GuruFocus -
- EBITDA: Decreased slightly below 2% compared to last year.
- Net Income: Decreased by approximately 12.5%.
- Net Debt: Increased by 3% but decreasing versus year-end.
- CapEx: Increased by 20%.
- Renewables Penetration: Increased from 55% to 73% in the first nine months of 2024.
- Electricity Consumption: Increased by 1.7%, adjusted to 2.3% after corrections.
- Cost of Debt: Stabilizing at 2.8%.
- Personnel Costs: Increased due to salary hikes and workforce expansion.
- Greenhouse Gas Emissions: Significant decrease in scope 1 and 2 emissions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Renewables penetration increased significantly from 55% to 73% in the first nine months of 2024, driven by higher hydro and solar production.
- CapEx is up by 20%, with strong execution and confidence in meeting the year's targets.
- Net debt is decreasing faster than anticipated, showing positive financial management.
- The company received government approval for significant CapEx related to the Sines industrial area, amounting to EUR536 million.
- The average cost of debt is stabilizing at a lower rate than previously expected, around 2.7% to 2.8%.
- EBITDA decreased by slightly below 2% compared to last year, impacted by nonrecurring events from the previous year.
- Net income fell by approximately 12.5%, driven by the decrease in EBITDA and higher financial costs.
- Natural gas consumption decreased due to increased electricity generation from renewables, impacting gas-related revenues.
- OpEx increased, primarily due to higher personnel costs and inflation-driven salary increases.
- There is a delay in some new constructions in Chile, affecting the expected growth in TRANSEMEL for the year.
A: Rodrigo Costa, CEO, mentioned that the government is committed to maintaining and potentially increasing investment levels in energy transition projects. JoAo Faria Conceicao, COO, added that transfers to RAB are expected to increase with a major project coming online by year-end. Goncalo Morais Soares, CFO, noted no major changes in rates of return are expected, and a strong year for CapEx execution is anticipated.
Q: When will the regulator publish the next regulatory review draft? Also, can you clarify the timeline and business plan impact of the EUR600 million investment in Sines?
A: JoAo Faria Conceicao, COO, stated that the regulatory review is expected to follow the usual timeline, with the first proposal on parameters by October 15. The Sines investment is divided into three phases, with completion expected by mid-2031. Only a small part of this investment is included in the current business plan.
Q: Could you explain the tax reimbursement received in the third quarter?
A: An unidentified company representative explained that the reimbursement was due to overpayment of taxes, resulting from a sizable tax benefit recognized in the previous year. This was a correction of the tax amount paid, impacting cash flow but not the income statement.
Q: What are the expectations for the rate of return in the current interest rate environment?
A: Goncalo Morais Soares, CFO, indicated that while market rates are increasing slightly, they are not expected to materially impact the rates of return for the next year.
Q: How does the company plan to address the lower transfers to RAB compared to CapEx?
A: JoAo Faria Conceicao, COO, explained that the discrepancy is due to the timing of project completions, with many projects being multiyear and expected to transfer to RAB in the following year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.