Redeia (REE) Q2 2024 earnings summary

Executive summary

• Achieved record TSO investment in H1 2024, with over EUR 421 million invested, up 19% year-over-year, and total investments reaching EUR 456.8 million, mainly in the Spanish regulated business.

• Renewables accounted for about 60% of Spain's generation mix, with 78.4% of installed capacity emission-free in H1 2024.

• The end of regulatory useful life for pre-1998 assets led to a EUR 260 million annual revenue impact, but underlying business performance grew on a like-for-like basis.

• Diversification businesses, including international transmission, satellite, and fiber optic, contributed positively to EBITDA.

Financial highlights

• Revenues declined 10.9%–11.5% year-over-year due to the pre-98 asset effect; excluding this, revenues grew 1.6%.

• EBITDA fell 13.7%–13.8% year-over-year, but would have grown 3.5% excluding the pre-98 asset impact.

• Net profit was EUR 269 million, down 24% year-over-year; adjusted for pre-98 assets, net profit grew 5.2%.

• Operating cash flow after taxes reached EUR 693 million, up 9.6% year-over-year, supported by a EUR 193 million tax refund.

• Final dividend of EUR 0.7273 per share paid for 2023, totaling EUR 1 per share for the year.

Outlook and guidance

• 2024 guidance confirmed: estimated EBITDA above EUR 1.3 billion and net profit around EUR 500 million.

• Over EUR 1 billion per year in TSO investment expected to continue for several years, with a 2025 target of EUR 5 billion.

• Financial targets for 2021–2025 reaffirmed: EBITDA margin >70%, FFO/Net Debt >15%, Net Debt/EBITDA <5x, and EUR 1/share dividend floor.

• Full-year contributions expected from Amazonas Nexus and the Unico Programme in the satellite business.