EDP (EDP) H2 2010 earnings summary

Executive summary

• 2010 EBITDA rose 7% to €3.6bn, driven by a balanced portfolio, growth in renewables and Brazil, and efficiency gains.

• Net profit increased 5% to €1.079bn; 88% of EBITDA came from regulated or long-term contracted activities.

• Strategy emphasized protected-return growth, lower investment, disciplined financing, and maintaining a low-risk profile.

Financial highlights

• EBITDA increased 7% YoY to €3.6bn; excluding FX impact, growth was 4%.

• Net profit rose 5% YoY to €1.079bn, despite net interest costs increasing 3%.

• CapEx was close to €2.7bn, down €600m YoY; 74% was expansion investment.

• Efficiency savings reached €159m by 2010, nearly achieving the €160m 2012 target two years early.

Outlook and guidance

• 2011 EBITDA and net profit were expected to grow at low-single-digit rates; around 90% of EBITDA had low-risk visibility.

• 2011 average cost of debt was expected at no more than 4%; net debt target was below 2010, supported by €500m of planned disposals.

• CapEx targets: €2.2bn in 2011 and €2.0bn in 2012; 2012 new capacity was expected to add €150m to EBITDA.

• 2012 guidance included a €0.185 per-share cash dividend and positive free cash flow generation.

• Iberian liberalized EBITDA in each 2011 quarter was expected to exceed Q4 2010's €80m; contracted average selling price was slightly above €50/MWh.