Enagás (ENG) Q2 2024 earnings summary

Executive summary

• Accelerated rollout of the 2022-2030 Strategic Plan, focusing on asset rotation, cost control, and energy transition, with major milestones achieved in the last quarter.

• Divestment of a 30.2% stake in Tallgrass Energy for $1.1 billion to Blackstone, with proceeds supporting hydrogen investments, debt reduction, and dividend policy.

• Construction began on Germany's first onshore LNG terminal in Stade, with a 15% stake and operator role, and commercial operation expected in 2027.

• Efficiency plan limited operating expense growth to ~1% despite inflationary pressures.

• Spanish gas system maintained 100% supply availability, with high storage levels and robust LNG slot demand.

Financial highlights

• EBITDA for H1 2024 reached €385.7 million, up 3.7% year-on-year.

• Recurring after-tax profit (excluding Tallgrass sale) at €148 million, up 10% year-on-year; reported net profit was -€210.8 million due to a €360 million loss from the Tallgrass sale.

• Total revenues for H1 2024 were €442.5 million, down 1.7% year-on-year; operating expenses decreased by 5.2%.

• Subsidiaries and affiliates contributed €102.1 million to EBITDA, a 14.3% increase.

• Net debt reduced to €3.164 billion at June 2024, with further reduction to ~€2.4 billion expected post-Tallgrass sale.

Outlook and guidance

• 2024 after-tax profit expected between -€90 million and -€80 million, EBITDA between €730–740 million, and year-end net debt around €2.4 billion.

• Dividend for 2024 set at €1 per share; long-term sustainable dividend range projected at €0.8–1.1 per share beyond 2026, with a payout ratio of 40%.

• Strategy plan update expected before year-end, with a full new plan pending regulatory clarity.

• Efficiency plan targets recurring operating expense growth of ~1% CAGR through 2026.

• On track to meet annual EBITDA targets.