Italgas SpA, Italy's biggest natural gas supplier, said that it is expecting a change in the way that its pipeline network is valued, this will boost operating profit in Italy by “at least” a fifth.
The change, announced on Monday by the energy regulator, should increase the value of the Turin based company's 28,000-mile regional and local network by a similar amount, Italgas said in a statement distributed by the Italian exchange. Italgas is a unit of the state-controlled Eni SpA, Europe's fourth biggest oil company.
The Electricity and Gas Authority abandoned an one and a half year legal battle with Italgas and five other utilities over valuation criteria. Higher network values would allow the companies to charge consumers more. Italgas shares climbed to a sixteen month high yesterday.
“The estimate seems quite prudent,” said Antonio Tognoli, an analyst at ING Bank in Milan, who has a “buy” rating on Italgas shares. “Given how the markets are at the moment and the seasonal nature of the business, I think twenty percent is fine.”