EDP profits up 83% to €946M

Portugal’s multinational energy provider EDP achieved a net result of €946 million, an 83% increase on the same period last year when it posted a €518 million result.

According to EDP, the results between January and September were supported by the “recovery in hydropower production in Portugal (+61%) after the extreme drought in 2022” and also from the “increase in the recurrent net result in Brazil following the success of the takeover bid for (the remainder of ) EDP Brasil.”
In terms of asset rotation, the company highlights a growth of 38% in revenues totalling €393 million with the conclusion of two transactions in Spain and Poland.
Excluding losses posted by the company in H1 regarding the Pécem coal fired power station in Brazil, EDP’s recurrent net result in the first 9 months of the year was actually €1.026Bn, double on the €512 million posted in the like-for-like period.
The EBITDA also increased by 25% to €3.8Bn, boosted by the increase in hydropower output in Portugal and Spain (EBITDA of €1.03Bn, 424% more than in 2022) and from a return to normal in electricity and gas supply costs on the first nine months of 2022”.
Investment stood at €4.1Bn, most of it (€3.6Bn) on renewable energy projects. To September, the company registered 5.2GW of renewable capacity in renewable energy projects.
To September, the company registered 5.2GW of renewable capacity under consecution in 19 markets, as well as in electricity networks in Portugal, Spain and Brazil.
However, renewables suffered from below average results to September in terms of wind energy and a fall in electricity prices in the European wholesale markets on values in 2022 resulted in a fall of 4% in EBITDA in the solar and wind segment.
Equally, the impact of inflation on the company’s operational costs resulted in a 3% reduction in EBITDA on the Iberian peninsula.
In an interview with CNBC, CEO Miguel Stilwell de Andrade said: “We had a tremendous first nine months of the year, driven very much by the normalisation of hydro (after the 2022 drought).
“We also took over the minorities share of EDP Brasil, a company that we have in Brazil that is listed. We also sold some project portfolios we had in Poland and Spain, and so we’re also looking good for the rest of the year.”
On the offshore business EDP has in the US, he said: “We have some great offshore businesses in the US and in Europe (Scotland), and we’re also building some projects in France. I think if you look at the medium to long-term trend offshore is going to be a very important part of the decarbonisation of the economy, whether in Europe, the US, or elsewhere in the world, and we have the relative ability to scale up the capacity for offshore wind”
He stressed that while there had been some “hiccups and issues”, most of them were “company specific to our competitors”, but looking at EDP’s projects, most of which are based off Massachusetts or California (Rising Tree Wind Farm and two phases of the Lone Valley Solar Park) — the latters of which is still in development, — the company hasn’t taken any investment decision yet — “we are still very optimistic about deploying those projects and investing in them.”
And based on a PPA (Power Purchase Agreements) of US$ 145 per MW/h Stilwell said that it was a “fair price point” saying that EDP continued to think it was “viable” and was “optimistic” in the long term.
As to climate change and the effects on EDP’s business, the CEO said: We have to look at the long term trends for wind, hydro and solar, we can’t look on a quarterly basis on what’s happening with the weather, because our investments are in projects that typically last for 30 years; and yes, there will be quarters when the wind will be down, others up, but we must look at the long-term trends and we can’t see any change in the sun or wind patterns long term, so I think these projects will continue to be very economical long term whether wind, hydro or solar.”