VERBUND (VER) H1 2024 earnings summary

Executive summary

• Revenue and EBITDA declined sharply year-over-year due to lower wholesale electricity prices, despite strong increases in hydro, wind, and PV generation volumes.

• Lower achieved contract prices for hydro and renewables, along with reduced storage output, impacted earnings.

• Sales segment improved due to lower procurement costs, but grid and flexibility products contributed less.

• Impairment losses totaling about €195 million were recognized for Gas Connect Austria and CCGT Mellach due to regulatory changes and lower margins.

• Major investments continued in hydropower, wind, solar, grid infrastructure, and green hydrogen projects.

Financial highlights

• EBITDA fell 21.9% year-over-year to €1,762.4 million; reported group result dropped 29.3% to €910.1 million; adjusted group result down 22.9% to €1,008.5 million.

• Operating cash flow declined to €1,850.2 million; free cash flow after dividends was negative €602.4 million.

• Net debt rose 41.9% to €2,496.0 million; gearing increased to 24.4% from 15.7%.

• Depreciation increased 13.4% to €285 million; additions to tangible assets rose to €444.6 million.

• Earnings per share: €2.62 (HY 2023: €3.71).

Outlook and guidance

• 2024 EBITDA expected between €3,000–3,300 million; group result between €1,500–1,650 million, assuming average hydro, wind, and PV generation.

• Payout ratio set at 45–55% of adjusted group result (€1,600–1,750 million).

• Sensitivities: ±1% hydro generation impacts group result by ±€6.9 million; ±1% wind/PV by €0.6 million; ±€1/MWh in wholesale price by ±€2.1 million.

• 88% of planned hydropower generation for 2024 hedged at €123.0/MWh.