9M21
Results
Webcast details
Webcast: www.edp.com
Date: Friday, November 5th, 2021, 11:30 am (UK/Portuguese time)
Lisbon, November 4th, 2021
Content
Main highlights for the period | 2 |
Consolidated Financial Performance | |
EBITDA Breakdown | 3 |
Profit & Loss Items below EBITDA | 4 |
Investment activity | 5 |
Cash Flow Statement | 6 |
Consolidated Financial Position | 7 |
Net Financial Debt | 8 |
Business Segments | |
Renewables | 10 |
Electricity Networks | 16 |
Client Solutions & Energy Management | 19 |
Income Statements & Annex | |
Income Statement by Business Segment | 23 |
Quarterly Income Statement | 24 |
Generation Assets: Installed Capacity and Production | 25 |
Electricity Networks: Asset and Performance indicators | 26 |
Financial investments, Non-controlling interests and Provisions | 27 |
Sustainability performance | 28 |
Share performance | 29 |
EDP - Energias de Portugal, S.A. Headquarters: Av. 24 de Julho, 12 | 1249 - 300 Lisboa, Portugal |
Main highlights for the period
Key Operational Data
Installed capacity (MW)
Weight of Renewables (1)
Production (GWh)
Weight of Renewables (1)
Scope 1 & 2 Emissions Intensity (gCO2/kWh) Customers supplied (thousand of contracts) Customers connected (thous.)
9M21 | 9M20 | ∆ % | ∆ Abs. |
24 457 | 26 849 | -9% | -2 392 |
79% | 74% | - | 6p.p. |
43 165 | 45 890 | -6% | -2 725 |
76% | 74% | - | 2p.p. |
167 | 122 | 37% | +45 |
9 256 | 11 372 | -19% | -2 116 |
11 380 | 10 550 | 8% | +830 |
EDP's recurring net profit was €510m in 9M21, a 2% decrease YoY. 9M21 performance was positively impacted by the integration of Viesgo in Spain and the increase in results in networks in Brazil, having been penalized by the rise of energy prices in the Iberian market and by below-average wind resources. 9M21 results performance support the reiteration of our previously provided guidance for
2021.
Gross investments increased 15% to €2.7B in 9M21, of which 95% dedicated to renewables and electricity networks, fully aligned with
the energy transition. In renewables, over the past 12 months, EDP has installed +2.5 GW of wind and solar capacity and 76% of EDP's electricity generation came from renewable sources, while our coal installed capacity decreased 37% YoY, as part of our strategy to become coal free by 2025.
Recurring EBITDA decreased 1% to €2,511m in 9M21. Forex impact was -4% YoY, implying a 3% growth of recurring EBITDA ex-forex.
Income Statement (€ million)
Gross Profit
OPEX
Other operating costs (net)
Operating costs
Joint Ventures and Associates (2)
EBITDA
EBIT
Financial Results
Income taxes & CESE (3)
Non-controlling Interest
Net Profit (EDP Equity holders)
9M21 | 9M20 | ∆ % | ∆ Abs. |
3 634 | 3 777 | -4% | -143 |
1 107 | 1 073 | 3% | +34 |
63 | 81 | -22% | -18 |
1 170 | 1 154 | 1% | +16 |
43 | 3 | - | +40 |
2 507 | 2 625 | -4% | -118 |
1 355 | 1 388 | -2% | -33 |
(356) | (505) | 29% | +149 |
289 | 238 | 21% | +50 |
200 | 222 | -10% | -23 |
510 | 422 | 21% | +88 |
Recurring EBITDA in Renewables decreased by 4%, despite the above average performance of hydro production in Iberia and the wind and solar installed capacity increase by 13% to 13.0 GW, these impacts were offset by wind resources 5% below average, and the negative impact of the Polar Vortex in USA in February.
Recurring EBITDA in the Electricity Networks segment had a strong growth of +43% to €948m. In Iberia, the operational costs kept a descending trajectory (-6%YoY), supported by the increasing digitalization of the grid and with the integration of Viesgo, which has more than doubled the size of our operations in Spain. In Brazil, EBITDA increased 48% in Euro terms, supported by the execution of the investment plan in greenfield transmission projects and capex to reinforce our distribution networks, as well as the positive impact of annual inflation updates of regulated revenues, which more than offset the devaluation of 11% of the Brazilian Real against the Euro.
The client solutions and energy management segment was penalized by the high gas and electricity prices in the Iberian wholesale market. Recurring EBITDA presented a 66% decrease YoY. After the very positive performance of the Energy Management activity in
9M20, the strong increase in energy prices, particularly in 2Q21 and 3Q21, which implied an increase in energy sourcing costs, as well as negative mark-to-market impact on energy hedging contracts in 9M21.
In Sep-21,net debt stood at €12.1bn, flat YTD, as the acceleration of investment, mainly in renewables and networks, in line with the strategic plan, and temporary increase of working capital, were balanced by the €1.5bn capital increase by EDPR and the €2bn green hybrid bond issues in the period.
Key Performance indicators (€ million)
Recurring EBITDA (4)
Renewables
Networks
Clients solutions & EM
Other
Recurring net profit (4)
9M21 | 9M20 | ∆ % | ∆ Abs. |
2 511 | 2 528 | -1% | -17 |
1 432 | 1 485 | -4% | -53 |
948 | 664 | 43% | +284 |
134 | 390 | -66% | -256 |
(3) | (11) | 74% | +8 |
510 | 522 | -2% | -11 |
Following the deals already announced in US and Europe, we have already secured €2.3bn of proceeds from the renewables' asset rotation activity in 2021-2022. In Brazil, in October we announced the acquisition of the transmission company CELG-T and the first asset rotation deal in transmission. Finally, EDPR announced this week the acquisition of Sunseap, the largest distributed solar player and top 4 solar player in South East Asia, for and EV of €0.9bn. Following this Transaction, EDP is going global with a presence in 25 markets representing ~75% of worldwide renewables growth until 2030.
Key Financial data (€ million) | Sep-21 | Dec-20 | ∆ % | ∆ Abs. | |
Net debt | 12 124 | 12 243 | -1% | -119 | |
Net debt/EBITDA (x) (5) | 3,7x | 3,5x | 4% | 0,1x | |
FFO / Net Debt | 18% | 19% | -7% | -1p.p. |
(1) Including Wind, Solar, Hydro and mini-hydro capacity; (2) Full details on page 27; (3) CESE: Extraordinary contribution from the energy sector; (4) Excluding one-off impacts as per page 3 (EBITDA) and page 4 (Net profit); | (5) Net of regulatory receivables; net debt excluding 50% of hybrid bond issues | |
(including interest); Based on trailing 12 months recurring EBITDA and net debt excluding 50% of hybrid bond issue (including interest); Includes operating leases (IFRS-16) | - 2 - |
EBITDA Breakdown
EBITDA (€ million) | 9M21 | 9M20 | ∆ % | ∆ Abs. | 1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 3Q YoY | EBITDA 9M21 | |||||||
∆ % | ∆ Abs. | ||||||||||||||||||||
Renewables | 1 432 | 1 572 | -9% | -140 | 549 | 614 | 409 | 1 041 | 445 | 562 | 425 | - | -9% | -140 | Other (2) | ||||||
Wind & Solar | 917 | 1 074 | -15% | -156 | 340 | 453 | 280 | 581 | 269 | 385 | 263 | - | -15% | -156 | Brazil | 6% | Portugal | ||||
Hydro Iberia | 388 | 401 | -3% | -13 | 177 | 127 | 97 | 363 | 137 | 144 | 107 | - | -3% | -13 | |||||||
Hydro Brazil | 127 | 97 | 30% | +29 | 32 | 34 | 31 | 96 | 40 | 33 | 55 | - | 30% | +29 | 21% | 37% | |||||
Electricity Networks | 940 | 664 | 42% | +276 | 235 | 204 | 224 | 244 | 310 | 271 | 360 | - | 42% | +276 | |||||||
Iberia | 674 | 484 | 39% | +190 | 160 | 157 | 167 | 154 | 214 | 197 | 262 | - | 39% | +190 | €2,51 bn | ||||||
Brazil | 266 | 180 | 48% | +86 | 76 | 47 | 57 | 90 | 95 | 73 | 98 | - | 48% | +86 | |||||||
Client solutions & EM | 139 | 400 | -65% | -262 | 204 | 82 | 114 | 76 | 107 | (4) | 36 | - | -65% | -262 | 19% | ||||||
Iberia (2) | 47 | 316 | -85% | -269 | 168 | 59 | 89 | 29 | 77 | (28) | (3) | - | -85% | -269 | North | ||||||
Brazil | 92 | 85 | 8% | +7 | 36 | 24 | 25 | 47 | 30 | 24 | 38 | - | 8% | +7 | America | 17% | |||||
Other | (4) | (11) | 68% | +8 | (9) | (10) | 7 | (35) | 2 | (1) | (2) | - | 68% | +8 | |||||||
Consolidated EBITDA | 2 507 | 2 625 | -4% | -118 | 980 | 891 | 754 | 1 325 | 864 | 828 | 815 | - | -4% | -118 | Spain | ||||||
- Adjustments (1) | (4) | 97 | - | - | 67 | 13 | 17 | 355 | 21 | (7) | (18) | - | - | - | |||||||
95% Energy Transition | |||||||||||||||||||||
Recurring EBITDA | 2 511 | 2 528 | -1% | -17 | 912 | 878 | 737 | 970 | 844 | 834 | 833 | - | -1% | -17 |
EBITDA in 9M21 amounted to €2,507m and recurring EBITDA amounted to €2,511m, a 1% YoY decline (-€17m
YoY) vs. recurring EBITDA of €2,528m in 9M20, which excludes the impact from Hydro, CCGT and B2C supply activities disposed in Iberia in Dec-20 (combined EBITDA contribution of €119m in 9M20). EBITDA performance YoY comparison is largely impacted by weaker energy management results in Iberia vs. a very strong 9M20, aggravated by the sharp increase in energy prices in 9M21, the weak wind load factors and negative impact of the polar vortex in 1Q21 in the US, and adverse ForEx impact (-€97m YoY) mainly due to the 11% BRL depreciation vs. the Euro. Electricity networks EBITDA continued to show a very strong growth of 42%, supported by the Viesgo acquisition, the positive impact from annual inflation update of regulated revenues in Brazil, the execution of Transmission growth in Brasil, and also due to the recovery of economic activity, with distributed electricity increasing +13% YoY across the 3 geographies where EDP is present.
RENEWABLES (57% of EBITDA, €1,432m in 9M21) - Excluding the sale of 6 hydro plants in Portugal closed in Dec-20 (EBITDA contribution of €87m in 9M20), EBITDA declined 4% YoY (-€53mYoY) mainly impacted by (i) the negative impact of the polar vortex weather event in US (-€35m), (ii) the de-consolidation of wind assets sold in December 2020 (€72m EBITDA contribution in 9M20), (iii) adverse ForEx impact (-€53m) and (iv) lower asset rotation gains (-€41m, excluding ForEx impact) which more than offset (v) the strong hydro performance Iberia, particularly in 1Q.
ELECTRICITY NETWORKS (37% of EBITDA, €940m in 9M21) - EBITDA increased by 42% YoY (+€276m YoY),
driven by (i) Viesgo contribution (€148m), (ii) +€21m in Portugal, mostly due to good OPEX performance on accelerated digitalisation (iii) +€86m in the Brazil, exceeding a significant negative impact from BRL devaluation (-€31m YoY), with EBITDA performance in local currency positively impacted by stronger demand, regulated revenues indexation to inflation, smaller over-contracting, update of the concessions asset's residual value (VNR)
with inflation and anticipation in the commissioning of a transmission line.
CLIENT SOLUTIONS & ENERGY MANAGEMENT (6% of EBITDA, €139m in 9M21) - Excluding the sale of B2C supply
business and Castejon CCGTs in Spain closed in Dec-20 (EBITDA contribution of €32m in 9M20), the decommissioning of Sines Coal plant in Dec-20 (€37m recurring EBITDA contribution in 9M20), the one-off gain in 1Q21 (€21m) on the disposal of our 50% stake in the supplier CHC in Spain and the one-off cost related to the agreement with Sonatrach (- €17m), recurring EBITDA 9M21 decreased 66% YoY to €134m following the tough YoY comparison vs. the very strong energy management results in 9M20 aggravated by the adverse environment in 9M21, penalized by a negative mark- to-market on gas financial hedging (~130m) (non-cash), to be reverted through associated higher operational margins, mostly until 2022YE. This implied a significantly higher production and sourcing costs as well as a negative mark-to- market impact on hedging contracts in energy markets. This was just partially offset by the improvement of EBITDA in:
- supply activities, supported by a recovery in B2B consumption (+19% YoY) and the increase of new services penetration rate (30% vs. 27% in 9M20); (ii) Thermal generation, supported by the increase in energy prices and the ancillary services in Spain. In Brazil, EBITDA performance largely reflected the BRL depreciation (-€11m), while local currency performance was driven by a strong growth of the supply and energy management EBITDA supported by a strong performance of the trading division, with the positive impact from of the mark-to-market of some contracts with longer terms.
- Adjustments include: (i) €97m in 9M20, including the EBITDA contribution of 6 hydro plants in Portugal and Castejon CCGT and B2C supply sold in Dec-20 (€119m) and the cost related to the forced burning of coal ahead of Iberian coal anticipated shutdown (-€22m); (ii) -€4m in 9M21, including the one-offgain on the sale of our 50% stake in the energy supplier CHC in Spain to our partner CIDE (€21m), cost with Sonatrach agreement (-€17m)and HR restructuring costs in Spain (-€8m).
(1) Adjustments for one-off impacts, described above(*); (2) Includes namely Poland, Romania, France, Belgium, Italy.
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Profit & Loss Items below EBITDA
Profit & Loss Items below EBITDA (€ million) | 9M21 | 9M20 | ∆ % | ∆ Abs. | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 3Q YoY | ||||
∆ % | ∆ Abs. | |||||||||||||
EBITDA | 2 507 | 2 625 | -4% | -118 | 754 | 1 325 | 864 | 828 | 815 | 8% | +61 | |||
Provisions | 54 | 129 | -58% | -76 | 78 | (17) | 12 | (9) | 50 | -36% | -28 | |||
Amortisations and impairments | 1 098 | 1 107 | -1% | -10 | 340 | 524 | 356 | 366 | 376 | 11% | +36 | |||
EBIT | 1 355 | 1 388 | -2% | -33 | 336 | 818 | 496 | 470 | 389 | 16% | +53 | |||
Net financial interest | (396) | (420) | 6% | +24 | (119) | (143) | (123) | (113) | (160) | -34% | -41 | |||
Capitalized financial costs | 69 | 41 | 67% | +28 | 15 | 29 | 24 | 21 | 25 | 61% | +9 | |||
Unwinding of long term liabilities (1) | (137) | (154) | 11% | +17 | (55) | (50) | (48) | (45) | (45) | 19% | +11 | |||
Net foreign exchange differences and derivatives | 11 | (17) | - | +28 | (1) | (7) | 18 | (8) | 1 | - | +2 | |||
Other Financials | 96 | 45 | 115% | +51 | 23 | 6 | 6 | 14 | 77 | 234% | +54 | |||
Financial Results | (356) | (505) | 29% | +149 | (137) | (166) | (123) | (131) | (102) | 26% | +35 | |||
Pre-tax Profit | 999 | 883 | 13% | +116 | 199 | 652 | 373 | 339 | 287 | 44% | +88 | |||
Income Taxes | 237 | 173 | 37% | +64 | 39 | 136 | 63 | 100 | 74 | 90% | +35 | |||
Effective Tax rate (%) | 24% | 20% | 20% | 21% | 17% | 29% | 26% | |||||||
Extraordinary Contribution for the Energy Sector | 52 | 65 | -20% | -13 | 3 | - | 51 | 0 | 0 | -93% | -2 | |||
Non-controlling Interests (Details page 27) | 200 | 222 | -10% | -23 | 49 | 138 | 79 | 75 | 46 | -8% | -4 | |||
Net Profit Attributable to EDP Shareholders | 510 | 422 | 21% | +88 | 108 | 378 | 180 | 164 | 167 | 55% | +59 |
The amount of provisions in 9M21 includes €48m of a contingency related with the ongoing court case on a fine decided by the Portuguese competition authority regarding ancillary services in 2009-13. In the 9M20, provisions amounted to €129m, including €30m related to the decision to anticipate the shutdown of Iberian coal plants, booked in 2Q20, and €73m booked in 3Q20 related to the Portuguese government decision to deduct this amount from CMEC contracted generation revenues regarding the same alleged ancillary services 2009-13 overcompensation that is being legally challenged by EDP.
Amortisations and impairments decreased by 1% YoY, to €1098m, mainly supported by the de-consolidation of assets in Spain (€8m in 9M20), an impairment of €77m on Sines coal plant in 9M20 and forex impact (€27m YoY). In addition, 9M21 amortization and impairment charges reflect the impact from new capacity additions in the last 12 months.
Net Financial results amounted to -€356m in 9M21. Note that financial costs in 9M21 were impacted by non-recurring items, including a €64m gain on the acquisition at a price below book value of the shareholder loans granted by our previous minority partner (25%) at Soto 4 CCGT in Spain and -€24m cost related to repurchase of outstanding debt (vs. - €57m in 9M20). Excluding non-recurring items, net financial interests increased 2% YoY to -€372m in 9M21, led by ~10bps YoY increase in average cost of debt to 3.3% (vs. 3.2% in 9M20). Net foreign exchange differences and derivatives (+€28m YoY) were mostly impacted by US Dollar and BRL derivatives. Capitalised financial expenses
increased to €69m in 9M21 mainly due to increasing volume of work in progress in transmission in Brazil and in renewables.
Income taxes amounted to €237m, representing an effective tax rate of 24% in 9M21 vs 20% in 9M20.
Non-controllinginterests fell 10% YoY to €200m in 9M21, including: (i) €69m related to EDPR (-54% YoY), mainly explained by the decrease of EDPR's net profit; (ii) €115m related to EDP Brasil (+44% YoY) on the back of the strong performance of EDP Brasil, despite the Brazilian Real depreciation (details on page 27); and (iii) €28m following Viesgo acquisition in Dec-20.
Overall, net profit reached €510m in 9M21 (+21% or +€88m YoY). Adjusted for the disposal of operations in Iberia in 2020 (hydro in Portugal and Castejon CCGT and B2C supply in Spain) and by one-off impacts*, recurring net profit fell 2% YoY, to €510m in 9M21, driven by the weaker performance of renewables and energy management which was partly mitigated by growth in networks and strong performance of our hydro and supply operations.
- Adjustments and non-recurring items impact at net profit level: (i) -€99m in 9M20, including the adjustment for the net profit contribution of 6 hydro plants in Portugal (€66m) and Castejon CCGT and B2C supply sold in December 2020 (€18m), early shutdown of Sines (-€89m), CMEC Overcompensation provision (-€50m) and one-off liability management cost (-€45m); (ii) no impact in 9M21, gain from CIDE disposal (+€21m), acquisition of debt in minonity stake in Spain (€36m) are offset by curtailment costs in Spain (-€5m); Provision on competition authority penalty (- €33m) and buyback prepayment fees (-€19).
(1) Includes unwinding of medium, long term liabilities (TEIs, IFRS-16, dismantling & decommissioning provision for generation assets, concessions) and interest on medical care and pension fund liabilities.
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Investment activity
Capex (€ million) | 9M21 | 9M20 | ∆ % | ∆ Abs. | |||
Expansion | 2 052 | 1 448 | 42% | +604 | |||
Renewables | 1 766 | 1 230 | 44% | +536 | |||
Electricity Networks | 238 | 198 | 20% | +40 | |||
CS&EM and Other | 48 | 20 | - | +28 | |||
Maintenance | 369 | 303 | 22% | +65 | |||
Renewables | 15 | 16 | -7% | -1 | |||
Electricity Networks | 269 | 209 | 29% | +60 | |||
CS&EM and Other | 85 | 78 | 8% | +6 | |||
Consolidated Capex | 2 421 | 1 752 | 38% | +669 | |||
95% of Capex in the Energy Transition | |||||||
Net expansion activity (€ million) | 9M21 | 9M20 | ∆ % | ∆ Abs. | |||
Expansion Capex | 2 052 | 1 448 | 42% | +604 | |||
Financial investments | 292 | 612 | -52% | -320 | |||
Proceeds Asset rotation | (554) | (678) | -18% | +124 | |||
Proceeds from TEI in US | (583) | (310) | 88% | -272 | |||
Acquisitions and disposals | (39) | (101) | -62% | +62 | |||
Other (1) | 491 | 261 | 88% | +230 | |||
Net expansion activity | 1 660 | 1 232 | 35% | +428 |
Investment activity in 9M21
(€ million) | |||||
292 | 369 | ||||
292 | 554 | ||||
131 | |||||
2 421 | |||||
2 052 | |||||
1 660 | |||||
Gross Investment | Maintenance | Expansion | Asset rotation | Other (3) | Net expansion |
(2) | Investment |
1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | CAPEX 9M21 | |||
Other | |||||||||||
341 | 391 | 716 | 953 | 464 | 693 | 895 | - | Portugal | |||
271 | 320 | 639 | 871 | 380 | 588 | 794 | - | ||||
15% 15% | |||||||||||
65 | 63 | 71 | 91 | 74 | 81 | 79 | - | ||||
5 | 8 | 7 | (10) | 10 | 23 | 22 | - | 8% | |||
Spain | |||||||||||
84 | 103 | 116 | 205 | 111 | 128 | 130 | - | Brazil 22% €2,4 bn | |||
5 | 4 | 7 | 18 | 3 | 5 | 7 | - | ||||
57 | 75 | 80 | 121 | 75 | 101 | 93 | - | 40% | |||
23 | 24 | 29 | 65 | 34 | 22 | 30 | - | ||||
North America | |||||||||||
425 | 494 | 832 | 1 157 | 576 | 820 | 1 025 | - | ||||
Gross investments, including Consolidated Capex and Financial Investments, increased 15% YoY to €2.7Bn in 9M21, of which 95% allocated to renewables and electricity networks activities, fully aligned with the energy transition.
Consolidated capex increased 38% to €2.4 bn in 9M21, 94% of which dedicated to renewables and electricity networks. EDP expansion capex increased 42% to €2.1 bn, accounting for 85% of total capex.
Financial investments in 9M21 (€292m) were entirely concentrated in renewables, namely: (i) wind onshore projects (€129m), (ii) wind offshore related to our 50% equity stake in Ocean Winds (€83m), (iii) Solar Decentralized Generation (€63m), and (iv) hydro generation (€13m).
Maintenance capex in 9M21 (€369m) was mostly dedicated to our electricity networks business (73% of total), namely with a significant contribution from Viesgo's integration in Spain, and the roll out of digitalization in Portugal, with 5.5M smart meters deployed, which corresponds to a 38% increase YoY.
Expansion investments (expansion capex + financial investment) in 9M21 increased 14% to €2.3 bn, largely dedicated to renewables globally (~88%):
- €2.1 bn investment in new renewable capacity (+12% YoY) was distributed between North America (52%), Europe (34%) and Latam & others (14%) (details on page 10).
- €238m investment in networks in Brazil (+20% YoY, in Euros, including the adverse FX impact). In local currency, transmission capex increased 21% while capex in distribution increased by 53% YoY, namely due to the roll-outof new transmission lines and in distribution, grid expansion and improving quality of service.
All in all, net expansion activity investment increased strongly to €1.7 bn in 9M21 (+€0.4 bn YoY, vs. €1.2 bn in 9M20), mainly due to (i) the acceleration of the build out activity (+€0.3 bn YoY); (ii) lower proceeds from Asset Rotation (+€0.1 bn YoY); (iii) anticipation of bill payments to fixed assets' suppliers (+€0.3Bn YoY) aiming to optimize treasury management in the context of high financial liquidity and low short term interest rates. This was partially mitigated by higher TEI proceeds in the US in 9M21 (-€0.3BnYoY).
(1) Includes Proceeds from Change in WC Fixed asset suppliers, change in consolidation perimeter, reclassification of asset rotation gains and other; (2) Includes Capex and Financial investment; (3) Includes the items "other", "acquisitions and disposals" and "Proceeds from TEI in US".
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EDP - Energias de Portugal SA published this content on 04 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2021 17:55:06 UTC.