Si prefieres ver la web siempre en español, haz click aquí.
José Bogas (left), Chief Executive Officer, and Marco Palermo (right), General Manager of Administration, Finance and Control
Gross operating profit (EBITDA) reached €2.413 billion, a slight decrease of 2.5%.
Endesa reaches the midpoint of 2024 with results that allow it to reaffirm its financial targets for the year: ordinary net profit of between €1.6 and €1.7 billion and gross operating profit (EBITDA) of between €4.9 and €5.2 billion.
As of June, Endesa's net profit amounted to €800 million, a 9% decrease compared to the same period in 2023.
EBITDA fell slightly by 2.5% to 2.413 billion, stabilising its performance since the start of the year.
Cash generation reached €1.0 billion in the second quarter of the year, showing a solid recovery from the previous quarter, which was impacted by the Qatar arbitration decision.
Since June 2023, Endesa has increased its renewable capacity by 800 megawatts (MW), bringing the total to 10,100 MW. Including nuclear power, Endesa now generates 90% of its peninsular electrical production free from CO2 emissions, an increase of eight percentage points compared to the end of the first half of the previous year.
Following the closure of the As Pontes power station at the end of 2023, Endesa's generation fleet in the Iberian Peninsula will be coal-free. The demolition contract for the plant has been awarded and will be carried out over the next four years.
The company emphasises the need to enhance and update the regulation of distribution grids. This includes increasing the remuneration rate to align with developments in other European countries that have concluded their regulatory reviews, positioning the rate between 7.3% and 8.7%. It estimates that 30GW of power was rejected in Spain between 2020 and 2023 due to insufficient grid capacity, and it calls for seizing this opportunity for reindustrialisation and growth.
It also requests a regulation to support investment in new power generation groups in the Canary Islands due to the obsolescence of the existing fleet.
In addition, the company reiterates that the 30% increase in the Enresa tax, which is already in effect to fund the decommissioning of the power stations, does not align with the 2019 nuclear protocol and jeopardises the economic viability of the plants.
Endesa anticipates the imminent closure of the sale of a minority stake in its portfolio of operational solar projects in Spain (2,000 megawatts).
Endesa's results at the end of the first half of the year have enabled it to reaffirm to the market that it is on track to meet its main financial targets for the full year 2024. These goals include achieving a gross operating profit (EBITDA) of between €4.9 and €5.2 billion and a net ordinary profit of €1.6-1.7 billion.
Specifically, the company reported an EBITDA of €2.413 billion, marking a modest decline of 2.5% from the previous year. This was due to the normalisation of the conventional thermal generation business, which was offset by growth in renewables, marketing, and grids. Net income stood at EUR 800 million, down by 9%, normalising its trend following a first quarter impacted by the recording of the extraordinary 1.2% tax on revenues. Ordinary net income (considered for the dividend distribution) decreased by 12% to €772 million. Cash flow also recovered robustly, reaching €1.192 billion in the first half of the year, up from €1.025 billion in the first three months.
All this occurs within a context where wholesale prices have fallen to an average of €39/MWh, representing a 56% decrease from the €88 recorded in the same period of 2023. This development mirrors that of the TTF gas index, which registered an average price of €29.5/MWh, representing a 34% decrease.
Installed capacity in renewable energy sources in the Iberian Peninsula has increased by 9% since the end of the first half of 2023, reaching 10,100 MW. As a result, and due to the significant annual increase in hydroelectric generation, emission-free production on the peninsula (including nuclear) accounted for 90% of the total in the first half of the year, an increase of eight percentage points from the previous year.
Capital expenditure in the first half amounted to €924 million, a 16% decrease, following the policy of more selective and efficient scrutiny on where to allocate the company's capital. 70% was allocated to grids (44%) and renewables (22%).
Furthermore, Endesa anticipates the imminent closure of the sale of a minority stake in its portfolio of operational solar projects in Spain (2,000 megawatts).
Regulatory status
During the presentation of results, CEO José Bogas provided a update the regulatory status of three major challenges confronting both the energy sector and Endesa as a key player within it. Firstly, he emphasised the need to reform and enhance the regulation of the distribution grid to make it conducive to investment, thereby capitalising on the opportunity for reindustrialisation and growth offered by renewable and competitive energy. Currently, the grid is not adequately scaled to meet demand requirements, and as a result, between 2020 and 2023, up to 30GW of new capacity has been rejected due to insufficient grid capacity throughout Spain.
To boost grid investment through to 2030, it must be adequately compensated, and Endesa supports increasing the financial remuneration rate in alignment with developments in other European countries where the regulatory remuneration review for this sector has already concluded. Implementing the parameters used in other European countries would set the rate in Spain within a range of 7.3% to 8.7%.
Secondly, Bogas emphasised the Canary Islands to point out that the thermal generation fleet is outdated and that the existing regulations do not adequately support investment requirements. In this regard, he mentioned the two tenders initiated by the government: the emergency tender, which resulted in the award of 155MW from the 250MW solicited, and the competitive bidding process to fill an additional 1,361MW.
Thirdly and finally, regarding the 30% increase in the Enresa rate to €10.36/MWh, effective since 1st July, the company has reiterated stance analysis that this hike is not consistent with the 2019 nuclear protocol and jeopardises the economic viability of the nuclear power plants.
José Bogas, Chief Executive Officer
Commercial developments
Regarding the company's debt, net financial debt increased slightly to €10.8 billion, whereas gross debt decreased by 1% to €13.6 billion. Endesa concluded June with 6.7 million customers in the deregulated market, focusing its strategy on enhancing customer loyalty, particularly among its most valuable customers. The company has successfully supplied 81% of the electricity it sells at a fixed price to various customer types using its own emission-free production.
The deregulated electrical unit margin remained stable compared to the first half of 2023 at €58/MWh, and it is anticipated to average €54 for the year, slightly above the previous year's figure. The company has also already sold in advance 98% of this year's production, 94% of the 2025 production, and 60% of the 2026 production, which allows it to shield itself from market volatility.
In the gas business, the reduced use of combined cycle systems and the general decline in consumption have decreased the traded volume by 20% to 36 TWh, which 20% lower than in 2023. The margin has recovered to approximately €2/MWh, close to the average estimated for the whole year.
José Bogas, CEO of Endesa, has highlighted the first half of the year: "Our results put us on track to achieve our targets for 2024. Our integrated strategy supports effective management in a volatile environment. We are also optimising our customer portfolio to enhance the loyalty of our most valuable customers, while identifying a unique regulatory opportunity to support the energy transition objectives in Spain."
Financial performance
Regarding the development of the company's debt, the net financial debt increased slightly to €10.8 billion, while the gross debt decreased by 1% to €13.6 billion. The cost of liabilities was recorded at 3.6%, up from 3.2% at the end of the previous year. The leverage ratio (net financial debt relative to EBITDA over the last 12 months) remained essentially stable: 2.9 times by the end of June, up from 2.8 times at the close of 2023.
About Endesa
Endesa is a leading electric company in Spain and the second largest in Portugal. Additionally, it is the second largest gas operator in the Spanish market. It operates an integrated business that comprises electricity generation, distribution, and commercialisation. As one of the main operators of charging points in Spain, Endesa also offers electric mobility services, along with other value-added services aimed at electrifying energy uses at homes, businesses, industries, and public administrations. Endesa is firmly committed to the United Nations' SDGs and therefore, actively promotes the development of renewable energies through Enel Green Power España, grid digitisation through e-distribution, and corporate social responsibility. Fundación Endesa is also active in this area. Our team comprises around 9,000 employees. Endesa is part of Enel, the largest electricity group in Europe.