Terna SpA (TRN.MI), Italy's biggest power grid by capacity, said Tuesday that net profit in 2007 rose 6.4% on the year, better than expected, thanks to efficiency measures and cost cutting.
Terna said 2007 net profit was EUR413.9 million, up from a restated EUR389.1 million for 2006. Terna Tuesday restated 2006 figures to reflect accounting changes for Brazilian concessions.
A survey of nine analysts polled by Dow Jones Newswires had expected on average net profit at EUR396.8 million.
The Rome-based company said 2007 earnings before interest, tax, depreciation and amortization, or Ebitda, rose 13% to EUR977.8 million on revenue of EUR1.35 billion, up from EUR1.28 billion in 2006.
It reported preliminary 2007 Ebitda and revenue last month.
"We are optimistic for 2008," said Chief Executive Flavio Cattaneo in a statement. "We want to consolidate our results and look with interest also at possible acquisition deals." Operating costs in 2007 fell 9.2% to EUR370.4 million.
Terna said it will propose to shareholders a total dividend of EUR0.151 a share on its 2007 profit, up 7.9%% from EUR0.140 the year before. Analysts' average expectations were for a dividend of EUR0.147.
The company has already paid an interim dividend of EUR0.056.
"Its dividend is a guarantee in these times of (volatile) market conditions," said Edoardo Liuni, a Rome-based analyst with IlNuovoMercato.
Terna is scheduled to hold an analysts' conference call at 1630 GMT Tuesday. Analysts are on the lookout for comment on the possible acquisition of Enel SpA's (ENEL.MI) high-tension power lines in Italy.
Terna's shares have gained about 4% over the past year, easily outperforming the benchmark S&PMib Index, which has lost around 21% in the same period, as investors turn to companies with steady cash-flows and strong dividends.
At 1327 GMT, Terna shares had slipped EUR0.01, or 0.4%, to EUR2.80, in an overall higher Milan market.