Societatea Energetica Electrica (EL) Q2 2024 earnings summary

Executive summary

• EBITDA increased by 6% year-over-year to RON 614.7 mn in H1 2024, driven by strong distribution segment performance and higher regulated tariffs.

• Net profit declined 28.3% to RON 102.1 mn, mainly due to unfavorable supply market dynamics and higher financing costs.

• Distribution revenues increased 15% year-over-year, supported by tariff increases and higher distributed volumes.

• The company is expanding into renewables, targeting 1 GW by 2030, and advancing storage and green tech joint ventures.

• Electrica is Romania's leading electricity distributor and supplier, serving ~3.93 million users and 3.5 million consumption points, with a 16.18% market share as of April 2024.

Financial highlights

• H1 2024 consolidated revenues reached RON 4.2 bn, with EBITDA at RON 615 mn (up RON 35 mn year-over-year), and net profit at RON 102 mn (down RON 40 mn year-over-year).

• EBITDA margin improved to 14.7% in H1 2024 from 12.1% in H1 2023.

• Net debt stood at RON 4.7 billion at H1 2024, with RON 1.3 billion in state subsidy repayments collected in July.

• Share price increased over 40% YTD, outperforming the BET-TR index.

• Group liquidity as of June 2024 was RON 1,076 mn, with cash at RON 478 mn.

Outlook and guidance

• Awaiting final NRA methodology for the fifth regulatory period, which will inform the next seven-year strategy.

• Management remains focused on stabilizing results and generating sustainable long-term growth.

• Expecting positive impact from new initiatives and ongoing cost management in coming months.

• Strategic objectives emphasize diversification in renewables, digitalization, ESG, and operational efficiency.

• Regulatory changes, including tariff adjustments and evolving support schemes, are expected to impact both distribution and supply segments through 2025.