EDP’s profits rise by 20% until March

Today, the EDP group announced its quarterly results.

EDP’s profits increased by 20% to 368 million euros until March compared to the same period last year, driven by the increased contribution from electricity networks in Brazil.

The recurring EBITDA decreased by 5% to 1,342 million euros, “reflecting the performance of the generation and commercialization business in the Iberian Peninsula, impacted by the lower integrated margin in 1Q24 compared to a high level in the same period last year.”

On the other hand, the EBITDA of the wind and solar segment increased by 1%, “supported by gains from renewable asset rotation transactions in North America, totaling €58M, and mitigated by the decrease in renewable energy production due to below-average wind resources and the reduction in the average selling price of energy.”

EDP Renewables announces a cut in investment of three billion until 2026

EDP Renewables announced today a cut of three billion euros in its net investment compared to the forecast in the strategic plan.

The company now expects to invest 4 billion euros in the next three years until 2026, in net terms, three billion less than previously planned, as per a presentation released to the market today.

The gross investment in renewables will be 12 billion euros for the period 2024-2026, with net investment reaching 4 billion euros, three billion less than the strategic plan, “preserving a healthy balance sheet,” focusing on efficiency improvement.

“The market has changed in the last 12 months,” said Miguel Stilwell d’Andrade today in a call with analysts. “We are not ignoring the signals. It is necessary to recalibrate” the plan. The manager highlighted the drop in electricity prices and the high capital costs, pointing out that interest rates are expected to remain high for longer than forecast in the US, compared to the eurozone, which is expected to see changes in the coming months.

The company now expects to install 10 gigawatts of power between 2024-2026, at a rate of three gigawatts per year, of which 7 gigawatts are already “secured.”

The company reversed the negative trend of this session and is now rising by 1.82% to 13.97 euros on the Lisbon Stock Exchange.

According to the previous business plan, the EDP group expected to invest 25 billion euros during this period: 21 billion (85%) in renewable energies and four billion (15%) in electricity networks, averaging around 6.2 billion euros annually. The company expects to add 4.5 gigawatts of renewables per year, totaling 18 gigawatts by 2026 to reach 33 gigawatts of renewables by 2026, and to reach 50 gigawatts by 2030.

EDPR’s profit rises by 4% but investment declines

EDPR’s profits increased by 4% to 68 million euros in the first quarter compared to the same period last year.

The result was “impacted by a lower contribution from the top line and the increase in taxes, due to the tax treatment of gains from asset rotation, offset by a reduction in net financial costs and non-controlling interests (-11% year-on-year).”

Thus, revenues fell by 11% to 632 million euros, impacted by the lower average selling price (-3%) and lower energy production (-3%).

The company reveals that the average selling price dropped by 3% to 61 euros/MWh, “reflecting lower electricity market prices in Europe. The year-over-year comparison was also driven by the downward regulatory revision of electricity prices for regulated assets in Spain from 2023, announced in June 2023.”

Meanwhile, production also declined by 3% to 9.9 TWh, impacted by wind asset rotation in the last 12 months, with the sale of 256 MW in Spain, 142 MW in Poland, and 260 MW in Brazil, where production plunged by 54% due to disconnection and scheduled maintenance in several projects, “which required periodic shutdown of operations, and slightly lower renewable resources compared to the previous year.”

Gross investment, on the other hand, plummeted by 23% to 759 million euros, “with over 80% of its operational investment in Europe and North America, reflecting EDPR’s focus on its core markets with low risk.”

Considering asset rotation transactions, with proceeds of 300 million, the net expansion investment reached 900 million (-8%).

On the other hand, net debt surged by 900 million to 6.7 billion, “reflecting the investments made in the period.”

Financial results declined by 14% to 108 million, “impacted by the debt mix rebalancing strategy, with an increase in the euro (€) and a decrease in the dollar (USD), and by the increase in capitalized financial expenses, due to project execution delays along with maintaining a debt cost of 4.66%, due to the lower debt cost of new refinancing,” according to the statement.

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Asraful Shohag

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