Naturgy has managed to consolidate in the first half of 2024 the record results obtained last year, now in a more competitive scenario marked by a sharp global decline in energy prices. The Group recorded an EBITDA of 2,846 million euros and a net income of 1,043 million euros, both at the same level as last year. These results demonstrate the company’s strength in adapting to the environment and generating value for its shareholders and are the result of a model based on operational efficiency, proactive risk management and financial discipline in capital management.
It is also worth highlighting that Naturgy has recently reached an agreement with Sonatrach on the price of Algerian natural gas procurement for the year 2024. ‘The closing of this latest negotiation confirms Naturgy’s ability to reach agreements in competitive contexts. It also proves the solidity of the historical relationship between the parties and ratifies the commitment of both companies to the security of supply to the Iberian Peninsula. Sonatrach is indeed proving to be a reliable partner,’ said Naturgy executive chairman Francisco Reynés.
Naturgy’s accounts reflect a clear balance between the contribution of the regulated business of distribution networks and the businesses of energy management, generation and supply. EBITDA obtained by the former, which includes the management of all its electricity and gas networks, grew by 16% to €1,454 million. On the other hand, the EBITDA of the second group of businesses reached €1,415 million, a decline of 14%, in a scenario experiencing sharp declines in the main global energy benchmarks such as TTF (-49%), Henry Hub (-29%) and JKM (-45%).
The renewable generation business improved its EBITDA by 30% to €305 million, driven by the commissioning of new capacity. As a result, Naturgy’s renewable generation capacity now exceeds 6.6 GW. This figure will continue to grow driven by the upcoming entry into operation of different projects currently under construction in Spain, the United States and Australia, totalling an additional 2.2 GW.
Investment in the first half of the year amounted to €947 million, also in line with last year’s level, and focused on renewable generation and distribution networks businesses. In this scenario of continued investment efforts, the company has simultaneously managed to reduce its net debt to €11,838 million. Naturgy continues to adapt its capital structure, reducing the volume of fixed-rate debt to 70% and strengthening its liquidity, which now stands at almost 9,800 million euros.
The results also illustrate Naturgy’s strong commitment to sustainability. Emission-free installed capacity has now exceeded 40% of the total, and emissions intensity decreased by 10% to 217 tCO2/GWh.
Naturgy has also made progress on meeting other ESG targets, such as diversity. The presence of women in management roles has risen to 37%, significantly exceeding its previous levels.
The Board of Directors approved a first interim dividend payment for 2024 of €0.5 per share, to be paid on 1 August.
Guidance above market expectations
The good performance up to June and the outlook for the second half of the year allow Naturgy to provide with 2024 guidance above current consensus estimates. In particular, 2024 EBITDA and Net Income are expected to exceed €5,300 million and €1,800 million respectively.
Similarly, investments are expected to reach approximately €2.6 billion accumulated for the full year. This figure will be mainly earmarked for activities related to decarbonisation, increasing renewable capacity in operation in Spain, Australia and the United States and reinforcing the electricity and gas grids.
Assessing the results and the outlook
‘H1 results illustrate Naturgy’s ability to adapt to an increasingly competitive energy scenario. Moreover, our current forecasts for FY2024 confirm the better-than-expected results and a firm commitment to continue advancing in our transformation’, explained NATURGY’s executive chairman, Francisco Reynés. ‘This performance and the positive outlook are the result of the combined efforts of a numerous team of remarkable professionals, committed both to the company’s objectives and to satisfying our customers’ needs,’ he added.
New Strategic Plan to accelerate Naturgy’s transformation
The company will elaborate a new 2025-30 Strategic Plan until the end of the year, which will be adequately communicated to the market. The aim is to define a roadmap that is both ambitious and attractive to all stakeholders, with a growth vision that continues the transformation undertaken by the Group, and that creates value for all shareholders.
The 2018 Strategic Plan introduced the beginning of the Group’s transformation and ended with the achievement of all its objectives. The 2021 Strategic Plan set new and ambitious goals that have been exceeded to date, against a complex and volatile energy backdrop.
Throughout all these years Naturgy has met all its goals: i) ensuring financial discipline, balancing investment policies, dividends and prudent indebtedness; ii) consolidating the commitment to decarbonisation, growing in renewable capacity and creating a growth platform for renewable gases; iii) adapting the distribution networks to the latest technologies available, ensuring their operational optimisation and appropriate regulatory management; iv) proactively managing risk; and v) ensuring the supply of gas and electricity.
Share price
Despite the good results exceeding market expectations, Naturgy’s share price has been affected in recent months by various factors beyond the company’s performance and fundamentals, particularly by the exclusion as a constituent from the MSCI indices in the first quarter of this year, due to its insufficient free float.
‘The solid 1H24 performance, as well as the guidance for the end of the year, highlight that the current share price does not reflect the reality of the company’, according to Francisco Reynés.
Renewable gases
Naturgy continues leading the development of renewable gases in Spain, both with the development of biomethane production and distribution projects in the short term, as well as with the development of hydrogen as an energy vector that will have a significant impact on the energy mix in the long term. The company is well positioned to seize these opportunities that should help accelerate decarbonisation and is therefore ready to deploy significant investments and resources in this business, as the future Strategic Plan will outline.
In the first half of the year, the Group commissioned a new biomethane production plant in Vila-Sana (Lérida). The new facility raises the Group’s production capacity of this renewable gas in Spain to 29 GWh, equivalent to the annual consumption of 6,000 households. The company is working on the construction of two new facilities that will be commissioned in the coming months.
