A2A : S.p.A. Board of Directors has examined and approved the Half year financial report at June 30, 2017

• Gross Operating Margin at 649 million euros (+6% compared to the first half of 2016). Excellent organic and external growth in all Bus, apart from EPCG penalized by low rainfall.
• Ordinary Net Profit at 252 million euros recorded strong growth (+19% compared to the corresponding period of 2016)
• The exercising of the PUT Option on EPCG produced a negative effect of 95 million euros on the Group Net Profit. EPCG will cease being fully consolidated from the 2nd half of 2017
• The Group Net Profit, after the effects of the PUT Option on EPCG, amounted to 157 million euros (254 million euros in the first half of 2016)
• Investments of 171 million euros, up by 32% compared to the first half of 2016
• Net Financial Position, amounting to 3,047 million euros, down by 89 million euros compared to December 31, 2016

Milan, July 31, 2017 - At today's meeting of the Board of Directors of A2A S.p.A., chaired by Mr. Giovanni Valotti, the Board examined and approved the Half year financial report at June 30, 2017.

The scenario of the first half of 2017 was characterized by high electricity and gas prices, although they were slightly down on those recorded in the first quarter: the PUN Baseload amounted to 51.2 €/MWh, rising by 38% compared to 37.0 €/MWh in the first half of 2016 and the average price of gas at the PSV (Virtual Trading Point) amounted to 19.3 €/MWh, up by 32% compared to the same period of the previous year.

These price levels on the Italian wholesale market are linked to the stoppage of several French nuclear power plants in the early months of the year and the particularly harsh temperatures recorded mainly in the month of January, as well as the exceptional heat wave which struck the Italian peninsula in June. The spreads, on both the CCGTs and coal production, expanded.

The lower rainfall at the end of 2016 and in the first six months of 2017, has instead had a very negative effect on hydroelectric production (both in Italy and in Montenegro), reducing it by almost 40%.

The temperatures were essentially in line with the first half of 2016.

The first half of the year closed with highly satisfactory economic-financial results that exceeded the Group's expectations.

The Gross Operating Margin (EBITDA), at 649 million euros (+5.7%), in addition to the contribution deriving from the companies newly acquired in 2016, benefited from the strong organic growth recorded in all the BUs, and in particular, in the Generation, Environment and Heat & Networks BUs.

The growth of the Gross Operating Margin net of the non-recurring components was even more sustained, rising by 13% from 534 million euros on June 30, 2016 to 604 million euros on June 30, 2017.

The Net Profit pertaining to the Group of the first six months of 2017 amounted to 157 million euros (254 million euros at June 30, 2016).

The Group's Net result for the first half of 2017 was significantly influenced by the effects arising from the exercise, on July 1, 2017, of the PUT Option on the entire stake in the share capital held by A2A S.p.A. in the Montenegrin company EPCG (41.75%). The value of the PUT Option is 250 million euros; the disposal will take place in multiple steps, i.e. in seven equal instalments for each of the following seven years beginning in the month of May 2018, upon payment by the Government of Montenegro of the related fees at each maturity date. As highlighted in the press release published by A2A S.p.A. on July 25, 2017, the shareholding in EPCG was subject to a precautionary seizure in connection with the known proceeding related to intra-group services rendered to EPCG by A2A between 2010 and 2012. The preventive injunction likewise has shown that the proceeding in question was also extended to A2A S.p.A. A2A S.p.A. will legally challenge this injunction, by the deadlines stipulated (or by August 2, 2017), in the forms and in the courts provided for by the local ordinance, in order to obtain its repeal by the date established for the collection of the first instalment, set for May 1, 2018.

On June 30, 2017, EPCG was still fully consolidated in A2A.

Due to the exercise of the PUT Option, the stake in EPCG was reclassified from permanent investment to held-for-sale investment with the consequent change in the valuation criteria. A2A valued EPCG's assets and liabilities in accordance with the IAS 36 principle of the lesser of their book value and their fair value as inferable from the compensation following the exercising of the PUT Option. The new valuation led to a total write-down of 95 million euros, of which 60 million euros corresponds to the adjustment of the asset value to the PUT Option value (250 million euros) and 35 million euros to the 3 effects of the discounting of the seven equivalent annual disposal and cash in instalments. The reduction in the Net Profit of the Group in the first half of 2017, amounting to 97 million euros (- 38%), is therefore mainly attributable due to two extraordinary items (one positive in 2016 and one negative in 2017):

• the booking in the first quarter of 2016 of a non-monetary capital gain of 52 million euros, related to the partial, non-proportional demerger of Edipower with effect as of 1 January 2016, in favour of Cellina Energy;
• the total write-down for 95 million euros of the assets of EPCG recorded in the first half of 2017.

Gross of the two extraordinary effects mentioned above, the 'Ordinary' Net Profit would therefore be up by 40 million euros, from 212 million euros as at June 30, 2016 to 252 million euros as at June 30, 2017.

During the period the generation of net cash was positive and equalled 89 million euros, after investments for 171 million euros. The Net Financial Position as at June 30, 2017 thus amounted to 3,047 million euros (3,136 million euros at the end of 2016).