Redeia, the group that includes Red Eléctrica de España (REE) and Hispasat, recorded a net profit of 689.6 million euros in 2023, up 3.7% on the same period the previous year. The company, 20% of which is owned by the state and in which no private shareholder can exceed 5%, reduced total investment by 3.5%, but significantly increased (by 55%) investments aimed at electrical infrastructure. Mainly to meet the growth of renewable energy projects.
Gross operating result (Ebitda) neared 1.508 million, up 1.1% on 2022, with the contribution of international business particularly strong, up 16% year-on-year, according to data sent early this morning to the National Commission for the securities market (CNMV). Both net and gross profit were slightly above targets that had been set for the year as a whole, including Ebitda of 1,500 million and net profit at 2022 levels. After a clearly positive start to the session, Redeia shares fell further. than 1.5% in the middle of the session.
The Beatriz Corredor-led company’s revenues, including those of its investees, rose by just over 3% last year to 2.129 million euros, with “growth across all areas of activity being more pronounced in diversified ones.” Growth was below average in the case of electricity infrastructure management and operation (REE’s core business), which closed last year with a turnover of 1.625 million, up just 1.6%. Its satellite subsidiary Hispasat increased its revenue by more than 9%.
The most negative aspect of Redeia’s annual results is the increase in net debt, which increased by 7.4%, from 4,634 to 4,975 million euros. Additionally, midway through the rate hike cycle, the average interest rate on the group’s debt rose from 1.62% to 2.14%. The other side is also due to the rise in price of money: savings bring more – financial income, which more than doubled the previous year.
He holding company REE and Hispasat will pay a dividend of one euro in 2024, allocated to the previous year’s results, an amount identical to the dividends of recent years.
2023 is far from a peak year – “a critical year for investments that will rise from around 500 million to 825 million”, according to Redeia CEO Roberto García Merino – will only be the beginning of a string of years of very strong increases in grid spending to support the energy transition : In 2024, the target will be 1000 million per year. This will be the new baseline figure, the executive said. “We are capable of consolidating and executing this 1 billion and even going further in the coming years if necessary,” he said while presenting the results to analysts.
Redeia’s CEO believes that to finance the needs of the new network in Spain, the “strength of the balance sheet” of the public-private company will be “enough.” However, he left the door open to other “alternatives,” such as issuing “a new hybrid instrument or placing non-essential assets on the market.” Asked about the remuneration that REE receives, which is set by the National Commission of Markets and Competition (CNMC) and which has been one of the greatest workhorses in recent years, García Merino was convinced that compared to the current percentage “insufficient, the next model will better”: “The European regulator has made it clear that remuneration rates must be updated,” he said.
The grid manager says a second major link to France, vital to securing the output of Spain’s increasingly large renewable energy sources and preventing energy losses, will be ready in 2027, a year earlier than the National Markets and Competition Commission (CNMC) believes.
“The connection across the Bay of Biscay continues to be on schedule,” notes the company’s management. “The cable and converter supply contracts were awarded in June and the ground works contract was awarded in December to continue the works and reach the commissioning stage.” At the end of last year, investments in this chapter exceeded 170 million euros.
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