Enagás (ENG) Q2 2024 earnings summary

Executive summary

• Accelerated execution of the 2022-2030 Strategic Plan, focusing on asset rotation, cost control, and energy transition, with major milestones in decarbonization and hydrogen infrastructure.

• 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, reinforcing European supply security and commercial operation expected in 2027.

• Efficiency Plan kept operating expense growth at ~1% despite inflation, and Spanish gas system maintained 100% supply availability with high storage and LNG slot demand.

• All major hydrogen projects selected as European Projects of Common Interest, with significant regulatory and financial progress at national and EU levels.

Financial highlights

• EBITDA for H1 2024 reached €385.7 million, up 3.7% year-over-year; recurring net profit (excluding asset rotation) increased 10% to €148 million.

• Including Tallgrass sale, reported net profit was -€210.8 million, reflecting a capital loss of €358.8–€360 million.

• Total revenues were €442.5 million, down 1.7% year-over-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, the lowest since 2008.

Outlook and guidance

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

• Dividend policy maintained at €1 per share for 2024 and €1.74 per share for 2023 fully paid.

• Sustainable dividend beyond 2026 projected in the €0.8–1.1 per share range, with payout ratio around 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.