The following is a summary of the VERBUND AG (OEZVF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• VERBUND reported a slight decrease in Q1 2024 earnings compared to 2023 due to a drop in gas prices, decreased electricity wholesale prices, lowered gas demand, and a slow European economy.

• EBITDA decreased by 8.7% to €883 million and group result decreased by 4.3% to €506 million, while net debt improved by 35.8% to €1.129 million.

• Average contract price for own electricity generation from hydropower fell to €118.1 per megawatt hour in Q1.

• 2024 projections include a reported and adjusted EBITDA between €2.8 billion and €3.3 billion, and a reported group result between €1.45 billion to €1.75 billion.

• Loss from the Sales segment for 2024 was €100 million but improved in Q1 with a positive contribution of approximately €30 million from trading.

Business Progress:

• VERBUND continues to implement its Sustainable Strategy 2030, focusing on expanding New Renewable Energy generation in Europe and the green hydrogen economy.

• Generation from wind and photovoltaic (PV) sources increased given new power plant capacities and heightened utilization of VERBUND's Mellach CCGT.

• Primary hydro projects, Limberg III and Reißeck II pump storage power plants, are progressing well with expected generation from the Gratkorn run-of-river project in 2024.

• Uncertainty surrounding hydroelectric projections for 2024 exists due to unpredictable weather, but high optimism remains due to a good year's start.

• The company showed interest in the growing data center market and considers itself an ideal partner for Power Purchase Agreements (PPAs).

• CapEx for Renewables for 2024-2026 is projected to be around €1.8 billion, mainly allocated to pipeline and projects in Spain, Germany, and Italy.

• There are plans for significant capacity commissioning within the New Renewable segment over the next three years.

• The company acknowledges a requirement for grid transformation in Europe and revealed a regulated grid company's regulatory account standing at around €500 million.

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