SNAM Aktie

Hello, everyone. Welcome to the Q1 2026 Results Presentation Conference Call. My name is Gara, and I will be your operator for today's event. Please note, this conference is being recorded. [Operator Instructions].

I will now hand you over to Francesca Pezzoli, Executive Director, Investor Relations, Sustainability, P&C and Ratings. To begin the conference. Please go ahead.

Good afternoon, ladies and gentlemen. Welcome to the presentation of Snam's consolidated results for the first quarter of 2026, which were approved by the Board earlier today. I am here with Luca Passa, Snam's Chief Financial, Sustainability and International Asset Management Officer.

Luca will walk you through the most recent market trends and update, the latest regulatory developments and the main industrial and financial achievements over the period. He will then provide a detailed review of our financial results, and then we will open the floor for your questions. With that, I'm pleased to hand over to Luca.

Thank you, Francesca, and good afternoon, everyone. I'm on Page #2. Italian Gas demand was up around 0.5% in the first quarter of 2026, with exports stable at 0.5 bcm. Physical flows were unaffected by Hormuz developments, while geopolitical uncertainty drove price volatility.

2026 WACC is stable across all our businesses, providing visibility on returns. In parallel, the recent Energy Law-decree has mandated ARERA, our regulator, to define the regulatory framework and key principle for CCS, representing an important step towards greater clarity on the development of this segment.

We delivered sound first quarter 2026 results. Adjusted EBITDA of EUR 775 million is up 9% year-on-year when adjusted for first quarter 2025 one-off related to the 2024 deflator update recovery, driven by organic growth and larger perimeter.

Adjusted net income at EUR 375 million is up 2% year-on-year, net of the above mentioned one-off, thanks to higher EBITDA, partially counterbalanced by depreciation and financial charges. Investment at approximately EUR 1 billion includes the acquisition control over OLT. The transaction is strategic to expand our LNG footprint, which is essential for national security of supply.

Net debt stood at EUR 18.5 billion versus EUR 17.5 billion at the end of 2025 after the investment activity carried out during the period, the payment of the interim dividend, OLT control acquisition and the cash out for the Italgas Exchangeable refinancing. The average cost of debt remained broadly stable at 2.6%.

Moving to M&A and financing. In March, we completed the acquisition of the control of OLT and promptly refinanced its existing debt, achieving more favorable terms and optimizing the capital structure. In addition, we have extended an increase to EUR 5.1 billion, our Sustainability-Linked revolving credit facility.

Following the presentation of our business plan, Moody's upgraded our rating to Baa1 with stable outlook, while S&P Global Ratings revised its outlook from negative to stable this morning, confirming the A- rating. At the same time, equity analysts have revised upwards their estimates and target prices, confirming the positive market reception of the plan in terms of value creation and strengthening of our credit profile.

Moving to Slide #3. Adriatica Line Phase 1 is 80% completed. It was 68% at December 2025 with total grants cash in for around EUR 291 million, including EUR 57 million received in the quarter. Storage levels already reached around 50% at the end of April, and they are at 53% as of today with 90% filling target before the next winter already secured to the latest auctions.

LNG continues to provide significant volumes and flexibility, accounting for around 33% of total gas imports with 52 cargoes delivered to Italy versus 45 last year. We have successfully completed Phase 1 of the competitive auction process for the disposal of our biomethane business which attracted very significant market interest.

We are now moving into the second phase with the objective of signing by year-end with the business to be classified as for sale and the closing at the beginning of next year. We also made important progress on sustainability. Sustainable finance reached 86%, up 1% versus December 2025.

We maintained extensive engagement with shareholders, reflecting in an average approval rate of around 98% across all AGM items. On ESG ratings, MSCI AA was confirmed, and we are included also this year in the Dow Jones Sustainability Best-in-Class index.

Moving to Page #4. In the January-March period, Italian gas demand amounted to 21.8 bcm. The 0.5% increase year-on-year was mainly driven by the thermoelectric sector, 0.1 bcm or plus 2%, partially offsetting lower hydroelectric generation. Demand from the industrial and civil sectors remained broadly in line with the first quarter 2025 levels.

In the early months of the year, residential consumption was primarily influenced by the weather conditions. Export was stable at approximately 0.5 bcm, mainly through Tarvisio.

Looking at the supply flows, we have seen a further increase with LNG volumes up 17% versus first quarter 2025, mainly driven by the good availability of the Ravenna terminal, which has been fully operational since May 2025.

The additional LNG capacity is significantly enhancing the country's energy security by diversifying supply sources, which is particularly important in the current geopolitical environment.

So far in Italy, we have not observed any physical disruption to the gas flows with all expected cargoes in March delivered as planned. In April, Qatari volumes affected by the force majeure were effectively replaced by cargoes from alternative geographies.

More broadly, Europe has experienced limited physical tightness so far, supported by weaker weather-driven demand in March and April as well as reduced competition from Asia. Storage refilling remains as a key European theme looking ahead. And in this context, we have proactively accelerated the injection into our storage facilities, securing the volumes required for the next winter season.

In fact, moving to the Slide #5, through a proactive approach and close coordination with institution and the regulator, Snam has ensured the condition for a timely and efficient storage refill ahead of the winter. Following the destruction, sufficient capacity has been allocated to achieve the target of filling Italian gas storage facilities to at least 90%.

In total, around 17.5 bcm have been allocated out of a domestic storage capacity of just over 19 billion cubic meters, taking into account both the gas already stored and the volumes contractually secured. As a result, by the end of April, storage levels reached around 50% of available capacity today at 53% compared with a European average of approximately 33%, which includes also Italy.

This represents a critical factor in the current context of supply uncertainty, supporting system security while helping to mitigate price volatility and reduce market speculation.

Moving to Slide #6 on investments. Out of the total investments, around 54% refers to the OLT transaction. Considering only technical investments, over 50% are related to development. 90% of the investment gross of OLT enterprise value acquisitions are European Taxonomy aligned and include.

H2-ready replacement, dual well compressor stations, biomethane plants connection, H2 and CCS investment and large part of biomethane CapEx and energy efficiency, excluding cogeneration. SDG alignment is calculated only on technical investment, excluding the OLT business combination and is 56%, of which majority goes towards SDG 9, 13 and 7, respectively, industry innovation and infrastructure, climate action and affordable and clean energy.

Let's now move to the EBITDA analysis on Slide #7. Adjusted EBITDA for the period was EUR 775 million, plus 2% compared to last year and plus 9%, netting the EUR 52 million deflator one-off recognized in the first quarter of 2025. The growth is mainly attributable to regulated revenues increased for about EUR 33 million mainly related to tariff RAB and output base growth.

Perimeter effects related to Stogit Adriatica growth for EUR 8 million that in 2025 entered into perimeter from March, Ravenna FSRU for EUR 10 million that started operating from May 2025 and OLT consolidation from March 2026. The slight increase in regulated cost is mainly attributable to labor costs and new hires.

With regards to the Market Solutions businesses, the plus EUR 7 million EBITDA contribution is mainly driven by biomethane following higher business volumes and to energy efficiency and energy performance contracts in public administration segment.

As for the full year '26 guidance, we confirm adjusted EBITDA to reach around EUR 3.1 billion, driven by RAB growth, OLT consolidation and the full year contribution of Stogit Adriatica and Ravenna FSRU.

Moving to Slide #8. During the first quarter, our associate portfolio confirmed its resilience against a backdrop of heightened geopolitical and macroeconomic volatility. TAP delivered a strong quarter, supported by the capacity expansion by 1.2 bcm a year, reinforcing its strategic role in the diversification of Italy's gas imports.

Desfa benefited from lower net financial expenses, although this effect is expected to reverse over the year. SeaCorridor performance was mainly driven by higher operating costs and depreciation, also reflecting phasing effects related to carryover activities that we partially absorbed during the year. Teréga was impacted by lower cross-border bookings at the Spanish interconnection, an effect expected to be recovered over time through standard regulatory mechanisms.

The recent agreement by Enagás to acquire 31.5% stake in Teréga in which we hold a 40.5% interest clearly highlights the underlying value of the assets, which benefits from a stable and visible regulated return profile, supported by an integrated gas infrastructure platform made by pipelines and storage with upside potential from the development of H2 and CCS infrastructure.

EMG was the only group associate directly affected by the conflict in Iran with a temporary reduction in gas flows in March, resulting in a limited impact of EUR 2 million on the first quarter results, which flows back at regime from April 3.

Finally, Italian Associates benefited from a one-off effect linked to the OLT transaction closing. Overall, first quarter performance is in line with our full year expectation of around EUR 360 million contribution. The year-on-year decline is mainly driven by the one-off and perimeter effects, including the ADNOC divestment in early 2025 and the deconsolidation of OLT from associates that following its full consolidation on a line-by-line basis from March.

Let's now move to the first quarter 2026 net income analysis on Slide #9. Adjusted net income for the period was EUR 375 million, minus 8% compared to the first quarter of 2025 and plus 2% considering the deflated one-off recorded in the first quarter of 2025, net of the fiscal effect.

The trend is attributable to higher EBITDA, partially counterbalanced by higher D&A for EUR 434 million following new assets entering into operation and Perimeter effects, Stogit Adriatica, Ravenna FSRU and the OLT consolidation, all of which weighs for about EUR 14 million. Higher net financial expenses due to higher average net debt with an average net cost of debt stable at approximately 2.6%, slightly negative contribution from associates for EUR 4 million as a result of higher Italian Associates contribution for 7, counterbalanced by a decrease of EUR 11 million in the International Associates. First quarter 2026 taxes includes the IRAP increase and a benefit on the OLT from the recovery of deductible financial expenses raised in the previous years.

As for the full year 2026 guidance, we confirm an adjusted net income above EUR 1.45 billion, which reflects the EBITDA performance, partially counterbalanced by higher D&A and higher net financial expenses. It includes around EUR 40 million of IRAP increase related to the energy decree mentioned before.

Turning now to the cash flow on Slide #10. Cash flow from operations for the period amounted to around EUR 860 million and was the result of EUR 626 million of funds from operation and EUR 234 million of positive working capital. The change in working capital was mainly driven by about EUR 400 million of tariff-related items and EUR 100 million of Superbonus fiscal credit decrease, partially counterbalanced by around minus EUR 180 million of temporary commercial net working capital and minus EUR 100 million related to the full service.

Net investment for the period amounted to EUR 574 million, including the cash out related to the OLT transaction, net of cash acquired. Other outflows were mainly related to the payment of the interim dividend for EUR 404 million and to the impact of the Italgas bond exchangeable refinancing for EUR 432 million, while other items are largely attributable to the OLT debt consolidation, resulting in a change in net debt of about EUR 992 million.

Moving to Slide #11. Net debt amount to around EUR 18.5 billion at the end of March 2026, with net cost of debt substantially stable at 2.6%, while the fixed to floating mix stands at 75%, 25%. Sustainable finance reached approximately 86% of committed financing, up 1% versus December 2025.

During the first part of 2026, we successfully issued an exchangeable bond in Italgas shares for EUR 500 million as refinancing of the existing bond. We secured bilateral banking facilities totaling EUR 600 million as well as drawn down EUR 140 million from the European Investment Bank signed early in 2025 for the connection of biomethane production plants into national gas network. In addition, we have extended and increased to EUR 5.1 billion, our sustainability-linked revolving credit facility.

As for credit agencies, Moody's upgraded Snam to Baa1 stable outlook in April on the back of the 2025 results and stronger forward metrics compliant with a 12% threshold on FFO net debt for the higher position. Fitch affirmed the BBB+ rating with stable outlook, flagging the metrics are very well positioned for the current rating and close to the A- positioning.

And finally, today, Standard & Poor's affirmed the A- rating, improving the outlook from negative to stable confirming the solid investment-grade profile of Snam. As for the full year 2026 guidance, we confirm a net debt at around EUR 19 billion, including the OLT acquisition and its consolidation. To conclude, we are delivering across all fronts, security of supply, strategy execution and financial performance.

I'm on Slide #12. we are supporting security of supply. The 90% storage filling target ahead of winter has already been contracted, strengthening the resilience and flexibility of the national energy system. At the same time, we are making solid progress in executing our strategy with key projects of advancing as planned.

This is translating into a solid financial performance underpinned by the strength and full visibility on our regulated business. Overall, we remain fully on track to deliver our full year 2026 guidance. We are now ready to take your questions.

[Operator Instructions] The next question comes from the line of James Brand of Deutsche Bank.

I have 2 questions. The first is on the new CCS regulation that you mentioned. In the strategic plan, I think there was EUR 0.8 billion of investment in the plan related to a new CCS pipeline. And I was just wondering is the regulation kind of shaping up and the early discussions around it, how you expected? Could that provide kind of upside to the plan? Or do you still see that level of investment as being reasonable? That's the first question.

And then the second question is just on the kind of trigger. Obviously, there's been some pretty big movements in bond yields and inflation. There's a kind of debate around whether France gets taken out of the measurement of the risk-free rate. Where do you see those debates going? And do you think if market prices stay where they are at the moment, you'd get a trigger later this year?

Thanks, James. You're right. It's EUR 800 million on CCS of investment during the plan. Regarding the regulation, what I can say at the moment is that the decree provides for basically ARERA to start drafting the guideline of the regulation.

The decree has not been translated into law. Once it's done, ARERA will have 120 days to draft these guidelines. We don't have, let me say, further visibility vis-a-vis what we already assume in our business plan, our business plan for the EUR 800 million of investment, which I remind are divided between EUR 400 million on transport and EUR 400 million on the equity injection in the JV for the storage part, which is a joint venture with Eni.

We are assuming an average return, which is 100 basis points higher than the one we are using for gas in transport and gas in storage. Now we will have more visibility during basically the course of this year, I suppose. And to the questions whether with this more visibility, we might decide to accelerate or increase investment, I think we will know a few months before we take FID, which at the moment is expected to be taken, I would say, the beginning first quarter next year. And that's what we can say at the moment on this topic.

Regarding the second question, so the movements, yes, we saw the movements on bond yields, on inflation. I can tell you that our mark-to-market for the 2027 trigger taking out France, and I will come back on that, is current below 30 basis points. Therefore, it doesn't trigger for the 3 businesses. The assumption is that France will be taken out because as you probably remember, they have been downgraded before the start of the observation period.

Therefore, we will have a discussion with the regulator on the calculation because technically is in within the regulation, the fact that France is still in, notwithstanding they are not any more AA country. As far as the other impacts, clearly, what might drive some upside to our numbers is inflation.

We are seeing inflation higher than our business plan in the next 2 years, 2027 and 2028 that clearly if that materialize, you will have a higher revaluation of the RAB. Overall, also in the longer year, we can say that the increase in inflation is in the region of 0.1%, 0.2% vis-a-vis an average that was 1.9% across the 5 years of the plan.

The next question comes from the line of Javier Suarez of Mediobanca.

I wanted to focus on the associate contribution. I think that during the presentation, the company has highlighted limited impact on the Middle East crisis or gas -- disruption in the gas market, et cetera, et cetera. So I just wanted to elaborate with you on the possible disruption in the contribution from associates if the situation in the Middle East continues to stay as a complicated one.

Do you perceive that as a risk in any of the subsidiaries? And if you elaborate on that, that would be helpful. Also on the associate interested on the -- by the entrance of Enagás in the shareholding structure of Teréga that you mentioned during the presentation.

Do you see that as an accelerator in the business plan of the company or the strategic relevance of that asset to better integrate different relevant European countries on the gas side as well?

And the third question is on the taxation. This quarter taxation is relatively low and stable versus last year. I understand that there is a one-off this quarter. So can you elaborate with us which is your expectation for a normalized taxation by the year-end?

Thanks, Javier. Regarding asset contribution around this geopolitical context. We do not foresee any other impact on our associates. The only impact, and I mentioned that during the presentation was on the EMG pipeline, which is the pipeline connecting Egypt to Israel, where flows for just 1 month were lower than usual.

They become, I would say, normal back at the beginning of April. The impact of EMG being all low flows is in a region of EUR 1 million per month to give you basically a sensitivity. But since the 3rd of April is running without basically any problem. And regarding the other subsidiary, we do not see any potential impact from the current geopolitical tensions.

On the second question on Teréga, first of all what we can comment is that clearly the valuation that Teréga assigned for the transaction, which they're call under antitrust and Golden Power approval in France is revaluating the sum of the parts of some of the analysts for our stake because according to the valuation Teréga is paying, basically, our stake should be in the region of EUR 750 million, more or less of value, while the sum of the parts is in the region of EUR 600 million.

So there is, let me say, a value crystallization there that could be extracted Teréga is a very mature asset, very efficient asset in terms of strategy, very similar to the Snam strategy because they are very much involved in transport as well as in storage, one of the few assets that is involved in storage.

And they are developing both hydrogen, as you know, to the [ BAM ] project as well as CCS. So then, I would say, acquisition is welcomed by us. They are a partner to us in other assets, and we welcome an industrial operator vis-a-vis financial investors in these assets also going forward.

Regarding taxation, yes, you are right. We have a positive impact of EUR 4 million around the OLT acquisition, which is basically lowering our tax rate. Tax rate for the first quarter is 24.5%. A normalized tax rate we are expecting for the full year guidance is in the region of 26.5%, which assumes a 2% IRAP increase that I have mentioned before.

The next question comes from the line of Bartek Kubicki of Bernstein.

I would like to touch base on 2 aspects. First of all, on the gas market per se and the regulation, meaning you mentioned first quarter was okay in terms of gas demand, but I would like to know whether you are seeing any gas demand destruction in April and May so far in Italy, but also in neighboring countries where you are exporting gas and whether you think the government may or more specifically the Italian government may do something to limit gas consumption in the country.

And also on the gas market, I would like to ask you about your kind of first impressions conversations with the new regulatory body or the regulatory board. And what is your view on their view and opinion on the gas market per se. Whatever is something different versus the previous regulator? And just a clarification on the biomethane, if you can just update us on the book value of those assets at the end of first quarter '26.

Thanks, Bartek. On first question, gas market, I would say, evolution. As I said, first up until the end of March is up basically 0.5%. We are estimating gas consumption for the full year at 64 bcm, which is higher than last year. April is a little bit less in terms of demand. It's minus 2% vis-a-vis April basically the 2025, and that is mostly linked to weather. Now the increase in gas demand we are seeing is coming from the thermoelectric sector being power generation with gas.

Therefore, we are not seeing any, I would say, effect from the current crisis around gas consumption. And on the second part of your question, whether the government is thinking about measures to limit gas consumption, we are not aware of any of the basically potential interventions.

Clearly, what the government is focused on is in lower the energy bills for both industrial as well as residential customers, but that is part of the energy decree that they have actually approved at the end of February. But there are no design or no potential intervention, at least for the moment around basically gas consumption.

On the second question, what I can tell you is we had, as all the other operators, the first public auction with new basically Board of ARERA, including clearly the Chairman. I think what I can comment there is that they are very receptive of our views on the current situation with regards to gas and in particular, infrastructure supporting basic gas flows.

So if I can comment, you asked what is the difference between them and the previous, I think they have been very pragmatic on what is the current situation, realizing that what we have done in terms of the actions we took through the auctions in order to secure basically the storage target at 90% is clearly a sign that this regulator is supportive of an infrastructure that is supporting clearly the gas as an energy vector in the country.

As far as the book value of our biomethane platform at the end of the first quarter, you can call it at EUR 635 million more or less, which is EUR 20 million more of what we had basically at the end of 2025.

The next question comes from the line of Mafalda Pombeiro of Goldman Sachs.

I only have one. Luca, is there any update on the progress or maybe even on timing that you could give us on -- with respect to your asset rotation program announced at your recent CMD. I think there's been a few press news hinting something could happen. And just interested to hear any comments you can give.

To be honest, Mafalda, we presented the asset rotation as a part of a combination of disposals for EUR 1.6 billion and a combination of potential acquisition for EUR 1.2 billion. We generally do not comment on M&A unless there is, let's say, a formal process ongoing like the one that we are currently doing for the biomethane platform.

I already said on that particular process, we just ended Phase 1. We are entering Phase 2 with the expectation to basically receive binding offers basically before the summer and potentially signing before year-end. Regarding the other assets around the asset rotation, again, I cannot comment.

Once we have something to comment, we will tell you what we have signed in terms of disposal or in terms of acquisition. But I cannot comment. I can tell you that there are ongoing discussion on both sides of the asset rotation, both on acquisition as well as on asset disposals.

[Operator Instructions] The next question comes from the line of Emanuele Oggioni of Kepler.

The first one is only a clarification on the guidance, the net profit guidance, I suppose is adjusted net profit, so does not include the IRAP, the additional IRAP of EUR 40 million a year in '26.

The second question is on an update on the TAP because the overall capacity is around 10 billion cubic meter it was in '25. But in '26, this capacity should increase by 1.2 billion cubic meter. So you can update on this considering that Q1 was basically flat, plus 3% flows year-on-year.

Thanks, Emanuele. Regarding the guidance, yes, it's adjusted net income for EUR 1.450 million. It includes this guidance EUR 40 million of additional taxation for the IRAP increase. So I repeat, it includes the EUR 40 million IRAP increase.

Regarding basically TAP, yes, you are right. 2026 since January, we started to operate the pipe with 11.2 bcm of capacity, which has been, as you know, through basically market testing agreed with the shippers that are using this pipe. Therefore, the improvement that you see in the first quarter are derived basically from that kind of additional contribution.

I can tell you that we are foreseeing TAP contributing above EUR 85 million for the full year of 2026.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you very much for listening. We are available for any follow-up questions. Good afternoon. Thanks.

Hello, and welcome to Snam's 9 Months 2025 Consolidated Results Conference Call. My name is Zach, and I will be your operator on today's call. Please note this conference is being recorded. [Operator Instructions]

I will now hand you over to your host, Francesca Pezzoli, Director of Investor Relations, to begin today's presentation. Please go ahead.

Good afternoon, ladies and gentlemen. Welcome to the presentation of Snam consolidated results for the first 9 months of 2025, which were approved by the Board earlier today. I'm here today with Luca Passa, Snam Chief Financial Officer. Luca will walk you through the key market trends, the latest regulatory developments and the main industrial and financial achievements of the period. He will then provide a detailed review of our financial results, and update of our full year guidance and a few closing remarks. After that, we will open the floor for your questions.

With that, I'm pleased to hand over to Luca.

Thank you, Francesca. Good afternoon, everyone. Let me start with the key trends in the Italian gas market during the first 9 months of 2025 at Page #2. Gas demand in Italy was above 44 billion cubic meters, a 2% increase compared to the same period last year. Residential and commercial sector was up 2%, largely due to slightly colder weather condition, while industrial demand was broadly stable.

The thermoelectric sector grew by more than 2%, driven by lower electricity imports and reduced hydroelectric output due to the lower rainfall compared to the same period in 2024, partially offset by weaker power demand. This confirms the critical role of gas-fired power generation in balancing the energy system, especially as we integrate an increasing share of renewable energy. Exports have also risen sharply, growing roughly 5x compared to the previous year, mainly through outflows from Tarvisio also driven by a decreasing TTF PSV spread differential becoming negative during September and October. Storage levels at 92%, well above the European average.

Looking at supply flows, we have seen a notable shift. Pipeline imports decreased by 2.8 billion cubic meters, more than offset by liquefied natural gas imports, which rose by 4.2 billion cubic meters, a significant 38% increase year-on-year. This growth was supported by the full return to operation of the OLT terminal in Livorno and the start-up of the new terminal in Ravenna.

As a result, LNG accounted for over 30% of Italy's gas imports. This contributes significantly to the enhancing both the country energy security and the diversification of supply sources, which is crucial in today's complex geopolitical environment. These dynamics highlight the relevance of a flexible and diversified infrastructure to ensure energy stability and system resilience in an increasingly volatile and interconnected environment.

Let's move to the key financial highlights on Slide #3. We have delivered sound 9-month results despite persisting volatility. Adjusted EBITDA of EUR 2.227 billion is up 6.6% year-on-year, driven by growth in regulatory revenues. Adjusted net income at EUR 1.096 billion grows double digit year-on-year, thanks to higher EBITDA and greater contribution from the associates, only partially offset by higher depreciation and financial charges. Investment at EUR 1.767 billion were broadly in line with the same period of the previous year.

Net debt stood at EUR 17.4 billion, down 1% versus first half 2025 after the investment activity carried out during the period and the dividend payment. The average cost of debt remained broadly stable at 2.6%. The Board of Directors also approved the distribution of an interim dividend for 2025 of EUR 0.1208 per share, representing a 4% increase compared to the previous year, in line with our dividend policy.

As for regulatory updates and as already disclosed, the regulator has changed the RAB indexation for 2025 to the normalized index of consumer price for the European Union countries relating to Italy, IPCA Italy. At the same time, the for 2024 was updated to 7.9% from 5.3% to recover past adjustments. Therefore, 2025 tariff RAB was lifted to EUR 26.2 billion from EUR 25.8 billion.

On the 6th of August, ARERA published a resolution for the progressive implementation of the full ROSS by 2028 with a transition period for 2026, 2027. The observation period for the 2026 WACC up date ended in September. The calculation is very close to the figure level, but the final outcome remains uncertain, and it will ultimately depend on the final inflation figure for 2026 and other components of the formula.

The Council of Minister approved on June 30, a draft law for the definition of legislative framework for carbon capture and storage, hydrogen and methane emission reduction that needs parliament approval. Last week, on the 27th of October, the technical rules for CCS were issued jointly by the competent ministries. Several progress also on the financing front. We have successfully issued our first U.S. dollar multi-branch sustainability-linked bond totaling $2 billion and EUR 1 billion of EU Green bond. Moreover, in October, we have cash in EUR 121 million of Adriatic line grants.

Moving now to our associates portfolio. The stake in ADNOC Gas Pipeline was sold to Lunate for EUR 233 million in March, while our 2% stake in ITM Power was disposed at the end of July. With regards to OGE acquisition in Germany, the foreign direct investment clearance is still ongoing, and this is one condition present for the closing of the deal. The long stop date is now November 17.

In addition, we have signed an exclusive agreement for the acquisition of Higas, which has the rights for the conversion of its Oristano LNG coastal storage facility in the Sardinia region into an FSRU terminal.

In 9 months, we have accelerated our strategy delivery. I'm now on Page #4. Let me remind the key highlights on gas infrastructure. We have more than 850 construction sites open, which represent a 19% increase versus 9 months 2024. Works on Phase 1 of the red decline are moving forward steadily with an overall completion at 43%. It was 35% at June 30. The BW Singapore regasification unit, moored offshore Ravenna began operations in May and 13 vessels arrived so far.

In the 9 months, Italy received 165 LNG tankers, half of which coming from the U.S. for a total volume of about 15 billion cubic meters. At the end of September, storage level was 92%, as mentioned, 10% higher than the European average. At the moment, we have improved at around 95%, well ahead of the rest of Europe to be fully prepared for the winter season.

Moving to our energy transition platform on Page #5. The first phase of the CCS project in Ravenna has delivered solid technical results. On the industrial phase, permitting for the pipeline is at an advanced stage and the process for storage has recently begun. We have submitted an application for the Connect European facility grants in excess of EUR 300 million, and we look forward to additional regulatory instruments to move ahead.

As mentioned, the Ministry of Environment has just published the Ministerial Decree on CCS technical regulation issued jointly by the competent ministries. On biomethane, we have 72 megawatts already in operation, authorized or under construction, and our mission is to speed the ramp-up and maximize the value of these assets. Renovit backlog is broadly stable at EUR 1.4 billion. With regard to the H2 backbone, we have been awarded EUR 24 million contribution by the Connect European facility to cover approximately half of the feasibility studies, and we are progressing with them.

Looking at sustainability and innovation, 35% of CapEx aligns with the EU taxonomy and 57% with SDGs, while sustainable finance is stable at 86% of the total. We expect 2025 Scope 1 and 2 CO2 emission down at least 25% versus 2022, which is our baseline. This is an improvement versus initial expectation of 20% reduction, mainly thanks to the new dispatching optimization tool supported by AI and a better performance on methane in this transition year of application of the new European rules.

Furthermore, for the fifth consecutive year, Snam received a gold standard recognition from the United Nations Environment Program, UNEP, for methane emission reduction, confirming the group high standard of transparency and accuracy in methane emission reporting and concrete commitment on emission reduction. Our first employee share ownership plan has had an outstanding participation rate of 55% of the total workforce even more relevant as the first window only allowed for subscription through own capital, tangible signs of employees' alignment with the corporate objectives and their active participation is Snam long-term value creation journey. I would like to take this opportunity to express personally my sincere gratitude to all colleagues who joined and supported this initiative.

Moving to Slide #6. Out of the total EUR 1.8 billion of investment broadly in line with the previous year, 35% is EU taxonomy aligned and includes. With regard to gas infrastructure, H2-ready replacements, dual fuel compressor station, biomethane plants connection. As for the energy transition businesses, H2 and CCS, a large part of biomethane CapEx depending on the plant's technical standards and energy efficiency, excluding cogeneration.

SDG alignment is at 57%, of which the majority goes towards SDG 7, 9 and 13, respectively, affordable and clean energy, industry innovation and infrastructure and climate action. More than 50% of the CapEx are development investment, reflecting the company industrial growth phase.

Let's now move to the 9-month 2025 EBITDA analysis on Slide #7. EBITDA for the period was EUR 2.227 billion, plus 6.6% compared to last year or plus EUR 138 million. Regulatory items were broadly neutral as the recognition of the 2024 deflator update for EUR 52 million and the adoption of Italian IPCA for RAB revaluation starting in 2025 for around EUR 23 million were counterbalanced by the WACC decrease for around EUR 77 million. The growth is mainly attributable to regulatory revenues increased for around EUR 119 million, Stogit Adriatica entered into the perimeter for -- from the 3rd of March 2025 and positively contributed by EUR 30 million. Ravenna FSRU that started operation from May and contributed by EUR 18 million.

In details, the regulated revenues growth breaks down as follows: Transport and storage revenue increased by around EUR 122 million linked to the investment plan execution. Fast money effect amount to around EUR 16 million, higher allowed OpEx mainly due to inflation recognition, positive volume effect. These items were partially counterbalanced by the absence of LNG extra revenue recognized in the second quarter of 2024 for around EUR 40 million, lower output-based incentives by EUR 60 million versus last year, mainly attributable to the storage reverse flow service and the expected phaseout of input-based incentives.

The increase in gas infrastructure operating costs, about EUR 29 million is mainly attributable to labor cost in large part due to the inflation recognition under the collective labor contract and new hires. With regard to the energy transition business, the plus EUR 5 million EBITDA contribution versus 9 months 2024 is mainly driven by biomethane supported by higher volumes.

As for the full year guidance, we update our guidance to EUR 2.950 billion EBITDA, which reflects the positive impact of the 2024 deflator update accounting for around EUR 52 million and the switch to the Italian IPCA index for RAB revaluation starting in 2025, worth approximately EUR 40 million for the full year.

I'm now on Page #8 on the associates. Their contribution to group net income was EUR 290 million, a plus EUR 57 million increase compared to the same period of the previous year. Out of the total contribution, EUR 197 million come from our international associates and the remaining EUR 93 million from the Italian associates.

Let's now dive into the performance of each one. TAP slightly higher year-on-year contribution is mainly driven by inflation adjusted tariff and lower net financial expenses. With 16% of Italian imports, TAP is the second largest pipeline import route and will be further reinforced by the start of commercial operation of the 1.2 bcm yearly expansion from January 2026. SeaCorridor operating performance is slightly higher, thanks to lower OpEx incurred in the first 9 months, expected to normalize by year-end and lower D&A due to some investment postponement. With approximately 15 bcm imported, it represents the first Italian import route. Terega contribution is substantially in line, thanks to cost savings, we partially offset the higher financial charges due to 2024 refinancing.

Moving to Austria. In 2025, TAG benefited from the new regulatory framework, which eliminates volume risk, bringing net income contribution to positive. Also GCA's performance benefited from the new regulatory framework, however, offset by a worsening in the bookings, which will be recovered in T+2 tariff. Worth mentioning the significant increase of exports from Italy to Austria underlying the strategic relevance of this route.

Desfa lower contribution was due to extraordinary auction premium on LNG imports and export to Bulgaria in 2024. However, the market outlook remains positive. Greek gas demand rose by nearly 17% year-on-year, driven by higher power generation needs and a colder winter. LNG remains key, covering over 40% of imports and the Alexandroupolis FSRU is now back in operation. Desfa ambitious CapEx plan underpins this strategy. And just yesterday, the Komotini compressor station starts of operations marked the interconnection strengthening with Bulgaria and the wider region.

Interconnectors contribution remains in line since we are reaching the yearly regulatory cap, thanks to capacity of almost 50% booked until 2026. EMG contribution is substantially in line compared to the same period of 2024. Regarding ADNOC, as already explained in March, we have completed the stake disposal. On the Italian associates, the growth is mainly driven by Italgas overperformance and by the higher contribution from Adriatic LNG following the increase of Snam participation in the company from last December. For the full year, we expect approximately EUR 365 million contribution from associates, excluding OGE potential contribution.

Let's now move to the 9 months 2025 net income analysis on Slide #9. Adjusted net income for the period was EUR 1.096 billion or plus 10% compared to 9 months 2024 due to higher EBITDA by EUR 138 million, as previously commented, partially counterbalanced by higher D&A by EUR 77 million following rising investment and the enter into perimeter of Stogit Adriatica from March and Ravenna FSRU from May, higher net financial expenses by EUR 16 million, mainly driven by a slight increase in financial expenses related to debt, reflecting higher average net debt with an average cost broadly stable at approximately 2.6%.

Contribution from associates is positive for EUR 57 million, as already commented as a result of higher international associates for EUR 33 million and higher Italian associates for EUR 24 million. Lower taxes reflect higher contribution from associates to EBT as well as tax credit adjustment related to 2024 income taxes. As for the full year, we update our guidance to EUR 1.420 billion net income adjusted, which reflects the positive impact net of taxes of the 2024 deflator update and the switch to Italian IPCA index for RAB revaluation starting in 2025 with a tax rate for the full year expected to be around 25%.

Turning now to the cash flow on Slide #10. Cash flow from operation for the period amount to around EUR 2.063 billion and was the result of EUR 1.717 billion of funds from operation and EUR 346 million of working capital cash generation. The change in working capital was mainly driven by regulatory working capital with around plus EUR 170 million due to tariff-related items, mainly driven by tariff receivable decrease, around minus EUR 110 million absorption due to balancing activities and default service, about plus EUR 130 million of cash generation, mainly driven by the super bonus fiscal credit decrease and around plus EUR 160 million of temporary cash generation due to a reduction in receivable from the compensation energy clearinghouse related to flexibility service to be reserved by year-end.

Net investment for the period amount to EUR 2.237 billion, including EUR 564 million of cash out related to Stogit Adriatica and around EUR 23 million of ADNOC disposal cash-in. Other outflows were mainly related to the payment of the dividend for EUR 969 million, resulting in a change in net debt of about EUR 1.188 billion.

Moving to Slide #11. Net debt amounted to around EUR 17.4 billion at the end of September 2025. Net cost of debt, which is calculated as financial charges net of liquidity incomes on average net debt for the period was broadly stable at 2.6%, while the fixed/floating mix stood at 89% / 11%. Sustainable finance ratio is at 86%, well on track to reach our long-term target of 90% by 2029.

Following the publication of a new sustainable finance framework, we successfully placed in May our first U.S. dollar multi-tranche sustainability-linked bond totaling $2 billion, which was the first sustainability-linked transaction globally with a net zero emission reduction target across Scope 1, 2 and 3. Moreover, in June, we have published a European bond fact sheet and issued our first European green bond of about EUR 1 billion, which so far is the largest senior single tranche by a European corporate.

Following this transaction, the funding for the year is completed, leaving remaining part of the year for further opportunistic prefunding activities. Credit ratings were confirmed by Moody's and Fitch following OGE acquisition announcement, while Standard & Poor raised Snam positioning to A- following the upgrade of the sovereign, providing the strength of our credit metrics and business profile.

As for the full year guidance, we reduced our net debt guidance to EUR 18 billion, thanks to higher cash conversion, a neutral net working capital effect, greater cash in from associates and an increase in investment-related payables. Net cost of debt is expected to remain stable at 2.6% with net financial expenses at around EUR 340 million.

I am now on Slide #12 to wrap up the full year 2025 guidance, where we confirm EUR 2.9 billion of CapEx for the year, of which EUR 2.5 billion on gas infrastructure and EUR 0.4 billion on energy transition. As well as tariff RAB for EUR 26.2 billion, already reflecting the effects of the ARERA Resolution 130 as discussed earlier. We upgrade our full year guidance with respect to an EBITDA of EUR 2.950 billion versus the previous guidance of EUR 2.850 billion, mainly to reflect the effects of the above-mentioned resolution for a total impact of approximately EUR 90 million.

Adjusted net income guidance moved to approximately EUR 1.420 billion from EUR 1.350 billion, mainly to reflect the above-mentioned resolution net of taxes. Net debt guidance significantly improves to EUR 18 billion, thanks to higher cash conversion, the neutral net working capital effect, greater cash in from associates and increased investment related payables. This outlook incorporates the expectation that the 24.99% OGE stake acquisition, if completed by 2025 year-end will be financed through either asset rotation or the issuance of a dedicated hybrid instrument.

Finally, the Board has approved the distribution of an interim dividend for 2025 amounting to EUR 0.1208 per share with a payment due starting from January 21, 2026. This is up 4% versus the previous year, in line with the guidance and represent a 71.4% payout.

To close on Page #13, the current energy scenario continues to highlight the crucial role of gas in ensuring system stability and resilience within an increasingly volatile and interconnected environment. We remain fully committed to support Italy's security of supply as shown by the high storage levels and the significant increase in LNG volumes injected into the network, demonstrating the country's role as a strategic energy gateaway for Europe.

We are also accelerating the execution of our strategy with over 850 construction sites currently active across the country, the commission of the Ravenna terminal and the city progress on the Adriatic line. Our strong performance over the first 9 months with all key financial indicators improving reflects the solidity of our business model and operational excellence. This, together with greater financial flexibility, allow us to upgrade our 2025 guidance on EBITDA, net profit and net financial debt, supporting long-term sustainable value creation for all our stakeholders.

We are now open to take your questions.

[Operator Instructions] And the first question comes from the line of Javier Suarez of Mediobanca.

The first one is on the latest draft law on CCS and hydrogen. If you can elaborate for us your reading of this first draft and the possible implication for Snam and its business model?

Then the second question is on the situation -- an update on the situation in Germany with OGE, which is -- the question is which is your best estimate for a decision for the conclusion or not of this deal and which in terms of deadline is the absolute maximum that you have to take a final decision in this operation.

And then the third question is on the slide on energy transition. You are mentioning a EUR 1.4 billion backlog. If you can give us some details and granularity on this backlog.

Thanks, Javier, for the 3 questions. So when it comes to the draft law for CCS H2, this was already widely expected. It was proposed on the June 30, and we are waiting for parliament approval. We give basically the power to the regulator in order to regulate these 2 energy vectors, which currently are not part of the mandate of the regulator. Therefore, is, I think, a very important step when it comes to finalizing our investment decision around these 2 businesses.

Now on CCS, on top of the draft law, as I mentioned during the presentation, also a technical specification last week were issued by the ministries and technical specification means security, how to handle, how to transport basically that type of molecule, basically CO2 molecule. So clearly, we are moving in the right direction and will allow us to basically give us, let me say, the way in which we are planning for CCS to take an FID on the industrial phase of the project by the beginning of 2027.

When it comes to the German update on the potential acquisition, I can only mention that we currently are on the Phase 2 of the FTI procedures, which has been going since basically the end of April and that we have a long stop date with our counterpart on the contract that ends on the 17th of November. Therefore, our expectation is by then to have an answer one way or the other. And therefore, we will know shortly whether we can finalize and conclude acquisition because this is the only condition precedent for us to basically execute finally the contract.

For the energy transition backlog, I can tell you that only 10% is now residential because it has gone down, as you probably remember, a lot of the works were related on the residential part of the Super Ecobonus tax allowances that was [indiscernible] in Italy up until 2023. 45% currently is on public administration, which has been the major focus of the company in the last couple of years and 45% on large industrial customers. So that is the split of the EUR 1.4 billion of backlog, which has a duration over 7 years currently.

The next question comes from the line of James Brand of Deutsche Bank.

Congrats on the results. I just wanted to ask, I know you just kind of answered a little bit on CCS, but I was just kind of keen to understand the kind of time line there for getting more clarity and also what that opportunity could be worth for you if you're willing -- obviously, you haven't set anything out that's too concrete at the moment, but maybe just to delve into that a little bit. So you said you're hoping to start making decisions on projects in early 2027. Could you just tell us kind of what the next steps are on the regulatory side? Are we waiting for the law to pass and then the regulator to come out with some regulatory framework? Or if that's not the case, what else are we waiting for to be coming through, firstly?

Secondly, I guess these investments are going to be outside the RAB, but maybe that's not clear yet. And thirdly, is there anything at all you can say about the scope of the investment opportunity here? It seems like it could be a very big one. And obviously, you haven't set anything out, but is there any kind of rough commentary you could give us or help us in kind of understanding how big an opportunity it would be?

Thanks, James, for your question. On CCS, clearly, the draft law needs to be converted into law by the parliament, and we expect that to happen, I would say, before year-end or just in and around year-end. That will give the powers to ARERA to start formally work on a draft regulation. Now we expect this business to be fully regulated, therefore, contributing to our regulated asset base.

I will tell you what we have already included in our business plan presented last January, which is EUR 500 million of CapEx, of which EUR 300 million on transport and EUR 200 million, which is our share in the JV for the storage business together with Eni. The assumption for us is that clearly this EUR 500 million of investment will translate into RAB fully by the end of 2029. And the expected remuneration, at least what we assume so far is to have a remuneration which is similar to the one of gas for both transport and storage, but clearly at a premium. Our assumption is, on average, 100 basis point premium. Clearly, this is a discussion that we will have with the regulator once they are entitled formally to basically start drafting the regulation. But those are basically the expectation.

In terms of investment, clearly, if we take an FID decision at the beginning of 2027, the amount of investment for both, I would say, transport is in the region of EUR 800 million more or less, and that will last even beyond clearly the business plan. When it comes to basically the JV, there is another EUR 1 billion, EUR 1.5 billion of investment on our side that will go even beyond those type of dates. But let me say that we will be more specific in terms of the scope of this investment in the business plan update that we will give to the market during the first quarter of next year. But as you pointed out, clearly, this will be a sizable investment. What I can tell you is it will be a fully regulated business and accreting to basically the regulated asset base of the company.

And the next question comes from the line of Emanuele Oggioni of Kepler Cheuvreux.

The first is on the '26 allow WACC based on the official site of ARERA seems that they used the old ECB inflation parameter. So probably the trigger that will not be activated. I don't know if you can comment on this. We'll discover probably in a few hours or tomorrow.

The second question is on LNG, the Oristano projects and the possible acquisition. I think probably before you will ask you try to get a higher level of protection for -- within the current regulatory framework for LNG. So basically, volumes warranted similar to the previous 2 vessels in Italy before to go ahead to the investments. And if we can expect investments in line with the previous 2 FSRU, so around EUR 400 million, EUR 450 million per vessel.

And finally, when you can expect the update of the business plan will be in January or after along the year?

Thanks, Emanuele. We are finalizing -- my answer to the last question first. We are finalizing the date is going to be towards the end of February, beginning of March in terms of timing, but we have not finalized yet.

When it comes to the first question, what I can comment is you all analysts have models in order to model whether the trigger gets triggered or not and what is the inflation assumption that you need to set into the model for it to trigger or not to trigger. So clearly, this is a decision that ARERA will take. And as you said, probably they already taken, but it will be public in the next few hours. So I cannot comment on that. I can only add that ARERA has always been a very reasonable regulator. Therefore, I expect them to take a reasonable decision also on this topic.

When it comes to the Sardinia or Oristano project, first of all, this is going to be a virtual pipeline to the mainland. Therefore, also the LNG facility will be accounted into the transport regulation and nor the LNG regulation. So we will enjoy the same type of remuneration of a transport facility. The amount of investment that we are expecting to basically devote to both the LNG ship as well as the works that we need to do on site in terms of pipes is in the region of EUR 700 million will be fully detailed in the new business plan again that we presented between the end of February and the beginning of March of next year.

Then on the broader question, whether we feel that LNG terminals need to be fully guaranteed in terms of volumes. Clearly, this is very important for us. You have seen from the numbers that LNG is becoming a key source of imports when it comes to gas. Therefore, we feel that this investment need to be fully regulated, and we should have guarantee on volume at 100% rather than the current 64%.

The next question comes from the line of Sarah Lester of MS.

Just a really quick one, please, on your latest disposals preference ranking. So I saw that you mentioned the possible asset rotation to fund the Open Grid Europe acquisition. So just wondering if you're able to please provide a bit more color around how you currently consider the pecking order for the potential candidates for disposal post ADNOC. And I suppose this is actually a broader question, too. It's not just within the Open Grid Europe context.

No. The asset rotation is not just in the context of the potential of the acquisition. It's part of the review of the portfolio that we are doing following clearly the strategic positioning of the company going forward across certain regions. Now what I can comment today is only on the public process that we currently have ongoing, which is the disposal of our biomethane platform. We have hired publicly all advisers, including financial advisers, and we will be in the market with that portfolio probably closely after year-end. The book value of that portfolio, just for you to remember, is in the region of EUR 560 million as of today.

Okay. Next question is from the line of Marcin Wojtal of Bank of America.

Just a couple of questions on the numbers, if you allow me. So firstly, you increased your guidance for EBITDA by about EUR 100 million. Can you just remind us what amount of that EUR 100 million actually flows mechanically into 2026?

And my second question, could you just repeat the indication that you gave for associates for 2025? I didn't quite catch that decision, but if you could just clarify that guidance.

Yes. Marcin, the guidance for contribution of the associate portfolio for the full year expected today is EUR 365 million, which is slightly higher than what I said in the first half results call. And this EUR 365 million exclude any contribution from OGE because even if you go to closing, it will not be part of the contribution for this year.

When it comes to what of the current guidance upgrade will translate into 2026, I can tell you that the same contribution on the [indiscernible] that we had in 2025, which is about EUR 40 million, we will also driven into 2026. So EUR 40 million is what we expect to have higher contribution from the new indexation in 2026.

The next question comes from Davide Candela of Intesa Sanpaolo.

I have 2. First one is a clarification on net debt. You improved the guidance by EUR 400 million. I was wondering if that neutral working capital you're seeing is just temporary and as an effect for this year and will be reverted in the next year or it is actually a structural recovery you are seeing?

Second question, in the Slide 5, you mentioned a contribution with regards to the reduction of methane emission from AI. I was wondering if with regards to this topic, you are also seeing some benefits on the cost side and your general operation in your company.

Thanks, David. When it comes to the working capital neutral expectation towards year-end, I mean, this is our job. I mean we need to plan on a working capital basis being neutral every year. Clearly, we had swings in the past 2 to 3 years, given that the market was either long or short with the relevant prices impact that affect clearly our working capital, especially towards year-end. But the expectation, if prices, let me say, stabilize across the numbers that we are seeing in the last -- in the recent months, we should have neutral working capital every year. And that's on this point.

When it comes to the reduction of emissions, which is expected to be 25% vis-a-vis 2022, that is part of the work that we're doing on the way in which we dispatch basically our gas in the network. We fully digitalize our assets now is almost 18 months. And after clearly digitalizing our asset, we are using different type of algorithms also supported by AI intelligence in order to see what is the best dispatching method that allow us to consume less in terms of burning gas in order to pressure the gas into the pipes.

Clearly, there are also some cost benefit, but those are part of the remuneration and in the numbers that already we are seeing when it comes to what is the cost of dispatching our gas transport. I can tell you that we are just seeing the first signs of a full digitalized network system that might even improve going forward, not only on emission reduction, but on general efficiency going forward.

The next question comes from the line of Bartek Kubicki of Bernstein.

I would like to ask 3 questions. First of all, with regards to the slide on gas demand, you are pointing to higher gas demand from households. And my question is whether you see any reason to believe that the gas demand from households will structurally increase in the future? Or do you think it's rather going to be down trending and only impacted by weather?

Second of all, on the energy efficiency order book you discussed before, I would like to ask you what do you see in terms of margins? Meaning do you see margins improving over time? Or do you think there's an increasing competition and consequently, margins are being squeezed?

And the third question will be on your convertible bond on Italgas and the latest share price performance. If you can maybe explain a little bit how does it impact your financial costs and what it could do to your future cash outflows once the bond is redeemed?

Thanks, Bartek, for your 3 questions. So when it comes to gas demand, besides also the weather adjustment that you discussed, the expectation, and I don't think it's going to be driven mainly by residential, but both by industrial as well as thermoelectric production is for a stabilization of desire level of volumes. We expect this year to close basically with a full demand in the region of 64 basically bcm, which confirms the growth that we've seen in the first 9 months of the year. But let me also add that the expectation is to stay at this level up until 2030.

Therefore, I think there is a structural shift when it comes to usage of gas and in particular, for thermoelectric production, which only started this year, but will be structural, and we will see it going forward also for the announcement of other countries to increase combined cycle generation when it comes to electricity.

When it comes to the energy efficiency marginality, what I can tell you is that clearly, we have moved from a pure or, let me say, larger residential business to public administration and industrials. This business has always run in the region of 16% to 19% in terms of marginality. Currently, we are not seeing margin pressures, but the more the contracts are larger, the more sophisticated customers and all these customers, especially when it comes to public authority are public tenders, clearly, there is some kind of pressure on marginality, but it's not something that we are seeing because the book has been built over the last 24 months.

When it comes to the Italgas exchangeable, what I can comment is it is an exchangeable currently is in the money in terms of where the share price is vis-a-vis the conversion premium. Therefore, we have optionality to convert if you want, starting from, I think, is September, October next year or wait for maturity. And in that case, we will decide whether to deliver share, cash or a mix of those. There is no impact in terms of cash flows in the sense that we have an underlying and we have set the terms to which the instruments will be reimbursed.

The next question comes from the line of Charles Swabey of HSBC.

I just have one on U.K. gas storage and your ambitions there through dCarbonX. Just I was wondering if you could provide any update on sort of the timing or size of the investment there? And if you're in conversation with government about any sort of potential regulatory framework that might underpin that investment.

What I can comment, Charles, on that is that current consultation, DCX is clearly working -- developing, let me say, a project in that respect. But as of now, in terms of where we stand and what could be, let me say, a pre-FID type of schedule, it's very difficult to say. Again, for us, our participation in DCX as a developer of these projects, then we will consider whether we want to invest in the project or not. So we have no commitment in that sense going forward.

Thank you. As of now, there are no further questions. I will give it a moment in case there is any follow-up questions from the participants. There are no further questions. I will now hand you over back to your host, Francesca, for any closing remarks.

So thank you very much for listening. As usual, the Investor Relations team is available for any follow-up. Thank you. Bye-bye.

Thank you.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Snam First Half 2025 Consolidated Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Francesca Pezzoli, Head of Investor Relations at Snam. Please go ahead, madam.

Good afternoon, ladies and gentlemen, and welcome to the presentation of Snam H1 2025 consolidated results, which were approved by the Board earlier today. Our presentation will be divided into 3 parts. First, Snam's CEO, Agostino Scornajenchi, will share his opening remarks, offering an overview of recent market developments, regulatory updates and the main industrial and financial milestone achieved during the period. Luca Passa, Snam's CFO, will then provide a detailed review of our financial performance. After that, Agostino will return for some closing remarks, followed by our Q&A session. With that, I'm pleased to hand over to Agostino.

Thank you very much, Francesca. Good afternoon, everyone, and thank you for joining us today. This is my first call since my appointment as Snam's CEO in May. I'm honored to lead such a solid organization, which is a pillar of the energy system and plays a central role in ensuring energy security for our country and for Europe. I found a company with strong fundamentals and great people.

Let me begin by highlighting a few key facts that underscore the central role of Italy's gas infrastructure. Each year, we transport around 600 terawatt hour of energy, twice the amount carried by the electricity grid and at less than 50% of the unit cost. Approximately 40% of this gas is used in gas-fired power generation, producing around 120 terawatt hour of electricity. This accounts for about 45% of Italy's total electricity output and up to 70% on days where renewable generation is low.

In addition, we delivered more than 110 terawatt hour for industrial and hardware-based sectors, including steel, ceramics and chemical subsectors. Moving now to Slide #4. The energy crisis and geopolitical situation have reshaped perception of energy security across Europe. This has triggered the need of strengthening gas infrastructure. In a few years, the country shifted from a system largely dependent on pipeline imports from Russia to a more diversified mix, including growing imports from North Africa, Azerbaijan via the TAP pipeline and liquefied natural gas.

LNG, in particular, more than doubled versus '21, accounting for 30% in H1 '25, supported by new regasification terminals in Piombino and Ravenna. It has created the need of the new marine infrastructure requiring a new set of engineering and operational competencies. Moreover, gas plays a critical role as a stabilizing energy source in a system increasingly dominated by intermittent renewables. Events such as Spain's blackout highlight the importance of determining the appropriate share of traditional generation needed to ensure system security without creating excess capacity.

Rather than focusing solely on an energy transition, we strongly believe we are entering into an energy addition or energy integration phase based on a balanced mix of energy sources to maintain both competitiveness and sustainability. Let me now turn to some key trends at Page 5 in the Italian gas market during the first half of '25. Between January and June, gas demand in Italy reached 33 billion cubic meters, a 6% increase compared to the same period last year, marking the first rebound in 4 years. Residential and commercial sector were up by 3%, largely due to slightly colder weather condition, while industrial demand remained broadly stable.

The key driver of the increase was the thermoelectric sector, which grew by 12%. This underscores the critical role of gas-fired power generation in balanced energy system, especially as we integrate an increasing share of renewable energy. The flexibility provided by gas plants proved to be vital to maintaining grid stability in a context of greater intermittency, and this is an European phenomenon with gas-fired electricity production up 17% in Europe. Exports have also risen sharply, growing roughly fourfold compared to the previous year, driven in particular by flows from Tarvisio.

Looking at supply flows, we have seen a notable shift. Pipeline imports decreased by 1.8 billion cubic meters, more than offset by liquefied natural gas imports, which rose by 2.4 billion cubic meters with a significant 32% increase. This growth was supported by the full return to operation of the OLT terminal in Livorno and the start-up of a new terminal in Ravenna. As a result, liquefied natural gas accounted for over 30% of Italy's gas imports.

This contributes significantly to enhancing both the country energy security and the diversification of supply sources, which is crucial in today's complex geopolitical environment. We have been able to successfully navigate sudden shift in market dynamics and gas flows, ensuring security of supply, thanks to the flexibility of Snam's existing infrastructure, further enhanced by the addition of new regasification terminals. In H1 '25, we progressed on the strategy delivered.

I'm now at Page 6. Let me remind the key highlights on gas infrastructure. Works on Phase 1 of the Adriatic Line are moving forward steadily with 42% of the pipeline installation completed and progress on the compression station reaching 20% with overall completion at 35%. The BW Singapore regasification unit moored offshore Ravenna began operations in May. Short-term auctions have already allocated capacity for June and July with 4 vessels having arrived so far.

The first half of the year, Italy received more than 100 LNG tankers, nearly half of which coming from the U.S. for a total volume of about 10 billion cubic meters. At the end of June, the storage exceeded 70%, approximately 10% higher than the European average. At the end of July, we are about 80%. Moving to our energy transition platform. The first phase of the CCS project in Ravenna has delivered solid technical results. Permitting for the pipeline is at an advanced stage and the process for storage has recently begun.

We expect the technical regulation on CO2 transport to be published soon. We look forward to greater regulatory clarity to move ahead with the next phase. On biomethane, we have 72 megawatts already in operation authorized or under construction, and our mission is to speed the ramp-up and maximize the value of the asset. Renovit backlog is broadly stable at EUR 1.4 billion. With regard to the H2 backbone, we have been awarded EUR 24 million contribution by the Connected Europe Facility Energy program to cover approximately half of the feasibility studies.

Let's look now at sustainability. 32% of CapEx aligns with the EU taxonomy and 61% with SDGs in H1 '25, while sustainable finance reached 86% of the total. We expect '25 Scope 1 and 2 CO2 emission down approximately 20% versus 2022, which is our baseline. As part of our commitment to transparency and biodiversity, we have published our first TNFD, Taskforce on Nature-related Financial Disclosure reconciliation table. We have also launched our first employee share ownership plan, supported by a dedicated communication campaign aimed at reaching our entire [Audio Gap].

Let's now move to the H1 results at Page 7. We have delivered a sound performance despite persistent volatility. Adjusted EBITDA of EUR 1.492 billion is up by 5.3% year-on-year, driven by growth in regulated revenues. Adjusted net income at EUR 750 million, plus 8.5% year-on-year, thanks to higher EBITDA and greater contribution from associates, only partially offset by higher depreciation and financial charges. Investment at EUR 1.122 billion was broadly in line with H1 '24 following the completion of works related to the Ravenna LNG terminal.

Net debt reached EUR 17.6 billion, mainly reflecting the investment carried out and the dividend payment. The average cost of debt was stable at 2.5%. Standard & Poor's raised Snam rating to A- following the upgrade of the sovereign and confirming our strong credit profile. Let's now move to key regulatory updates. The regulator has changed the RAB indexation from '25 to the harmonized index of consumer price for the European Union countries related to Italy, the so-called EPCA Italy.

At the same time, the deflator for '24 was updated to 7.9% from 5.3% to recover past adjustments. Therefore, 2025 tariff RAB was lifted to EUR 26.2 billion from EUR 25.8 billion. On May 22, ARERA published a consultation document that contains some adjustments to the implementation criteria for the ROSS-based regulation and the general guidelines for the progressive implementation of the full ROSS by 2028 with a transition period '26, '27.

It adopts a step-by-step proportionate approach designed to ensure a smooth transition for all market participants. The Council of Ministers approved on June 30, a draft law for the definition of a legislative framework for carbon capture and storage, hydrogen and methane emission reduction. The draft now needs to pass through parliament, and it will lay the groundwork for establishing a CCS market in Italy and attributes to ARERA, the role of regulator for the hydrogen and CCS market. Several progress were made on the financing front. In an extremely volatile geopolitical context, we have successfully issued our U.S. dollar -- our first U.S. dollar multi-tranche sustainability-linked bond totaling USD 2 billion and 1 billion first EU green bond. Very good job, Luca. With this transaction, we have completed the refinancing for the full year.

Moving now to our associates portfolio. In March, the stake in ADNOC Gas Pipeline was sold to Lunate for $234 million. In May, we have successfully placed via accelerated book building, the sale of a portion of Italgas option rights and partially follow the capital increase diluting our stake by approximately 2%. In addition, we have recently concluded our exit from ITM Power for an amount of $11.5 million equivalent.

With regard to OGE acquisition, the closing is subject to some condition precedents that were partially met. In particular, no other shareholder exercised the right of the German antitrust authority provided the green light. The process for the foreign direct investment clearance is ongoing, and our base case is to close the deal by the end of Q3 this year. Now I hand over to Luca for the comments on financials. Please, Luca.

Thank you, Agostino, and good afternoon, everybody. Moving to Slide #9. Out of the total around EUR 1.1 billion of investment broadly in line with the previous year, 32% is EU taxonomy aligned and includes -- with regards to gas infrastructure, H2 ready replacement, dual fuel compressor station, biomethane plant connections. As for the energy transition businesses, H2 and CCS, a large part of biomethane depending on plant technical standards and energy efficiency, excluding cogeneration.

SDG alignment is instead 61%, of which the majority goes towards SDG 7, 9 and 13, respectively, affordable and clean energy, industry innovation and infrastructure and climate action. More than 50% of CapEx are development investment, reflecting the company industrial growth phase. Let's now move to H1 2025 EBITDA analysis on Slide #10. EBITDA for the period was EUR 1.492 billion, plus 5.3% compared to last year or plus EUR 75 million.

The growth is mainly attributable to regulatory items for a total of around EUR 70 million related to the recognition of the 2024 deflator update for EUR 52 million, the adoption of the Italian IPCA for the RAB revaluation starting in 2025 for around EUR 50 million, partially counterbalanced by the WACC decrease for around EUR 50 million. Regulated revenues increased for around EUR 54 million, Stogit Adriatica that entered into perimeter from the 3rd of March 2025 and positively contributed by EUR 18 million. Ravenna FSRU that started operation in May and contributed by EUR 4 million.

In detail, the regulated revenues growth was driven by transport and storage revenues increased by around EUR 77 million linked to the investment plan execution. Fast money effect for around EUR 11 million, higher allowed OpEx mainly due to inflation. These effects were partially counterbalanced by the absence of LNG extra revenues recognized in second quarter 2024 for around EUR 40 million, the output-based reduction of around EUR 70 million versus last year, mainly attributable to the storage reverse flow services and the expected phaseout of input-based incentives.

The increase in gas infrastructure operating cost, about EUR 30 million is mainly attributable to lower cost in large part due to inflation and new hires. With regard to the energy transition business, the EUR 8 million EBITDA contribution is mainly driven by biomethane supported by higher volumes. As for the full year, our guidance is EUR 2.850 billion EBITDA, which does not reflect the positive impact of the 2024 deflator update, which accounts for around EUR 52 million, nor the switch to Italian IPCA index for RAB revaluation starting in 2025, which is worth approximately EUR 40 million for the full year.

As described at Page 11, during first half 2025, our associates contributed to the group net income by EUR 204 million or plus EUR 47 million increase compared to the same period of the previous year. Out of the total contribution, EUR 131 million came from our foreign associates and the remaining EUR 73 million from the Italian associates. Let's now dive into the performance of each one.

TAP's slightly higher year-on-year contribution is driven by inflation-adjusted tariffs and lower net financial expenses. With 15% of Italian imports covered in the first half 2025, TAP is the second largest import route via pipeline with commercial operation starts of the 1.2 bcm expansion in January 2026. Construction works are almost completed and commissioning activities have already started. The corridor's operating performance remained broadly in line year-on-year with approximately 11 bcm of gas transported to Italy in the first half of the year, confirming it as the country's leading import route via pipe.

Terega contribution was slightly lower compared to the first half 2024, mainly due to higher energy costs driven by strong storage withdrawals as well as higher interest expenses following a bond refinancing in 2024. Moving to Austria. TAG benefited from the new regulatory framework, which removes volume risk, allowing TAG to fully record allowed revenues versus last year, bringing net income contribution to positive. Also GCA's performance benefited from the new regulatory framework, however, offset by a worsening in the booking situation, which will be recovered from t+2.

In H1 2025, we recorded a significant increase of exports from Italy to Austria, underlying the strategic relevance of this route. Desfa lower contribution is due to lower auction premium on LNG imports and export to Bulgaria, now in line with historical trends. However, Greek demand rose by 15% compared to first half 2024, driven by a colder winter and a higher demand for power generation. Alexandroupolis FSRU is expected to be back in operation by the beginning of the next thermal year 2025, 2026.

Interconnector contribution remains in line year-on-year since we are reaching the yearly regulatory cap, thanks to capacity almost 50% booked until 2026. EMG contribution is substantially in line versus first half 2024. We do not expect to record material deviation on the yearly contribution from the upstream interruption occurred in June. Regarding [Audio Gap] represented only 1 month of net income contribution, while you can see the consolidated reported level, the capital gain.

Italian associate growth is mainly driven by Italgas overperformance in first half and by higher contribution from Adriatic LNG following the increase of some participation in the company from last December. For the full year, we expect approximately EUR 360 million, EUR 365 million of contribution from associates, assuming OGE contribution starts in fourth quarter. You will find in the annex the updated info pack with detailed contribution and data of all our associates.

Let's now move to the first half 2025 net income analysis on Slide #12. Adjusted net income for the period was EUR 750 million, plus 8.5% compared to first half 2024 due to higher D&A by EUR 51 million following rising investments and the entering into perimeter of Stogit Adriatica from March and Ravenna FSRU from May. Higher net financial expenses by EUR 22 million, mainly driven by a slight increase in financial expenses related to debt, reflecting higher financial indebtedness with an average cost of net debt flat at approximately 2.5% lower nondebt-related financial income, in particular, lower interest related to the default service.

Higher contribution from associates, as already commented, which was the result of higher international associate contribution for EUR 20 million and higher Italian associates for EUR 27 million. Lower taxes reflected higher contribution from associates to EBT as well as tax credit adjustment related to 2024 income taxes.

It is important to note that the EUR 1.350 billion net income full year guidance does not include the positive impact of the 2024 deferred update, which is worth around EUR 52 million nor the switch to the Italian IPCA index for RAB revaluation starting in 2025, estimated approximately EUR 40 million for the full year. Turning now to cash flow on Slide #13. Cash flow from operations for the period amounted to around EUR 1.118 billion and was the result of EUR 1.039 billion of funds from operations and EUR 79 million working capital cash generation.

The change in working capital was mainly driven by regulatory working capital with around EUR 300 million of tariff-related items, mainly driven by additional tariff components, around EUR 330 million absorption due to balancing and settlement activities and default service and about EUR 100 million cash generation, mainly driven by super bonus fiscal credit decrease.

Net investment for the period amount to EUR 1.575 billion, including EUR 564 million of cash out related to Stogit Adriatica and around EUR 233 million of ADNOC disposal cash-in. Other outflows were related to the payment of dividends for EUR 955 million, resulting in a change in net debt of about EUR 1.342 billion. EBITDA cash conversion reached a very healthy 78%.

Moving to Slide #14. Net debt amount to around EUR 17.6 billion at the end of the first half 2025. Net cost of debt, which is calculated as financial charges net of liquidity income on average net debt for the period remained stable at 2.5%, while fixed floating mix is at 89%, 11%. The stable finance ratio is at 86%, well on track to reach our long-term target of 90% by 2029. The new sustainable finance framework has been published, including the new targets on carbon neutrality for Scope 1 and 2 by 2040 and net zero for all scope by 2050.

Following the publication, Snam successfully placed its first U.S. dollar multi-tranche Sustainability-Linked bond totaling $2 billion. It represents the first Sustainability-Linked transaction globally with a net zero emission target across Scope 1, 2 and 3. Moreover, in June, we have published the European Green bond fact sheet in a full alignment with the European green bond standards.

Following it, we issued our first green bond aligned with the European green bond standards for a total amount of EUR 1 billion, the largest European green bond by European corporate so far. Following this transaction, funding for the year is completed, leaving the remaining part of the year for further opportunistic prefunding activities. Credit ratings were confirmed by Moody's and Fitch following OGE acquisition announcement, while Standard & Poor's raised positioning to A- following the upgrade of the sovereign, providing the strength of our credit metrics and business profile. I will now hand over to Agostino for the closing remarks.

Thank you very much, Luca. In conclusion, we have reported solid financial results across all key indicators while making tangible progress in the execution of our strategic plan. This confirms the strength and the resilience of our business model. The broader energy and geopolitical landscape remains volatile and complex. In this context, the central role of gas within the energy system has become increasingly evident. Our infrastructure has proven essential both in supporting supply diversification and in providing the flexibility needed to balance the market that is increasingly reliant on intermittent renewable sources.

Looking ahead, we benefit from strong visibility, and we are very comfortably on track to deliver or even exceed our full year '25 guidance. As a Snam new CEO, I am fully committed to delivering sustainable growth, maximizing long-term value creation for all our stakeholders and preserving the company's robust financial position and flexibility. We move forward with confidence supported by solid fundamentals, a clear strategy and the purpose-driven organization ready.

And on this, let me thank all the Snam people for the tremendous effort and professionalism they put in their daily activities. In conclusion, things are happening in a very volatile energy environment as Snam wants to play a central role in reshaping the energy sector towards the future. We are now available to take all your questions in a live Q&A session. Thank you very much.

[Operator Instructions] The first question is from Javier Suarez of Mediobanca.

Three questions. The first one is a high-profile, I guess, question after the publication in the Italian press of the first draft of the energy decree that should be approved by the Council of Ministers anytime soon. The question is, which are the implication of that energy decree for a company like Snam and the implication for your strategic priorities? That is a question for the CEO.

And then second question is on your guidance. So the numbers, the net income that the company has released represents circa 5% of -- 55% of the net income target and the guidance is not considering any important regulatory update. So the question is, what is preventing you from increasing the guidance? Is just for the sake of being conservative or there is something that we should be aware of that is preventing you for increasing that guidance at this stage?

And then the third question is a specific question on the carbon capture and storage activity. If you can provide more color on the long-term strategy from the company in that activity and the implication that this may have for a company like Snam.

Thank you very much, Javier. It's a pleasure to take your question. Regarding in general, let me say, the strategy of Snam and the approach related to what is happening on the legislative framework. Well, I think that we do have an environment in which we have to face as a nation, high energy cost and also some increasing concern for the security of supply. This is our life in the latest 4 or 5 years with the crisis following the invasion of Ukraine. And also, this is something that is continuing with the recent events and blackouts events that happened not so far from here.

So there are some concerns about the stability of the electricity systems and the long-term perspective about such sector. I do appreciate a lot the effort of the government in trying to find long-term solution to these complicated issues that involves the proper structure of the market after 30 years of functioning of a certain market system that probably was defined several years ago with different priorities and the criteria that now need to be updated.

So we are very positive on this. But we don't want to play, let me say, a passive role, we want to play a proactive role in supporting institution and find the right solution. We presented last January a business plan. And I say we, meaning that the business plan is not my business plan, it's the business plan of the company. I personally will be focused in ensuring continuity and delivery. And at a certain point, we will update such business plan.

I want to ensure that Snam will remain a key pillar of the European energy system and the guarantor of the security of supply especially when the geopolitical and market dynamics are changing rapidly and unpredictably. What we know is that today, the gas molecules represent more or less 30% of the energy mix, and this represents the main source of electricity in the country. We also consider financial discipline as an essential element of our strategy. We will continue seeking the right balance between investing for growth while maintaining a solid capital structure in order to be able to deliver a long-term value for all our shareholders.

We are also conducting an in-depth review of our portfolio of associates and all the ancillary businesses to assess how they best fit with our strategy to maximize the value creation for Snam and its stakeholders. Regarding your second question on the update -- potential update of the guidance. Well, you're right, we are talking about very positive results. And based on the results at the end of June, we are more than comfortable to deliver the full guidance even to exceed such guidance.

You have also to consider that the EUR 1.35 billion of adjusted net income guidance does not reflect the positive impact from the deflator update, which accounts per se for around EUR 52 [ million]. So for sure, there is a good possibility that we will exceed such guidance. But you have to consider that I've just taken the role of Snam CEO, and I'm now currently conducting a thorough review of all potential upsides and risk. We have not highlighted anything relevant.

But while the initial signs are more than encouraging, I believe it's still premature to formally revise the guidance before completing such analysis. Although we expect that additional $90 million deflator update at least will be finally delivered. We will come back on this in November when we'll comment our 9-month results. Relating CCS. Well, from a technical standpoint, let me say that we are continuing to advance in the Ravenna CCS project with a very good partnership with Eni, we consider that CCS will be a relevant part of our industrial future.

And this is something that need to be connected with what we just explained during the presentation. We know that we will need a certain amount of gas to continue to provide technical support to the electricity system and to industrial sector. This is what I mean with energy integration. We have to integrate our gas, and we have to accept that a certain part of CO2 need to be emitted. So the question is not how to put gas to 0 because this is impossible from a technical standpoint, but how can we manage this in a sustainable way.

And CCS is a technology tool that we want to explore at the best of our possibility, and this is what we will do in the coming future. Ravenna exercise is an excellent example of what Italian technology can do in partnership with the relevant players. And aside this, we consider very positive the decision of the government to start discussing about the future regulation on CCS. We will follow it, and we will provide all our support to this evolution.

The next question is from James Brand from Deutsche Bank.

Agostino, congratulations on joining Snam, and I wish you all the best of luck in the new role. I just had one question actually, and that was on new incentives. As I understand it, the regulator is working on potentially kind of 2 or 3 new incentives for you or maybe 2 new incentives and you can propose one. So I was just wondering whether you could give us some more detail in terms of how you think those incentives might look the new ones that the regulator is looking at, like how are they anticipated to work? And when will they be brought in?

Well, I think that you are talking about the consultation document issued by ARERA at the end of May that contains adjustment to the implementation criteria for the ROSS-based regulation. And of course, it includes also some element in order to anticipate some hypothesis about the impact of some output-based incentives. Well, that's for sure, an interesting tool. We will explore it.

We'll do our best to take benefit from this evolution of the regulation. But let me tell you that we will follow a proportionate approach we want to -- not to use this tool with, let me say, a speculative approach. We try to do our best to implement evolution that will provide real changes for the benefit of the final customers, but without creating any relevant modification to our risk profile.

The next question is from Bartek Kubicki of Bernstein.

Agostino all the best as well. Two questions, one big picture and one company specific. The big picture is related to the EU-U.S. deal announced over the weekend, where EU is going to buy a much bigger amount of energy from the U.S. So I just wonder how do you look at this from gas infrastructure perspective? Because I guess it also means importing much more gas to the EU market. So just your view, whether it's actually feasible and whether there's enough transport LNG capacity in Europe and in Italy to take more U.S. gas.

That will be the first one. And second, the company specific, if you look at you regarding the funding structure. I recall in the past, Snam used to have much higher proportion of floating debt. I think it was even hitting around 25% years ago. Now you have 11%. So you have kind of fixated a higher amount of your debt. Is it like this to be going forward? I mean you want to have much more fixed debt in the funding structure? Or this is only temporary and future needs you will be financing with short-term floating debt as well?

Thank you. Thank you very much, Bartek. And also, James, thank you very much for congratulations. I will do my best as Snam CEO. So regarding the evolution on import side on LNG and the recent news happened between -- on the agreement between EU and the United States. Well, let's start from some historical figures. In '24, energy imports were valued at more or less EUR 350 billion, EUR 370 billion, of which around EUR 70 billion, EUR 75 billion, more or less 20% came from United States.

Under the new trade agreement between the U.S. and the European Union, it seems that Europe committed to import EUR 750 billion worth of energy, including a lot of things, oil, gas, nuclear, raw materials over 3 years. It means 250 billion per year that is more or less 3x increase in the annual energy imports from the U.S. So let's look now and nothing to comment on this, it's not up to me. But let's look at Italy specifically looking at our gas demand. Well, the full year '24, the total gas consumption was 62 billion cubic meters, of which 15 billion came off from LNG. So we are talking about 25%.

On this 15 billion cubic meters, 5 billion came from U.S. If we move to '25, we do expect the total gas demand will move from 62 to 64 with 20 bcm, 20 billion cubic meters or 30% expected from liquefied natural gas. If we look at the figures at the end of June, we are more or less on the U.S. gas where we were at the end of '24.

And we do expect that if this trend continue, we will expect to more or less double the volumes from U.S. in '25. If you look at the regasification capacity of the Ravenna terminal that has been added to the other station unit, the total regasification capacity for the country reached 28 billion cubic meters. That is more or less 50% of the capacity that could be used to accommodate potential LNG imports from the U.S. Regarding your question on debt structure, I will give the floor to Luca. Please, Luca.

Bartek, regarding the funding structure, the 89%, 11% fixed to floating is temporary. We have, let me say, a target to be on 75-25 every year. It's temporary, and it's related to the fact that we issued longer-term fixed rate, as you might recall, in the U.S. So current duration is 4.7 years overall. We expect to finish the year shortening the duration between 4.2 and 4.3 average as well as cost of funding today is at 2.5%, we expect to finish the year at 2.6% overall net debt cost of funding.

The next question is from Alberto de Antonio of BNP Paribas Exane.

[Audio Gap] your new role. A couple of questions from my side. The first one, maybe a follow-up on guidance regarding the net income of EUR 1.35 billion. And you mentioned doesn't account the deflator, which is EUR 52 million, so EUR 52 million and then the [ IPCA ] adjustment. But could you remind me the number, EUR 40 million, so 4-0 or EUR 14 million, 1-4. It will be the first one.

Then the second one is regarding the Italgas stake that you -- like you have not fully subscribed all the shares. And actually, the share has performed really well. Could you consider to sell this stake or part of this stake to finance your operations? Do you have a full discretionary decision forward regarding this? Or will you have to reach an agreement with CDP, your major shareholder?

Or do you have any other contractual or legal requirement that prevents for doing so? And finally, maybe if you could update us on the mark-to-market value of the WACC for 2026, if you expect the threshold of a trigger mechanism to be reached or it's still below the 30 basis points?

Okay. Alberto, regarding the guidance. So the 2 positive effects, which are not currently in the guidance is EUR 52 million regarding the adjustment of the deflator inflation index for 2024, which is EUR 52 million, 5-2 and EUR 40 million, 4-0, the move to IPCA for 2025. So EUR 92 million in total pretax. And that's basically what is not currently included in the formal guidance.

Regarding the Italgas stake, you might recall that we have one shareholder pact with CDP, which is our shareholder and also Italgas shareholder that provides us not to go below 6.4% in Italgas. And on top of that, we have issued an exchangeable back in 2023 that is basically covering what is left between 6.5% and 11.4%, which is our current stake.

Therefore, we do not expect to do anything on Italgas given the contractual framework that is actually in place on both the exchangeable as well as the shareholder part. Regarding the third question, mark-to-market on WACC, we currently are still above the trigger mechanism on the WACC. It's currently 15 basis points away on the transport, which is the, I would say, most relevant one and about 5 to 6 basis points away when it comes to regasification. There are only 2 months left. So our expectation is clearly for the trigger not to be triggered.

[Operator Instructions] The next question is a follow-up of Alberto de Antonio from BNP Paribas Exane.

Maybe one additional question regarding your debt. In 2026, you will have to finance around 3.6 -- refinance around EUR 3.6 billion of debt maturing during 2026. What is the expected impact on your cost of debt? And what -- where do you see the average cost of debt by year-end 2026? And also, maybe if you could explain us the rationale behind issuing some debt in U.S. dollars and whether you think that this is an interesting way of financing operation given that actually all of your operations are in euros.

Thank you, Alberto. I'm answering first the second part of your question. So the reason why we have tapped the U.S. dollar market is because it's the most, I would say, developed capital markets when it comes to fixed income across the globe. The company with its investment plan has between EUR 2.5 billion and EUR 3.5 billion of funding every year to be done. And clearly, the euro market is, I would say, very available to us, but we want to have alternatives, so diversification of funding.

Now we don't take any currency risk when we issue in dollars. We swapped all our issuance directly into euro. So there is no currency risk attacks and the rationale is just to diversify market access. When it comes to 2026, we haven't gave the guidance on our expected cost of debt. I said that 2025 full year expected cost of debt is 2.6%. Clearly, if interest rates remains where they are, we might have some increase, but we're very far away from the 3%, which is at the end of our plan in terms of estimates.

Yes. If I may add something, Luca, if you don't mind, I will insist on what I told you previously, we consider our financial solidity, stability and confirmation of our rating important element of the strategy of the company. We will do our best to keep it, to keep the debt under very strict control to pay as less as possible for future -- future bonds and also consider, I said before that I would like also to explore all the possibility inside our portfolio in order to assess if all the participation that we do have are strategic or not and also leveraging on this to make our capital structure more and more efficient also in the future.

[Operator Instructions] There are no more questions registered at this time.

So thank you very much for listening to the call. As usual, the Investor Relations department is available for any follow-up questions. Thank you very much.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.