EDP (EDP) H2 2012 earnings summary

Executive summary

• FY12 EBITDA fell 3% to €3.6bn amid weak Iberian conditions and non-recurring Brazil impacts; growth in renewables partly offset the declines.

• Net profit was €1.012bn, down 10% YoY; EPS was €0.277. The proposed cash dividend remained €0.185 per share.

• Long-term contracted and regulated activities represented more than 85% of EBITDA, supporting earnings visibility amid market volatility.

Financial highlights

• FY12 CapEx was €2bn, down 7% YoY; operating costs rose 3% at group level, while €75m of OPEX III savings targets were achieved.

• Net debt rose €1.35bn in 2012, up 8% to just over €18.2bn, driven mainly by higher regulatory receivables.

• Regulatory receivables increased €1.1bn in Portugal, including €270m linked to extreme drought and €790m in line with regulator-defined amounts.

• FY12 financial results benefited from lower financial-stake impairments: €5m in 2012 versus €58m in 2011 for BCP.

Outlook and guidance

• FY13 EBITDA guidance was flat YoY; FY14 EBITDA was expected to exceed FY11, supported by hydro plants moving out of CMEC, new capacity and wind-farm consolidation.

• FY13 CapEx guidance remained €2bn, with 500MW of wind capacity planned, mainly in Poland and Romania; potential 2014–15 investment cuts of €200m–€300m if conditions worsen.

• FY13 Iberian electricity demand was forecast to decline 2%; Brazil EBITDA was expected to recover significantly from 2012 but remain below normalized levels.

• FY13 cost of debt was estimated at 4.3%–4.4%; the net debt/EBITDA target remained 3x by 2015.

• FY13 dividend floor remained €0.185 per share in cash, even if payout temporarily exceeded the 55%–65% target range.