Enagás (ENG) Q3 2024 earnings summary

Executive summary

• Net profit for the first nine months reached €233.5M, up 7.8% year-over-year, on track to exceed the updated annual target.

• Sale of Tallgrass Energy stake for $1.1B significantly reduced net debt and improved the risk profile, with credit rating upgraded to BBB+.

• Strategic focus on energy transition, hydrogen infrastructure, and efficiency, with progress on H2Med and regulatory milestones.

• Continued strong execution of the 2022-2030 Strategic Plan, focusing on security of supply, asset rotation, and energy transition initiatives.

• Gas system maintained 100% supply availability, with industrial demand up 3.1% but total gas demand down 8.6% due to lower demand for electricity generation.

Financial highlights

• Total revenues for 9M2024 were €665.2M, down 1.1% year-over-year; EBITDA was €572.8M, flat versus prior year.

• Net profit excluding asset rotation impact was €233.5M; including the Tallgrass sale, net profit was -€130.2M due to a €363.7M accounting loss.

• Net debt reduced from €3.347Bn at December 2023 to €2.421Bn at September 2024, a 27.7% decrease.

• Financial result improved by 26.9% due to higher cash remuneration and lower debt.

• Operating expenses decreased by 4% to €235.2M, reflecting efficiency measures.

Outlook and guidance

• 2024 net profit target updated to €270M–€280M post-Tallgrass sale; including the accounting impairment, reported net profit would be -€90M to -€80M.

• EBITDA guidance for 2024 is €730M–€740M; net debt expected at ~€2.4Bn by year-end.

• Dividend commitment maintained at €1.00/share.

• Recurring operating expenses expected to remain within the ~1% CAGR target for 2022-2026.

• Strategic Plan update planned with 2024 annual results.