Full Year 2024 Enagás SA Earnings Call
Yeah, Good morning, ladies and gentlemen, and welcome to the earnings presentation for <unk> for the year of 'twenty 'twenty four as we had announced we will also be giving you our strategy update for 2020 five 'twenty 30.
The relevant documents have been filed with the stock exchange authorities. This morning and are available on our website www dot and I got to stop yes, our chief Executive Officer to answer that is will be chairing. This presentation with him we have our corporate head of energy transition that the legal authority, our CFO and Michele Manto.
Speaker Change: I'm from the corporate Department, all communication institutional Investor Relations. So I started out at sea and myself. The initial presentation will last about 30 minutes and then we will have a Q&A.
You'll be able to ask your questions directly.
Speaker Change: Directly or in rising through our platform will attempt to answer those questions in as much detail as possible. Thank you very much and I'm going to give the floor to our CEO Arturo answer. Thank you very much good morning, ladies and gentlemen, Thank you for following this earnings presentation welcome.
Speaker Change: As we announced.
Speaker Change: Alongside the full year 'twenty 'twenty four earnings presentation. Today, we're also going to present, our strategy update for 'twenty 'twenty five 'twenty society, because since we presented our stuff that you plan in July of 'twenty to 'twenty two.
Speaker Change: Government has changed and now two and a half years later it seems an ideal time to take stock and update our vision on our goals I will start my talk with the milestones of 'twenty 'twenty four the results of the year and our targets for 2025, and then I will discuss.
Speaker Change: Because all the stuff. She plan is rolling out I'll present, the Houston strategic update for 2020 five 'twenty 30 with its Phil.
Speaker Change: <unk> financial projections, and I will wrap up with some highlights about our ESG commitments and a few conclusions 'twenty 'twenty four has been a landmark year for the future of an Argos in these 12 months, we have reached highly relevant milestones cleared out key uncertainties.
Speaker Change: And adopted the decisions we needed to get the company ready for a new growth spurt driven above all by hydrogen.
Speaker Change: To do that a year ago, we restructured our equity adopting a sustainable payout policy more closely aligned to that of our peers. We also sold our stake until grass synergy.
Speaker Change: Which enabled us to bring down our net debt and enhance the company's.
Speaker Change: Risk profile.
Speaker Change: As.
Speaker Change: Uh huh.
Speaker Change: The rating agencies have confirmed both standard <unk> Poor's, and Fitch nonstop and assays rating to Triple B plus.
Speaker Change: What's more C. A D arbitration found for and I gosh in the proceedings on the gas pipeline investment in Southern Peru G. S. B.
Speaker Change: Although the amount awarded is smaller the unexpected it puts an end to over seven years of hearings and clearly showing and I guess as management to have been correct. Moreover, it has eliminated uncertainty over repatriating dividends from a Peruvian company.
Speaker Change: I support the other day, they got to the bedroom.
Speaker Change: For Prudential reasons, our accounts do not.
Speaker Change: Take into account other.
Speaker Change: Potentially better outcomes from arbitration, including a material error rectification requests for <unk>.
Speaker Change: Total of $94 million, which has already been filed with the C. E. D on an additional $230 million for guarantees which could be recovered following C. D arbitration over the G. S P.
Speaker Change: Bankruptcy proceedings, we have already informed the Peruvian government that we are willing to reach an amicable solution regarding the enforcement of the award as I said before these milestones leaves the company in an excellent position to achieve more growth in the future.
Speaker Change: In 2020 for the Spanish gas system.
Speaker Change: Reported.
Speaker Change:
Speaker Change: 100 per cent supply guarantee and availability and it also demonstrated its resilience.
Speaker Change: In the face of adverse the extreme climate.
Speaker Change: Crises, such as the terrible high intensity storms and floods that hit part in Spain, which showed just how important it is to incorporate in company restaurants.
Speaker Change: Impacts of climate change.
Speaker Change: Though total demand went down in 2024 in line with the rest of Europe gas infrastructure and natural gas in particular has once again proven to be vital for Spain.
Speaker Change: Industry in 2024, where demand grew four 2% and two guaranteed electricity supply with record demand, peaking I see they did on December.
Speaker Change: Our 11th.
Speaker Change: Since the mean.
Speaker Change: Object of today's event is to present, a 'twenty 'twenty five 'twenty says he strategy update I will just briefly summarized our 'twenty 'twenty four performance.
Speaker Change: After.
Tax profit without one offs.
In 2020, four or 310.1 million euros.
Speaker Change: That's three.
Speaker Change: 0.2% higher than that in 'twenty, two 'twenty, three and above our guidance.
Speaker Change: Including one off.
Speaker Change: From asset rotation and the accounting impact of capital losses from the G. S. P Award a T. P stood at $299 3 million euros, which means.
Speaker Change: Streamlining our.
Speaker Change: Yeah now in order to make our strategic projects and our payout policy more robust now and for the future. Our EBITDA went up to 700 and <unk> 7 million euros also above.
Speaker Change: Our target.
Speaker Change: Efficiency in operating expenses and the excellent performance of our invested companies as well as better financial income.
Speaker Change: Returns have been vital in it.
She even these results we have a very sound and prudent debt structure with over 80% at fixed rate.
Speaker Change: The sale of our.
Speaker Change: Tallgrass Energy's stake has enabled us to reduce our net debt by 28%.
Speaker Change: On shore up our financial structure.
With an excellent liquidity position of.
Speaker Change: 3.25 billion Euro.
Speaker Change: What's more in 'twenty 'twenty four we've been able to maintain our leadership in sustainability and achieving our decarbonization targets, we have cut our C. O two emissions by 22 and a half per cent.
More than our original target I'm, bringing us ever closer to becoming a net zero company by 'twenty 40.
Speaker Change: On the basis of figures I've just shared today.
Today, we are announcing our targets for this year 2025.
Speaker Change: To obtain an after tax profit of approximately 265 million euros.
Speaker Change: To close the year with net debt at a similar level to that of 'twenty 'twenty four right around $2 4 billion euros.
Speaker Change: On an EBITDA of around 617 million euros.
Speaker Change: And to keep our.
Speaker Change: Funds over net debt ratio above 15% in line with our Triple B, plus credit rating and to remunerate, our shareholders with a dividend of one euro per share.
Speaker Change: We will now describe.
Speaker Change: Progress on the implementation of our strategy plan, which we presented in July of 2022 and.
Speaker Change: In response to changing circumstances in Europe after the Russian invasion of Ukraine. Since then we have taken all the steps we had planned and it's.
Speaker Change: Execution exceeding our own expectations in these two and a half years, we've achieved very relevant milestones along the three main lines of the plan, which I'll briefly.
Speaker Change: Briefly remind you all first where supply security in Spain in Europe, we have made a significant contribution to that objective. Thanks to the extremely high flexibility of a robust Spanish infrastructure network managing our infrastructure has generated savings of around.
Speaker Change: <unk> 10 billion euros in these national Spanish energy Bill due to lower prices than elsewhere in Europe between 2020, two and 'twenty 'twenty four and during this period. There has been a significant recovery of industrial demand, which grew eight 1%.
Speaker Change: Also we have consolidated our role in this strategic delivery of LNG to Europe with 22 supply sources between 2022 and 'twenty 'twenty, four and Hudson and 77.6 Terawatts hour re exported regasification.
Speaker Change: Your kitchen plants have played a key role in this we currently have about 2200, LNG offloading slots contract there and about a thousand loading slots.
Up to 2022 are clear.
Speaker Change: Demonstration of the long term interest of power utilities in the Spanish gas system.
Speaker Change: With a focus on Spain on Europe, we have moved forward with our asset rotation policy with.
Since you've already been informed of.
Speaker Change: On which you can see in the presentation as far as the second line of our strategy plan, we have exercised they stick controls of our financial and operating expenses. The latter have only risen by 1% I'm not in a high inflation environment. Moreover, our net financial expenses have considerably improved.
Moved.
Speaker Change: Dropping.
34% in the period.
Speaker Change: The third line is that a green hydrogen and renewable molecules.
Speaker Change: I will speak about it in more detail since that is really the core of our strategy update.
But first I'm going to.
Speaker Change: Dwell into the key roles.
Gas infrastructures natural gas infrastructure is having and will continue to have.
Speaker Change: In this context in which.
Speaker Change: Strategic autonomy on competitiveness or an increasing priority for Europe gas infrastructures are going to be crucial for the energy transition for three main reasons.
Speaker Change: Firstly because of the importance of energy sovereignty, given geopolitical uncertainties on the reconfiguration of global LNG flows ticket by the Ukraine War secondly, because of the critical backup that combined cycle.
Speaker Change: <unk> provides the electricity grid since electricity demand peaks will become ever greater due to the increasing contribution of intermittent renewable energy generation to the mix and the decommissioning of nuclear power as well as the increase in installed capacity.
Speaker Change: Of data centers.
Speaker Change: Consuming up to two points 2500 megawatts by 2030, according to the Spanish government AI strategy also the consumption of gas power will become even greater penetration of green molecules, which means we will require high capacity infrastructure to handle it.
Speaker Change: Leasing volumes in the case of LNG plants.
Speaker Change: Well as contributing to.
Speaker Change: Europe's.
Speaker Change: Supply security they will also play new roles and the power transition, including for example.
Speaker Change: Driving decarbonization of Maritime transport.
Speaker Change: And there, Spain, and Energas will play a very relevant role making a.
Speaker Change: The friendship contributions finished regasification plants account for about 30% of the US total regasification capacity and store 40 per cent of Europe's LNG.
Speaker Change: LNG.
Speaker Change: And in the US we have achieved a nine fold increase in bunkering from our terminals.
Speaker Change: Since 2022.
Speaker Change: And our country is pioneering the supply of bile LNG following their certification of the plants in Weibo in Barcelona.
Speaker Change: Let me now move into the third line of our planned renewable hydrogen and other molecules for decarbonization Green hydrogen is being rolled out at an unprecedented speed outpacing any previous power vector in history I will not let the.
Speaker Change: Huge number of milestones achieved in this area in 2024 since we've recently held and I says third hydrogen day, where we gave you detailed explanations and you can always check.
Speaker Change: <unk> for further details the new European Commission has upped its commitment with green hydrogen and its infrastructures as the perfect meeting point for its green and industrial agendas.
Speaker Change: The competitiveness compost presented by the European Commission precedent or still have underlying.
Speaker Change: On January 29th.
Speaker Change: Underscored the need to accelerate investments in hydrogen infrastructure all of Europe is moving ahead in this direction 17 member states have already published that hydrogen production targets and their national energy and climate plans accounting for a total of 52.
Speaker Change: Two gigawatts of which 31.5 gigawatts.
Speaker Change: Are concentrated in the four countries.
Speaker Change: Holden H two men.
Speaker Change: 48 infrastructure projects have been recognized as projects are common interest already on these projects are a common interests or P. C is covered 21000 kilometers of hydrogen pipelines and an estimated 60 billion euros and investments in hydrogen infrastructures.
Speaker Change: Quantities, which really relieve no room for doubt we are entering a new cycle and creating European hydrogen network is one of the top priorities for the European Commission and the member States.
Speaker Change: And our guys are there and the frontline. So these process that's third analyze hydrogen day showcased the very strong institutional and government support.
Speaker Change: Significant business progress.
Pedro Sanchez: We had special guests, including the president to the Spanish government Pedro Sanchez Executive Vice President of the European Commission to Saudi Arabia, and the precedent of the Spanish regulatory body C. N M C Cannae Fernandez.
Pedro Sanchez: Indisputably over the next years renewable hydrogen will be the driving force for competitiveness in both Spain and Europe. The demand forecast for hydrogen are clear for example in Europe. The demand established only by the regulatory obligations from the renewable.
Pedro Sanchez: Energy directive Red three on the refuel EU aviation regulations will reach between three and four and a half million tons by 2030.
Pedro Sanchez: Demand estimated for that year by the Spanish energy and climate plan will be point 8 million tonnes.
This regulation helps boost demand hydrogen supply will be driven by increased industrial capacities.
Pedro Sanchez: And economies of scale, which will trigger.
Pedro Sanchez: A reduction in hydrogen prices due to lower costs and greater electrolyzed water efficiency.
Pedro Sanchez: Spain.
Pedro Sanchez: Since the end of 'twenty 'twenty four we've had the IBEX index developed by <unk> in which the cost of producing hydrogen in Spain is in line with our costs recorded in the first auction of the European hydrogen bank.
Pedro Sanchez: In the project sent from Spain, a 5.8 years per kilogram.
Pedro Sanchez: According to the electricity cost scenarios the price of green hydrogen by 2030, well they between three eight on 2.6 euros per kilogram.
Pedro Sanchez: The Iberian Peninsula will certainly produce the most competitive hydrogen in Europe.
Pedro Sanchez: A hydrogen market is only possible.
Pedro Sanchez: With.
Pedro Sanchez: Infrastructure connecting supply and demand.
Pedro Sanchez: This is then a guy says main focus and will continue to be so over the next years in Spain and in Europe as proven by the projects. We have included in our strategy update.
Pedro Sanchez: In Spain.
Pedro Sanchez: First the elements of the Spanish hydrogen backbone network will stretch over 2500 kilometers and will represent a gross investment of $4 7 billion euros. Most of it up to 20 factories, it's key infrastructure for.
Pedro Sanchez: For decarbonization and industrial competitiveness as demonstrated by the call for interests, we put out at the end of 2023.
Pedro Sanchez: In order to respond to this demand for infrastructure.
Pedro Sanchez: We presented for the second call for P. C is in November of 'twenty 'twenty four.
Pedro Sanchez: For new sections of the backbone network, which will entail an additional 1480 kilometers with gross investment estimated at 2000.
Pedro Sanchez: <unk> thousand 135 million euros these new sections.
Pedro Sanchez: Not included in this strategy update I stay will be rolled out after 2030.
Pedro Sanchez: We are now moving ahead with it.
Pedro Sanchez: Meeting the calendar established for the first lines of the backbone network.
Pedro Sanchez: Klein with a mandate and trusted upon us by the Spanish government for the deployment of our P. C. I project, we have carried out the conceptual engineering of the backbone network and awarded the basic engineering for the first two compression stations amongst other developments, we will be starting.
Pedro Sanchez: I am going to come in the next weeks to rollout.
Pedro Sanchez: Step two a plan for public consultation the biggest ever in Spain of this nature and our goal is to take.
Pedro Sanchez: Take the final investment decision for the backbone network by 2027 are afraid to med. It has been recognized as the most advanced quarter in Europe and a key project. So that the E. U can lead the energy transition process. The participation in the call for interest we announced.
Pedro Sanchez: Last February 10th together with our European partners.
Pedro Sanchez: It was an outstanding success.
Pedro Sanchez: With 528 projects presented by 168 companies.
Pedro Sanchez: In the four countries of the corridor.
Pedro Sanchez: The corridor will come into operation at the beginning after 20 factories and will involve gross investment for <unk> of 1.16 billion euros between 'twenty 'twenty four and 'twenty 30.
Pedro Sanchez: Which to med.
Pedro Sanchez: Will transport the ore.
Pedro Sanchez: Most competitive green hydrogen in Europe.
Pedro Sanchez: And both the backbone network and H to Med <unk>.
Pedro Sanchez: On the phone backing off the European Commission, we have obtained a 100% of the connect in Europe facility funds, we applied for to carry out the studies and the initial engineering for each two men and the first lines of the Spanish hydrogen backbone network.
Pedro Sanchez: And associated underground storage.
Pedro Sanchez: The Spanish network has received $32 5 million euros.
Pedro Sanchez: All projects are.
Pedro Sanchez: Related to H.
Pedro Sanchez: Two med corridor.
Pedro Sanchez: Been awarded $97 3 million euros in funding, which is 39% of the total.
Pedro Sanchez: He now approved funding for hydrogen projects.
Pedro Sanchez: But from hydrogen and Argos has other significant growth drivers for the next years.
Pedro Sanchez: Bringing together new businesses to develop.
Pedro Sanchez: Services and infrastructure is connected to other green molecule is vital for decarbonization, wherein our gas will be an increasingly prominent player. We have set up scaled green energy scale.
Pedro Sanchez: The scale of Green energy.
Pedro Sanchez: Focus on C O two bunkering in small scale for LNG and by LNG Green hydrogen for mobility and renewable ammonia.
Pedro Sanchez: In the field of renewable or no ammonia, we will be.
Pedro Sanchez: Promoting the development of port infrastructures for renewable ammonia in the footprint of our Regasification plants, where we expect to be able to manage a million tons a year in well why don't I have feed us by 2030.
Pedro Sanchez: Since LNG plays a key role in the decarbonization of the maritime transport another sector skills Green energy is developing small scale export terminals.
Pedro Sanchez: And bile LNG and LNG Bunkering vessels, we already have two in operation and another one under construction and us for C. O. Two it is becoming.
Pedro Sanchez: Increasing priority throughout Europe, our focus will be to develop C. O two pipelines liquefaction plants.
Pedro Sanchez: C O twos shipping vessels driving the establishment of logistic hubs around our LNG plants.
Pedro Sanchez: We aim to manage.
Pedro Sanchez: 4 million tons, a year of emissions.
Pedro Sanchez: From Spanish cement plants by the beginning of the next decade with the potential.
Pedro Sanchez: Capacity in Spain, that's reflected in the coffer interests, we put out in 2023 or 10 4 million tons.
Pedro Sanchez: These are C O two emissions that would be impossible to reduce by other means and so these infrastructures will be essential crucial for decarbonization.
Pedro Sanchez: And this is already taken shape in concrete projects such as the one we have with Holcim and set us on the one we're promoting with millions which will come online in 2031 with a total net investment.
Pedro Sanchez: For the loss of some 130 million euros.
Pedro Sanchez: Both projects will be presented in the innovation fund event in April of this year.
Pedro Sanchez: I have left for us to use a renewable hydrogen for press.
Speaker Change: Presto mobility, which is playing an increasingly important role.
Speaker Change: In fact, just a few days ago, we heard that we have been granted the C. F funds, we applied for to develop six hydrogen.
Speaker Change: Filling stations in Spain.
Speaker Change: These stations are part of the Echo high net project, which will supply renewable hydrogen to light vehicles and large transport fleets.
Speaker Change: <unk> 20th Society. The goal is to have 12 hydrogen stations, which will represent 15% of the figure estimated in the national action framework.
Speaker Change: The new investment cycle with a.
Speaker Change: Green hydrogen.
Speaker Change: And the center together with other molecules and services will be underpinned by our very sound balance sheet will also have an updated regulatory framework for natural gas infrastructures and the new framework for hydrogen infrastructures.
Speaker Change: In the case of natural gas the next regulatory framework should contemplate fair remuneration from regulated activities with a financial rate of return that will appropriately reflect the cost of capital in line with macroeconomic.
Speaker Change: Trends and incentives to guarantee.
Speaker Change: Supply and their sustainability of gas infrastructures. These infrastructures.
I have already demonstrated how critical they are for energy security industrial competitiveness in their financial health and sustainability of the gas system.
Speaker Change: Our management has led us to be recognized as the most efficient T. S. L in Europe infra.
Speaker Change: Infrastructures, which will Moreover play.
Speaker Change: Increasingly critical role for the power system underpinning the electricity system in particular, given the planned phase out of nuclear energy and increasing demand from data centers.
Speaker Change: The deadlines for the next regulatory period for natural gas.
Speaker Change: Ah.
Speaker Change: Very clear financial rate of return for the 20th 27, and 2032 framework will be announced this first quarter.
Speaker Change: C N M. C has announced we expect that the circulars on gas regulations will begin the consultation process in October which should mean a final.
Speaker Change: No person will be ready by July 2026, as for hydrogen we need a scheme that will provide incentives for the development of new infrastructures key for decarbonization industrial competitiveness unstained energy sovereignty with appropriate remuneration on current assets and.
Speaker Change: From the moment the investments are made.
Speaker Change: In order for the hydrogen market to become a reality in Europe.
Speaker Change: We need.
Speaker Change: Fast transposition of the directive with good alignment between member States.
Speaker Change: Unproper coordination between regulators and the different countries.
Speaker Change: To summarize the main figures the strategy update we are presenting today.
Speaker Change: Establishes a 45%.
Speaker Change: More investment than we had forecasted and the strategy plan. We presented in July of 2022 with a total of 4.03 billion euros of which 83% would be eligible investment up to 2030. According to European Union taxonomy for its contribution to the Inver.
Speaker Change: Our mental goal of mitigating climate change.
Speaker Change: Green hydrogen will be the heart of N eyeglasses growth strategy with 3.12 billion euros in this period investments, which will accelerate after 2026, and which will be the baseline for our EBITDA to achieve an estimated compound any.
Speaker Change: <unk> growth of nine and a half per cent over the 'twenty to 'twenty six 'twenty 30 period. This ambitious investment program will be accompanied by our efficiency plan, which has shown itself to be a very effective tool and which will continue to.
Speaker Change: Curtail operating expenses with a.
Speaker Change: Cup on your annual growth of around 1.5% between 2024 and 2026 below arc.
Speaker Change: Inflation forecast, we also foresee an improvement in our debt related net financial income with a 40% reduction over this period what Romeo.
Speaker Change: But all those moving pieces yamanaka fewer sofie for our fellows.
Speaker Change: But if you indulge me.
Speaker Change: On the most common balance soluble gap.
Speaker Change: We had was sound.
Speaker Change: Balance sheet, which along with prudent regulatory assumptions remains compatible with our priority to offer attractive and sustainable remuneration to our shareholders and maintaining.
Speaker Change: Our payout policy of one euro per share beyond 2026 as long.
Speaker Change: Long answer.
Speaker Change: Our business and regulation assumptions used for the update materialize.
Speaker Change: With these planned investments in it as well almost double its regulated assets between 2026, and 2030 listing them to nearly 5 billion euros in 2030, we will mark a revealing milestone and the contribution to energy transition in our company.
Speaker Change: Our a b of our green hydrogen as it's well exceed those of natural gas that year, a future of growth driven by deep carbonization backed by the solid commitment of the entire inner gas team many of them over 50% of the company also as shareholders.
Speaker Change: In the framework of our flexible remuneration plan today, we again offer company employees.
Speaker Change: The possibility to receive part of their remuneration and scraped.
Speaker Change: Technical cooperation will end sustainability will become uneven.
Speaker Change: More core element and then I guess its purposes, including all elements in the company's transition plan to mitigate climate change in compliance with the corporate sustainability reporting directive, we will be a net zero company by 2040 and for that purpose. We are on the path of strictly decarbonize.
Speaker Change: In our direct operations. We're also acting on those activities that affect our value chain, where we will also be net zero by 2050.
Speaker Change: We have clearly established our commitment with tangible mines in action in which the adaptation.
Speaker Change: Our infrastructures and the development of our hydrogen investments and new logistical chains for other key molecules for Decarbonization will play a key role.
Speaker Change: His commitment explains our track record at the top of the major Internet International sustainability indices.
Speaker Change: Or digital transformation plan allows us to move ahead swiftly along our sustainability roadmap and our strategy plan.
We are rolling out a more digital energy model in all areas of our activity.
Speaker Change: With.
Speaker Change: A star role in our cyber security plan to ensure resilience and continuity of our business and artificial intelligence as a transformative disruptive element.
Speaker Change: And some were driven by digitalization technology and innovation as big strategy drivers to speed up the arrival of a hydrogen based economy.
Speaker Change: Other outstanding initiative is the hydrogen technology Observatory, which we launched and in under 12 months already has more than 40 Leerink partners to roll out the technical development for this sector through the whole value chain.
Speaker Change: That will wrap it up with six main conclusions 'twenty 'twenty four was a turning point for Antigua we adopted.
Speaker Change: Important decisions and achieved significant milestones that enhanced the company's balance sheet sheet and risk profile.
Speaker Change: Thanks to this performance were in an excellent position to tackle a new investment stage vital to the decarbonization of both Europe and Spain.
Speaker Change: Our better balance sheet lays it sound foundation for our sustainable dividend policy beyond 'twenty 'twenty six between 2022 and 24, we paid out 1.27 billion euros and dividends.
Speaker Change: Thus proving that our commitment to shareholders is an absolute priority and our strategy.
Speaker Change: Gas infrastructures will continue to play a vital role to guarantee supply security industrial competitiveness and the very future of energy transition and decarbonization.
Speaker Change: Europe's institutional and financial support to Spain infrastructure is clear to see with scale Green energy. We will also roll out other key services for energy transition like C O two bio LNG and hydrogen for mobility.
Speaker Change: More than half the de Carbonization Battle lies in the field of renewable molecules and Spain has a unique opportunity we cannot miss.
Speaker Change: Which is why hydrogen infrastructures are so vital.
Speaker Change: And last.
Speaker Change: The growth of our company and creating value for our shareholders is a major priority for the entire Energas team. This strategy is a road map to invest over 4 billion euros in the next few years with hydrogen as the main driver and building up.
Speaker Change: The integration of the future. Thank you very much for your attention. We are here now to answer your questions.
Speaker Change: Thank you very much Mr CEO over to the Q&A period.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, the Q&A session starts now.
Speaker Change: To participate.
Speaker Change: Please press star one and your phone keyboard. Thank you.
Speaker Change: Thank you. Our first question comes from Fernando Lafuente analyst from Alantra. Good morning. Fernando. Please go ahead with your question.
Speaker Change: Hello, Good day, everybody and thank you very much for your presentation and for the strategy you laid out I have three questions. The first one about the regulatory framework.
Speaker Change: Well, obviously I don't expect an exact number but what are your rate of return range for the next regulatory period, and what sort of incentives are you considering.
Speaker Change: Incentives to investment or extra incentives second question is about the Peru arbitration I would like to hear about the timing of those met quite material.
Speaker Change: Extra airplanes beyond.
Ruling when do you expect to have any data on that and also.
Speaker Change: Kim K G b dividends.
Speaker Change: Have they been released or when do you expect them to be.
Speaker Change: And third about midterm cash generation.
Speaker Change: Could you give us an estimate or a range before.
Speaker Change: Beyond the 'twenty 'twenty seven.
Speaker Change: I don't know for the period 27 30 for instance.
Speaker Change: Yeah.
Fernando Lafuente: Well, thank you Fernando.
Fernando Lafuente: As for the regulatory framework on Trs.
Fernando Lafuente: I can obviously make no specific announcements.
Fernando Lafuente: We're waiting for the C N M C.
Fernando Lafuente: To publish.
Fernando Lafuente: The first quarter memo on the Trs.
Fernando Lafuente: The power system.
Fernando Lafuente: As you know this letter at our words as a benchmark for the gas system. So we will soon here what the published number is.
Fernando Lafuente: Our assumption to draft, our forecasts circles around 6.5.
Fernando Lafuente: Present, but as I said the C. N M C numbers will be published very soon.
Fernando Lafuente: Well, it's possible incentives are remuneration of ongoing investment.
Fernando Lafuente: Well for the remuneration.
Fernando Lafuente: Half the gas system.
Fernando Lafuente: Where.
Fernando Lafuente: Considering some remuneration to the sustainability of the gas system as part of a general incentives in the power system to provide continuity.
Two.
Fernando Lafuente: The remuneration of our supply continuity as has been assumed during the ongoing period, which is fully justified because as I said the gas system and create increasingly plays a role of supporting the entire electricity generation system.
Fernando Lafuente: And we'll continue to do so.
Fernando Lafuente: Undoubtedly.
Fernando Lafuente: As for hydrogen investments well.
Fernando Lafuente: Considering.
That.
Fernando Lafuente: Oh.
Fernando Lafuente: This structure involves plenty of new construction.
Speaker Change: Part of the infrastructure will involve refurbishing exits things existing structure, but mostly it'll be do construction. So we do believe no investments are justified and we trust that remuneration.
Fernando Lafuente: Those whoa.
Speaker Change: We'll be there.
Speaker Change: About the Peru arbitration.
Speaker Change: I should like to point out that all.
Speaker Change: Our accounting contemplate.
Speaker Change: The sum we're entitled to according to the ruling.
Speaker Change: These are the two aspects I mentioned during my presentation.
Speaker Change: Material.
Speaker Change: Reimbursement huh.
Speaker Change: And also contemplating that through the arbitration.
Speaker Change: On the G. S. B tendering process, we might recover all or part of the guarantees but down which is an aspect that was acknowledged by the arbitrators. So.
Speaker Change: Oh of course.
Speaker Change: In the case of Oh.
Speaker Change: But claim the first claim where we believe were likely to win that one in the case of a tender arbitration the process will be long.
Speaker Change: Yeah, it's probably and we cannot estimate how long it will turn.
Speaker Change: It will take.
Speaker Change: So.
Speaker Change: And the budget deficit in case of an arbitration decision, we're not announcing any amount, but we have announced in the market that these are action lines, we intend to pursue and which might a yield a certain amount.
About the T. G P will believe that the.
Speaker Change: Court decision the arbitration.
Speaker Change: Brewing.
Speaker Change: Should be to re lease the cash resources blocked in Peru on account of T. G P dividends.
Speaker Change:
Speaker Change: The decision is final, but there was a second ongoing arbitration exclusively dealing with that matter. So we trust that this ruling will arrive during 'twenty twenty-five. Meanwhile, we will take all the necessary steps to unblock the that cash flow.
Speaker Change: No.
Speaker Change: Including a four oh willingness to discuss with the Peruvian government.
Speaker Change: We will touch upon all of the levers we can to free up that cash and where you also have to wait for the ruling on the second arbitration that will probably come in in the next two months and on cash operations during that period I'm.
Speaker Change: Sure Louise has the numbers by now.
Louise: Yes, good morning Fernando.
Louise: In truth for the 27 38 period.
Louise: We're considering a fun preparation of approximately 580 million euros based on three components the fund operation.
Louise: It will be approximately $340 million.
Louise: During the second period, the company and under the regulatory assumptions Arturo mentioned would generate or will maintain a stable cash flow.
Louise: Yeah.
Louise: Thus, allowing our cash flows to remain stable.
Louise: Second component.
Is it flows from Investees, which are approximately 170 million. These are stable flows with high visibility and then the fund operation in connection with hydrogen, including the work in progress element and the commissioning of the backbone network in 2030.
Louise: With that we get an average of fund of 230 million, leading us to a total of 580 million.
Louise: And I would say that.
Louise: That with the deleveraging.
Louise: Pseudo mentioned.
Louise: During the 26 period, when we will generate two extra billing and cash for a net debt of $2 3 billion in 'twenty three.
Louise: These elements would allow us to face that period, 27, 32 deploy that K P. I, a plant and to maintain the present dividend policy.
Thank you Fernando for your questions.
Louise: Next question comes from.
Louise: From Mediobanca Javier Suarez. Please go ahead with your question.
Javier Suarez: Hello, Good day, everyone and thank you for the presentation.
Speaker Change: My question is about the regulatory timing.
Speaker Change: We do see that there's a lag from the regulator to determine the remuneration of the electric system and the filing of the National plan for electric infrastructures. So my actual question is do you believe that this first regulators document.
Speaker Change: The consultation paper for the electric system will have to be.
Speaker Change: Here the reference points for the gas system.
Speaker Change: And do you believe this document will include some guideline to give you a visibility on your potential remuneration beyond 2027 and in connection with this I wonder.
Speaker Change: What's your interpretation is off the delay of our publishing the national plan for electric infrastructures. So in a context.
Speaker Change: In which these are mandatory investments for companies like yours.
Speaker Change: Whoa that national infrastructure plan include.
Speaker Change: Any of those guidelines that might have an impact for you.
Speaker Change: In other words, well, we know how relevant it will be to create an AD hoc hydrogen national infrastructure plan.
Speaker Change: So the boil down question is when do you expect to have visibility for this capex in connection with hydrogen.
Speaker Change: And it's do remuneration I thought your CEO mentioned that Oh things are growing quite urgent.
Speaker Change: Since you're expecting that this hydrogen specific regulation will be published and just as you were very explicit and publishing your experts expected remuneration for the gas system would you be equally open about your assumption for hydrogen remuneration what number.
Speaker Change: Or is are you using for your forecast.
Speaker Change: And finally.
Speaker Change: One last question about Peru.
Speaker Change: After the GSP arbitration decision what should be immediately applicable could you update us about your negotiations with the Peru government is it true that you're waiting for the final T. G B decision and when this final.
Speaker Change: Outcome or award is granted you will sit down with the Peruvian government in reach and agreed.
Speaker Change: A discussion or agreement with the Peru government or am I missing something here.
Speaker Change: That's all thank you.
Okay.
Speaker Change: Thank you for your questions Javier.
Speaker Change: About your first set of questions.
Speaker Change: I believe that.
Speaker Change: In Antigua, we can only provide a partial answer.
Speaker Change: Since there are aspects of the electric system.
Speaker Change: Plan that are beyond.
Speaker Change: Our scope.
Speaker Change: We do not sit at the heart of the process.
Speaker Change: As a Gaza.
Speaker Change: Transporting operators in the power system.
Speaker Change: I would like to.
Speaker Change: State.
Speaker Change: That the financial remuneration rate letter will be published for its consultation very soon it was announced for the first quarter of 'twenty five yes.
Speaker Change: Yes, this might involve a slight delay.
Speaker Change: Versus early.
Speaker Change: Calendar's, but we also know that in the past few years.
Speaker Change: New.
Speaker Change: Directors were appointed to cover vacancies in the T N M C.
Speaker Change: These are new directors had to take officer.
Speaker Change: And the peer of the Parliament so.
Speaker Change: T N M scene members are renewed which might go to explain that limited delay.
Speaker Change: I don't think they are dragging their feet and I'm sure that.
Speaker Change: The letter will be published very soon and of course, it does provide guidelines to the gas system because the methodology for the financial remuneration rate established in that letter will be the one to apply to the gas system. Although in the gas system. This will be enacted one year later and there.
Speaker Change: Therefore, there might be a collage on account of the size of the numbers themselves, but certainly at the letter would provide a clue or a guideline as you called it a high quality guideline on what the F. R. R will look for the gas system.
Speaker Change: As for blending there's not much I can say.
Speaker Change: It hits our <unk>.
Speaker Change: Extraordinarily complex technical work.
Speaker Change: So.
Speaker Change: Yeah.
Speaker Change: It will it will take time.
Speaker Change: To become available and I'm sure. The sole reason is oh, the complexity of the technical work behind it.
Speaker Change: At any rate have yet I would like to underscore that hydrogen has its own roadmap.
Speaker Change: And the hydrogen roadmap is established by the National Energy plan, which is already approved and enforced and it already establishes the bad numbers for hydrogen generation and for the electricity required to generate that hydrogen.
Speaker Change: So we are our benchmarks.
Speaker Change: Our our Beacon is the national energy and climate plan. So we do not believe that the electric system will introduce any changes on the national plan. It will just provide a clearer view.
Speaker Change: But we believe that our the national blend is a perfect reference framework and that is where we find and installed capacity for Electrolyze Theres, a 12 Gigawatts for 2030, which is fully compatible with the objective of the commissioning of the backbone network.
Speaker Change: 2030 as established in the National blend and then based on that H. Two met so have you are we will be on the lookout for anything published of but.
Speaker Change: The foundations are were laid by the National plan and that's the only reference point, we need the bond hydrogen capex and one will we have any visibility on its potential remuneration, well and our strategy update.
Speaker Change: We established that by 2027.
Speaker Change: The remuneration principles for the hydrogen regulation system must be established and that will lead us to the final decision on remuneration for the backbone network and for that purpose to things are going on first of the discussion.
Speaker Change: Half the energy creation Act and the Congress, which has particularly competencies in the.
Speaker Change: The field of hydrogen like establishing methodologies remuneration system operators are reminiscent you should've infrastructures letters about access capacities all of that is under discussion in the Congress as we speak and the administration is working full steam.
Speaker Change: Transpose, the Decarbonize guys gas and hydrogen plant, which is another element to design the regulatory remuneration framework for hydrogen.
Speaker Change: The administration have declared their intention to move ahead by the two year deadline for transposed the directive actually a preliminary consultation has already been published for the whole package and we.
Speaker Change: We are convinced that very soon the ministry will be publishing a consultation with the text for the transposition of that European Directive, which is so important for our industry.
Speaker Change: About remuneration brackets.
Speaker Change: Well.
Speaker Change: We believe that our remuneration framework for hydrogen a regulated one will have a reasonable Ah you reasonable yields similar to gas.
Speaker Change: Which involves a post tax at a rate of 6.5% to 7% for a spread of 150 to 200 basis points on the cost of capital for an a gas.
Speaker Change: We are convinced that we should have a remuneration.
Speaker Change: Pass through remuneration for Opex during the first couple of years and as I said appropriate remuneration of work in progress and collection.
Speaker Change: Love investments Blas and they have a pretax F. R. R of approximately 8%.
Speaker Change: Considering that in the case of hydrogen there are no other remuneration or incentive elements like for instance, our.
Speaker Change: Supply continuity.
Speaker Change: Those are our assumptions on which we build the forecast we brought to you today.
Speaker Change: About of the Peru arbitration well the minute we arrest the award.
Speaker Change: We contacted the Peruvian government and made ourselves available for the negotiation on the execution of the award and we have filed to the different official buddies in Peru.
Speaker Change: To leave the list of category too.
Speaker Change: You know the words, we have requested that the sum do be paid.
Speaker Change: And we're still waiting for are the broiler administrations reply.
Speaker Change: Considering that our we are fully available and willing to move ahead towards a solution.
Speaker Change: And where we are working along the same lines in terms of the T. G P dividends.
Speaker Change: We're taking every possible step to unblock those dividends without waiting for the second Arbitration award, but certainly the second award will also be irrelevant because the specific purpose of that arbitration is including us.
Speaker Change: And the category to a law 30 737.
Speaker Change: And although the award is final in the sense that our inclusion in that list that counters. The agreement of reciprocal investments between Spain, and Peru, and therefore, not legal but first a word had no implementation capacity because the minute.
Speaker Change: We filed our first request for arbitration.
Speaker Change: No ban had been issued two international transfers.
Speaker Change: And I got from Peru.
Speaker Change: And then by the second award we request a decision.
Speaker Change: Addressed to a claim of dress to the Peru administration to pull us out of the list and release. These funds. So the first award is final in terms of the subject matter and we believe that the second award well establish it and explore.
Speaker Change: Is it execution instead.
Speaker Change: Instructions. So we're doing everything we can to repatriate those funds since the award was issued but we do believe that the second award will also play a key role if we have not repatriated those funds by them. So we're not.
Speaker Change: Waiting for the second award we're doing everything we can already and we're negotiating with the Peruvian administration and we've made ourselves available to find the best possible way to execute.
Speaker Change: The award from the first arbitration.
Speaker Change: Yes, well. Thank you very much heavier for that question. The next one from JB capital from Ignacio Dominic Good morning Ignacio. Please go ahead.
Ignacio Dominic: Yes. Good morning, Thank you for the presentation and for answering my questions.
Speaker Change: The first question is about H to Matt I'd like to know.
Ignacio Dominic: What kind of timeline you have in mind.
Speaker Change: For the final investment decision.
Speaker Change: I understand that it might happen towards the end of this year, but I would like you to confirm that.
Speaker Change: And also.
Speaker Change: And I've asked.
Speaker Change: Sees the results of that call for interest.
Speaker Change: Which took place a few days ago on my second question about the hydrogen backbone network in Spain, I'd also like to know when you expect to have.
Speaker Change: The plan.
Speaker Change: From the government of Spain, I think in the presentation you.
Speaker Change: You spoke about a final investment decision by 'twenty 'twenty, seven, but I imagine that's connected to the government's own or the ministries on plan.
Speaker Change: And my third question about the performance of its subsidiaries.
Speaker Change: Could you give us some additional color on the performance, especially of T. G P on top.
Speaker Change: And.
Speaker Change: What your forecasts are for the coming years and what are your targets by 2030.
Speaker Change: Because I know you spoke about between 25 and 30, but what are you actually including in these targets.
Speaker Change: Yeah.
Speaker Change: Thank you very much Ignacio.
Speaker Change: First us 182 men.
Speaker Change: The final investment decision will necessarily have to be connected to our being awarded the European funding necessary to undertake the.
Speaker Change: Development of the infrastructure in the case of H two men on the international Interconnections the contribution of our connect in Europe facility will be very significant in order to guarantee the financial.
Speaker Change: Feasibility and so what we have in front of US now is.
To complete the preliminary studies as you know.
Speaker Change: And as I explained in the presentation.
Speaker Change: We have received all the funding we had requested for the studies of that corridor, which is really extraordinary almost 40% of all the funding awarded by the C. I N E for hydrogen infrastructures are for our H two Mad corridor, but no once we complete the study.
Speaker Change: We have to go through a whole series of.
Speaker Change: Procedures.
Speaker Change: With the European institutions, we have to file the investment project with the regulators and so eventually we will be able to request the funds for construction.
Speaker Change: All of that will mean that the final investment decision will not take place before I would say 2028, but.
That will be the subject of a specific announcement by the consortium when we have more visibility of the timeline.
Speaker Change: As for the results of a call for interest.
Speaker Change: We believe that they were.
Speaker Change: Hugely successful there was a webinar on February 10th.
Speaker Change: Which we presented the conclusions.
Speaker Change: Office process or just the first of its kind in Europe. The main conclusions indicate that the Iberian peninsula in Spain in particular.
Speaker Change: Huge potential for green hydrogen production and going to us medallion I thought right to give us some of the key figures from that in a moment, but clearly these results confirm.
Speaker Change: Those of the previous call for interests for Spain, a year earlier and our tremendous guaranteed for Europe at age two med will generate enough volumes of renewable hydrogen in order to.
Speaker Change: Yeah.
Speaker Change: Fulfill the design capacity for this infrastructure, we've checked that France will play.
Speaker Change: A double row, as both consumer and producer of hydrogen and in fact here in the first part of the period. They maybe a net exporter and we've also checked that the coffer interests has awaken tremendous interest in Germany, especially in the western part of Germany, where the Oh Gee.
Speaker Change: <unk> networks being deployed on the <unk>.
Speaker Change: Vision and a call for interest indicates that this infrastructure might be decisive in order to cover a hydrogen needs of German industry in that area, but anyway, I'm going to give the floor to an Italian one with I finish. So she can give us some of the key figures and as for the planning by the government the binding planned by the government for the.
Speaker Change: <unk> network it will be connected with a transposition of the director until the government of course has its own timeline, but the directive was published in July of 'twenty 'twenty four and so.
Speaker Change: We'll have to be transposed by July 26 at the latest and therefore, the binding plan will probably be a.
Speaker Change: Ready by that year. However.
Speaker Change: It's actually a really important the government precisely in order not to have to wait until the legal framework is fully transposed for the binding.
Speaker Change: Plan that governments already given us a mandate to develop the P C eyes.
Speaker Change: And has already given us the green light to start with the proceedings for both the backbone network and H two men. So we have green light to start the public consultation process and the environmental impact planned so the.
Speaker Change: Backbone network doesn't have to wait for the binding plan to be in place because we already have the legal mandate from the cabinet.
Speaker Change: On legal.
Speaker Change: The support of the Royal decrees and 23 in order to undertake these projects without waiting for the binding plan to be published by the government. So now I'm going to give the floating Italia. So she can remind us of some of the figures from that call for interest rates to Matt and then I'll ask Luis to give us the <unk>.
Speaker Change: Tell us about the.
Speaker Change: T G P and in the past performance, a kind of a forecast for the coming years, yes. Good money nestea, yes. The coal franchise for US was a tremendous success in terms of participation. We had 168 companies present 528 projects throughout our core.
Speaker Change: Sure.
Speaker Change: But as I said take home message for example, Vermont, which is one of the purposes of this call for interests, where it's understanding how much demand capacity through biomarker that would be of that Barcelona, Marseille by 2032 would be talking about 2 million tons that could be exports.
Speaker Change: It beyond the Iberian Peninsula, and by 2035 number would rise to 2.6 and France.
Speaker Change: <unk> pointed out would be able to export.
Speaker Change: Approximately point 4 million tons to France to Germany, So let's call for interest has.
Speaker Change: Underscored.
Speaker Change: The conclusions and findings of the original Spanish call for interest. There were also lots of projects that would produce four internal Spanish consumption 2032, Hep B 2.6 million tons. So the Spanish production.
Speaker Change: The potential is huge.
Speaker Change: Yes, good morning, nausea as for the subsidiaries.
Speaker Change: As I as.
Speaker Change: So we said at the beginning and the 27 30 period, we expect a dividend contribution from subsidiaries of about 170 $180 million.
Speaker Change: The average dividend from subsidiaries in 'twenty four but also in 25 will be around $165 million.
Speaker Change: And in this contribution T. G. P is the biggest contributor around $85 million for 2025, and <unk> 45 million.
Speaker Change: And how do we expect these contributions to evolve in the future, particularly T. G P and tough well actually they will be increasing up to 118 million on average. So there will be an increase of about 15 million driven mostly by the expansion of Tau, which will mean its contribution would rise from 45 million to 65.
Speaker Change: Five or 70 and T. J P will remain more or less at around 75 million. So these are the main components of the contribution of our subsidiaries in the next years.
Speaker Change: Thank you very much for those answers we're going to move to the next question, which is from Societe Generale.
Speaker Change: Jorge Alonso. Please go ahead.
Speaker Change: Yes, good morning.
Speaker Change: Yes, I have a question.
Speaker Change: Could you give us.
Speaker Change: Some idea of the level of net debt that you might reach by 2030 with the fault.
Speaker Change: Plan.
Speaker Change: Or at least.
Speaker Change: Give us an idea.
Speaker Change: If.
Speaker Change: The ratio.
Speaker Change: Got to net that you think should stay at 14% to keep your current rating.
Speaker Change: Could you give us more or less.
Speaker Change: An idea.
Speaker Change: Of.
Speaker Change: Whether it would be about 4 billion and net debt that would make sense in that context.
Speaker Change: And another question the EBITDA.
Speaker Change: Looking at the compound growth forecasts here given us for 2030.
Speaker Change: Would be at around 818 million.
Speaker Change: If I'm not mistaken.
Speaker Change: Just to make sure.
Speaker Change: And whether that includes 12 months.
Speaker Change: Months of contribution from <unk>.
Speaker Change: The hydrogen infrastructures are received by 2030, they would be bringing in full 12 months of revenue and my final question is the plan to fund all of this capex.
Speaker Change:
Speaker Change: Are you considering any potential asset divestments I know European Europe is your core footprint not Latin America, but.
Speaker Change: Do you really feel comfortable with beginning.
Speaker Change: This investment plan.
Speaker Change: Oh Wow.
Speaker Change: Was divesting of some of your.
Latin American portfolio and finally.
Speaker Change: How are you planning equipment supplies and so on because according to your plan. It looks like construction will be very concentrated over a couple of years and so I wonder what kind of execution risks might exist there or if it's all pretty standout with no significant bottlenecks. Thank you.
Okay.
Jorge Alonso: Thank you very much Jorge.
Speaker Change: Yeah.
Speaker Change: About net debt by 2030.
Speaker Change: Our forecasts.
Speaker Change: We estimated at 4.3 97 billion euros.
Speaker Change: Approximately.
Speaker Change: That with the F C L.
Speaker Change: That.
Speaker Change: The CFO mentioned earlier would mean that we would have a ratio a 15% so compatible with our triple B plus rating.
Speaker Change: As for our EBITDA by 2030.
Speaker Change: Pretty similar to the calculations you mentioned, our EBITDA would be 875 million euros in our forecast for that year with the contribution of a full 12 months of the hydrogen fish that essentially we expect that the backbone network, which is the main.
Speaker Change: Contribution of hydrogen that year would come online at the beginning of the year.
Speaker Change: And as for potential divestments.
Speaker Change: We haven't considered any in the financial forecasts that we've announced today.
Speaker Change: Of course, you know that the.
Speaker Change: The assets that we still have in Latin America are the.
Speaker Change: Altamira Regasification plant on especially the Peruvian assets, particularly.
Speaker Change: The T G P S theyre not.
Speaker Change: Naturally our priority.
Speaker Change: Is too.
Speaker Change: Yeah.
Speaker Change: Finish the litigation process with the Peruvian government and so we're not planning any divestments at this time, but once everything.
Speaker Change: Has been resolved we will make some strategic assessment of those assets, but right now we're not considering rotating those assets in the near future.
Speaker Change: Within this planning horizon.
Speaker Change: Okay.
Speaker Change: But it's the fact that she said Jorge that the challenge of.
Speaker Change: And he and the supply of equipment and services for the execution of a project of this magnitude is a challenge and that's why we've been working on it from day, one and we are already the finding request for information processors from different suppliers and equipment manufacturers, we have a very clear.
Speaker Change: <unk> relationship with the equipment vendors with the Oems and with the equipment manufacturers because.
Speaker Change: Uh huh.
Speaker Change: Project of this size means you must reserve capacity well in advance we're already doing that both for the backbone network and for H, two med and ice.
Speaker Change: I've explained we have already begun to put out some tenders and award some initial elements.
Speaker Change: The development of these assets starting with the engineering work, which does also.
Speaker Change: So.
Speaker Change: A lot of effort in projects of beef Fisk magnitude, so definitely a key aspect of Jorge and that's why we're very much focused on it in our own.
Speaker Change: Planning cycle for these assets.
Speaker Change: Thank you very much there are no further questions in the Spanish channel. So we're going to open the floor to questions.
Speaker Change: Thank you, we'll now take questions from the English room as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Very much first question comes from James Runde analyst of Deutsche Bank.
Speaker Change: Hi, good morning, and thank you for the presentation I had a few questions. Firstly, you are tying to be giving a bit more granularity on some of the financial projections in 'twenty sorry Chi.
Speaker Change: I want to especially on the EBITA, where you said 875 million are you able to provide a rough split for how much for classifieds Jan how much of that is the gas business.
Speaker Change: Last question.
Speaker Change: You also just provided a net debt number in 'twenty 30.
Full point 4 billion.
Speaker Change: I wanted to.
Speaker Change: I believe you said that was not assuming any divestments.
Speaker Change: I just want to ask what does that assume for the dividends because you will see provided guidance for the dividend out to 2026 for one year.
Speaker Change: You said you believe that that's sustainable, but obviously haven't provided guidance I was trying to hitachi for the dividend.
Speaker Change: Does the $4 4 billion of shares about one year old continues to make a different assumption.
Speaker Change: And then the final question is on the.
Speaker Change: I guess the regulation, partially on the return dynamics shoot you kind of said in answer to another question.
Speaker Change: You are anticipating that you should have or what kind of around I believe what you said you anticipate you should happen, we're trying to provide a central hydrogen.
Speaker Change:
Speaker Change: There's been a whole kind of debate up until now which has been to you do you have a higher return and take the risk.
Speaker Change: It may be involved in Hodgkin big.
Being higher than format troll gas regulation or do you take a low return and so you've got kind of some kind of come back.
Speaker Change: Backstop.
Speaker Change: Or some kind of a very secure regulation.
Speaker Change: Just wondering whether youre thinking you might have evolved to toll.
Speaker Change: Talking about late summer time touched it makes me think you're willing to take maybe a bit more risk.
Speaker Change: What is what is the latest thinking on.
Speaker Change: Yeah, a government backstop on the on the hygiene investment losses.
Speaker Change: The retention when you buy it for the high risk. Thank you very much.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Thank you very much for your question James.
Speaker Change: First of all regarding EBITDA by 2030.
Yeah, if I said our.
Speaker Change: Guidance is 875 by by that year.
Speaker Change: Of those.
Speaker Change: 400.
Speaker Change: Yes.
Speaker Change: That's logos.
Speaker Change: 870 comes from the affiliate.
Speaker Change: Companies.
Speaker Change: Around 290.
Speaker Change: 290 comes from hydrogen in Rome, 'twenty come from the new <unk> as we call it adjacent businesses, mainly the Bunkering business.
Speaker Change: Bennett Beth I mess on for 2030, those 4.4 billion euros.
Speaker Change: Don't include divestments.
Speaker Change: If the result of.
Speaker Change: Cash generation during the period and the investments that we are and this is doing.
Speaker Change: But as I said no divestments.
Speaker Change: Included in the equation.
Speaker Change: For the Pbms, what I said is.
Speaker Change: The.
Speaker Change: With Baird.
Speaker Change: Predictions, we have presented today our assumption.
Speaker Change: He is one euro per share beyond.
Speaker Change: 2026 on viewpoint.
Speaker Change: 30.
Speaker Change: Uh huh.
Speaker Change: Provided that or a Samsung.
Speaker Change: For the business evolution and for the.
Speaker Change: Regulation and the remuneration scheme for the next period are met.
Speaker Change: So this is not a commitment is the assumption we've taken for these predictions.
Speaker Change: And in those projections, we see that with these net debt of four point, Paul and this Capex program and the remuneration assumptions, we've we've taken.
Speaker Change: The one euro per share dividend is sustainable during the next period.
Speaker Change: Okay.
Speaker Change: And for Hudson.
Speaker Change: Regulated return.
Speaker Change: What we are seeing is the boot.
Speaker Change: Profitability has to be similar to that of gas.
Speaker Change: But as you know in there and that's what all the gossip system. Besides the.
Speaker Change: Financial remuneration right. There are other incentives such as the remuneration of the continuity of supply.
Speaker Change: And these incentives are not.
Speaker Change: <unk> for the hydrogen system that means that the.
Financial remuneration rate has to be higher for not for hydrogen done for natural gas to produce a similar level of postcards.
Speaker Change: No.
Speaker Change: Profitability post Postbox financial return. So this is why we are considering the same.
Speaker Change: Internal return between 7.5, and 8% for both systems for natural gas and for hydrogen but that requires a higher the financial remuneration rate for the hydrogen because in the hydrogen system we won.
Speaker Change: How are the incentives that are established for the gas system and hope that these this is clear enough.
Speaker Change: Thank you very much we are ready to take the next question that comes from Bank of America, John Campbell, Florida, Georgia.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Hi, Good morning, everyone. Yeah. Thanks for taking my questions I just had a very quick one I'm looking through your slides it looks like you updated your assumption.
Speaker Change: Level of either call it subsidies or grants for the construction of the Spanish backbone network to your left the grants the same in H two meds I'd be interested to know everything has gone from 40% originally to 'twenty, what kind of underpins. Our assumption have you heard anything any details you can provide I think would be it would be helpful.
Speaker Change: Thank you.
Speaker Change: Thank you John.
Speaker Change: What we are seeing and when we.
Speaker Change: Oh analyze the track record of.
Speaker Change: F C of subsidies for these kinds of infrastructure, although in the past.
Speaker Change: And no hydrogen infrastructure has been subsidized so the correlation is not.
Speaker Change: Direct our own Budd would we have seen is that typically the intensity of EU funding.
Speaker Change: Four into.
Speaker Change: The national Interconnections.
Speaker Change: Trans border embed connections is higher than for the enabling national systems that provide.
Speaker Change: And the necessary support for the interconnection so we have.
Speaker Change: Decided to be more concerned about these and we are assuming a 40% intensity of EU subsidies for each tumor for the.
Speaker Change: Transport impact connections.
Speaker Change: 20% for the domestic backbone. This is as I said because of the track record that shows that for domestic infrastructure C. F. Typically provides lower intensity of EU funding and we have.
Speaker Change: Just.
Speaker Change: Try to be more prudent more conservative to reflect these lower intensity in the case of of National infrastructure, We think that this 20% for the Spanish backbone and 40% for a stomach is.
Speaker Change: Realistic.
Speaker Change: Whilst being concerned about these so for these financial projections, we think that it's a very very good references.
Speaker Change: Thank you.
Speaker Change: Thank you very much.
Speaker Change: Much next question comes from Morgan Stanley.
Speaker Change: Seaborne. Please go ahead good morning.
Good morning, Yes. Thank you for taking my question its basically on your on your policy of 40% payout ratio on all that before beyond 'twenty 'twenty six.
Speaker Change: Am I was I was wondering basically how could that evolve depending on the on the hydro hydrogen capex trajectory My point here is if ever.
Speaker Change: Can you spend less capex on the hydrogen than expected for example, because because they're all delayed would that mean would that mean lower dividend because you would have lowered their food because hydrogen would not contribute as much EBITDA as expected or could that mean hires have you done because actually you would have.
Speaker Change: Less to two investing until maybe more more cash available I was wondering how you think about that and as well on the different question on the size of the guarantees on GSP that you're that you were talking about that you you're still hoping to get at some point. If you could just quantify that that would be very healthy.
Speaker Change: Thank you very much.
Speaker Change: Thank you for your question Arthur.
Speaker Change: Yeah.
Speaker Change: As you as you know we have Monday by the government of Spain to half hour.
Speaker Change: Spammy is hydrogen backbone in place by 2030 and this is what we are.
Speaker Change: And this is Jim this is what we are required.
Speaker Change: We're required to do so and we don't consider them.
Speaker Change: Deviations from these basic objective of our plan I think it could and couldn't be otherwise because this is something that is established already in the panic in the in.
Speaker Change: And the mandate, we have received from the government.
Speaker Change:
Speaker Change: So we we cannot now give alternative.
Speaker Change: Projections of our dividend.
Speaker Change: Dividend to that that I have already commented.
Speaker Change: All in all four of these are Samsung are very robust to ensure a sustainable development beyond 2026, if there is a material deviation from these.
Speaker Change: Our plans in the coming years, we will.
Speaker Change: Consider the possible consequences, but we don't see any change to the dividend policy, we think that if there is some.
Speaker Change: Let's say a slight delay in the plans.
Speaker Change: Everything can be maintained in the terms, we have explain the capex come be deployed will be.
Speaker Change: Paper, perhaps partially or perhaps the contribution of hydrogen may you also and we figure out what our ramp up but this is just the speculations I think if it doesn't.
Speaker Change: <unk> reflects any b some of the management team at this point in time, we think that our plans are very robust. They are in accordance to the mandate. We have received from the government and we have of course.
Speaker Change: Some.
Speaker Change: Range of flexibility of.
Speaker Change: Sensibilities to maintain these <unk>.
Speaker Change: <unk> of the future of DB them, even if there is some non material.
Speaker Change: Just meant to our plans.
Speaker Change: Concerning.
Speaker Change: The GSP and the one piece these represents if I'm not mistaken 230 million.
Speaker Change: Million dollar in this case and we think this is going to be alone poses the arbitration procedure for for that is just starting and so we prefer not to include any.
Speaker Change: Income from that market.
Speaker Change: I'd be curious from Brazil.
Speaker Change: Kosovo until 'twenty something if there are news in that regard we will maintain our.
Speaker Change: The market updated on that but don't expect news soon because this is going to be a lengthy process that is just starting but we think it's important to let the market know that we are going to fight for receiving <unk>.
Speaker Change: When those parts of the.
Speaker Change: Amount, we are claiming that have not been acknowledged by the GSP arbitration last December.
Speaker Change: Thank you very much there are no more questions in the English room.
Speaker Change: But most of it has been there so we're not going to answer the questions that have come in in writing to our website, although lots of them have already been answered.
Speaker Change: In the previous questions and answers and the first is from Kai Shah from our analyst Flora.
Speaker Change: And she was asking.
Speaker Change: What is the reason.
Speaker Change: Why you delayed some of the investments and underground storage facilities and what is the capex for hydrogen that the company might expect beyond 'twenty if 30.
Speaker Change: Based on the.
Speaker Change: Proposal for these new sections that you've set for the second P. C I.
Speaker Change: Cool.
Speaker Change: In Q4 those questions Laura.
Speaker Change: That first.
Speaker Change: As you know in our first PCI list. We've included two underground storage facilities one of them.
Speaker Change: More mature than the other.
Speaker Change: Because the incorporation of storage to the backbone network.
Speaker Change: It needs to also be gradual we've greatly increased our design capacity for the backbone network and we're moving forward and our ability to optimize.
Speaker Change: The storage cycles within the pipes themselves and the line pack as its called so the role of the infrastructure itself with a different pressure levels. It can handle.
So linear storage.
Speaker Change: And we're also moving forward a great deal with optimizing the injection extraction cycles from storage, which means that the commissioning of underground storage timeline.
Speaker Change: Can be.
Speaker Change: And that for example in the first storage, which will have eight cavities.
Speaker Change: And they pay it up to 2030, we think we'll only have to bring four of those cavities online.
Speaker Change: So those will be sufficient so.
Speaker Change: As we get to know more about the technical capabilities of the network and its storage capabilities and.
Speaker Change: Linear storage, we are able to delay some of the investments into underground storage and that's why it's not in the 2030.
Speaker Change: Horizon and as for hydrogen Capex for the new sections in the presentation. I gave you the gross investment that we estimate would be needed for those sections, but it's really too early to include them in our financial forecast. They have been presented for the second P. C. I left we'll have to wait for.
Speaker Change: The decision from the European Commission and so once we have more visibility about those infrastructures and the capex. They will represent and how we will incorporate it into our financial forecast, we will share it and.
Speaker Change: Other presentations. Thank you thank.
Speaker Change: Thank you very much the other questions that we've received in writing have already been answered and so there are no further questions and with that we will close this call.
Speaker Change: Thank you very much everyone for your attention and as usual we will be available in the Investor Relations who answer any additional questions. Thank you.
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