By expanding its storage facilities, Edison makes available to Italy significant reserves of natural gas.
Uses
millions of m3 of natural gas 2005 2004 % change
  IAS/IFRS IAS/IFRS  
Residential use 4,012 3,186 25.9%
Industrial use 1,471 1,653 (11.0%)
Thermoelectric fuel use 7,307 6,156 18.7%
Exports 346 282 22.7%
Other sales 507 181 180.0%
Total uses 13,643 11,458 19.1%
Natural gas reserves (in millions of m3 of equivalents) 26.1 23.6 10.6%
Financial Highlights
(in millions of euros) 2005 2004 % change
  IAS/IFRS IAS/IFRS  
Sales revenues 3,303 2.231 48.1%
EBITDA 353 335 5.3%
as a % of sales revenues 10.7% 15.0%  
Capital expenditures 73 60 21.7%
Investments in exploration 22 25 (12.0%)
Number of employees (1) 441 416 6.0%
(1) End of period amount.
Sales revenues totaled 3,303 million euros in 2005, or about 48% more than in the previous year. This increase is mainly the result of higher unit sales of natural gas (+19.1%) and an increase in average unit revenues. In detail, consumption of natural gas by residential customers rose by 826 million cubic meters (+25.9%), while sales to thermoelectric power plants were up 1,151 million cubic meters (+18.7%) compared with 2004.
EBITDA increased to 353 million euros, up from the 335 million euros earned in 2004.
The improvement in EBITDA was made possible by higher unit sales and the positive impact of favorable trends in the benchmark markets on the Group's oil and gas production. These developments more than offset the negative effect of a contraction of the price/cost spread earned on sales to residential customers, especially during the second half of the year; the charges incurred in connection with the use of the strategic reserve during the periods of unusually intense cold early in the year; and the sale of the gas transmission network in July 2004.
With regard to this issue, Edison filed a report with the Ministry of Production Activities detailing the events that made it necessary to tap into the strategic reserve and concurrently applied for a permit to use the reserve, as required by the Decree dated September 26, 2001. If this filing is accepted, it will help reduce the cost of drawing from the reserve, which amounted to about 20 million euros.
Sales and Marketing
In 2005, unit sales of natural gas increased to 13,643 million cubic meters, or 19.1% more than the 11,458 million cubic meters sold in 2004.
Thanks to the implementation of successful marketing programs, unit sales to residential users (both consumers and distributors) were up sharply, rising by about 25.9% compared with 2004.
Shipments to thermoelectric power plants were also significantly higher than in 2004 (+18.7%), reflecting the Group's increased ability to supply its plants directly instead of relying on outside suppliers.
On the other hand, sales to industrial users decreased by 11.0% compared with 2004.
The activities that operate in the wholesale market enjoyed solid growth, with unit sales reaching 507 million cubic meters, counting exports, up from 181 million cubic meters in 2004.
At December 31, 2005, the Group served about 163,000 residential customers.
Production and Procurement
In 2005, production of natural gas totaled 1,248 million cubic meters, or about 60 million cubic meters