EDP’s Profit Grows in the 1st Quarter Driven by Power Grids in Brazil

Portuguese energy group EDP, whose main shareholder is state-owned China Three Gorges, earned EUR 354 million euros in the first quarter, 17% more than in the same period last year, with an improvement in electricity networks in Brazil.

EDP stated that gross operating profit (Ebitda) soared in Brazil by 51%, to EUR 252 million, driven by gains from the rotation of electricity transmission assets, after the group acquired 100% of EDP Brazil in August 2023, following a takeover bid, which has had a positive impact on its results.

The EBITDA of the electricity networks business in Portugal, Spain and Brazil grew by 24% to 474 million, thanks to the good performance of the South American country.

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Of the 17,405 gigawatt hours (GWh) of electricity EDP produced between January and March, 1% less than a year ago, 97% was generated from renewable sources.

Between January and March, EDP invested EUR 1.1 billion in renewable projects, with 4.6 GW under construction, and in the reinforcement of the electricity grids in Portugal, Spain and Brazil, which accounted for 97% of the total investment.

EDP Renováveis, whose main shareholder is EDP, has cut its planned investment until 2026, by three billion euros and reduced the average annual increase in installed capacity in 2025 and 2026 from four to three gigawatts (GW).

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During a conference call with analysts, the company announced a recalibration of the investment objectives for 2025-2026, due to the fall in energy prices in Europe, the maintenance of high interest rates and the impact on cash flow of the challenges in the supply of capacity in 2023.

EDP Renováveis will invest EUR 4 billion (in net terms) between 2024 and 2026, EUR 3 billion less than previously planned, with the aim of preserving a healthy balance sheet and investing in efficiency improvements, while gross investment will reach 12 EUR billion in the 2024-2026 period.

Also revised downward was the plan to increase installed capacity by 10 GW between 2024 and 2026, of which 70% (7GW) is already secured.

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On March 2 last year, when it presented its new strategic plan for the 2023-2026 period in London, the EDP group announced that it intended to invest EUR 25 billion by 2026, of which EUR 21 billion in renewables (85%), with a gross annual investment of EUR 6.2 billion.

EDP Renováveis updated its financial outlook until 2026, now expecting recurring EBITDA (earnings before interest, taxes, depreciation and amortization) to reach EUR 1.9 billion this year and 2.4 billion in 2026, translating into a compound annual growth rate (CAGR) of 9% between 2023 and 2026 (15% without accounting for asset rotation).

Recurring net income should stand at 400 million euros in 2024 and 700 million euros in 2026, while net debt should stand at EUR 7 billion at the end of this year and maintain this figure in 2026 (compared to EUR 6.7 billion  at the end of the first quarter of this year).

 

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