CNTEE Transelectrica (TEL) Q2 2024 earnings summary

Executive summary

• Operational revenues rose 113% year-over-year to 4,685 mil Lei in H1 2024, driven by higher tariffs, increased volumes, and exceptional non-recurring income from a legal settlement.

• Net income increased 63.2% year-over-year to 264 mil Lei, primarily due to higher EBITDA and a one-time gain from a lawsuit.

• Investments in tangible and intangible assets rose 37.5% year-over-year, supporting grid modernization and capacity expansion.

• Major infrastructure projects were completed, including the 400 kV Porțile de Fier–Reșița line and Medgidia Sud substation upgrades.

• The company distributed dividends of RON 0.28/share from retained earnings, with payment starting June 27, 2024.

Financial highlights

• EBITDA grew 26.8% year-over-year to 489 mil Lei, reflecting improved operational performance and non-recurring income.

• EBIT rose 50.8% year-over-year to 267 mil Lei.

• Operational costs increased 128.9% year-over-year to 4,246 mil Lei, mainly due to higher grid losses, maintenance, and personnel expenses.

• Cash and cash equivalents: RON 527 million at period end, up 9% from H1 2023.

• Investments: RON 256 million in tangible/intangible assets (+37.5% year-over-year).

Outlook and guidance

• Focus on grid digitization, renewable integration, and interconnection capacity expansion.

• Regulatory changes and tariff adjustments expected in H2 2024, with potential further system service tariff updates.

• Continued investment in SMART GRID and resilience, with major projects planned through 2027.

• Ongoing monitoring of grant funding opportunities and collaboration with EU TSOs for innovative projects.

• Domestic electricity demand grew 1.9% year-over-year, while domestic production fell 8.4% year-over-year, indicating ongoing market volatility.