Acciona Energías Renovables (ANE) H1 2024 earnings summary

Executive summary

• H1 2024 was challenging for renewables, with record-low Spanish prices, high hydro/wind output, and low demand, leading to reduced production and revenues.

• International operations faced weak volumes and grid limitations, with unusually low output in Mexico, Australia, and the US, but a strong regulated/contracted base and active fleet management mitigated impacts.

• Asset rotation program advanced, including a €287m sale of 175 MW hydro assets in Spain, expected to generate €170m in gains and close by year-end.

• Installed capacity increased by 1,678 MW year-over-year to 13,944 MW, with 442 MW added in H1 2024 and 1,734 MW under construction.

• Investment grade ratings maintained, with Fitch affirming BBB- (Stable) and DBRS downgrading to BBB (Stable); MacIntyre project monetization contributed €335m in cash inflow.

Financial highlights

• Group revenues fell 24% to €1,333m; EBITDA down 39% to €419m; attributable net profit dropped 84% to €65m.

• Generation revenues in Spain fell 33.5% to €379m, while international generation revenue grew 10.9% to €371m.

• Net financial debt increased to €4,606m as of June 2024, up 23.6% from end-2023, mainly from investment and dividend payments.

• Gross ordinary capex was €504m, down 54.3% year-over-year; net investment cash flow was -€847m in H1 2024.

• Total production increased 7.7% to 13,441 GWh; consolidated production up 14% to 11,945 GWh.

Outlook and guidance

• H2 2024 expected to see higher operating contribution as Spanish power prices recover and output normalizes.

• 2024 EBITDA guidance of ~€1bn pre-capital gains, assuming 25.5 TWh output and ~€60/MWh Spanish pool price.

• Capex for 2024 guided at €2.5bn, with moderation planned for 2025 to restore leverage ratios.

• Asset rotation and value crystallization plans provide flexibility for value creation and financial proceeds in 2024 and 2025.

• Regulatory banding mechanism expected to contribute around €30/MWh to average price for regulated assets in 2024.