ERG (ERG) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA for H1 2024 reached €281 million, up 4% year-over-year, driven by increased installed capacity, US expansion, and new projects in Italy and France, despite lower market prices.

• Adjusted net profit for H1 2024 was €106 million, down 7–8% YoY, impacted by higher depreciation, financial charges, and a higher tax rate after the cancellation of fiscal benefits in Italy.

• Major expansion into the US renewables market with a 317 MW wind and solar portfolio acquisition and partnership with Apex Clean Energy, plus significant new capacity in Italy and France.

• Issued a €500 million Green Bond, extending debt maturity and supporting the 2024–2026 Business Plan; Fitch confirmed BBB- rating, MSCI confirmed AAA ESG rating.

• ESG leadership recognized by MSCI, Corporate Knights, and CDP; obtained Gender Equality Certification in Italy.

Financial highlights

• H1 2024 adjusted revenue: €386 million (+4% YoY); H1 2024 adjusted EBITDA: €281 million (+4% YoY); H1 2024 adjusted net profit: €106 million (-7–8% YoY).

• Q2 2024 adjusted EBITDA: €116 million (+8–9% YoY); Q2 2024 adjusted net profit: €28 million (down from €36 million YoY).

• H1 2024 capital expenditure: €444 million, mainly for US and France acquisitions, Italian repowering, and new projects.

• Net financial indebtedness before IFRS 16 at June 30, 2024: €1,912 million (up from €1,445 million at Dec 31, 2023), reflecting investments, dividends, and buybacks.

• EBITDA margin remained strong at 73% in H1 2024.

Outlook and guidance

• 2024 guidance confirmed: full-year EBITDA €520–580 million, CapEx €550–600 million, year-end net financial position €1,750–1,850 million.

• Italian wind and solar EBITDA expected to rise due to incentives and new capacity; international wind EBITDA to decrease due to lower prices, partially offset by new US and French assets.

• Significant new capacity (600 MW, +18% vs. end-2023) to be fully contributing from 2025.

• Guidance unchanged despite a €35 million cash out for substitute tax to free up goodwill, expected to yield €13 million/year in tax savings over five years.