Italgas to invest €13 billion to increase focus on AI

By Francesca Landini

MILAN, June 23 (Reuters) - Europe's largest gas distributor Italgas will invest €13 billion ($14.85 billion) through 2032 as it increases the use of artificial intelligence and expands across Italy, it said on Tuesday.

Total investments are 14.6% higher compared with the group's previous strategy when excluding the cash outlay related to the acquisition of 2i Rete Gas last year, which has boosted its prospects for growth.

The group aims to achieve €280 million in cost synergies and efficiencies, up 12% from a previous estimate. The new target is mainly driven by the productivity increase enabled by artificial intelligence, which has been raised to €100 million from €70 million in the previous plan.

Shares in the group fell 1.7% underperforming Milan's blue-chip index, down 1% at 0745 GMT as Italgas confirmed its dividend policy, its full-year guidance for 2026 and an average rate of growth above 9% for its earnings per share through the plan. 

Some analysts had expected a larger improvement in the earnings per share growth rate.

WIDER, MORE FLEXIBLE NETWORK?

"The investments will make our network even smarter, more widespread and flexible," Chief Executive Paolo Gallo said in a statement.

Italgas said digital meters and sensors would help with the task of blending conventional gas with small amounts of more experimental fuels such as hydrogen and biomethane.

It will spend the bulk of its planned capital expenditure, equal to €8.4 billion, on the development, digitisation and repurposing of gas infrastructures in Italy, while devoting €2.4 billion to winning gas distribution tenders.

Beyond Italy, the development and expansion of the gas network in Greece will get €1 billion.

Half a million euros could go to fund potential acquisitions.

Italgas expects earnings before interest, taxes, depreciation and amortisation to be €3.3 billion in 2032, implying an average annual growth rate of 8.4% from 2025 levels.

($1 = 0.8754 euros)

(Additional reporting by Mirko Miorelli, editing by Giulia Segreti and Barbara Lewis)