Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EDP Renovaveis SA (EDRVF, Financial) achieved a record number of megawatt installations, with capacity additions increasing by three gigawatts year on year.
- The company observed a 5% increase in generation during the first nine months, driven by improved wind conditions and new additions in North America.
- Significant efficiency improvements were noted, with core OpEx per average megawatt in operation declining by 7% year on year.
- EDP Renovaveis SA (EDRVF) successfully closed four asset rotation transactions, generating EUR1.5 billion in proceeds.
- The company has secured a diverse and mature pipeline in the US, with significant local manufacturing, reducing exposure to potential import tariffs.
Negative Points
- Generation was lower than expected due to deviations in wind and solar resources, particularly in the third quarter.
- Asset rotation gains were EUR0.2 billion lower year on year, impacting overall financial performance.
- The company's net profit decreased to EUR210 million, compared to EUR467 million in the same period last year.
- There were delays in commissioning new capacity, with some projects moving into the fourth quarter of 2024.
- The Colombian projects faced significant challenges, with little progress in discussions with the government regarding economic conditions.
Q & A Highlights
Q: Could you provide guidance on the full-year generation and EBITDA, considering the lower generation forecast and higher average selling prices?
A: We anticipate generation between 35 and 36 terawatt hours, down from the previous 40-terawatt-hour guidance due to lower resources and project delays. While we don't provide specific EBITDA numbers, the lower generation and absence of additional capital gains will impact the EBITDA, likely below the EUR1.9 billion guidance.
Q: How insulated is your US supply chain against changes in import tariffs for projects beyond 2026?
A: We have secured US-made panels for future projects, with agreements with Q-Cells, Illuminate, and First Solar for panels manufactured in the US. Our supply chain is well-positioned to mitigate tariff impacts, and we will continue to reinforce this strategy.
Q: What is the impact of capacity delays on PPAs and potential cost implications?
A: The delays are mainly administrative, with no penalties expected. Projects are mechanically complete, awaiting utility licenses or minor equipment adjustments. We have a clear line of sight to completion without additional cost implications.
Q: Can you elaborate on the potential impact of US political changes on your growth strategy?
A: We believe the US remains a key market, with strong demand for renewables. Despite political changes, the benefits of the Inflation Reduction Act in Republican states make substantial cuts unlikely. We will monitor policy developments closely.
Q: What is the outlook for asset rotation gains, particularly in Poland, and should we expect lower gains in the future?
A: Asset rotation gains in Poland were lower due to high CapEx and interest rates at the time of investment. We expect gains to improve as we rotate projects with higher PPA prices from recent investments, but 2025 gains may still be lower.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
