Societatea Energetica Electrica (EL) Q4 2024 earnings summary

Executive summary

• 2024 consolidated net profit was RON 389.6 million, 34.6% above budget but down 49.5% year-over-year, reflecting strong performance despite a complex regulatory and economic environment.

• Operational revenues were RON 10.68 billion, up 1.5% over budget but down 18-20% year-over-year; EBITDA was RON 1.36 billion, a 3.5% increase over projections but down 20.6% year-over-year.

• Distribution segment saw EBITDA growth due to higher tariffs and distributed volumes, while supply segment EBITDA declined sharply on lower sales and subsidy income.

• Major investments in renewables and grid modernization advanced, with RON 808 million invested in distribution, achieving 112.5% of the planned target.

• Fitch Ratings upgraded the outlook from negative to stable, supporting future green bond issuance.

Financial highlights

• Revenues: RON 8,995 million in 2024, down from RON 9,817 million in 2023; EBITDA: RON 1,360 million, down 20.6% year-over-year; net profit: RON 389.6 million, down 49.5% year-over-year.

• Distribution segment revenues rose 6.8% year-over-year, driven by higher tariffs and increased distributed volumes (+4.2%).

• Supply segment revenues fell 13.1% due to lower supplied volumes and regulatory adjustments.

• Net debt at year-end was RON 4.4 billion, reflecting ongoing support scheme financing and production portfolio investments.

• Dividend distribution increased by 50% over the previous year, with a proposed gross dividend of RON 0.1767/share and nearly all standalone net profit distributed.

Outlook and guidance

• Cautious optimism for 2025, with a focus on exceeding investment objectives and sustainable growth.

• Support scheme for energy expected to end mid-2025, after which indebtedness should decrease.

• Targeting 1 GW renewable production and 900 MW storage by 2030, with an investment plan of at least RON 3.7 billion over the next five years.

• Regulatory changes to support smart grid, energy storage, and digitalization initiatives.