Enagás (ENG) Q4 2024 earnings summary

Executive summary

• 2024 marked a pivotal year with improved risk profile, significant deleveraging, and a strategic focus on hydrogen and decarbonization, supported by major asset sales and equity restructuring.

• Sale of Tallgrass Energy stake for $1.1B reduced net debt by €943M to €2.4B, improved credit ratings to BBB+ by S&P and Fitch, and strengthened the balance sheet.

• ICSID arbitration in Peru (GSP) resolved in favor, awarding $194M, though with lower-than-expected award; further claims ongoing.

• 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

• Recurring net profit (excluding one-offs) reached €310.1M in 2024, up 3.2% year-over-year and above guidance; including one-offs, net profit was -€299.3M due to Tallgrass and GSP impacts.

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

• Net debt reduced to €2.4B, with over 80% at fixed rates, financial cost at 2.6%, and liquidity of €3.25B.

• Total revenues for 2024 were €913.2M, down 0.7% year-over-year.

• Dividend of €1 per share maintained, with €378.9M paid in 2024 and €1.27B paid out between 2022 and 2024.

Outlook and guidance

• 2025 targets: after-tax profit of ~€265M, EBITDA of ~€670M, net debt stable at ~€2.4B, and funds over net debt ratio above 15%.

• Investment plan for 2025-2030 increased by 45% to €4.035B, with €3.125B allocated to hydrogen and 83% eligible under EU taxonomy.

• Dividend policy of €1 per share expected to continue through 2030, subject to regulatory and business assumptions.

• EBITDA forecast for 2030 is €875M, with hydrogen contributing €290M.

• EBITDA CAGR of ~2.5% (2024-2030) and ~9.5% (2026-2030) expected.