Terna (TRN) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw continued execution of the updated 2024-2028 industrial plan, with €17.7bn investments, a €1.2bn increase, focused on grid modernization and energy transition.

• S&P upgraded the rating to A- (stable) in April, Moody’s confirmed Baa2; €750m green bond issued and €1.8bn ESG-linked facility signed.

• 12 new grid development projects authorized in Q1 2025, with over €23bn investment planned over 10 years.

• Major infrastructure projects advanced, including completion of the first Tyrrhenian Link submarine cable and progress on Sa.Co.I.3.

• Net debt decreased to €11.1bn as of March 2025, reflecting strong financial management.

Financial highlights

• Q1 2025 revenues rose 5.1% year-over-year to €902m; EBITDA up 3.8% to €652m; net income reached €275m, up 3%.

• CapEx totaled €562m, a 16.4% increase year-over-year, with €527m in regulated activities.

• Net debt at March 2025 was €11.1bn, slightly below 2024 year-end.

• Operating cash flow of €483m covered 86% of CapEx; free cash flow to equity improved to €48m from -€84m in Q1 2024.

• Operating costs increased 8.5% year-over-year, mainly due to higher activity volumes.

Outlook and guidance

• All targets from the March 2025 industrial plan update confirmed, with 2025 revenue expected at €4.03bn, EBITDA at €2.70bn, and net profit at €1.08bn.

• CapEx target for 2025 set at approximately €3.4bn, focusing on grid digitalisation, resilience, and renewables integration.

• Expectation to book over €50m in out-of-base incentives (OBIs) for 2025; €550m cumulative OBIs expected for 2025-2028.

• No change expected in regulatory WACC for 2026, remaining at 5.5%.

• Macroeconomic risks include weak global growth, trade tensions, and geopolitical instability.