EDP (EDP) Q3 2024 earnings summary

Executive summary

• Net profit rose 14% year-over-year to €1,083m, driven by strong electricity networks in Brazil and hydro recovery in Iberia, with renewables accounting for 97% of total generation and an 18% increase in renewables output.

• Recurring net profit increased 7% year-over-year to €1,095m, with the company on track to meet or exceed its €1.3bn net income target for 2024.

• Decarbonization advanced significantly, with coal revenues nearly eliminated, fossil fuel revenues below 2%, and CO2 emissions intensity down 73% year-over-year.

• Operational efficiency improved, with OPEX down 2% year-over-year and OPEX to gross profit at 26%.

• 96% of €3.4bn total investment was allocated to renewables and electricity networks in Portugal, Spain, and Brazil.

Financial highlights

• Recurring EBITDA increased 1% year-over-year to €3.9bn, with underlying performance offsetting lower asset rotation gains.

• Electricity networks contributed 33% of total EBITDA, up 14% year-over-year, driven by strong results in Brazil and Iberia.

• Net debt stood at €17.3bn, supported by €1.6bn organic cash flow and €1.1bn asset rotation proceeds, with Debt/EBITDA at 3.6x and FFO/Net Debt at 20%.

• High financial liquidity at €8bn, with over €6bn in available credit lines, covering refinancing needs until 2027.

• Gross profit rose 2% to €5.26bn, while revenue for 9M24 was €10.8bn, down 12% year-over-year.

Outlook and guidance

• Confident in delivering €1.3bn net income for 2024, with upside risk and recurring EBITDA guidance of ~€5bn.

• Comfortable with 2025 and 2026 consensus, maintaining long-term guidance and expecting continued growth in networks and renewables.

• Asset rotation gains expected to remain under pressure in 2024–2025, with recovery anticipated from 2026 as higher PPA prices materialize.

• Net debt by year-end will depend on timing of tax equity proceeds and asset rotation deals, some of which may close in 2025.