ERG (ERG) Q1 2025 earnings summary

Executive summary

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

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

• Strategic focus remained on value over volume, with selective M&A, organic growth, and long-term PPAs and CFDs to stabilize revenues; three PPAs signed in Italy and UK, and 40 MW awarded in German auctions.

• Fitch confirmed BBB- rating with stable outlook; AGM approved EUR 1 per share dividend and renewed share buyback authorization.

Financial highlights

• Adjusted EBITDA was EUR 145 million, down from EUR 165 million in Q1 2024; adjusted net profit was EUR 49 million, down from EUR 78 million.

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

• Capital expenditure in Q1 2025 totaled EUR 115 million, mainly for UK wind acquisition and new wind, solar, and storage projects in several countries.

• Net financial debt/indebtedness before IFRS 16 increased to EUR 1,854 million (EUR 1,793 million at 2024 year-end), mainly due to investments and working capital dynamics.

• Cash flow from operations was EUR 85 million, down from EUR 138 million in Q1 2024.

Outlook and guidance

• 2025 EBITDA guidance confirmed at EUR 540–600 million, factoring in weak Q1 wind conditions; upper range requires above-average wind in H2.

• CapEx guidance for 2025 is EUR 190–240 million; year-end net financial position expected at EUR 1,850–1,950 million.

• Only one FERIX auction expected in 2025, with participation in three projects (~150 MW); further auctions likely in 2026.

• 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.