Iren (IRE) H2 2023 earnings summary

Executive summary

• FY 2023 EBITDA rose 13.5% to €1,196.9m; attributable net profit increased 12.8% to €254.8m, while revenue fell 17.5% to €6,490.4m.

• Results reflected Market BU recovery, stronger hydroelectric generation and contributions from SEI Toscana and AcquaEnna, despite inflation and volatile energy markets.

• Proposed dividend was €0.1188/share, up 8% YoY, with a 60% payout; net debt/EBITDA was 3.3x.

Financial highlights

• Revenue was €6,490.4m, down 17.5% YoY; lower commodity prices reduced energy revenue by more than €1,229m, while lower volumes cut it by ~€286m.

• EBITDA reached €1,196.9m, up 13.5%; EBIT was €464.6m, up 0.2%, and attributable net profit was €254.8m, up 12.8%.

• Adjusted EBIT increased 8.1% to €506m and adjusted group net profit rose 10.9% to €284m; financial charges increased to €89m from €70m.

• Operating cash flow was €680.3m, down 37.2%; free cash flow was negative €246.1m versus negative €115.6m in FY 2022.

• Technical capex was €867m, down 3.5% YoY from €898m; investments expanded the asset base, mainly in regulated businesses.

Outlook and guidance

• FY 2024 EBITDA guidance was €1,220m–€1,230m; gross investments excluding incentives were guided at ~€1B, with net debt/EBITDA at ~3.3x.

• FY 2024 economic results are expected to grow YoY, supported by improved distribution parameters, plant development, Siena Ambiente consolidation and customer-portfolio profitability.

• Energy generation is expected to face lower prices and higher renewable-generation volumes versus FY 2023; 2024 investment priorities include networks, waste facilities and renewables.