Snam (SRG) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA rose 16.1% year-over-year to €1,417m, and adjusted net income increased 11.3% to €691m, driven by regulated business and WACC uplift.

• Investments surged 60% to €1,159m, mainly in gas infrastructure projects like Ravenna LNG and Adriatic Backbone.

• Net debt increased to €16.4bn with a 2.5% average net cost of debt.

• Edison Stoccaggio acquisition for €560m signed, expected to be net income accretive from 2025 and consolidating storage market share.

• Progress on energy transition projects, including H2 and CCS market tests, and strong sustainability performance with 32% of capex taxonomy-aligned.

Financial highlights

• Revenues declined 6.1% year-over-year to €1,799m, mainly due to lower energy transition business revenues.

• Adjusted EBITDA margin improved to 78.8% from 63.7% year-over-year.

• Adjusted EBIT up 19.8% to €918m; reported net profit down 9.2% to €634m due to one-off charges.

• Net financial debt increased by €1.08bn since December 2023, reaching €16.35bn, mainly due to investments and dividend payments.

• Cash flow from operations was €1.05bn, nearly covering net investments of €1.12bn, resulting in negative free cash flow of €68m.

Outlook and guidance

• FY 2024 guidance confirmed: €3bn investments, adjusted EBITDA above €2.75bn, adjusted net profit ~€1.023bn, and net debt expected at €17.5bn.

• High visibility on results due to approved regulation, tariffs, and investments.

• Direct emissions expected to fall 17% from 2022 baseline by year-end.

• Financing needs for 2024 are almost covered; average cost of net debt expected to remain at 2.5%.