Hera (HER) Q3 2024 earnings summary

Executive summary

• Nine-month results show double-digit net profit growth and strong operational performance, with organic EBITDA up €117 million and adjusted EBITDA rising 3.1% to €1,037.6 million, despite a 25.3% revenue drop due to lower energy prices and reduced incentivised activities.

• Net profit attributable to shareholders rose 20.1% to €282.9 million, driven by operational improvements, reduced financial expenses, and effective multi-business strategy.

• Total shareholder return reached 24% for the period, exceeding business plan targets and supported by visible EPS growth.

• Growth in operating results was driven by increased energy sales, waste management volumes, and all regulated activities.

• Customer base expanded to over 7.5 million citizens with at least one service provided.

Financial highlights

• Revenues declined 25.3% year-over-year to €8,187.4 million, mainly due to lower energy commodity prices and reduced incentivised activities.

• Adjusted EBITDA rose 3.1% to €1,037.6 million, with margin improving to 12.7%.

• Adjusted EBIT increased 3.5% to €522.5 million; adjusted net profit up 20.1% to €282.9 million.

• Operating cash flow reached €774 million, up €110 million year-over-year.

• Gross operating capex totaled €561.1 million, up 9.2% year-over-year, focused on plant, network, and infrastructure development.

Outlook and guidance

• Business Plan targets confirmed, with continued focus on sustainable growth, infrastructure development, and green transition.

• Management expects net working capital absorption to stabilize as commercial growth normalizes.

• Regulatory changes and new tariffs to support future revenue streams, especially in regulated businesses.

• Financial flexibility and solid net debt/EBITDA ratio position the Group for future external growth opportunities.

• Provisions expected to remain low, barring significant energy price spikes.