EDISON: le b?n?fice net augmente de 30% et atteint 531 millions d'euros

HIGHLIGHTS OF THE GROUP'S ELECTRIC POWER AND HYDROCARBONS OPERATIONS

(in millions of euros)

	2006	2005
Electric Power Operations
Sales revenues	6,945	4,972
EBITDA	1,162	988
Hydrocarbons Operations
Sales revenues	4,171	3,303
EBITDA	434	353

Sales Volumes and Revenues

Sales were up sharply in 2006, rising to 8,523 million euros, or 28.6% more than the 6,629 million euros reported the previous year. Revenues were up 39.7% for the electric power operations and 26.3% for the hydrocarbons operations.

The electric power operations enjoyed a healthy expansion in unit sales in Italy, which grew by 24.1% to 65.4 billion kWh (52.7 billion kWh in 2005). This gain reflects Edison's ability to increase its share of the deregulated market, where its sales jumped 49.2%, owing in part to the availability of the additional power generated by new power plants and the success of the Group's marketing strategy. During the year, Edison increased its activity in the main foreign power exchanges, executing trades for a total of about 1.8 billion kWh.

In the natural gas area, the supply available to the Group totaled 13,6 billion cubic meters, about the same as in 2005. Newly commissioned facilities boosted consumption of natural gas by the Group's thermoelectric power plants by 13.8% to 8.3 billion cubic meters (7.3 billion cubic meters in 2005). Because the natural gas emergency limited access to new supplies of natural gas, the Company was forced to cut back deliveries to market customers (both residential and industrial). As a result, unit sales fell from 5.5 billion cubic meters in 2005 to 4.5 billion cubic meters in 2006.

EBITDA

In 2006, EBITDA rose by 19.3% to 1,536 million euros (1.288 million euros in 2005).

The electric power operations reported a gain of 174 million euros (+17.6%). This increase reflects primarily an expanded supply of electric power, made possible by the full availability of new power plants, the Group's expansion in the deregulated markets and the optimization of its operations in those venues.

The hydrocarbons operations (+81 million euro, or 22.9%, compared with 2005) benefited from the impact of the renegotiated prices paid for natural gas under certain long-term supply contracts and of higher benchmark oil prices on oil and gas exploration and production activities in Italy and abroad. These favorable developments more than offset the adverse effect of a fine of about 20 million euros imposed by the Electric Power and Natural Gas Authority for the alleged use of storage capacity for purposes other than those for which it had been awarded and of the costs incurred to comply with the Resolutions by which the Authority revised the rates at which natural gas is sold (about 50 million euros).

EBIT

EBIT grew to 752 million euros in 2006, or 17.7% more than the 639 million euros earned the previous year, as the improvement generated by the Group's industrial activities was reduced in part by an increase in depreciation, compared with 2005.

Net Profit

The Group's net profit jumped to 664 million euros, or 29.8% more than the 504 million euros earned in 2005.

This remarkable improvement was made possible by the positive operating performance of the Group's industrial activities and by nonrecurring gains. In viewing these data, it is important to keep in mind that in 2005 the net profit included gains earned on the sale of Tecnimont and the AEM Spa shares (totaling about 110 million euros) and a smaller tax burden made possible by the use of the loss carryforwards that were still available at that point. In 2006, the bottom line included a gain of 114 million euros on the sale of the power-line network and 202 million euros in net benefit generated by the realignment of the taxable base of a significant portion of Edison Spa's power plants to the higher amount at which they are carried in the statutory financial statements (Law No. 266 of December 23, 2005).

When the extraordinary items mentioned above are excluded, the 2006 net profit shows a 30% increase over the previous year.

Indebtedness

At December 31, 20065, the Group's net borrowings totaled 4,256 million euros, sharply down from 4,820 million euros at the end of 2005. As a result, the debt/equity ratio improved to 0.62 (0.75 at December 31, 2005).

Bonds Due within 18 Months of December 31,

A fixed-rate (7.375%) 600-million-euro bond issue floated in 2000 will mature on July 20, 2007.
A variable-rate 830-million-euro bond issue floated in 2002 will mature on August 26, 2007.
Both bond issues will be repaid using ample cash funds provided by bank credit lines already secured at more favorable interest rates.

Outlook for 2007

The full availability of the Torviscosa power plant and the commissioning of the Simeri Crichi (800MW) and Turbigo (800MW, owned by Edipower) facilities in 2007, coupled with the Group's efforts to optimize its energy portfolio, should offset the impact of unfavorable changes in the regulatory environment.

In 2007, industrial results should be not lower than those reported for the year just ended. The Group's financial position is expected to show further sharp improvement, due to the expected exercise of the "2007 Edison Common Share Warrants" that are still outstanding.

Performance of the Group's Parent Company

The net profit reported by Edison Spa, the Group's Parent Company amounted to 632 million euros, up from 516 million euros in 2005. Edison Spa prepared separate financial statements, as required by the international accounting principles.

The Board of Directors will recommend that the Shareholders' Meeting declare a dividend of 0.048 euros per common share and 0.078 euros per savings share

The Board of Directors agreed to convene a Regular Shareholders' Meeting on April 5 (on the first calling) or on April 6 (on the second calling) to approve the 2006 annual financial statements. The dividend will be payable as of April 19, 2007 (coupon presentation date: April 16, 2007). Consequently, as required under the Warrant Regulations, the right to exercise the 2007 Edison Common Share Warrants, currently suspended from February 19, would be resumed on April 16, 2007.

The Shareholders' Meeting will be asked to vote on the election to the Board of Directors of Ivan Strozzi, who was coopted by the Board on December 6, 2006, and on a motion by the Board of Statutory Auditors recommending that the audit assignment be awarded to PriceWaterhouseCoopers for an additional three years (i.e., until the 2010 Annual Report).

Lastly, the Board of Directors approved the 2006 Corporate Governance Report, which explains the steps taken by the Company to comply with the requirements of the new Code of Conduct for Listed Companies.

An Extraordinary Shareholders' Meeting will be convened by the middle of June 2007 to amend the Company Bylaws to allow the election of the Board of Directors on the basis of slates of candidates and introduce any additional changes that may be required pursuant to law and to comply with the suggestions of the Code of conduct.

Conference Call

The Group's 20065 operating results 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.

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

The Report on Operations, the draft 2006 financial statements, the 2006 consolidated financial statements, the Report of the Statutory Auditors and the Report of the Independent Auditors will be available at the Company's headquarters, at Borsa Italiana through the NIS system and at the Group's website (www.edison.it) within the statutory deadline.

The balance sheet and statement of income of the Group and the Parent Company are annexed to this press release. The independent auditors have not yet issued their report on the data contained therein.

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

(Tables are available in attachment)

Edison Spa

Press Office
Foro Buonaparte, 31
20121 Milan - MI

Tel. +39 02 6222.7331
Fax. +39 02 6222.7379
[email protected]