Serena Energia (SRNA3) Q4 2024 earnings summary

Executive summary

• 2024 EBITDA reached BRL 1.95 billion, up 19% YoY, with production rising 18% and net income at BRL 86.3 million, driven by operational efficiency and new assets.

• Net debt/EBITDA improved to 4.3x–4.4x from a 6.8x peak in 2023, reflecting strong deleveraging and cash generation.

• 90% of production is pre-sold for the next decade via inflation-linked offtake agreements, ensuring predictable cash flows.

• Major asset swap with EDFR completed, consolidating 100% of Ventos da Bahia and exiting Pirapora.

• No new investments in 2024; focus shifted to capital recycling, asset optimization, and capital discipline.

Financial highlights

• Commercialization margins rose to BRL 322.7/MWh, with O&M savings offsetting BRL 86 million of curtailment impact.

• Net revenues grew 36% YoY to BRL 4.13 billion; adjusted EBITDA margin at 73.6% for 2024.

• Cash earnings for 2024 reached BRL 767 million, with a 22% earnings yield.

• Curtailment and resource constraints negatively impacted EBITDA by BRL 180 million.

• Transactions at the asset level generated an NPV of BRL 380 million, with BRL 180 million impacting 2024 EBITDA.

Outlook and guidance

• 2025 EBITDA is expected to be in line with or higher than 2024, with a conservative approach to Northeast resources and stable Texas prices.

• Guidance practice discontinued; future performance will be tracked through detailed analysis and quarterly production reports.

• Capital structure policy targets adjusted net debt/EBITDA between 3.375x and 4.125x by end-2025, with temporary increases for new investments.

• Focus on mitigating curtailment, increasing local loads, and securing long-term offtake agreements for Goodnight 1 & 2.

• Expectation of mean reversion in resource incidence and reduced DG connection delays in 2025.