• Installed Capacity: 19.3 gigawatts as of December 2024, with a record annual addition of 3.8 gigawatts.
• Generation: Increased by 6% year on year to 36.6 terawatt hours.
• Average Selling Price: Decreased by 3% year on year to EUR58.9 per megawatt hour.
• Adjusted Core OpEx: Reduced by 9% per average megawatt in operation.
• Recurring EBITDA: EUR1.7 billion, a 9% increase year on year.
• Asset Rotation Gains: EUR179 million, lower by EUR281 million compared to the previous year.
• Net Debt: EUR8.3 billion as of December 2024, an increase of EUR2.5 billion from December 2023.
• Net Profit: Recurring net profit of EUR221 million.
• Tax Equity Proceeds: Record $1.2 billion in the US, with $900 million received in Q4.
• Capacity Additions: 3.8 gigawatts in 2024, driven by solar and storage projects.
• Financial Results: EUR373 million in 2024, with a 28% improvement quarter-on-quarter.
• Expansion CapEx: Approximately EUR4 billion, contributing to the increase in net debt.

• Warning! GuruFocus has detected 8 Warning Signs with EDRVF.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EDP Renovaveis SA (EDRVF) achieved a record annual capacity addition of 3.8 gigawatts in 2024, aligning with their guidance.
• The company reported a 9% reduction in adjusted core OpEx per average megawatt in operation, reflecting efficiency improvements across regions.
• Recurring EBITDA increased by 9% year on year to EUR1.7 billion, driven by higher electricity sales and effective cost control strategies.
• EDP Renovaveis SA (EDRVF) closed a record $1.2 billion in tax equity proceeds in the US, with $900 million received in the fourth quarter.
• The company successfully normalized the US solar supply chain, overcoming previous delays and installing 0.2 gigawatts of batteries from co-located projects.

Negative Points

• The average selling price of electricity decreased by 3% year on year to EUR58.9 per megawatt hour, impacted by lower market prices in Europe.
• Net debt increased to EUR8.3 billion as of December 2024, driven by expansion CapEx and financial investments.
• EDP Renovaveis SA (EDRVF) faced a significant non-recurring impact on net profit due to impairments related to Colombian wind projects and US offshore projects.
• The company experienced lower asset rotation gains compared to the previous year, impacting overall financial performance.
• There is regulatory uncertainty in the US, which poses challenges for future project planning and execution.

Q & A Highlights

Q: With the new trajectory on capacity addition and asset rotation, will this be enough to bring net debt to a sustainable level by the end of 2026? A: Miguel De Andrade, CEO, mentioned that they plan to provide a broader business plan update later in the year, likely post-summer, to address longer-term projections. Rui Manuel Rodrigues Lopes Teixeira, CFO, added that they expect an improvement in operational cash flows and contributions from asset rotation and tax equity, which should help reduce net debt, though no specific number was provided.

Q: Why is there a lack of guidance for 2025, and what clarity is needed to address the current share price? A: Miguel De Andrade explained that the lack of guidance is due to uncertainties in volume and asset rotations, including issues like curtailment. Regarding share price actions, he stated that if the opportunity cost of new projects is lower than investing in their own shares, they would consider acting, but currently, they are not in that position.

Q: Are you slowing the pace of capacity additions due to balance sheet constraints or challenges in finding projects meeting return thresholds? A: Rui Manuel Rodrigues Lopes Teixeira clarified that they are able to find projects with good profitability and risk profiles, but current uncertainties, particularly in US regulation and permitting speed in Europe, have led them to adjust the pace of investment. They are focusing on reinforcing the balance sheet while maintaining strict investment policies.

Q: What is the status of the South Coast wind project, and what does the impairment in Ocean Winds mean for this project? A: Miguel De Andrade stated that the impairment assumes a four-year delay for the South Coast wind project, which is a prudent approach given recent executive orders and permit reviews. The project is ready to go with an attractive PPA price, and they are managing the optionality despite the delay.

Q: Have you seen any increases in the cost of solar panels, given the reliance on solar additions in your CapEx plan? A: Rui Manuel Rodrigues Lopes Teixeira confirmed that they have not seen increases in solar panel costs. For the 2025 and 2026 editions, costs are locked in, so they are not exposed to potential market changes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.