ERG (ERG) Q1 2025 earnings summary

Executive summary

• Q1 2025 results were significantly impacted by exceptionally weak wind conditions across Europe, with wind power output in Italy down 24%, leading to a 12% year-over-year decline in EBITDA to EUR 145 million and a 37% drop in adjusted net profit to EUR 49 million.

• New capacity additions, including 71 MW from M&A, repowering, and greenfield projects in Europe and the US, partially offset lower production.

• Strategic focus remained on value over volume, with growth through selective M&A, organic development, and long-term contracts to stabilize revenues.

• Fitch confirmed long-term rating at BBB- with stable outlook; EUR 1 per share dividend approved and share buyback program completed.

• Three long-term PPAs signed in Italy and UK, covering about 300 GWh/year; 40 MW in Germany awarded 20-year CFD tariffs.

Financial highlights

• Adjusted EBITDA for Q1 2025 was EUR 145 million, down from EUR 165 million in Q1 2024, mainly due to poor wind conditions.

• Adjusted net profit was EUR 49 million, down 37% year-over-year, impacted by lower EBITDA, higher depreciation, and increased financial charges.

• Net financial debt stood at EUR 1.854 billion as of March 31, 2025, up from EUR 1.793 billion at year-end 2024, driven by investments and working capital dynamics.

• Capital expenditure in Q1 2025 totaled EUR 115 million, mainly for UK wind acquisition and organic developments in several countries.

• Adjusted revenue for Q1 2025 was EUR 201 million, down from EUR 218 million year-over-year.

Outlook and guidance

• 2025 EBITDA guidance is confirmed at EUR 540–600 million, with the midpoint achievable if wind conditions normalize; upper range requires above-average wind in H2.

• CapEx guidance remains EUR 190–240 million, and year-end net financial position is expected between EUR 1.85–1.95 billion.

• April and early May continued to see below-average wind, but management remains confident in meeting guidance midpoint if conditions improve.

• Gross operating profit for Wind & Solar in Italy expected to increase slightly in 2025, with a significant increase abroad due to new capacity and acquisitions.