Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Redeia Corporacion SA (RDEIF, Financial) achieved a significant increase in renewable energy integration, with 78.4% of energy generated in the first half of 2024 coming from emission-free sources.
- The company invested over EUR420 million in the Transmission System Operator (TSO) during the first half of 2024, marking a 19% increase compared to the same period in 2023.
- Redeia Corporacion SA (RDEIF) maintained a strong financial position with a credit rating of A- by Standard & Poor's and Fitch.
- The international transmission business showed robust growth, contributing positively to the company's EBITDA with a growth rate of over 12%.
- The company confirmed its commitment to a significant CapEx plan, aiming to exceed EUR1 billion in investments by the end of 2024, which is the largest investment in its history.
Negative Points
- The end of the regulatory useful life of pre-1998 assets resulted in a negative impact on revenues, amounting to approximately EUR260 million.
- Revenues declined by 10.9% in the first half of 2024, primarily due to the pre-1998 asset effect.
- Net profit decreased by 24% compared to the first half of the previous year, aligning with the company's estimates.
- The company's financial result was slightly affected by a higher average cost of debt, which increased from 2.11% to 2.22% by the end of June 2024.
- The company faces challenges in balancing investments and dividends, with a need to manage financial stress due to increased CapEx requirements.
Q & A Highlights
Q: When will Redeia update its business plan to extend the time horizon to 2030?
A: Roberto Garcia Merino, CEO, stated that the company expects to have the necessary parameters to update the strategy plan within the next four to five months. The updated plan, extending beyond 2025, will likely be presented in the first half of 2025, depending on the draft planning and TRF review.
Q: What is Redeia's outlook for the new regulatory period and expected returns on invested capital?
A: The CEO expects an improvement over the current regulatory model, which does not meet the infrastructure deployment needs. Redeia is in discussions with the CNMC to enhance the current TRF and improve remuneration standards, aiming for a significant improvement in the regulatory framework.
Q: What is the expected timing and impact of EU funds on Redeia's financials?
A: Emilio Cerezo Diez, CFO, mentioned that the company expects to access EUR931 million in EU funds by the end of the year, which will support investment volumes and reinforce the balance sheet over the next couple of years.
Q: How does Redeia plan to balance investments and dividends in the coming years?
A: The CFO indicated that the balance will depend on the regulatory framework. The company aims to maintain a strong financial position and may consider aligning dividend growth with EBITDA growth, depending on the regulatory environment.
Q: Are there plans for disinvestment in non-core assets like Hispasat or international business?
A: The CEO stated that while Redeia has a strong balance sheet to support investment needs, any potential disinvestment in non-core assets would be considered based on strategic value and shareholder interests. The company also has other financial levers, such as hybrid financing, to support its CapEx plan.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
