Snam (SRG) Q3 2024 earnings summary

Executive summary

• Adjusted EBITDA rose 12.2% year-over-year to €2,089 million, and adjusted net income increased 5.7% to €996 million, reflecting strong growth in the first nine months of 2024.

• Investments surged 46.1% to €1.8 billion, mainly in gas infrastructure and energy transition projects, with 50% aligned to SDGs and 30% to EU Taxonomy standards.

• Interim dividend for 2024 set at €0.1162 per share, up 3% from 2023, to be paid January 22, 2025.

• Strategic acquisitions include Edison Stoccaggio for €560 million and increased stake in Adriatic LNG, both expected to close by early 2025.

• First Transition Plan published, targeting Net Zero by 2050 and a >20% reduction in Scope 1 & 2 emissions by 2024 vs 2022.

Financial highlights

• Total revenues fell 7.4% to €2,651 million, mainly due to a 70% drop in energy transition business revenues, partially offset by a 14.2% rise in gas infrastructure revenues.

• Adjusted EBITDA rose to €2,089 million (+12.2% year-over-year), and adjusted EBIT increased to €1,340 million (+14.4%).

• Adjusted net income was €996 million (+5.7% year-over-year); reported net profit was €952 million (-9.1% year-over-year) due to non-recurring items.

• Net financial debt increased by €664 million to €15,934 million, mainly due to investments and dividend payout, partially offset by the hybrid instrument issuance.

• Cash flow from operations was €1,249 million, with negative free cash flow of €601 million after investments.

Outlook and guidance

• FY 2024 guidance confirmed: adjusted EBITDA above €2.75 billion, adjusted net profit around €1.23 billion, investments of €3 billion, and net debt target revised to €16.5 billion.

• CapEx plan for 2024 expected to reach €3 billion, mainly for gas infrastructure projects.

• Output-based incentives for 2024 expected at around €100 million, with some growth anticipated in 2025.

• Gas demand in Italy projected at 62–63 BCM for 2024, with a slight decrease expected due to higher renewable generation.

• Scope 1 & 2 emissions expected to be reduced by 20% from 2022 baseline by year-end.