The energy company Endesa will invest 9.6 billion euros in the next three years, focusing increasingly on electrical networks and at the same time reducing its spending on renewable energy, according to its new strategic plan 2025-2027, presented this Tuesday.
The planned investments represent an increase of 8% compared to the 2024-2026 plan and the highest since 2014.
The electrical networks business will receive about 4,000 million, 45% more than in its previous plan, of which 45% will be allocated to meeting the objectives of the National Integrated Energy and Climate Plan (PNIEC) and to meeting the demand for new connections. , such as those from data centers, which can currently be rejected due to lack of capacity
The generation business will absorb 39% of Endesa’s total investment in the period, 3.7 billion euros, and the company is going to reduce its exposure to the solar business, which will account for 15% of all investment, to reinforce the wind business ( 37% of the total) and hydroelectric (another 37%), while the remaining 11% will be for battery storage. These 3.7 billion euros include the recent acquisition of Acciona’s hydraulic assets worth 1 billion euros and the company will continue to look for partners interested in minority stakes in green assets.
Likewise, it will invest approximately 1,000 million euros (10% of the total investment) in the maintenance of nuclear generation assets, whose closure is scheduled in Spain for the period 2027-2035, non-peninsular systems and combined cycles. The energy company will also invest 900 million euros in the energy marketing business.
In a meeting with analysts, the CEO, José Bogas, pointed out that it could increase the investment figure. As explained by Bogas, with a net debt of 1.8 times its EBITDA, the company still has additional investment capacity, estimating that investments can grow up to 4,000 million euros under the appropriate regulatory conditions.
Bogas added that if Spain wants to encourage investments in electricity networks it has to improve the profitability of investments in networks, review the legal limits on how much energy companies can invest in electricity networks and speed up the granting of permits.
According to the new strategic plan, Endesa plans to increase its net debt by 10%, reaching between 10,000 and 11,000 million, due to the increase in investments and the payment of dividends.
Improves results forecasting
The new strategic plan of Endesa, 70.10% controlled by the Italian semi-public Enel, foresees an adjusted net profit of about 1.8 billion euros this year, slightly above its previous forecasts, and between 2,000 and 2,200 million euros in 2027, with an accumulated annual growth rate of 7%.
Gross operating profit (before interest, taxes, depreciation and amortization, or ebitda) will be around €5.2 billion this year and between €5.6 billion and €5.9 billion at the end of the plan.
The dividend policy (which involves a distribution of 70% of adjusted profit with a floor of 1 euro per share) is extended until 2027.
For this year, investors can expect 1.2 euros per share, 20% more than for 2023 and 9% more than previously expected.
Endesa’s expectation is to pay 1.5 euros per share in 2027, which estimates that the dividend yield in the plan as a whole will range between 6% and 7%.
Extraordinary tax
The plan is prepared, as it appears in it, under the assumption that the temporary tax of 1.2% on energy companies in Spain, initially approved for two years and that last night the PSOE committed to the left-wing parliamentary groups to extend it one more year in a decree-law, it will not be in force beyond 2024.
Endesa has paid a total of 410 million euros for this extraordinary tax in the two years in which it has been in force.
In this regard, the CEO of Endesa considered it “impossible” for the extension of the extraordinary tax on energy companies to succeed “if nothing changes”, since it does not have the necessary support to move forward in Congress, and declared that “it is not the time for more taxes, but for investment”, if the objectives of the energy transition are to be achieved.
“On the other hand, the Government has launched a decree in which it says that it maintains the agreement with Junts. That means not taxing energy companies that maintain their current commitment to decarbonization. So it is a bit confusing,” he added in this regard. .
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