Bankinter | First quarter 2025 results beat estimates thanks to the network division. Maintains 2025 guidance (single-digit growth) excluding the positive impact of past cost recognition in the US. Growth would reach double digits with this impact. Key figures compared with consensus: EBITDA excluding capital gains €4,643 million (+12%) versus €4,491 million est.; NAV excluding capital gains €2,004 million (+26%) versus €1,707 million est.; Funds generated from operations €3,502 million (+11%); Net debt €55 700 million versus €51,672 million in December 2024.
Analysis team’s opinion: Good news in terms of results and also in the guidance for the year. The networks division has been the main driver of the group’s results and we expect a positive market reaction. Positive factors in results: (i) Growth in the regulated network asset base (+14%), tariff revisions and recognition of costs from previous years in the US; (ii) New capacity in renewables (+5%) and higher hydroelectric generation; (iii) Lower debt cost (4.9% versus 5.0% in 1Q24) and positive impact on derivatives. These factors have more than offset a normalisation of the trading margin, a lower wind load factor in the United Kingdom and the weakness of the dollar. The management team maintains its guidance for 2025, which implies adjusted NAV growth of between the mid-single digits and high single digits (€6 billion in the mid-range), as the impact of potential tariffs is minimal due to good supply chain management (> 80% of purchases awarded to local suppliers). This guidance does not include the positive impact of the recognition of past costs in the US. Guidance would improve, reaching double-digit growth in net profit, with this impact. Following these results, we maintain our Buy recommendation. Reasons: (i) Strategic positioning The group is a clear winner in the process of greater electrification and rapid decarbonisation facing the new energy model. Its positioning in networks and renewables, geographical diversification and solid financial structure enable it to capture opportunities in the new energy transition scenario. (ii) Growth. The 2026 Strategic Plan envisages mid/high single-digit NPA growth in the 2023-2026 period, with a high probability of an upward revision in the next update in September. (iii) Shift towards a more visible and less volatile business profile. On the one hand, most future investments are directed towards the network business, which is subject to predictable regulatory frameworks. On the other hand, in the generation business, long-term contracts (PPAs) are increasing so as not to depend on market volatility; (iv) Attractive assessment ratios: 2025 PER of 17.0x and 4.3% dividend yield.
