Business
Endesa S A : posts net profit of €800 million up to june and confirms its financial targets for the year
Endesa S A : posts net profit of €800 million up to june and confirms its financial targets for the
About this update from Endesa S.a.
Endesa's results at the end of the first half of the year have enabled it to reaffirm to the market that it is on track to meet its main financial targets for the full year 2024. These goals include achieving a gross operating profit (EBITDA) of between €4.9 and €5.2 billion and a net ordinary profit of €1.6-1.7 billion. Specifically, the company reported an EBITDA of €2.413 billion, marking a modest decline of 2.5% from the previous year. This was due to the normalisation of the conventional thermal generation business, which was offset by growth in renewables, marketing, and grids. Net income stood at EUR 800 million, down by 9%, normalising its trend following a first quarter impacted by the recording of the extraordinary 1.2% tax on revenues. Ordinary net income (considered for the dividend distribution) decreased by 12% to €772 million. Cash flow also recovered robustly, reaching €1.192 billion in the first half of the year, up from €1.025 billion in the first three months. All this occurs within a context where wholesale prices have fallen to an average of €39/MWh, representing a 56% decrease from the €88 recorded in the same period of 2023. This development mirrors that of the TTF gas index, which registered an average price of €29.5/MWh, representing a 34% decrease. Installed capacity in renewable energy sources in the Iberian Peninsula has increased by 9% since the end of the first half of 2023, reaching 10,100 MW. As a result, and due to the significant annual increase in hydroelectric generation, emission-free production on the peninsula (including nuclear) accounted for 90% of the total in the first half of the year, an increase of eight percentage points from the previous year. Capital expenditure in the first half amounted to €924 million, a 16% decrease, following the policy of more selective and efficient scrutiny on where to allocate the company's capital. 70% was allocated to grids (44%) and renewables (22%). Furthermore, Endesa anticipates the imminent closure of the sale of a minority stake in its portfolio of operational solar projects in Spain (2,000 megawatts). During the presentation of results, CEO José Bogas provided a update the regulatory status of three major challenges confronting both the energy sector and Endesa as a key player within it. Firstly, he emphasised the need to reform and enhance the regulation of the distribution grid to make it conducive to investment, thereby capitalising on the opportunity for reindustrialisation and growth offered by renewable and competitive energy. Currently, the grid is not adequately scaled to meet demand requirements, and as a result, between 2020 and 2023, up to 30GW of new capacity has been rejected due to insufficient grid capacity throughout Spain. To boost grid investment through to 2030, it must be adequately compensated, and Endesa supports increasing the financial remuneration rate in alignment with developments in other European countries where the regulatory remuneration review for this sector has already concluded. Implementing the parameters used in other European countries would set the rate in Spain within a range of 7.3% to 8.7%. Secondly, Bogas emphasised the Canary Islands to point out that the thermal generation fleet is outdated and that the existing regulations do not adequately support investment requirements. In this regard, he mentioned the two tenders initiated by the government: the emergency tender, which resulted in the award of 155MW from the 250MW solicited, and the competitive bidding process to fill an additional 1,361MW. Thirdly and finally, regarding the 30% increase in the Enresa rate to €10.36/MWh, effective since 1st July, the company has reiterated stance analysis that this hike is not consistent with the 2019 nuclear protocol and jeopardises the economic viability of the nuclear power plants.