange %
Revenues539.7 553.6 +13.9+2.6%
Operating costs(275.5)-51.1%(289.4)-52.3%+13.9+5.0%
Personnel costs(126.7)-23.5%(129.1)-23.3%+2.4+1.9%
Capitalised costs13.02.4%21.33.8%+8.3+63.8%
EBITDA150.427.9%156.328.2%+5.9+3.9%

The revenues at the end of 2007 disclosed an increase of 2.6%, rising from Euro 539.7 million in 2006 to Euro 553.6 million in 2007. The increase in sales is related to the higher revenues in urban sanitation services due to the adjustment of tariffs and the greater number of services provided.

Separate waste collection, net of volumes arising from sweeping activities (as envisaged by the DPCM project on separate collection of 5 June 1997), in terms of percentage-based incidence on total volumes collected, increased by approximately five percentage points, increasing from 33.5% at the end of 2006 to 38.4% in 2007, thus confirming the Group's commitment towards reducing its environmental impact.

As can be seen in the following table, the quantity of waste disposed of decreased by 2.6%.

The classification of the volumes treated, relating to the 2006 accounting period, has been aligned to the criteria for the current year.

Quantitative data (thousand tonnes)31-Dec-2006Inc%31-Dec-2007Inc%ChangeChange %
Municipal waste1,678.237.2%1,666.537.9%-11.7-0.7%
Market waste1,453.932.2%1,384.531.5%-69.4-4.8%
Special waste from plant by-products1,014.122.5%961.521.9%-52.6-5.2%
Direct customers-subsidiary companies369.68.2%385.88.8%+16.2+4.4%
Waste treated by type4,515.8100.0%4,398.3100.0%-117.5-2.6%
Landfills1,589.235.2%1,522.634.6%-66.6-4.2%
Waste to energy plants597.613.2%599.113.6%+1.5+0.3%
Selection plants244.45.4%257.65.9%+13.2+5.4%
Compost plants335.27.4%339.87.7%+4.6+1.4%
Stabilisation and chemical-physical plants908.220.1%848.219.3%-60.0-6.6%
Other841.218.6%831.018.9%-10.2-1.2%
Waste treated by plant4,515.8100.0%4,398.3100.0%-117.5-2.6%

The above noted analyses of the quantitative data shows lower use of the landfills and the chemical-physical stabilisation plants and greater use of the selection and composting plants.

The EBITDA in the waste management segment increased from Euro 150.4 million in 2006 to Euro 156.3 million in 2007, with an increase of 3.9%.

Note that the EBITDA was negatively affected by the discontinuance of the Cip/6 subsidies for electricity produced from the Rimini plant and Ecologia Ambiente of Ravenna, and the reduced volumes of electricity produced following maintenance on the old waste to energy lines in operation once the new plants started up: it should be noted that the new waste to energy plant in Ferrara started operations in 2007, and the Forli disposal plant was completed during the first quarter of 2008.