Edison: revenues at 7.8 billion euros in the first nine months of 2008, up 31,2%; EBITDA little changed, at comparable scope of consolidation

A strong third quarter in 2008, driven mainly by the performance of the electric power operations. The net profit for the quarter is up 80% to 117 million euros.

Milan, November 12, 2008 – Edison’s Board of Directors met today to review the Quarterly Report at September 30, 2008.

Highlights of the Edison Group (in millions of euros)

	Nine months 2008	Nine months 2007	%	Q3 2008	Q3 2007	%
Sales revenues	7,761	5,914	31.2	2,756	1,862	48.0
EBITDA	1,209	1,270	(4.8)	400	366	9.3
EBIT	673	746	(9.8)	231	174	32.8
Profit before taxes	526	584	(9.9)	189	118	60.2
Net profit	219	321	(31.8)	117	65	80.0

Highlights of the Electric Power and Hydrocarbons Operations (in mill. of euros)

	Nine months 2008	Nine months 2007	%	Q3 2008	Q3 2007	%
Electric power op.
Sales revenues	6,234	4,906	27.1	2,370	1,662	42.6
EBITDA	996	934	6.6	360	313	15.0
Hydrocarbons op.
Sales revenues	3,470	2,744	26.5	1,026	758	35,4
EBITDA	268	384	(30.2)	59	69	(14.5)

Operating Performance
Thanks to a strong performance in the third quarter of 2008, the Group reported improved results for the first nine months of 2008, which ended with a net profit that, net of the impact of the so-called Robin Hood Tax, was slightly higher than in the same period in 2007. Specifically, the net profit for the third quarter of 2008 rose to 117 million euros, or 80% more than in the same quarter last year. A positive performance by the Group’s industrial operations, which reflects the optimization of the sales mix by the electric power operations and the substantial margins earned in the deregulated market, accounts for this improvement.

Third-quarter EBITDA grew by 9.3% to 400 million euros (366 million euros in the third quarter of 2007). The electric power operations account for most of this improvement thanks to an EBITDA gain of 15% made possible, as mentioned above, by the margins earned in the deregulated market and by an increase in available hydroelectric capacity. These factors more than offset the impact of the divestment of some thermoelectric power plants in April 2008 and the effect of a reduction in the profitability of the CIP6 sales channel, which was penalized by the scheduled expiration of some contracts and the end of the subsidized-rate period for some facilities that operate under the CIP6 system.

On the other hand, the EBITDA reported by the hydrocarbons operations were down 14.5% compared with the 69 million euros earned in the third quarter of 2007. This decrease is the result of a reduction of the margins generated by the natural gas procurement and distribution activities caused by differences in the timing with which changes in the benchmark oil market are reflected in the formulas applied to purchasing and sales prices.

Sales Revenues
In the first nine months of 2008, the cumulative sales revenues of the Edison Group were up sharply, rising by 31.2% to 7,761 million euros (5,914 million euros at September 30, 2007). This gain is the combined result of higher unit sales, both by the electric power operations and the hydrocarbons operations, and of an increase in unit revenues made possible by a sharp rise in commodity prices during the reference period.

The electric power operations reported revenues of 6,234 million euros, or 27.1% more than in the first nine months of 2007. This positive change is due to, beyond the rise of oil scenario, to the increase in unit sales which were up 7.4%.

A higher sales volume in the deregulated market more than offset a reduction in unit sales in the CIP6 channel due to the expiration of some contracts and to the divestment of seven power plants in April. The hydrocarbons operations increased revenues in the first nine months of 2008 by 26.5% to 3,470 million euros as compared to the same period 2007. In this case, too, the revenue gain reflects a rise in unit sales, which improved by 4.5% compared with the first nine months of 2007, in line with the overall market growth. Specifically, sales were up 1.4% for residential users and 19.7% for industrial users, but decreased slightly (-1.7%) for thermoelectric users.

EBITDA
EBITDA for the first nine months totaled 1,209 million euros, or 4.8% less than in the same period last year (-2.7% net of divestments, which account for 27 million euros of the decrease). The electric power operations increased EBITDA by 6.6% to 996 million euros (+9.8% net of the divestment of some CIP6 power plants), as strong gains in unit sales and higher margins in the deregulated segments of the market more than offset a substantial decrease in the CIP6 segment. The EBITDA earned by the hydrocarbons operations were down 30.2% to 268 million euros. This decrease is largely the result of pricing changes in the benchmark oil market and of the differences in the timing with which these changes are reflected in the formulas applied to procurement costs, on the one hand, and to sales prices, on the other. The impact of this negative factor was offset in part by the benefit generated by renegotiating a long-term contract for the supply of natural gas from Russia. In addition, EBITDA for the same period last year included an extraordinary positive contribution provided by the reversal, in the first half of 2007, of a provision originally set aside for the potential impact of Resolution No. 248/04.

EBIT, Profit Before Taxes and Net Profit
For the reasons discussed above and as a result of the increase in depreciation caused by the commissioning of new power plants in the second half of 2007, EBIT for the first nine months of 2008 decreased to 673 million euros, or 9.8% less than the 746 million euros reported at September 30, 2007. Profit before taxes was down 9.9% to 526 million euros, owing in part to a charge of about 40 million euros for provisions recognized in connection with tax disputes related mainly to operations divested in the 1990s.

In the first nine months of 2008, the Group earned a net profit of 219 million euros, compared with 321 million euros in the same period last year (-31.8%). A higher tax burden accounts for this decrease. Specifically: the enactment of Legislative Decree No. 112 of June 25, 2008, which introduced the so-called “Robin Hood Tax”, had a negative impact of 106 million euros, including 65 million euros for deferred taxes and 41 million euros for current taxes.

Indebtedness
At September 30, 2008, the Group’s net borrowings amounted to 2,821 million euros, or 134 million euros more than the 2,687 million euros owed at December 31, 2007. This increase reflects the impact of the period’s outlays for capital investments (379 million euros), net financial expense (which decreased compared with the first nine months of 2007), additional equity investments in Group companies (including 139 million euros for a 5% interest in Edipower and 61 million euros contributed to Terminale GNL Adriatico), the distribution of dividends (281 million euros) and income tax payments, offset in part by the cash flow from operations and the proceeds from the sale of thermoelectric power plants operating under CIP6 contracts and of a 51% interest in Dolomiti Edison Energy Srl. The debt/equity ratio was 0.35 in the first nine months of 2008, compared with 0.43 in the same period 2007 (0.33 at December 31, 2007).

Outlook for the Balance of 2008
The positive performance achieved in the third quarter of 2008 justifies a more confident outlook for full-year industrial results that, assuming a comparable scope of consolidation, should be comparable with those reported in 2007, despite volatility of the scenario for raw material prices and change rates.

The Board of Directors was informed of the resignation of the Director Ivan Strozzi, who was also a member of the Audit Committee, and replaced him by coopting Andrea Viero, who was also appointed to the Audit Committee. The curriculum vitae of the new Director is available at the Group’s website: www.edison.it

Conference call
The Group’s operating results for the first nine months of 2008 will be presented today at 5:30 PM CET during a conference call. Journalists may follow the presentation in listen-only mode by dialing +39 02 802 09 28. The presentation will be available at the Group’s website: www.edison.it

As required by Article 154-bis, Section 2, of the Uniform Finance Law (Legislative Decree No. 58/1998), Marco Andreasi, in his capacity as Corporate Accounting Documents Officer of Edison S.p.A., attests that the accounting information contained in this press release is consistent with the data in the Company’s documents, accounting records and other records.

The Interim Report on Operations at September 30, 2008 will be on file and available upon request at the Company’s headquarters (31 Foro Buonaparte, Milan) and at the offices of Borsa Italiana Spa by November 13, 2008. It may also be consulted at the Group’s website:www.edison.it

Edison’s Press Office: Tel. +39 02 62227331. ufficiostampa@edison.it
Edison’s Investor Relations: Tel. +39 02 62228415. investor.relations@edison.it
www.edison.it

Public disclosure required by Consob Resolution No. 11971 of May 14, 1999, as amended.