EDISON SPA : LE BENEFICE AVANT IMP?T EN HAUSSE DE 13,4 % A 584 MILLIONS D'EUROS

Le Conseil d'Administration examine le rapport trimestriel au 30 septembre 2007


EDISON : LE BENEFICE AVANT IMPÔT EN HAUSSE DE 13,4 % A 584 MILLIONS D'EUROS

Hausse de 4,2 % de l'EBITDA à 1 270 millions d'euros

Milan, le 8 novembre 2007 - Le Conseil d'Administration d'Edison s'est réuni aujourd'hui pour examiner le rapport trimestriel au 30 septembre 2007.

FAITS MARQUANTS POUR LE GROUPE EDISON

(in millions of euros)

+--------------------+--------+--------+-------+-+--------+--------+-------+
|                    |9/30/07 |9/30/06 |Var. % | |Q3 2007 |Q3 2006 |Var. % |
+--------------------+--------+--------+-------+-+--------+--------+-------+
|                    |        |        |       | |        |        |       |
+--------------------+--------+--------+-------+-+--------+--------+-------+
|Sales revenues      |  5,914 |  6,231 | (5.1) | |  1,862 |  1,965 | (5.2) |
+--------------------+--------+--------+-------+-+--------+--------+-------+
|EBITDA              |  1,270 |  1,219 |   4.2 | |    366 |    445 |(17.7) |
+--------------------+--------+--------+-------+-+--------+--------+-------+
|EBIT                |    746 |    694 |   7.5 | |    174 |    279 |(37.6) |
+--------------------+--------+--------+-------+-+--------+--------+-------+
|Profit before taxes |    584 |    515 |  13.4 | |    118 |    231 |(48.9) |
+--------------------+--------+--------+-------+-+--------+--------+-------+
|Net profit          |    321 |    531 |(39.5) | |     65 |    133 | (51.1)|
+--------------------+--------+--------+-------+-+--------+--------+-------+

FAITS MARQUANTS POUR LES ACTIVITES ELECTRICITE ET HYDROCARBURES

(in millions of euros)

+--------------------------+--------+--------+-------+-+--------+--------+-------+
|                          |9/30/07 |9/30/06 |Var. % | |Q3 2007 |Q3 2006 |Var. % |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|                          |        |        |       | |        |        |       |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|Electric Power Operations |        |        |       | |        |        |       |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|Sales revenues            |  4,906 |  5,097 | (3.7) | |  1,662 |  1,737 | (4.3) |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|EBITDA                    |    934 |    892 |   4.7 | |    313 |    329 | (4.9) |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|                          |        |        |       | |        |        |       |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|Hydrocarbons Operations   |        |        |       | |        |        |       |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|Sales revenues            |  2,744 |  2,955 | (7.1) | |    758 |    871 |  (13) |
+--------------------------+--------+--------+-------+-+--------+--------+-------+
|EBITDA                    |    384 |    368 |   4.3 | |     69 |    128 |(46.1) |
+--------------------------+--------+--------+-------+-+--------+--------+-------+

Résultats opérationnels du Groupe sur les 9 premiers mois de l'année 2007

Sur les 9 premiers mois de l'année 2007, la demande en électricité est restée stable en Italie, mais le radoucissement exceptionnel des températures lors de l'hiver a entraîné une baisse de l'utilisation du gaz (-4,9 % par rapport aux 9 premiers mois de l'année 2006).

In this environment, Edison's ability to increase sales in the deregulated markets (+4.5%) helped mitigate the impact of a reduction in sales revenues, which totaled 5,914 million euros. The decrease of 5.1% compared with the same period last year is the combined result of changes in the scope of consolidation, lower demand for natural gas and a contraction of sales in the regulated markets caused by Resolution No. 249/06 with which the Electric Power and Gas Authority lowered the average prices of the avoided-fuel-cost component paid to CIP6/92 power plants. This resolution was later voided by the Regional Administrative Court of Lombardy and an appeal is pending before the Council of State.

Despite this, EBITDA increased by 4.2% to 1,270 million euros. The electric power operations (+4.7%) capitalized on an increased availability of high-efficiency power plants and benefited from an effective strategy implemented to optimize the mix of energy sources and uses in the deregulated markets. The hydrocarbons operations (+4.3%) reported a gain in profitability, as a steady improvement in operating performance and a successful strategy to optimize its supply mix more than offset the impact of lower unit sales. Nonrecurring gains of about 60 million euros were lower than the negative impact of Resolution No. 249/06.

EBIT were up 7.5% to 746 million euros, while profit before taxes grew by 13.4% to 584 million euros. The net profit totaled 321 million euros, down from 531 million euros in the first nine months of 2006. A higher tax burden is solely responsible for this decrease. Specifically, the difference in tax charges with first nine months of 2006 totaled 273 million euros, most of whose were due to the application of Law No. 266 of December 23, 2005 last year.

It is important to keep in mind that the results for the third quarter of 2007 were adversely affected by a change in the scope of consolidation caused by the sale of a majority stake in Serene Spa and by the impact of Resolution 249/06. The comparison with the same period in 2006 is also skewed by nonrecurring transactions that occurred last year.
If they are restated on a comparable scope of consolidation basis and net of the abovementioned nonrecurring transactions, EBITDA show a gain of more than 7% in the third quarter and of about 14% in the first nine months of 2007.

Sales Volume and Revenues

In the first nine months of 2007, sales revenues decreased to 5,914 million euros (-5.1% compared with the same period in 2006) due to the sale of Serene, a contraction in the demand for natural gas in Italy, lower prices quoted in euros for raw materials in the international markets, a reduction of the Single National Price in Italy and the impact of Resolution No. 249/06.

However, unit sales in the deregulated electric power markets increased by 4.5% to 30,015 GWh (28,711 GWh in the first nine months of 2006) thanks to the success of the Group's sales strategies and to higher sales on the Power Exchange. On the other hand, CIP6 sales were down 9.4%, reflecting the impact of the divestiture of Serene. Overall, unit sales of electric power amounted to 46,952 GWh, compared with 47,611 GWh in the first nine months of 2006 (-1.4%). Restated on a comparable scope of consolidation basis, total unit sales show a gain of approximately 1.5%.

In the natural gas area, consolidated unit sales totaled 9,711 million cubic meters (-2.8%, as against a drop of 4.9% in overall market demand for Italy caused by unusually mild weather). Residential and industrial customers purchased 2,345 million cubic meters (-30%, due to limited availability and increased demand from thermoelectric users), with consumption by the Group's thermoelectric power plants accounting for the balance (+10%, due to increased production by the thermoelectric facilities).

EBITDA

In the first nine months of 2007, EBITDA grew by 4.2% to 1,270 million euros (1,219 million euros in the same period in 2006).
During this period, the electric power operations increased EBITDA by 4.7% to 934 million euros (892 million euros in the first nine months of 2006). This improvement is the result of an effective strategy of optimizing the mix of energy sources and uses in the deregulated markets, which more than offset the impact of lower margins earned on CIP6 sales and the absence of the contribution provided by Edison Rete and Serene before they were sold.

The EBITDA generated by the hydrocarbons operations grew by 4.3% to 384 million euros (368 million euros in the first nine months of 2006) due to an increase in the margins generated by operating activities, made possible in part by the optimization of the portfolio of sources, and to the abovementioned nonrecurring gain of about 60 million euros, offset to some extent by the negative impact of Resolution No. 249/06.

EBIT, Profit Before Taxes and Net Profit

At September 30, 2007, EBIT totaled 746 million euros, compared with 694 in the first nine months of 2006 (+7.5%).
At 584 million euros, profit before taxes for the first nine months of 2007 was 13.4% higher than the 515 million euros reported at September 30, 2006. A reduction in financial expense, made possible by the Group's improved financial structure, is the main reason for this gain.
The Group's net profit totaled 321 million euros at September 30, 2007 (-39.5% compared with 531 million euros in the first nine months of 2006). A higher tax burden is solely responsible for this decrease. Specifically, the difference in tax charges with first nine months of 2006 totaled 273 million euros most of whose were due to the application of Law No. 266 of December 23, 2005 last year.

Indebtedness

At September 30, 2007, the Group's net borrowings amounted to 3,192 million euros, down sharply compared with the 4,256 million euros owed at December 31, 2006 (4,575 million euros at September 30, 2006). The positive cash flow from operations generated during the period, net of capital expenditures and investments in exploration (365 million euros in the first nine months of 2007), account for this improvement, taking also into consideration the exercise of warrants (520 million euros) and the sale of the investment in Serene Spa (117 million euros).
The debt/equity ratio improved significantly, standing at 0.43 at September 30, 2007, compared with 0.62 at December 31, 2006.

Outlook for the Balance of 2007

The commissioning of new facilities in Simeri Crichi (800 MW) and Turbigo (800 MW owned by Edipower), coupled with the implementation of policies carefully designed to optimize its energy portfolio, should enable the Group to offset the impact of potentially unfavorable changes in the regulatory environment, which, however, are still questionable at this point
For 2007 as a whole, industrial results should be better than those reported in 2006. The Group's financial position is expected to show further improvement, due to the exercise of the 2007 Edison Spa common share warrants, which expire on December 31, 2007.

* * *

The Board of Directors appointed Marco Andreasi Chief Financial Officer. He is replacing Renato Ravanelli, effective November 9, 2007. Mr. Ravanelli was appointed General Manager of AEM Milano. Mr. Andreasi was also appointed "Dirigente Preposto alla redazione dei documenti contabili societari" pursuant to Law No. 262/2005. Mr. Andreasi's curriculum vitae is available online at www.edison.it.

Lastly, the Board of Directors performed the self assessment process recommended in the Code of Conduct published by Borsa Italiana.

Conference Call

The Group's operating results for the first nine months of 2007 will be discussed today at 4:00 PM (3:00 PM GMT) during a conference call. Journalists may follow the presentation by telephone in listen-only mode by dialing +39 02 802 09 28.
The presentation will also be available at the Group's website: www.edison.it.

As required by Article 154-bis, Section 2, of the Uniform Finance Law (Legislative Decree No. 58/1998), Renato Ravanelli, in his capacity as "Dirigente Preposto alla redazione dei documenti contabili societari" of Edison S.p.A., attests that the accounting information contained in this press release is consistent with the data in the Company's documents, accounting records and other records.

The Quarterly Report at September 30, 2007 will be on file and available upon request at the Company's headquarters (31 Foro Buonaparte, Milan) and at the offices of Borsa Italiana Spa by November 14, 2007. It may also be consulted at the Group's website: www.edison.it.

* * *

Edison's Press Office: Tel. +39 02 62227331, [email protected]
Edison's Investor Relations: Tel. +39 02 62228415, [email protected]
www.edison.it

Public disclosure required by Consob Resolution No. 11971 of May 14, 1999, as amended.

Tables available in attachment:

- Consolidated Balance Sheet
- Income Statement
- Cash Flow Statement
- Changes in Consolidated Shareholders' Equity


Copyright Hugin

The appendixes relating to the press release are available on:
http://www.companynewsgroup.com/documents/PJ/CO/2007/127989_88_5T38_CdAEdisoneng.doc