EDP Renovaveis It is the fourth largest producer of renewable energy in the world.. The group’s activity is organized around 3 segments:
- Development and construction of electricity production units.
- Electricity production: from wind and hydraulic energy.
- Exploration and maintenance of power plants.
With a strong development pipeline, world-class assets and market-leading operational capability, EDPR has seen exceptional development in recent years and is currently present in 28 markets (including Belgium, Brazil, Canada, France, Greece, Italy, Mexico, Poland, Portugal, Romania, Spain, United Kingdom, United States and Colombia).
EDPR’s main shareholder is EDP Groupwith 71.27% of the share capital. Energías de Portugal, (EDP), is a global energy company and leader in value creation, innovation and sustainability.
MAIN SHAREHOLDERS
Excluding the participation of the EDP Group, EDPR shareholders comprise more than 30,000 institutional and private investors distributed in 26 countries with a primary focus on the United States. Institutional investors represented 94% of the company’s shareholders, mainly investment funds and socially responsible investors (“SRIs”), while private investors, mostly Portuguese, represented 4%.
EDPR 9M24 RESULTS
In the first nine months of 2024, EDPR’s net result was 210 million euros, -53% from the figures a year ago,mainly weighed down by a 54% reduction in profits from asset sales and negative impacts on projects in Colombia. The EBITDA of the Portuguese energy group closed September at 1,294 million euros, -9% in nine months. This result is achieved with a turnover of 1,731 million euros from January to September, +5% compared to a year ago. The operating cash flow generated by the group was 625 million euros, -35% vs. 9M23.
EDPR SOLVENCY
As of September 2024, EDPR’s net debt is 7,817 million euros, 34.66% more than the figure with which it closed December 2023. This amount represents more than 5x the annualized EBITDA. Reduction in the average cost of debt from 4.8% as of December 2023 to 4.5% as of September 2024. By currency, 40% of the debt is in € and 41% in USD and 19% remaining in other currencies; By type, 81% is referenced to a fixed rate and 19% to a variable rate and more than 70% of EDP’s debt has a maturity date beyond 2027.
REMUNERATION TO THE EDPR SHAREHOLDER
The dividend paid in 2024 is lower than a year ago. The Portuguese Group paid its shareholders €0.20/share during 2024, which represents a dividend yield, at the prices of this report, of 2%.
Historical price of EDPR
FUNDAMENTAL VALUATION OF EDPR
It has a 2023-26 Strategic Plan in place in which, among other objectives, it is set to accelerate growth to exceed 4GW/year, totaling an additional 17GW in 2023-26, practically doubling its installed wind and solar capacity until 2026 vs. 2020. Focuses on low-risk structural markets, such as North America, Europe, South America, APAC and Offshore. It plans to invest up to 20 billion gross dollars in the period covered by this plan, directed towards wind energy. onshore (40%), solar utility (40%) and 20% to emerging technologies such as distributed solar, wind offshoresbatteries and hydrogen. It will maintain its asset rotation strategy with the objective of entering up to 7 billion until 2026.
The arrival of Trump to the White House will not favor aid to the renewable sector in a market in which EDPR has important resources involved and focuses its strategy.
In an analysis by ratios on estimated results and under forecast for the end of 2025 (EPS: €0.47/share), the stock is trading expensive. The market pays PER of more than 20.9v for EDPR compared to 10.3v for its parent company, EDP, 15.7v for its competitor Acciona Energía, 14.7v for Iberdrola and 12.5 for Endesa. Expensive by sales ratio, at 3.8v and higher than its main comparables.
Based on our fundamental assessment, we are neutral with the medium/long term value.
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