ECONOMY

Milan energy firm is looking to expand in Greece, Balkans

MILAN – Italy’s AEM Milano is not only ready to play a leading role in the consolidation of the country’s gas and electricity sector, but is also looking to grow elsewhere in Europe, including Greece and the Balkans. «We’re looking at Europe,» Giuliano Zuccoli, the power utility’s chief executive and chairman, told Reuters in an interview. «Our ambition is to compete with companies which operate at a European level,» he said. «The Balkan area is interesting… and also Greece fits in this kind of logic.» Zuccoli said consolidation in Italy’s central-northern regions was also part of AEM’s strategy – but the utility would wait for the right moment, the right partner, and the industrial plan before making a move. «Marriages are necessary, but you have to do them when there are the right conditions,» he said. AEM became Italy’s biggest regional power utility last year when it joined France’s power giant EdF and a group of Italian partners to buy Italy’s second-biggest utility Edison. It plans to invest 2.7 billion euros between 2006 and 2011 and expects annual growth in its gross operating margin of between 6.5 percent and 8.5 percent during the period. Zuccoli said further acquisitions or other forms of partnership in Italy were «a further step to take» after the Edison acquisition. Other options The cooperation it had had with the Italian partners that helped it buy Edison had also encouraged it to look for more alliances, he said. These partners include Enia, Dolomiti Energia, and Sel. Rival utility ASM Brescia had been often indicated as a possible partner for AEM, but Zuccoli played this option down. «With Brescia, we have an historical connection, and it’s clear that historical connections are the most solid, but this does not imply that they are the most feasible option at the moment,» he said. City authorities in the prosperous Lombardy region in northern Italy have encouraged tie-ups between local utilities in order to consolidate a fragmented sector and compete with still dominant former power monopoly Enel and foreign rivals. Zuccoli reiterated AEM’s plans to sell its stake of nearly 6 percent in Swiss peer Atel if AEM did not manage to raise it to 20 percent. «We’re kind of blocked on these talks, but there is a reason,» he said. «We want this to be a strategic investment, not only a financial one.» AEM has previously said the talks on increasing its stake had been difficult because Atel’s ownership structure, apart from bigger shareholders EDF and Swiss EOS, was split among several Swiss utilities. Zuccoli reiterated plans to exit telecommunications company Metroweb and sell AEM’s stake in the national power grid. He also confirmed that AEM wanted to enter the water and waste management business in Milan, and said he spotted «positive indications» on future synergies by the new center-right administration which won this week’s local elections. AEM Milano is still 42 percent-owned by the city of Milan. In the first quarter, it posted earnings before interest, tax, depreciation and amortization (EBITDA) of 411 million euros, up 126 percent as it consolidated 50 percent of Edison.