Bankinter | Net profit in line and positive surprise in cash generation. Guidance maintained. 40% of the year’s share buyback programme completed.
Key figures compared to market consensus: EBITDA €2.711 billion (up 12%) versus €2.719 billion estimated; Net profit €1.041 billion (up 30%) versus €1.046 billion estimated; Operating cash flow €2.400 billion (up 101%);
Net debt €9,900 million versus €9,294 million in December 2024. Maintains guidance for 2025, with EBITDA of between €5,400 million and €5,600 million and net profit of between €1,900 million and €2,000 million.
Bankinter analysis team’s view:
The first half results show solid cash generation and allow us to reiterate our guidance for the year. EBITDA (+12%) and net profit (+30%) are very much in line with consensus estimates. Positive factors in the results:
(i) Higher electricity production (up 1%). Higher production from hydro and combined cycles offset a decline in solar, wind and nuclear;
(ii) Good management of the gas business (€10/MWh versus €2/MWh in 1H14),
(iii) Suspension of the special tax on electricity companies of 1.2% of their revenues in Spain;
(iv) Maintenance of the electricity trading margin (€18/MWh);
(v) Lower average debt and lower cost of debt (3.4% versus 3.6% in 1H 2024). These factors have more than offset a slight reduction in the contribution from the network business (up 1%) and the lower nuclear margin affected by the increase in the Enresa tax.
Of particular note is the strong cash flow generation in the period (up 100% to €2.4 billion) thanks to the good performance of working capital. This has enabled financing of investments (€2 billion including the purchase of hydroelectric assets), dividends to shareholders (€600 million), share buybacks (€300 million) and a moderate increase in debt in the period (up €600 million).
Following these results, we maintain our Buy recommendation. Reasons: (i) Attractive valuation ratios. Based on our estimates, the P/E ratio stands at 13.3x in 2025; (ii) Solid financial structure, with a Net Debt/EBITDA ratio of around 2.0x; (iii) High dividend yield: 5.2% in 2025. Taking into account the dividends included in the 2027 Strategic Plan (€4 billion) and the €2 billion Share Buyback Plan until 2027, shareholders could receive a total of €6 billion in three years (20% of its market capitalisation); (iv) Progress in decarbonisation, as a result of investments in renewables and lower gas sales. Emission-free production will reach 90% in 2027 and (v) Business model with greater visibility, thanks to growth in the regulated network business and long-term contracts in generation and marketing.
The group will update its Strategic Plan in the first quarter of 2026. Lower-than-expected remuneration for the network business could lead to lower EBITDA and net profit targets for the group in 2027.
