Post by : Bianca
Haleem
The Italian utility leader A2A has announced a significant increase in its investment strategy, raising its projected expenditure for 2024-2035 to €23 billion ($27 billion). Of this total, €1.6 billion is dedicated to developing and managing data centers, highlighting the company’s intent to leverage the rising demand for digital infrastructure in Italy.
This revised plan marks a €1 billion uplift in investment aims while modestly enhancing financial targets for the concluding years of the strategy. Despite this ambitious expansion, A2A affirmed a commitment to achieving at least a 4% annual growth in dividends, ensuring stable returns for its investors.
Following the announcement, A2A shares saw a decline of 6% on Wednesday at 0840 GMT, while Milan’s main index gained ground, as traders pointed to cautious projections for the coming year as the culprit behind the stock drop. However, A2A shares have experienced a 14% increase over the last month, indicating strong investor confidence in its long-term strategy.
Strategic Position in Lombardy
Lombardy, a key region in Northern Italy that includes financial capital Milan and industrial powerhouse Brescia, is witnessing dwindling supply of digital infrastructure. A2A’s established foothold and recent acquisitions in electrical networks within the region empower the company to facilitate the expansion of data centers, which is forecasted to increase capacity by as much as two gigawatts over the next five years—a considerable tenfold expansion compared to current capabilities.
Financial Overview
A2A reported a 4% dip in core profit for nine months, totaling €1.73 billion ($2 billion) year-over-year, largely attributed to reduced hydroelectric production. Nonetheless, the bolstered investment blueprint underscores A2A's confidence in prospects for growth, particularly in digital energy and infrastructure sectors.
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