Renta 4 | Solid operational performance across all divisions, driving single-digit mid-range EBITDA growth, led by strong performance in energy management, thermal generation and renewables. By division: In Spain, as expected, lower demand and gas prices are offset by higher electricity prices.
The LAtAm networks, although affected by exchange rates, improve our outlook due to higher tariffs. The energy management business, despite low exposure to gas prices due to hedging, has shown solid growth driven by higher volumes. Thermal generation in Spain is benefiting from strong demand for combined-cycle plants in the auxiliary services market, with the international segment affected mainly by exchange rates despite sound operations. Renewables responded positively to increased installed capacity and higher production, which more than offset lower prices. In the Trading division, pressure on electricity margins continues due to the effects of ancillary services, and although an improvement in gas margins is evident, this has also been affected by lower trading volumes. This strong operational performance has led to an improvement in net profit above our forecast, in line with the consensus.
Cash flow, supported by the performance of results, exceeded our forecast, bringing net debt to levels below our expectations.
We do not expect a significant impact on the share price. We will see whether the flexibility of its operations allows it to capitalise positively in the coming months on the effects of the volatility currently being seen in the energy markets due to the conflict in the Middle East. We reiterate our ‘overweight’ rating with a target price of €30.
