Hera (HER) H2 2023 earnings summary

Executive summary

• FY2023 adjusted EBITDA rose 15.4% to €1,494.7m; adjusted profit attributable to shareholders increased 16.5% to €375.2m, with strategic-plan targets exceeded three years early.

• Net debt fell 9.9% to €3,827.7m, taking net debt/adjusted EBITDA to 2.56x; the Board proposed a dividend of €0.14 per share, up 12%.

Financial highlights

• Revenue fell 25.8% YoY to €14,897.3m, mainly due to normalized energy prices and gas volumes, lower trading and mild weather.

• Adjusted EBITDA was €1,494.7m, up 15.4%; adjusted EBIT rose 18% to €741.0m.

• Adjusted net profit was €417.0m, up 12%; adjusted profit attributable to shareholders grew 16.5% to €375.2m.

• Operating investments, including capital grants, increased 15.0% to €815.8m; regulated asset base rose €144m to €3.33bn.

Outlook and guidance

• The January 2024 business plan targets shared-value EBITDA above €1bn in 2027, or 64% of total EBITDA, versus €776.0m and 52% in 2023.

• Dividend policy targets €0.16 per share in 2027; the proposed FY2023 dividend of €0.14 per share is payable from 26 June 2024, subject to approval.

• Gradual electricity-market liberalization from 1 July 2024 is expected to add more than 1m domestic customers following the award of seven tender lots.

• Hydrogen Valley plants in Modena and Trieste are under construction, with planned annual production of ~800 tonnes and completion by 2026.