Renta 4 | Results exceeding our expectations and guidance, as a result of the strong performance of the marketing and customer business, where better margins, gas retail, higher hydroelectric production against lower wind and solar production, and the strong performance of combined cycles have offset the effects of prices on the short position (although they are performing better than our expectations). The distribution business reflects the re-settlements of previous years and offsets the extraordinary gains of 2024. These effects, together with stable financial results due to lower gross debt and lower costs, have led to a 22% increase in net profit.
Net debt, which includes the purchase of Acciona’s hydro assets, is performing slightly better than expected thanks to a more favourable cash flow trend, allowing operating cash flow to be 8% higher than in 2024.
The company has updated its strategic plan until 2028, which broadly shows a significant increase in the network business (already reflected yesterday in the share price following the publication of Enel’s strategic plan; we will see if the share price continues to rise today), although there is a slight reduction compared to the previous plan in the investment plan for renewables, where they want to commission an additional 2 GW. The guidance is above our expectations and those of the consensus. They are maintaining their dividend policy unchanged at a payout of 70%, which will lead to estimated dividend growth of 4% per annum until 2028. The €2 billion share buyback plan remains unchanged (€600 million already executed, €500 million approved, and the remaining €900 million pending approval).
It is possible that the good figures for 2025 and the 2026-2028 plan, with better-than-expected guidance, will be positively reflected in the share price, although this was already partly reflected yesterday. We are awaiting the conference to learn more about the plan and offer further details, as well as to review our figures and valuation. For the time being, we reiterate our Overweight rating and target price of €34.70 per share.
