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Analysis of the Integrated Water Cycle Area

The result for the Integrated Water Cycle as at 31 December 2010 also increased with respect to the previous year:

(millions of )31-dic-0931-dic-10Change% Change
Water cycle area EBITDA131,4142,0+10,6+8,1%
Group EBITDA567,3607,3+40,0+7,1%
Percentage weight23,2%23,4%+0,2 p.p.

The Water cycle area was particularly affected by the previously mentioned reclassifications due to application of the IFRIC 12 standard, and the increased costs for services and capitalisations for the improved representation of the plant works to the Group companies. An analysis of the operating results achieved in the area containing the above mentioned variations is shown below:

Income statement (millions of )31-dic-09% Inc.31-dic-10% Inc.Abs. Change% Change
Operating costs(356,1)-61,0%(344,7)-59,5%-11,4-3,2%
Personnel costs(104,7)-17,9%(105,2)-18,2%+0,5+0,5%
Capitalised costs8,61,5%12,82,2%+4,2+48,8%

Revenues, equal to Euro 579.0 million, are down 0.8% compared to 2009.

If the effects of application of the IFRIC 12 standard are not considered, which generated a Euro +13.5 million change in 2010 compared to 2009, revenues are up by Euro 9.0 million (+1.9%) due to the combined effects of higher supply revenues to cover the services requested and lower connection revenues and revenues from volumes billed.

The reduction in operating costs, equal to -3.2 % is related to the effects noted above. If these impacts are not considered, the operating costs between 2009 and 2010 are down by Euro 4.2 million (-1.6%), showing that operating efficiency is being constantly monitored.

The capitalised costs, net of applying the provisions of IFRIC 12 and the accounting reclassification on the construction of the plants between the Group companies, are down by Euro 4.1 million.

The following table reports the main quantitative indicators in the segment.

Quantitative data31-dic-0931-dic-10Change% Change
Number of users (thousand units)1.166,31.173,3+7,0+0,6%
Volumes sold (millions of cubic metre)
Aqueduct system256,6250,8-5,8-2,3%
Sewage system225,7220,0-5,7-2,5%
Purification system226,2220,0-6,2-2,7%

The volumes of water supplied, in addition to the sewage and purification volumes, are down compared to 2009 due to the weather during the summer, since there was much higher rainfall in 2010 compared to the average for the period.

EBITDA at the end of 2010 increased by Euro 10.6 million, going from Euro 131.4 million in 2009 to Euro 142.0 million this year (+8.1%).

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