Enagás (ENG) Q4 2024 earnings summary

Executive summary

• 2024 marked a pivotal year with improved risk profile, major equity restructuring, significant deleveraging, and strategic asset rotation focused on Spain and Europe, positioning for future growth in decarbonization and hydrogen infrastructure.

• Sale of Tallgrass Energy stake for $1.1B reduced net debt by €1B, improved credit ratings to BBB+ by S&P and Fitch, and strengthened the balance sheet.

• ICSID arbitration win in Peru awarded $194M, ending a seven-year uncertainty and supporting future dividend policy.

• Strong progress in hydrogen infrastructure, with H2med and Spanish Hydrogen Backbone included in EU Projects of Common Interest and full CEF funding approval.

• Sustainable dividend policy maintained, supported by robust cash flow and aligned with peers.

Financial highlights

• 2024 recurring net profit was €310.1M, up 3.2% year-over-year and above guidance; including one-offs, net profit was -€299.3M due to Tallgrass sale and GSP award impacts.

• EBITDA reached €760.7M, exceeding targets but 2.5% lower than 2023.

• Total revenue for 2024 was €913.2M, down 0.7% year-over-year.

• Net debt reduced by 28% to €2.4B at year-end, with over 80% at fixed rates and liquidity of €3.25B.

• Operating expenses rose only 1% despite high inflation; net financial expenses dropped 34%.

Outlook and guidance

• 2025 targets: net profit ~€265M, EBITDA ~€670M, net debt ~€2.4B, and dividend €1/share.

• 2025-2030 investment plan totals €4.035B, with €3.125B allocated to hydrogen infrastructure.

• Expected EBITDA CAGR of ~2.5% (2024-2030) and ~9.5% (2026-2030); dividend policy of €1/share assumed sustainable through 2030.

• Reinforced balance sheet enables renewable hydrogen investments from 2027.