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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