Half Year 2025 Redeia Corporación SA Earnings Call
Roberto Garcia Merino: Good morning, ladies and gentlemen. We are now going to start our presentation of the earnings from the first half of 2025. Welcome everyone who is following us by telephone and on our website. Along with us today, we have Roberto Garcia Merino, our CEO, and Emilio Cerezo, our CFO. I will hand over now to our Chief Executive Officer. Good morning, everyone, and welcome. Thank you for attending this presentation. Today, we want to share the most significant milestones of the first half of 2025 with you, looking at Red Eléctrica Corporación S.A.'s performance and all the results achieved by the group during the period. We will wrap up the presentation with our vision for 2025. You may remember that is the last year of our current strategy plan. At the end of the presentation, we will have a Q&A so we can address any questions you might have.
Good morning, ladies and gentlemen, we are now going to start our presentation of the earnings from the first half of 2025. So welcome everyone who is following us by telephone and on our website along with US today, we have robotics, you'll get to see on that even though I see okay.
And Emilio cities, so our CFO.
Over now to our Chief Executive Officer, Good morning, everyone and welcome. Thank you for attending this presentation today, we want to share the most significant milestones in the first half of 2025 with you're looking at when they asked before mentioned only results achieved by the group during the period and we'll wrap up the presentation with star.
Vision 2025, and you may remember that the last year of our current strategy plan at the end of the presentation. We will have a Q&A. So we can address any questions you might have.
Roberto Garcia Merino: I would like to start by identifying the highlights of the period. Firstly, as you are all aware, at the end of April, there was a total power outage on the peninsular mainland, which I will discuss in greater detail later. But once again, it highlighted the importance of electricity grids and the need to strengthen the electricity system with additional flexibility tools. That is why we are continuing to boost our investments in the national transmission grid. These investments will enable us to achieve energy independence, supporting the development of the very fabric of industry and production.
So I'd like to start by identifying the highlights of the period.
Especially as you're all aware.
The end of April there was a total power outage on the peninsula mainland, which I'll discuss in greater detail later, but once again it highlights the importance of electricity grid and the need to strengthen the electricity system with additional flexibility to us and that's why we're continuing to boost our investments in the national trends.
Emission grid. These investments will enable us to achieve energy independence supporting the development of the very fabric of industry and production.
Roberto Garcia Merino: In this regard, during the first six months of the year, TSO investments exceeded 560 million, that is 34% more than in the same period of 2024, with a particular focus on international interconnections, links between islands, and energy storage, moving towards the goal of exceeding 1.4 billion euros by the end of the year. That is the largest investment in the history of Red Eléctrica Corporación S.A. This enormous investment effort has been supplemented by optimal management of the facilities, achieving a transmission network availability rate of close to 99% nationwide. Quite apart from the aspects related to the incident of April 28, one of the main milestones of this half year was the divestment of Hispasat at the end of January, for which the process of obtaining regulatory approvals is still progressing.
In this regard during the first six months of the year T. S. O investments exceeded 560 million, that's 34% more than in the same period of 2024.
With a particular focus on international and two connections links between islands and energy storage moving towards the goal of exceeding 1.4 billion euros by the end of the year, that's the largest investment in the history of electrical.
This enormous investment and such has been supplemented by optimal management of the facility is a T V. A transmission network availability rate of close to 19, 9% nationwide.
Apart from the aspects related to the incident at the 28 to April what is the main milestones this half year with the divestment of his special out at the end of January which the process of obtaining regulatory approvals is still progressing and we do expect to complete the transaction in the fourth quarter of the year, which is when we will collect the 725 million euros.
Roberto Garcia Merino: We do expect to complete the transaction in the fourth quarter of the year, which is when we will collect the 725 million euros. I'd also like to highlight the support of major financial institutions such as the European Investment Bank, which will enable us to roll out strategic projects such as the Salto de Tierra and the electricity interconnection between Spain and France. We've also signed additional loans for 800 million euros with various financial institutions, thereby strengthening our financial capacity to tackle the new investment plan we're starting with. In terms of sustainability, you should note that Red Eléctrica Corporación S.A. has been recognized in the S&P Global Sustainability Yearbook 2025, ranking us among the top 5% of the world's most sustainable companies and standing out as one of the best in the electricity sector worldwide.
I don't really like to highlight the supported major financial institutions, such as the European investment Bank, which will enable us to rollout strategy to projects such as yourself to the theater and the electricity interconnection between Spain, and France. We've also signed additional loans for 800 million euros with various financial institutions.
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In terms of sustainability.
You should know that really it has been recognized in the S&P global sustainability yearbook 2025 ranking us among the top 5% of the world's most sustainable companies standing out as one of the best in the electricity sector worldwide.
Roberto Garcia Merino: Moreover, we've updated our green finance framework to align it with the European taxonomy and the 2025 Green Principles. The framework seeks to ensure that our financial activities can support the projects to promote respect for and conservation of the environment. I'd like to focus on the incident that occurred last April. As you know, at 12:33 P.M. on Monday, April 28, there was a widespread power outage affecting mainland Spain and Portugal. Regarding the events that led to the peninsula electricity system reaching zero, starting at 12:03 A.M. on April 28, there was a first forced oscillation caused by abnormal behavior at a power plant in the province of Badajoz, which was repeated at 12:16, and then another inter-area oscillation at 12:19, both of which forced the system operator to adopt protocol measures to mitigate them.
Moreover, we've updated our green finance framework to align it with the European tax on to me in the 2025 Green principles.
The framework seeks to ensure that our financial activities couldn't support the projects to promote respect for and conservation of the environment.
So now I'd like to focus on the incident that occurred last April as you know at 12 33 P. M on Monday and it's the 28 of April there was a widespread power outage affecting mainland, Spain and Portugal.
Regarding the events that led to the peninsula electricity system, reaching zero starting at 12 O. Three a M. On April 28, there was a first forced oscillation caused by abnormal behavior to power plant in the province by the horse, which was repeated at 12 16, and then another into ore.
Oscillation at 12, 19, both of which forced the system operator to adopt protocol measures to mitigate them. These measures effective but resulted in a very different configuration of the electricity system to that initially planned for the 28 to April.
Roberto Garcia Merino: These measures were effective but resulted in a very different configuration of the electricity system to that initially planned for April 28. Likewise, there was generation that was incorrectly disconnected when the voltages in the transmission grid were within the permissible ranges according to regulations, and several generation facilities did not comply with the voltage control obligations imposed on them by operating procedure 7.4, which was in force at the time. These circumstances caused an increase in voltage and a cascade disconnection of more generation facilities, which brought the system to zero. Regarding this incident, we can highlight that the grid was not the problem, but part of the solution, as demonstrated by the rapid restoration of supply. Thus, from the very outset, Red Eléctrica Corporación S.A., together with other companies in the sector, worked to restore electricity supply throughout the peninsula as quickly as possible.
Like why is there was generation that was incorrectly disconnected when the voltages in the transmission grid well within the permissible ranges. According to regulations and several generation facilities did not comply with the voltage control obligations imposed on them by operating procedures 7.4, which was enforced at the top.
These circumstances caused an increase in voltage and a cascade disconnection of more generation facilities, which brought up the system to zero rigs.
Regarding this incident then we can highlight that the grid was not the problem, but part of the solution as demonstrated by the rapid restoration of supply.
That's it from the very outset.
BRCA together with other companies in the sector works to restore electricity supply throughout the peninsula as quickly as possible.
Roberto Garcia Merino: The restoration process was carried out swiftly and without any significant incidents in the transmission grid managed by Red Eléctrica Corporación S.A., and power was restored to most of the affected areas during the course of that same day and earlier the following night. On June 17, the Committee for the Analysis of the Circumstances that Led to the Electricity Crisis, chaired by the Minister for Ecological Transition and the Demographic Challenge, issued a report approved by the National Security Council. Likewise, Red Eléctrica Corporación S.A., as system operator and in compliance with current regulations, specifically the operating procedure number nine, on June 18 presented the report resulting from the analysis carried out, which also proposes measures to be taken to prevent a similar incident from occurring in the future.
The restoration process, well, that's carried out swiftly and without any significant incidents in the transmission grid manage virus electric and parallel what's your store to most of the affected areas. During the course of that same day and early the following night.
On the 17th of June the committee for the analysis of the circumstances that led to the electricity crisis chaired by the minister for ecological transition and the demographic challenge issued a report approved by the National Security Council.
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System, operator, and in compliance with current regulations, specifically the operating procedure number nine.
On the 18th of June presented their report, resulting from the analysis carried out which also propose as measures to be taken to prevent a similar incident from occurring in the future.
Roberto Garcia Merino: Both reports conclude that the incident had multiple causes, with a series of cumulative circumstances that far exceeded the N1 safety criterion and led to a power surge and a cascade of power outages. A technical report on the causes of the incident is still pending from ENTSOE, although the Association of European TSOs, despite being in the preliminary stages of their investigation, have published the first findings of their analysis. This analysis identifies the events that occurred on April 28, which basically coincide with those outlined in the reports from the Ministry and from Red Eléctrica Corporación S.A., also confirming that the voltages in the transmission grid were within operational limits at the time of the first disconnection of generation. It also confirms that the actions taken by the TSOs to mitigate the serious situation caused by these oscillations were those established in the defined protocols.
Reports conclude that the incident had multiple closes with a series of cumulative circumstances that far exceeded the N. One safety criterion and led to a power surge in a cascade of power outages.
Our technical reports on the causes of the incident is still pending from N. T. S. O E. Although the association of European T. S. O's, despite being in the preliminary stages of their investigation and publish the first findings. If their analysis is analysis identifies the events that occurred on the 20th.
Debate broke which basically coincide with those outlined in our reports from the Ministry and from Brazil Africa.
So confirming that the voltage and the transmission grid well within operational limits at the time of the first disconnection of generation. It also confirms that the actions taken by the T. S owes to mitigate the serious situation caused by these oscillations, whether it was established in the defined protocols in.
Roberto Garcia Merino: In addition, the investigation into the incident is continuing, both in the CNMC and at the national court. In this context, the incorporation of measures to reinforce the electricity system is essential. Thus, in its report of June 18, Red Eléctrica Corporación S.A. proposed a series of recommendations, including the provision of greater capacity and more resources so that the system can control voltage continuously and dynamically. It's also necessary to incorporate mechanisms to reduce sudden changes in energy flows, as well as to review the adjustments to the overvoltage function in the generation and evacuation networks and provide the system operator with greater system observability. We're confident that a consensus will be reached in the coming months on the implementation of these measures.
The investigation into the incident is continuing.
And the C N M C and at the National food.
In this context, the incorporation of measures to reinforce the electricity system is central to us and it's reported with the 18th of June.
I actually got proposed a series of recommendations, including the provision of greater capacity and more resources. So that the system can control voltage continuously and dynamically. It's also necessary to incorporate mechanisms to reduce sudden changes in energy flows.
What it is to review the adjustments to the overvoltage function in the generation evacuation networks and provide the system operator with greater system observer ability.
We are confident that our consensus will be reached in the coming months on the implementation of these measures and in this context. The council of ministers approved a new specific amendment to the 2021 'twenty 'twenty six electricity transmission network development plan. The second after the one approved in 2024. This includes.
Roberto Garcia Merino: In this context, the Council of Ministers has approved a new specific amendment to the 2021-2026 Electricity Transmission Network Development Plan, the second after the one approved in 2024. This includes 65 actions aimed at incorporating additional tools into the networks to facilitate voltage control, stability in the event of oscillations, and in general, the reinforcement of the electricity system throughout Spain. The investment associated with these actions is €750 million, bringing the total investment for the 2026 plan to €8.2 billion. In addition, the planning process for 2030 continues to move forward. Finally, it should be noted that the Royal Decree regulating the direct granting of subsidies from the Recovery, Transformation, and Resilience Plan funds of €931 million has been approved, which will give financial support to the investment effort in coming years.
65 actions aimed as incorporating additional tools into their networks to facilitate voltage control stability in the event of installations and in general the reinforcement of the electricity system throughout Spain.
The investment associated with these actions is 750 million euros, bringing the total investment for the 2026 plan to 8.2 billion euros.
In addition, the planning process for 2030 continues to move forward.
Okay.
Finally, it should be noted that the royal decree regulating the direct granting of subsidies from the recovery transformation and resilience plan funds of 931 years of million euros has been approved which will give financial support to the investment efforts in coming years.
Yes.
Roberto Garcia Merino: Moving on to remuneration, at the beginning of July, we learned of the CNMC's proposal on the methodology for calculating the financial remuneration rate based on the weighted average cost of capital for the next regulatory period, 2026 to 2031, which sets it at 6.46%. That's an increase of 88 basis points compared to the current 5.58%. A public consultation process is now open, during which the corresponding feedback can be submitted until August 4. To calculate the rate, the CNMC uses the methodology established in Circular 2-2019, although it does introduce certain modifications that support the increase in the rate to levels close to 6.5%. However, in the new calculation of the parameters of the proposed methodology, certain issues have been identified on which we will convey our views within the established deadline for consideration in the methodology finally approved.
Moving on to remuneration at the beginning of July we learned of the C. N M sees proposal on the methodology for calculating the financial remuneration rate based on the weighted average cost of capital for the next regulatory period 2026 to 2031, which sits at 6.46%.
Now that's an increase of 88 basis points.
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Public consultation process is now open during which the corresponding feedback can be submitted until the fourth of August to calculate the rate. That's N. M. C is the methodology established and Sucky led to Dash 2019, although it does introduce certain modifications that support the increase in the rate.
To levels close to 6.5% however in the new calculation of the parameters of the proposed methodology certain issues have been identified on which we will convey our views within the established deadline for consideration in the methodology finally approved.
Roberto Garcia Merino: The coming months will be very intense in terms of regulatory activity. Following the aforementioned public consultation on the financial remuneration rate, the Ministry may issue a report on the suitability of the proposal in line with the Energy Policy Guidelines, which point out that it was necessary to establish appropriate signals to encourage electricity transmission and distribution activities, particularly to meet new demand and integrate growing renewable generation. Once the feedback period has ended, after analyzing the comments received, the CNMC will draw up a new proposal, which will be submitted to the Council of State for its opinion. The deadline for issuing the opinion will be two months if it is processed as a general matter and 15 days if it is processed as a matter of urgency.
The coming months will be very intense in terms of regulatory activity.
Following the aforementioned public consultation on the financial remuneration rate the Ministry May issue a report on the suitability of the proposal in line with the energy policy guidelines. It's.
As you pointed out that it is necessary to establish appropriate signals to encourage electricity transmission and distribution activities, particularly to meet new demand and integrate growing renewable generation.
Once the feedback period has ended after analyzing the comments received let's say N M. C will drop a new proposal, which will be submitted to the council of state for its opinion the deadline for issuing the opinion will be two months. If its process does it general matter and 15 days of his process doesn't matter.
Urgency.
Roberto Garcia Merino: Finally, after taking into account the feedback from the Council of State, the new circular will be definitively approved, and that is expected to happen in Q4 2025. Moreover, the proposal for the revision of the methodology for remuneration of electricity transmission activities is due to be published shortly, initiating the corresponding feedback period with a similar timetable to that of the TRF. The entire regulatory review process is expected to be completed in the second half of the year and implemented at the beginning of 2026. Let us now discuss the results achieved by the company during the first half of the fiscal year. As you can see, the results obtained in the first half of the fiscal year are in line with market expectations, with positive performance across all lines now that we have left behind the effect of pre-1998 assets.
Finally, I have to take into account the feedback from the council of state the new circular will be definitively approved and that's expected to happen in the final quarter of 2025.
But the proposal for the revision of the methodology for remuneration of electricity transmission activities is due to be published shortly initiating the corresponding stayed back period with a similar timetable to that of the T. R F. They.
The entire regulatory review process is expected to be completed in the second half of the year and implemented at the beginning of 2026.
Let's now discuss the results achieved by the company during the first half of the fiscal year.
As you can see the results obtained in the first half of the fiscal year are in line with market expectations with positive performance across all lines now that we've left behind the effective pre 1998 assets.
Roberto Garcia Merino: Total investments amounted to 603 million euros, and debt at June 30 stood at about 5.54 billion euros, which is 170 million more than the 5.37 billion at the end of 2024 due to the heavy investment during the period. Of the total investment volume, I should highlight the investment in the TSO, which reached 564 million euros. That is 34% higher than the investment made in the previous year, and it suggests that the year-end investment volume should be over 1.4 billion euros in regulated activity in Spain. I would also like to remind you that following approval by the General Shareholders Meeting, a supplementary dividend of 0.6 euros per share was paid out on July 8 against the 2024 earnings, thereby fulfilling our market commitments and reaching a total dividend for the past year of 0.8 euros per share.
Total investments amounted to 603 million euros under to the associates of June stood at about 5.54 billion euros, which is 170 million more than the 5.37 billion at the end of 2024 due to the heavy investment.
In the period.
Of the total investment volume I should highlight the investment in the tier two which reached 564 million euros, that's 34% higher than the investment made in the previous year and it suggests that the year end investment volumes should be over one the 1.4 billion present in.
Sorry, one 4 billion euros in regulated activity in Spain, and I'd also like to remind you that following approval by the general shareholders meeting a supplementary dividend of no 0.6 euros per share was paid out on the 18th of July against the 'twenty 'twenty four earnings, thereby fulfilling our market commitments.
And reaching a total dividend for the past year have no 0.8 euros per share.
Roberto Garcia Merino: Now we can look at the income statement in its entirety. As we did in February, the 2024 financial year includes a reclassification of the various items in Hispasat's income statement attributable to Red Eléctrica Corporación S.A. into a single line item called Profit from the Period from Discontinued Operations. The sale of Hispasat brings the percentage of the group's EBITDA from regulated businesses, both in Spain and internationally, to 89%. I will now give the floor to Emilio Cerezo, who will be analyzing these results in greater detail. Emilio. Thank you, Roberto. Analyzing the revenue performance in detail, we have seen a growth of 2.2%, mostly due to the 24 million increase in TSO. This increase comes from the new financial remuneration rate in line with the recent draft published by the CNMC for assets subject to N plus 2, according to the accrual criterion.
Now we can look at the income statement in its entirety as we did in February the 'twenty 'twenty four and financial year includes a reclassification of the various items in his besides income statement attributable to read a yet into a single line item called profit from the.
Period from discontinued operations the sale of his preset brings the percentage of the groups of beta from regulated businesses, both in Spain and internationally to 18, 9%.
I'll now give the floor to Emilio said S. L who will be analyzing these results in greater detail Amelia.
Thank you are there though.
Analyzing the revenue performance in detail, we've seen a growth of 2.2%, mostly due to the 24 million increase in TCR T. S O.
This increase comes from the new financial remuneration rate in line with the recent draft published by the C. N M C for assets subject to N plus two according to the accrual criterion revenues from new additions net of subsidies were offset by the amortization of our.
Roberto Garcia Merino: Revenues from new additions net of subsidies were offset by the amortization of RAB under the current remuneration model. In the international business, we can highlight the positive performance of Chile and Peru, although this does not seem to be enough to offset the negative impact of Brazilian real's exchange rate on Argo's performance in Brazil. At the same time, the fiber optics business was affected by contract renegotiations in a context of market concentration, partially compensated by the effect of inflation on contracts linked to the Consumer Price Index. Turning to operating expenses, we see a growth of 3.1%. However, if we exclude the expenses offset by other operating incomes, such as Salto de Tierra and projects for third parties and others, growth was slightly lower, specifically 2.4%.
A b under the current remuneration model.
In the international business, we can highlight the positive performance of Chile, and Peru, Although this does not seem to be enough to offset the negative impact of Brazilian reals exchange rate on argo's performance in Brazil.
At the same time, the fiber optics business was affected by contract renegotiations in a context of market concentration partially compensated by the effect of inflation on contracts linked to the consumer price index.
Turning to operating expenses, we see a growth of 3.1%.
Ever.
If we exclude the expenses offset by other operating income such as solid, though the cheetah and projects for third parties and others Rose was slightly lower specifically, 2.4%.
Yes.
Roberto Garcia Merino: Staff costs increased due to a larger average workforce required to meet the challenges arising from the strong growth of groups' regulated assets. As for other expenses, we observe a moderate increase of approximately 2 million euros. In this context, the evolution of income and expenses leads us to an EBITDA growth of 2.8% compared to the previous year. The positive contribution of TSO was offset by a slight decline in international activity coming from the mentioned performance of Brazilian real, which, at a constant exchange rate, grew by 2 million euros. It is also due to the aforementioned performance of the fiber optics business. To conclude the income statement, our net profit was 269 million euros, in line with the first half of the previous year, although profits from continuing operations grew by 1.5% compared to 2024.
Staff costs and crew.
We used to due to a larger average work force required to meet the challenges arising from the strong growth of roofs regulated assets.
As for other expenses, we observed a moderate increase of approximately 2 million euros.
And as context, the evolution of income and expenses leads us to an EBITDA growth of 2.8.
8% compared to the previous year.
The positive contribution of T. S O was offset by a slight decline in international activity coming from the mentioned performance of Brazilian real which at constant exchange rate grew by 2 million euros and it is also due to the aforementioned performance.
All of the fiber optics business to.
To conclude the income statement, our net profit was 269 million euros in line with the first half of the previous year.
Although profit from continuing operations grew by 1.5% compared to 2024.
Roberto Garcia Merino: The performance of profit can be explained by several factors, not just the EBITDA performance already seen. On the one hand, amortization and other items increased, mostly due to higher operating assets. In addition, the financial result was worsened by 10 million US dollars due to lower financial income compared to the first half of 2024, due to lower placement of cash surplus. The corporate income tax remains in line with the previous year, with an effective rate, excluding the result of investee companies, of 24.6% compared to 25% during the first half of last year. Finally, the income reduction from discontinued operations for 4 million is due to the positive results of Hispasat in the first half of 2024. Now, in 2025, depending on the contractual agreement for the sale, Hispasat's results will not affect the group's income statement.
The performance of profit can be explained by several factors not just the EBITDA performance already seen on the one hand amortization and other items that increased mostly due to higher operating assets.
In addition, the financial result was worsened by 10 million U S dollars due to lower financial income compared to the first half of 'twenty 'twenty four due to lower placement of cash surplus.
The corporate income tax remains in line with the previous year with an effective rate. Excluding the result of investing in companies of 24, 6% compared to 25% during the first half of last year.
Finally, the income reduction from discontinued operations for 4 million is due to the positive result of his past that in the first half of 'twenty 'twenty four.
Now in 'twenty, and 'twenty, five and depending on the contractual agreement for the sale. His besides results will not affect the groups income statement.
Roberto Garcia Merino: Going now into investments, during the first half of this year, 603 million euros were invested, out of which 564 million were in the TSO, thus exceeding the investments made in the previous year by 34% and thus consolidating the serious effort Red Eléctrica Corporación S.A. is making to accelerate investment in the transport network. With regard to TSO strategic projects, we could highlight the following: the electricity interconnection between Spain and France via the Bay of Biscay, which continues to progress with the aim of reaching the milestone of commissioning the first link in 2027. Also, the new Peninsula Balearic Islands interconnection moves ahead, including the new high-voltage direct current link between the peninsula and Mallorca and other actions like synchronous compensators in Mallorca and a battery system on the islands of Menorca and Ibiza.
And going now into investment during the first half of this year 603 million euros were invested out of which 564 million. We're in the T. S. O. Thus exceeding the investments made in the previous year by 34% and thus consolidating the series.
So for the company is making to accelerate investment in the transport network.
With regard to T. S O strategic project, we could highlight the following the electricity interconnection between Spain, and France via the Bay of Biscay, which continues to progress with the aim of reaching the milestone of commissioning the first link in 'twenty 'twenty seven.
Also the new Peninsula Balearic Islands interconnection also moves ahead, including the new high voltage direct current link between the peninsula and Majorca and other actions like synchronous compensator and Majorca in a battery system on the islands of Minorca and beat them.
Roberto Garcia Merino: Also, work continues on the interconnection between Tenerife and La Gomera as strategic infrastructure for the smaller island electric system. In addition, progress is also being made on the Peninsula Ceuta and Galicia-Portugal interconnections. All these projects are expected to be commissioned by the end of this year. Furthermore, other projects relating to asset renewal and renewable rate generation evacuation measures continue, as well as the distribution support. As for our Salto de Tierra project in Gran Canaria, civil works continue, as do works for the hydraulic conduit of the construction of the pressure pipe and the installation of the pumping station in Ume. 94% of our investments are eligible under the European taxonomy, thus reinforcing Red Eléctrica Corporación S.A.'s commitment to sustainability.
Also work continues on the interconnection between Tenerife in Lago mirror, our strategic infrastructure for the smaller Island Electric system. In addition progress is also being made on the peninsula, Utah and Galicia, Portugal interconnect collections. All these projects are expected to be commissioned by the.
End of this year.
Furthermore, other projects relating to asset renewal and renewable generation evacuation measures continue as well as the distribution support.
As for our Salt, though the Chita project in Gran Canaria.
Civil works continue.
As do works for the hydraulic country of the construction.
Of the pressure pipe and the installation of the pumping station and Omi.
94% over investments are legible onto the European taxonomy, thus reinforcing where they ask of them had been to sustainability.
Roberto Garcia Merino: Turning to financing now, the group's financial net debt at the end of the half year stands at 5.539 billion. That is 169 million more than at the end of 2024, and the generation of a solid operating cash of 548 million partially offsets the group's heavy investment and the interim dividend payout. This cash flow of 548 million comes mostly from the following aspects. First, the generation of a positive FFO of 473 million euros and the reduction in working capital, which involved a cash flow of 75 million euros, mostly due to lower payment of balances payable to other companies and differences in refunds in the system due to excess transport tariffs charged in previous years. Items pending refund to the CNMC for these provisional tariffs rise up to 351 million euros at the end of June.
Turning to financing now.
The group's financial net debt at the end of the half year stands at 5.539 billion.
That's a 169 million more than at the end of 2024 and the generation of a solid operating cash of 548 million, partially offset the group's heavy investment and the interim dividend payout. This cash flow of 548 million comes mostly from the following aspect.
First the generation of a positive F F O a 473 million euros and the reduction in working capital, which involved a cash flow of 75 million euros, mostly due to lower payment of AR balances payable payable to Oh the <unk>.
Companies and differences in refunds in the system due to excess transport tariffs charged in previous years.
Items spending refund to the C. N M C for these provisional tariffs rise up to 351 million euros at the end of June.
Roberto Garcia Merino: Considering the above and the investments made during the year, as well as the dividend payout, our net financial debt grew by 3.1%, showing solid financial ratios. As for our credit rating, we maintain an A-minus rating both from Standard and Poor's and Fitch, although Standard and Poor's recently placed Red Eléctrica Corporación S.A. on credit watch negative, among other reasons due to the possible effects that our heavy investments will have on the group's financial ratios. As for the makeup of our financial debt, it is worth noting its diversification in terms of financing sources, with 79% at fixed rates until maturity and a continued predominance of euros over other currencies. This structure has enabled us to maintain a competitive average cost of debt in the current environment, now standing at 2.2%. We also continue to have the support of the European Investment Bank.
Considering the above and the investments made during the year as well as the dividend payout our net financial debt grew by 3.1% showing solid financial ratios.
As for our credit rating, we maintain an a minus rating both from standard <unk> Poor's and Fitch, Although standard and Poor's recently placed or they are on credit watch negative among other reasons due to the possible effects that are heavy investments will have on the groups.
Onshore ratios.
As for the makeup of our financial debt. It is worth noting its diversification in terms of financing sources with 17, 9% at fixed rates until maturity and the container predominance of euros over other currencies.
The structure has enabled us to maintain our competitive average cost of debt in the current environment now standing at 2.2%. We also continue to have the support of the European investment Bank. Thus on June 16, and agreement was formalized with the E. R. I b for financing 800 million.
Roberto Garcia Merino: Thus, on June 16, an agreement was formalized with the EIB for financing 800 million of the interconnection with France, and we signed a first tranche of a loan for 400 million euros. Thanks to this, we have strengthened our financial position to carry out the significant investment plan we are facing. Over the next four years, we will be facing maturities of around €3.5 billion, most of which are covered by our solid liquidity position, which will be further strengthened following the completion of the Hispasat sale, estimated to conclude by Q4 this year. Our ESG-related financing continues to increase, now reaching 80% of the total, thus bringing us ever closer to our commitment of achieving 100% sustainable financing by 2030. I will now hand it back to our CEO, who will conclude today's presentation. Thank you very much, Emilio.
Now the interconnection with France, and we signed our first tranche of alone for 400 million euros.
To this we have strengthened our financial position to carry out the significant investment plan we are facing.
Over the next four years, we will be facing maturities of around 3.5 billion euros, most of which are covered by our solid liquidity position, which will be further strengthened following the completion of the his post that sale estimated to conclude by the fourth quarter. This year.
And finally, our ESG related financing continues to increase now reaching 80% of the total that's bringing us ever closer to our commitment of achieving 100% sustainable financing by 2030.
I'll now hand, it back to our CEO, who will conclude todays presentation.
You're very much Emilia having analyzed the first half of the year will now discuss how we expect the company to perform in the second half of 2025.
Roberto Garcia Merino: Having analyzed the first half of the year, we will now discuss how we expect the company to perform in the second half of 2025. Focusing first of all on the investments in our core business, the TSO, we closed the first half of the year with over €560 million committed to projects that will enable us to define a robust, interconnected, and digitized network. We approach the second half of the year on the same positive path, and we estimate that we will reach investment levels of over €1.4 billion by the end of the year. That is what we committed ourselves to at the beginning of the year, if you remember.
Focusing first of all on the investments in our core business. The tier so we close the first half of the year with over 560 million euros committed to projects that will enable us to define a robust interconnected and digitized network and.
Now we approach the second half of the year on the same positive path and we estimate that we'll reach investment levels of over 1.4 billion euros by the end of the year and that's what we are committed ourselves to at the beginning of the if you remember and that will mean, we will probably exceed the $4 2 billion euros in cumulative.
Roberto Garcia Merino: That will mean we will probably exceed the €4.2 billion in cumulative investment for the whole 2021 to 2025 period, which is well above the target initially set. We are thus maintaining our commitment to the energy transition, ensuring investment in the transmission network as a catalyst for the transformation of the entire energy model towards a more sustainable, efficient, and emission-free model. To wrap up, we confirm our financial targets for the 2025 financial year, offering attractive remuneration for shareholders and maintaining a solid financial structure. The group's investment allows us to envisage estimated EBITDA of over €1.25 billion and net profit of over €500 million. Net debt will increase mainly due to the high volume of planned investments, although this increase will be offset by the €725 million received from the sale of Hispasat, with net debt estimated to be at around €5.7 billion at year-end 2025.
Investment for the whole 2021 'twenty five period, which is well above the targets initially set.
Maintaining our commitment to the energy transition ensuring investment in the transmission network. That's a catalyst for the transformation of the entire energy model towards a more sustainable efficient and emission free model.
To wrap up.
We confirm our financial targets for the 2025 financial year.
Offering attractive remuneration for shareholders and maintaining a solid financial structure. The group's investment allows us to envisage estimated a beat there of over 1.25 billion euros, a net profit of over 500 million euros net debt will increase mainly due to the high volume of plant.
Investments well this increase will be offset by the 725 million euros received from the sale of history with net debt estimated to be at around 5.7 billion euros at year end 2025, and that's the presentation. So thank you very much for your attention.
Roberto Garcia Merino: That is the presentation. Thank you very much for your attention, and we can now move on to the Q&A if you have any questions. Ladies and gentlemen, if you wish to ask a question over the phone, press asterisk one on your keypad. The first question comes from Javier Suárez from Mediobanca. Go ahead, Javier. Yes, good morning everyone, and thank you for the presentation. I have got three questions. The first one has to do with the blackout, with the outage. I would like to know if you consider or if you might consider during the second half of the year the possibility of endowing provisions in order to cover the company against any future complaints that might come in from retail and wholesale customers regarding the blackout and the possibility of having an impact on the payout policy. That is the first question.
And we can now move on to the Q&A, if you have any questions.
Yeah.
Ladies and gentlemen, if you wish to ask a question over the phone press asterisk one on your keypad.
Yeah.
The first question comes from Javier Suarez from Mediobanca go ahead come yet.
Yes, good morning, everyone and thank you for the presentation I have got three questions. The first one has to do with the blackout with the outage I'd like to know if you can see there or if you might consider during the second half of the year the possibility of enduring provisions in order to cover.
The company against any future complains that might come in from retail and wholesale customers regarding the blackout and the possibility of.
Having and that having an impact on the payout policy. That's the first question. The second has to do with regulation you talked about the possibility of improving the proposed return on invested capital now could you be more specific what are the factors that might be improved or.
Roberto Garcia Merino: The second has to do with regulation. You talked about the possibility of improving the proposed return on invested capital. Could you be more specific? What are the factors that might be improved or amended in order to improve the regulator's initial proposal? The methodology for electricity transmission in Spain, when do you expect this will be published, and what do you expect it to say? How will it improve on the current regulation? What do you think would happen? My third question has to do with the updating of the National Infrastructure Plan. When do you expect the plan to be enacted? What is your opinion regarding the annual CapEx that the company ought to invest over the years of the plan? Thank you. Javier, thank you very much. Going straight into your first question, I would say that on April 28, Red Eléctrica Corporación S.A.
Amended in order to improve the regulators initial proposal and then the methodology for electricity transmission in Spain.
When do you expect this will be published and what do you expect it to say how well it will even improve on the current regulation.
What do you think.
Would happen and then my third question has to do with the updating of the National infrastructure plan. When do you expect the plan to be enacted.
And.
What's your opinion regarding the annual Capex that the company or to invest over the years of the plan. Thank you.
Well, thank you very much going straight into your first question.
He would say that on April 28th grade electric acted with a enough diligence.
Roberto Garcia Merino: acted with enough diligence in compliance with all the standards and protocols established. So their performance was absolutely compliant both in technical and procedural terms as established by the regulator. We do not expect to save any provisions, as we do not expect any legal claims, as we acted with diligence. This version of the events of April 28 was ratified both by the external auditor and also external legal consultants. Considering the conclusions of their analysis, which are in the report of the Follow-Up Commission and in the PSOE report, and thanks to our own internal analysis, no provisions are required as no claims are expected. Therefore, our financial statements will not be affected, nor do we expect the situation to change in the future.
In compliance with all the standards and protocols established so their performance was absolutely compliant both in technical and procedural terms as established by the regulator. So we can we do not expect to save any probes.
<unk> as we do not expect it expect any legal claims as we acted with diligence.
And this version of the event of April 28 was ratified both by the external auditor and for also external legal consultants.
And considering the conclusions of their analysis.
R and the report of the follow up Commission and the Psoe report and thanks to our own internal analysis no provisions are required as no claims are expected and therefore, our financial statements will not be affected nor do we expect this situation to change.
Roberto Garcia Merino: The longer or the further we are from April 28, the more certain we are of the sound performance we had before, during, and after the incident. So we are not expecting any provisions now or in the future. You ask about the regulation as well. First of all, I would like to underscore the open dialogue the CNMC, our regulator, has established in this stage of the regulation model. In our case, in the transport field, we need to have an open perspective. I will later talk about the financial remuneration rate. In the case of transmission, there are things that could be improved in the remuneration structure, not just the rate. I believe it would take a joint comprehensive analysis to come up with an answer to that. RED ELÉCTRICA CORPORACIÓN S.A.
In the future I mean.
The the longer or the further we are from April 28, the more certain we are the sound performance, we had before during and after the incident. So we're not expecting any provisions now or in the future.
You ask about the regulation as well.
Well first of all.
I, though I would like to underscore the open dialogue the C. N M C. Our regulator has established in this stage of the regulation model.
In our case in the transport field, we need to have an open perspective, and I will later to talk about the financial remuneration rate, but in the case of transmission.
There are there are things that could be improved in the remuneration structure not just the rate, but I believe it would take a joined comprehensive analysis to come up with an answer to that and whether electric I has been meeting the milestones established for this year as they did on Jay.
Roberto Garcia Merino: has been meeting the milestones established for this year, as they did on July 4th by launching the consultation on the distribution model. Along that scheduled compliance history, the transmission activity will be publicly consulted as established probably very soon. As I was saying, we observed that the TRF is a starting point. Obviously, it's below our own expectations, but it's a step ahead from the regulator to adapt that TRF to present market conditions. We do feel that the regulator has an intention, albeit we don't consider it enough, to adapt to new market conditions. We do see a potential for improvement. During the allegations period, we expect to bring in some of the rationales to the table and hope that the regulator will listen.
Ally fourth by launching the consultation on the distribution model so along that.
Schedule compliance history.
The transmission activity Whoa.
Be publicly consulted as established a probably a very soon.
So as I was saying.
We observed that the T R F.
Starting point, obviously its below our own expectations, but it's a step ahead from the regulator to adapt that T. R F to present market conditions.
So we do feel that the regulator has an intention, albeit we don't consider it enough to adapt to new market conditions. So we do see a potential for improvement in during the allegations period, we expect to bring in some of the rash.
Rationales to the table and hope that the regulator will lessen perhaps the most relevant aspects we want to put on the table.
Roberto Garcia Merino: Perhaps the most relevant aspects we want to put on the table are the fact that we believe that the cost of funding is actually very far from the true market cost of financing in a structure like the transmission network. Also, the financial cost hypothesis used by the regulator is below the free risk rate. I'm sure that the regulator can reconsider their position in the light of these numbers. Then there are other aspects we're contemplating to update other parameters to standardize our practices to those of other European actors, like the market risk premium. You are surely aware that this parameter should not change because the activity it is applied to is different. On the side affecting us, that number is substantially below other parameters established by the very CNMC in industries like telecom, railroad, or airports. We do believe there's potential for improvement there.
The fact that we believe that the cost of funding is actually very far from the true market cost of financing and then in a structure like the transmission network.
And also the financial cost hypothesis used by the regulator is below the three risk rate.
So I'm I'm sure that the regulator can reconsider their position.
In the light of these numbers and then there are other aspects, we're contemplating to update other parameters to standardize our practices to those of other European actors like the market risk premium.
You are surely aware that there's parameters should not change.
Because the activity as it is applied to what's different and on the side affecting us that number is substantially below other parameters established by the very C. N M C and industries like a telecom railroad or airport.
So we do believe there's potential for improvement there and about the model it.
Roberto Garcia Merino: About the model, there's even further opportunity for improvement because in terms of remuneration, if we compare ourselves to other European structures, we see that several things could be improved, like acknowledgment of ongoing works. Obviously, the regulator would have to approve standard values both for investment and for operations. Some incentive aspects are not fully contemplated in the present methodology. We are convinced that once the allegations period is opened by the regulator, several things or aspects can be improved. I suppose we will have to wait until we see the full model. We do expect certain improvements in the FRR. As for our 25 to 30 plan, the process started in late 2023. During the first quarter, agents involved brought their development proposals to the Ministry. They put their scheduling on the table, and the system operator sent the initial proposal for development on October 1st.
There's even further opportunity for improvement because in terms of remuneration, if we compare ourselves to other European structured.
We see that several things could be improved liked acknowledgment of ongoing works obviously, the regulator would have to approve standard values both for investment.
And for our operations.
Some incentive aspects are not fully contemplated in the present methodology.
So we are convinced that once the allegations period is opened by the regulator several things can be or aspect can be improved but I suppose we will have to wait until we see the full model, but we do expect certain improve.
You've mentioned the F. R. R L.
And as for our 25 to 30 plan, while the process started in late 2023.
During the first quarter H.
Agency involved.
Brought there.
Development proposals to the Ministry.
They put their scheduling on the table and the system upgrade or send the initial proposal for development in October 1st.
Roberto Garcia Merino: A public consultation process should start to begin negotiations once the Ministry finishes their internal analysis on that early proposal. During the past few months, the Ministry has communicated that they have been working on the figures, and we expect them to launch or to open the process in the next few weeks/months. Just an extra comment, Javier. In the half-year financial statements we published, specifically on note 22, we explain our approach about provisions in great detail following the existing accounting standards, particularly IFRS 37. Since we do not expect resources to leave our company in connection with the blackout, no specific provisions were made. Note 22 is very specific about it. Thank you very much for your questions. Next question comes from Ignacio Dominique from JD Capital. Go ahead, please. Hello, good day, and thanks for the presentation and for taking my questions.
No.
A public consultation process should start to begin negotiations once the ministry finishes their internal analysis on that early proposal.
During the past few months the Ministry has can have communicated that they've been working on.
All the figures and we expect them to launch Oh.
Our two open the process in the next few weeks slash months.
And just an extra comment Javier.
And the half year financial statements, we published a specifically a note on note 22.
We explain our approach about provisions in great detail following the existing accounting standards, particularly ifr Ias 37, and since we do not expect resources to leave our company in connection with the blackout no specific provisions were made no twenty-two asbury.
Specific about it so thank you very much for your questions.
Next question.
Comes from Ignacio Dominik from JD capital go ahead. Please.
Hello, Good day, and thanks for the presentation and for taking my questions.
Yeah.
Roberto Garcia Merino: About investments, the administration has approved an increase in investments in this kind of network. Do you have any potential date to publish the scheduling, and what do you expect for the next few years, particularly years 26 and 27? My second question is about the credit rating for Red Eléctrica Corporación S.A. Would you help me understand if you have any measure, or if you have considered any measures to maintain the present rating, even if there is no formal commitment to do so? If you were downgraded, do you have any forecast about the financial cost for the next few years deriving from that? My third question is about OPEX considered and approved. What is the outperformance on the TSO, or what can we expect from this new draft that will be published soon? Thank you. Thank you, Ignacio Alan.
About investments.
The administration has approved an increase in investments in this kind of.
Network. So do you have any potential date for two operational scheduling and what do you expect for the next few years.
Particularly years 26, and 27 and then the second question.
About the credit rating.
For the year.
Would you help me understand.
If you have any.
Measure.
Two or if you have considered any measures to maintain the present rating even if there's no formal commitment to do so.
So if you were downgraded.
Do you have any forecast about the financial cost for the next few years deriving from that and my third question.
It was about.
Opec's considered and approved.
What's.
What's the out performance on a T S O.
Or what can we expect from this new draft of that will be published soon thank you.
Ignacio I'll answer your first and last question and then Emilio will talk more about the rating.
Roberto Garcia Merino: Your first and last question, then Emilio Cerezo will talk more about the rating. Investment, first of all, it is true that we will have to wait and see a bit because it is up to the Ministry to make further progress, which has to follow the consultation period, although I think that they have already had quite a lot of feedback. The advantage is that we, with the current planning and the amendments that have come up subsequently, have managed to get a forward-looking view of what will happen. We are pretty sure that we have already secured investment over the next three years for 2026 and 2027, and a lot of 2028 as well. We are quite sure about that. Because we have got ready in time, we know that we should be able to guarantee the investment. What do we expect for the future?
Okay Investment festival, it's true that we'll have to wait and see a bit because it talks to the ministry to make further progress which has to follow the consultation period, although I think that they've already had quite a lot of feedback the advantages that we with the current planning and the amendments that have.
Come up subsequently.
We have managed to get to a forward looking view of what will happen and we are pretty sure that we've already secured investment over the next three years. The 26 and 27 28 as well so who were quite sure about that and because we've got ready in time, we know that.
We should be able to guarantee the investment and what we estimate for the future well. This year, we had committed to reaching a 1.4 billion euros and we're pretty sure that we should get there and indeed exceeded and over the next few years, we expect to have and we're talking about averages here because you know that part of the cafe.
Roberto Garcia Merino: This year, we had committed to reaching 1.4 billion euros, and we are pretty sure that we should get there and indeed exceed it. Over the next few years, we expect to have, and we are talking about averages here because you know that part of the CapEx is always subject to actually obtaining the permits. We would accept that we would get an average of about 1.5 billion a year, perhaps a bit higher. That is a valid run rate for the investments. The level of certainty over the next three years is quite high for our supply and our operation. OPEX, yes, it is true. Here, I want to refer back to the incident on the 28th of April.
It's always subject to actually obtaining the permits but we would accept that we'd get an average of about 1.5.
Billion, a year, perhaps a bit higher but that is.
It's a sort of a valid run rate for the investments and the level of uncertainty over the next three years is quite high for our supply and our operation.
And Meanwhile, our Opex, yes, it's true.
Here I want to refer back to the incident on the 20th of April.
Roberto Garcia Merino: I wanted to make it very clear yet again how quickly we restored the system and got the electricity transmission network to work that day and up to the following evening. More than 5,000 maneuvers were carried out in the transmission system, and that was automatic. We did not actually have to do anything manually. That does show that the level of maintenance services of our installations is really high. That is something that should be recognized, evidently, within the regulatory parameters. That is an indicator that has to be analyzed by the regulator. There is also a certain amount of headroom which has to be left for operations. We share the figures with the regulator on a constant basis. The model, we will have to see how the efficiencies can perhaps offset some of that margin, that buffer.
I wanted to make it very clear is again, how quickly we restored the system and got the transmission network to work that day and up to the following evening more than 5000 maneuvers were carried out in the transmission system and that was automatic.
We didn't actually have to do anything manually and that does show that the level of maintenance of our installations is really high.
That's something that should be recognized evidently within the regulatory parameters that are an indicator that has to be analyzed by the rate you later.
And there's always a certain amount of.
Headroom it tends to be left for operations and we shared the figures with the regulator on a constant basis and the model well.
We'll have to see how the efficiencies can perhaps offset some of that margin that buffer, but regarding maintenance. There are certain things that could be used by way of compensation I think that this philosophy of maintaining the quality of the transmission system.
Roberto Garcia Merino: Regarding maintenance services, there are certain things that could be used by way of compensation. I think that this philosophy of maintaining the quality of the transmission system should be lauded. Before you talk about the credit rating, the situation we started from was A-minus, and that is a very sound rating. Over the next few years, the outlay in investment is going to be quite high. It was never a target as such to maintain the A-minus rating. So it is possible that in the future, this rating might be reconsidered. Emilio, we are always managing the company with a balance sheet which is sufficiently strong to deal with the current moment and the strategy plan we have for the future. Totally, Roberto. As we said before in the presentation, right now, we have an A-minus from Fitch and Standard and Poor's.
Be loaded.
And then before you took the credit about the credit rating well the situation. We started from was a minus and that's a very sound rating over the next three years. The outlay in investment is going to be quite high and it was never a target as such to maintain the a minus.
Ratings, so it's possible that in the future this rating might be reconsidered, but Emilio will you are always managing the company with a balance sheet, which is sufficiently strong to deal with the current moment and the strategy plan, we have for the future.
Totally Roberto as we've said before in the presentation right now we've got an a minus a minus from Fitch and standard <unk> Poor's and standard and Poors has published what they call a negative credit watch and that means the before three months, it's quite likely that they might not just.
Roberto Garcia Merino: Standard and Poor's has published what they call a negative credit watch. That means that before three months, it is quite likely that they might not just down to a lower level because they have seen our very demanding investment plan. Ignacio, you were asking about what measures we might put in place to conserve the investment grade. Our priority, as always been and always will be, to have a sound investment grade rating. There are aspects that lead us to think that we should continue to have it. Amongst other things, the improvement in the regulation, it is what we were talking about before, in the improvement in the FRR should improve our FFO. As Roberto said in his presentation, we have the BERTE funds as well, which will be receiving 931 million euros in order to really shore up our balance sheet over the next few years.
Down to a lower level, because they've seen a very demanding investment plan.
And Ignacio you were asking about what measures we might put in place to conserve the investment grade.
And our priority has always been and always will be to have a sound investment grade rating and their aspects that lead us to think that we should continue to have it.
Amongst other things the improvement in the regulation, that's what so we would talk to you about before in the improvement in the EF Ara should in.
Prove a F F O.
And as Roberto said in his presentation, we've got the parity funds as well, which will be receiving 900 and said you're a million euros in order to really shore up our balance sheet over the next few years and apart from that we've also got other measures you know about which we're going to be using Ah we reckon.
Roberto Garcia Merino: Apart from that, we have also got other measures you know about, which we are going to be using. We reckon in putting out hybrid bonds, we have already an issue going out of 0.5 million. We have some which have come out since 2023, and over 1.5 billion more should come in through that into our balance sheet structure. That is an instrument that is well suited to the moment here in Red Eléctrica Corporación S.A., where there is such strong investment in our core activity in Spain. We are pretty sure that we will be using these hybrid bonds in the future, which will mean that we should be able to maintain our sound credit rating, without a doubt.
In putting out hybrid bonds, we've got already in issue going out of <unk> 5 million and we've got some which have come out since 2023 and over 1.5 billion more should come in through that into our balance sheet structure. That's an instrument that's well suited to the moment.
Yeah, and Brett Yeah, whether such strong investment in our core activity in Spain, and we're pretty sure that we'll be using these hybrid bonds in the future, which will mean that we should be able to maintain a sound credit rating without a doubt in any way Ignacio as you can see.
Roberto Garcia Merino: Anyway, Ignacio, as you can see, looking ahead to the next few years, first of all, we have a very sound starting position with several tools at our disposal for financing the heavy investment over the next few years. That means that really that we are looking ahead with our strategy plan to feel that the investment will be financed easily. Coming back to the financial costs, if we are notched down one notch, that would have a significant impact on our debt costs, maybe 10 bps. I do not know. That is about what it would be. It is not really a relevant issue. The next question comes from Manuel Palomo from BNP. Go ahead, please. Hello. Good morning, and thank you for answering our questions. I have got three.
Looking ahead through the next few years Festival, we've got a very sound starting position with.
With several tools at our disposal for financing.
The heavy investment over the next few years.
And that means that really that we are looking head to with a strategy plan to feel that the investment will be financed easily and then coming back to the financial costs and.
If we are notched one down one notch that wouldn't have a significant impact on our debt costs, maybe 10 basis points I don't know that's about what it would be so it's not really a relevant issue.
The next question comes from Manuel Palomo from BNP.
Go ahead please.
Hello, Good morning, and thank you for answering our questions I've got three.
Roberto Garcia Merino: The first one has to do with the blackout, another about funding and finance, and the other, it is thinking about the future more than anything. Okay, the blackout first. I mean, you have said that Red Eléctrica Corporación S.A. acted in line with all the technical and procedural regulations. However, from the day of the blackout, there has been a big increase in the restrictions and the supplementary services leading to an increase in the system costs. If everything was done so well, why did you have to have such a big increase in these? That is my first question. The second one has to do with the financing. Coming back to what the previous analyst asked about in your answers, for the next few years, you are talking about a CapEx of about 1.5 billion, more or less.
The first one has to do with the blackout, another about funding and finance and the other well it's thinking about the future more than I think okay. The blackout pest.
I mean, you've said that that's electric are acted in line with all the technical and procedural regulations. However.
From the day into blackout, that's been a big increase in the restrictions and the supplementary services, leading to an increase in our system costs and if everything was done so well why did you have to have such a big increase in these that's my first question. The second one has to do with the final.
Sing.
Coming back to the previous analyst asked about her neuron says for the next few years, you're talking about a capex of about.
One 5 billion more or less.
Roberto Garcia Merino: With the National Energy Plan, it would seem that you will probably go further. Could you give us a threshold over which we might think that these other mechanisms, sale of assets or additional hybrids or, I do not know, any other action you might take, could be necessary? Have you got anything in mind? Might that be boosted up to 1.7 billion or 1.8 billion a year? My final question has to do with your plans for the future. I think it was the CEO who said that this is the final year. 2025 is the final year of the current plan. I wonder, when will you have your capital markets day to give us more clarity about what Red Eléctrica Corporación S.A. is going to be doing in the next few years? Thank you very much.
And with the National Energy plan and it would seem that you would probably go further so could you give us a threshold over which we might think that these other mechanisms.
Sale of assets or additional hybrid so I don't know any other action you might take.
It could be necessary.
Got anything in mind, when you it might not be boost it up to 1.7 billion or $1 8 billion yeah.
And then my final question has to do with your plans for the future.
I think it was the CEO, who said that this is the final year 2025 is the final year of the current plan So I wonder.
When will you have your capital bucket stay.
To give us more clarity.
About what really is going to be doing in the next few years. Thank you very much.
Roberto Garcia Merino: Perfect, Manuel, and thank you for your questions about the blackout incident again. One thing we do know is that Red Eléctrica Corporación S.A. was diligent to act in agreement with all established procedures, which is more than we can say about other players out there. Considering the situation, we decided to have a reinforced operation system in place to prevent non-compliance or failure to comply with operating procedures. We want to have enough coverage to cover for potential non-compliances from others. The Ministry knows this, and so does the CNMC. Until there are full measures in place to guarantee full compliance with the standards, we decided to create this safe and secure alternative with a reasonably curtailed impact in terms of how it affects the system. As for investment, I think Emilio said it already.
Perfect Manuel and thank you for your questions.
About the blackout incident again.
One thing we do know is that Red electric I was little diligent to add.
In agreement with all established procedures, which is more than we can say about other players out there.
Bettering the situation, we decided to have a reinforced operation system in place to prevent noncompliance or failure to comply with operating procedures, we want to have enough coverage.
To cover four but 10 showed noncompliant says from others and the Ministry know this and so does the C. N M. C. Until there are full measures in place to guarantee full compliance with the standards, we decided to create this safe and secured alternative were the reason.
Lee curtailed impact in terms of how it affects the system.
As for investment I think Amelia said it already.
Roberto Garcia Merino: There are plenty of levers and buttons we can use to take up investments in the next few years. Of course, we will have to wait for further visibility on the proposed plan announced by the administration. But as I said a while ago, our investments for the next three years are practically insured around approximately 1.5 billion a year. As soon as we hear from the government plan, we will round up our midterm plan. But that 1.5 billion sounds sensible enough, and the group has enough financial muscle to tackle that investment safely. We can increase our hybrid capabilities. There are European funds out there, and maybe other assets from the company could come into play. That's not on the table yet because we still have the financial muscle to tackle the kind of investment we expect to face in the next few years.
There are plenty of levers and buttons, we can use to take up investments in the next few years.
Of course, we will have to wait for further visibility on the proposed plan announced by the administration.
But as I said, a while ago our investments for the next three years are practically insured around approximately 1.5 billion a year as soon as we hear from the government plan, we will round up or mid term.
Blend, but of that 1.5 billion sounds sensible enough and the group has enough financial muscle to attack all that investment safely.
We can increase our hybrid capabilities there are European funds out there and maybe other assets from the company could come into play that's not on the table yet because we still have the financial muscle to tackle the kind of investment we expect to face in the next few years.
Roberto Garcia Merino: As for the strategy plan, and yes, you heard correctly, 2025 is the last year of our present plan. But until we are aware of the remuneration proposal and the new planning and scheduling, it is hard to make progress in a strategy plan. Once we are fully aware of regulation changes, which might come in the next few days, and the planning, then we will draft and issue a new strategy plan and publish it by the end of the year. We have no further questions from the Spanish room. Over to questions from the English connection now.
As for the strategy plan and yes, you heard correctly 2025 of the last year of our present plan, but until we are aware of the renovation proposal and the new planning and scheduling it is hard to make progress.
In our strategy plan, but once we are fully aware of the regulation changes.
<unk>.
<unk> come in the next few days and the planning then.
We would draft and issue a new strategy plan and publish it by the end of the year.
We have no further questions from the Spanish room over to questions from the English connection now.
Yeah.
Operator: Thank you. As a reminder to ask a question, please press star one on your telephone keypad. First question from the English room is from Arthur Sitbon at Morgan Stanley. Please go ahead.
As a reminder to ask a question. Please press star one on your telephone keypad first question from the English room as from office at ball at Morgan Stanley. Please go ahead.
Yeah.
Arthur Sitbon: Hello. Thank you for taking my questions. The first one is on the regulatory parameters document that the CNMC will publish. I understand from your slides that it is expected in the coming days. I was wondering if you are confident that the remuneration of work in progress CapEx will be included in this proposal, or if you think this is going to be a matter of negotiation in the allegation period and until the end of the year to obtain that. That is the first question. The second one is I was wondering if you could please quantify the OpEx outperformance that you expect in 2025 in electricity transmission versus the regulatory benchmark. If you think you may have the CNMC may want to implement a sharing mechanism on OpEx outperformance similar to what has been proposed for electricity distribution. Thank you very much.
Hello, Thank you for taking my questions. The first one is on the regulatory parameters documents that have to send them. If you will will publish I understand from your slides that you expected in the coming days I was wondering.
If you are confident that the remuneration of work in progress Capex will be included in this proposal or if your fingers she's going to be a matter of negotiation in the litigation period end and until the end of the year or two to obtain that so that's the first question.
One is just I was wondering if you could please quantify the opex outperformance that you expect in 2025 are in electricity transmission versus the regulatory benchmark and if you think you may have a.
I mean, she may want to implement a sharing mechanism on opex outperformance similar to what has been proposed for electricity distribution.
You very much.
Okay.
Roberto Garcia Merino: Okay. Many thanks, Arthur Sitbon. The regulatory review, a lot of work has been done internally with the CNMC technical teams so that we can share the current situation with them and they understand the costs of supplying the services and the kind of equipment that we need to roll out our investments. Right now, the team in the CNMC does share our information for 2022, 2023, and 2024. Now they know that they have to come up with a significant review of the unitary costs and remuneration. The current remuneration model covers benchmarks for costs going back to 2008. Now they are working with a benchmark which is based on 10 years prior to the investment period. You can imagine that working together, we have now got a database which is much more updated. We can expect that a review will be forthcoming, changing the parameters quite significantly.
Okay.
Many thanks Arthur.
Right.
The regulatory review well a lot of work has been done internally with the N. M. C. Technical teams. So that we can share the current situation with them and they understand the costs of supplying the services and the kind of equipment that we need to roll out our investments right now the T.
And that's N M C does share our information for 'twenty, two 'twenty three and 'twenty four.
And so now they know that they have to come up with a significant review of the unitary costs.
And our remuneration the current remuneration model covers benchmarks for costs going back to 2008, so now they're working with a benchmark, which is based on 10 years prior to the investment period and so you can imagine that working together, we've now go to a data base.
She's much more updated so we can expect that our review will be forthcoming.
Changing the parameters quite significantly remember that this adjustment, which will be applicable as of 2026 covers the commissioning after 2024 because of the pass to methodology covering the cost that we took on over.
Roberto Garcia Merino: Remember that this adjustment, which will be applicable as of 2026, covers the commissioning after 2024 because of the plus two methodology covering the costs that we took on over the period leading up to 2024. That will be everything then that is commissioned as of 2024 after that. As to the works in progress, the CNMC knows that there is a need, a relevant need in our remuneration model. This is common practice elsewhere in other European remuneration setups to remunerate work in progress. As we are speeding up our investment, the volume is pretty significant. We are expecting that the new remuneration model being proposed will cover work in progress. The Ministry as well has, in the CIRA Soria proposal, reflected something as a reality for us, which is the remuneration of every work in progress as we do it.
The period, leading up to 'twenty 'twenty, four and that will be everything then it's commissioned as of 2024 after that.
And as to the works in progress will defend M. C knows that there's a need.
Relevant need in our remuneration model and this is common practice elsewhere in other European remuneration setups to remunerate working progress and as we are speeding up our investment the volume is pretty significant so we are expecting that the new rooms.
Ration module being proposed will cover work in progress and the Ministry as well has in the CIT is saudia.
Proposal reflected something that's a reality for us which is the remuneration of every work in progress. This we do it or they have to do is ratify the return rate, which was established by the regulator. So we think that there should be one of the aspects covered in the initial proposal under.
Roberto Garcia Merino: All they have to do is ratify the return rate which is established by the regulator. We think that this should be one of the aspects covered in the initial proposal. If it is not for whatever reason, obviously that will be a relevant part of our feedback. Emilio Cerezo, do you want to talk about OPEX? Yes, our operating expenses in the second half of the year are estimated to go up slightly, rather more than proportionally, if we compare them to the first half of the year, amongst other things, because of the seasonality in the kind of work we do in maintenance. We think that at the end, the EBITDA will be very much in line with what we had already announced at the beginning of the year.
It's not for whatever reason, obviously that would be a relevant part of our feedback and Emilio do you want to talk about Opex you saw operating expenses in the second half of the year estimated.
To go up slightly rather more than proportionally if we compare to the first half the year amongst other things because of the seasonality is the kind of work we do in maintenance, but we think the end they'll be the we'll be very much in line with what we'd already announced at the beginning of the.
Roberto Garcia Merino: Regarding the possibility of implementing any sharing with the regulator of these, basically, sharing costs is something that we think. You know that the standard mechanisms of the CNMC entail sharing certain profits or losses depending on the performance of our business. We think that evidently this is a possibility. According to the regulations that are about to come out, the CNMC may well take us up on that.
And then regarding the possibility of implementing and the sharing of.
Well any sharing with the regulator of these well basically.
Well sharing costs is something that we think.
Well you know the the standard mechanisms of this N M C and tell sharing certain profits or losses, depending on the performance of our business.
So we think that evidently this is a possibility the according to the regulations that are about to come out the C. N M C may well.
Take us up on that.
Yeah.
Operator: Thank you. The next question is from James Brand at Deutsche Bank. Please go ahead.
Thank you. The next question is from James brand of Deutsche Bank. Please go ahead.
Yeah.
Arthur Sitbon: Hi, good morning, afternoon, depending on where you are. I had two questions, please. The first is on work in progress. I appreciate you just kind of made some very high-level comments on work in progress that you expected it to be remunerated. But are there any more details you can give us in terms of what your expectation is or maybe what your hope is for how work in progress will be remunerated? For instance, things like, do you expect it to include all your work in progress? Do you expect the T plus 2 to remain in place with work in progress? Do you expect to get the initial, the return on capital that you get on other assets, or do you expect to get less?
Hi, Good morning afternoon, depending where you are I had two questions. Please the fastest on work in progress I appreciate just kind of made some.
High level comments, so much in progress the expected it to be with Numerate said.
But are there any more details you can give us in terms of what your expectation is or maybe what your whole pairs for how Washington progress will be when you're more items for instance, things like do you expect it to include all your work in progress.
He has spent the T plus two to remain in place with work in progress juice. That's got the initial.
It's uncomfortable, but you've got other assets would you expect to cut loss when it doesn't necessarily expense concrete answer to all of those things, but it just is.
Roberto Garcia Merino: I do not necessarily expect concrete answers to all of those things, but is there any information you can give us to just flesh out a little bit more what your expectation is in that area? My second question is, do I understand it right that you are still expecting to get the transmission proposals in July or August, like early August, in the next few days, or is that going to be pushed back until after summer? Thanks.
Is there any information you can give us to just flesh out a little bit more on what your expectation is in the area and then the second question is.
I understand that right that youre sort of expecting to get the transmission proposals.
Yeah and in July all.
So right now early August in the next few days or is that going to be pushed back until after summer. Thanks.
Emilio Cerezo: Right. Thank you very much for your questions. First of all, your first question, work in progress, the kind of volumes we're talking about as we increase our investment, that is an item that naturally will have to grow. To the end of June, the volume of work in progress is 1.8 million for the transmission operation for the additional work that we are doing in Red Eléctrica Corporación S.A., which is remunerated. So there we are above the 2 billion level. Breaking down that work in progress, you remember that we have got relevant projects that move an enormous amount of CapEx, like the interconnection with France. That will be a process which will roll out, concluding at the end of 2027 or beginning of 2028. So we do expect that there should be a reasonably high level of work in progress in 2025, 2026, and 2027.
Right well, thank you very much for your questions.
First of all the first question on working progress those kind of volumes, we're talking about as we increase our investment that's an item that naturally will have to grow to the end of June the volume of work in progress is $1 8 million for the transmission operation for the additional work that we're doing.
Going into the third year.
Which is remunerated and so there were above the $2 billion level and then b.
Breaking down working progress and you'll remember that we've got relevant projects that move enormous amount of capex like the interconnection with France and that will be a process, which will rollout concluding at the end of 'twenty seven or beginning of 28. So we do expect that there should be a reasonably high.
High level of work in progress in 'twenty, five 'twenty six 'twenty seven.
Emilio Cerezo: In 2027, 2028, we will be commissioning both the Salto de Tierra project and the interconnection with France, which will bring down the amount of work in progress, but then we will be incorporating one-off projects, which will also generate a high level of investment, like the future interconnection with the Balearic Islands, which will push the figures up again. But over the next two, three years, we will see a high level of work in progress. In 2028, that work in progress will go down slightly as we commission the interconnection with France and the Tierra project. What we are proposing to the regulator here is evidently for the projects which are one-offs, they should consider how much investment they are moving over such long time periods. That evidently means that we need remuneration.
<unk> 2027, 28 will be commissioning, both the salt or they did a project on the interconnection with France, which will bring down the amount of work in progress, but then we'll be incorporating one off projects, which will also generate a high level of investment like the future interconnection with the Balearic Islands, which room.
To push the figures off the game, but over the next two three years, we will see a high level of work in progress in 2028 that work in progress will go down slightly as we commission the interconnection with France, and they cheered our project.
And what we are proposing to the regulator here is evidently toward the projects.
Or one offs they should consider how much investment there moving over such a long time periods that evident Lee means that we need to remuneration and then if you look at the volume or the difficulty of the projects. They do take place over a long period. So they should be reflected within the work in progress. So that we are reasonable.
Emilio Cerezo: If you look at the volume or the difficulty of the projects, they do take place over a long period. So they should be reflected within the work in progress. So there we are reasonably optimistic about this because it is habitual practice in the European regulatory framework. We have got precedents like the Salto de Tierra, which is backed by the ministry. You ask about the model, the proposals for the transmission grid. You ask about the initial proposal, which will come out for remuneration. The CNMC so far has complied with the deadlines established so that by the end of the year, they will have the remuneration model for the distribution and for transmission before the year end. So we expect that the publication should occur in the next few days or at the beginning of September, maybe.
Really optimistic about this because it is habitual practice in the European regulatory framework and we've got precedent like this although they cheetah, which is backed by the Ministry.
And then you asked about the model the proposals for the transmission grid.
And you ask about the initial proposal, which will come out for remuneration, while the C. N M C sofa as complied with the deadlines established so that by the end of the year that will have the remuneration model for the distribution and transmission.
Before the year end and so we expect that the publication should occur in the next few days or at the beginning of September maybe but we are expecting it's more likely to be now or at the beginning of August as they do comply with the deadlines They said.
Emilio Cerezo: But we are expecting it is more likely to be now or at the beginning of August as they do comply with the deadlines they set.
Yeah.
Okay.
Roberto Garcia Merino: Thank you. Our next question is from Martin Wachtel from Bank of America. Please go ahead.
Thank you. Our next question is from Martin Washed-out from Bank of America. Please go ahead.
Yeah.
Operator: Yes, thank you so much for the presentation. It sounds like your investments are clearly going to increase over the next few years. I was wondering, is there any impact on your dividend policy? Are you still committed to have a floor of $0.80 for the next, let's say, three to five years? Or could maybe changing your dividend per share be also a tool that could allow you to fund the CapEx while, let's say, protecting your balance sheet? I would appreciate it if you could provide a bit of color. Thank you.
Yes. Thank you so much for the presentation.
It sounds like your investments are clearly are going to increase over the next few years. So I was wondering is there any impact on your dividend policy are you still committed to have a floor of a defense.
For the next let's say three three to five years or the court could maybe changing your dividend pressure be also a tool that could allow you to fund to fund the capex, while let's say protecting your balance sheet I would appreciate I. Appreciate if you could if you could provide a bit of color. Thank you.
Yeah.
Emilio Cerezo: Thank you, Martin. Our dividend policy, our commitment is to charge the 2025 results dividend in 2026 of $0.0 per share, which is our commitment that we've made. We assumed those commitments in the current strategy plan. Evidently, when we're estimating the new dividend policy, we'll have to look at the context of the new strategy plan. Above all, take into account the demanding investment plans that we've got. Taking into account the relevance of the dividend policy, we recognize that in the company, it's really important the financial strength of the group and the horizon for growth that we have over the next few years. We think that we've been coherent in cutting back dividends when we had to cut back the other parameters in the company. We expect that we'll go through a positive evolution if the financial situation of the company allows for that.
Thank you Martin.
Our dividend policy our commitment.
Is to charge the 2025 results our dividend in 26 of no appointing gyros per share, which is a commitment that we've made.
And we assumed those commitments in the current strategy plan evidently when we're estimating the new dividend policy, we'll have to look at the context of the new strategy plan.
And above all take into account the demanding investment plans that we've got but taking into account the.
The relevance of the dividend policy.
We recognize it in the company, it's really important the financial strengths of the group President the.
Horizon for growth that we have over the next few years, we think that we've been coherent and cutting back dividends. When we had to cut back the other parameters in the company and we expect that we will go through a positive.
Evolution, if the financial situation of the company allows for that and we expect that it will so we have to wait for the next strategy plan, but we will continue to be coherent. So we know that the dividend policy will continue to play a very important role in everything we do.
Emilio Cerezo: We expect that it will. We have to wait for the next strategy plan, but we will continue to be coherent. We know that the dividend policy will continue to play a very important role in everything we do.
Yeah.
Arthur Sitbon: Let's hear the questions we got over email. Victor Perol from RBC asks, what are the net investments expected for 2025 and 2026, starting with a gross $1.2 billion?
Let's hear the questions, we got over email Victor from G. B C asks what are the net investment expected for 25 and 26.
Starting with the gross one 2 billion.
Emilio Cerezo: Okay, investment. Emilio Cerezo could give us more color maybe, but I can say that the subsidy we got for that 930 million for TRT for commissioning as of 2024 to the end of August 2026, certain facilities. So netting this out, the real remunerated investment for everything commissioned in that period, that will affect us netting out the baseline. We assume that we will end 2024, 2025 with a total level of 700 million, which will be for the commissioning of 2024 to 2025. That is going to move on to 2026. Our benchmark for what we have commissioned this year is about 1.1 million for 2025. In 2024, 2025, Emilio Cerezo, we will be moving around about 1,700, 1.7 in gross RAB up to the end of 2025. Okay.
Okay investment it could give us more color, maybe but I couldn't say that.
The subsidy, we got for that 900 million.
For T I D.
For commissioning as of 2024 to the end of August 2000, Twenty's six certain facilities are netting this out the real.
Remunerated investments for everything commissioned in that period.
So that will affect us netting out the baseline.
We assume that will and 'twenty four 'twenty five with the total level of 700 million with two speed for the commissioning of 'twenty 'twenty four to 2025, and that's going to move on to 2026 a benchmark.
For what we've commissioned this year is about 1.1 million for 2025 and in 'twenty four 'twenty five Emilio will be moving around about.
1700, 1.7 in gross our a b.
Yeah.
Up to the end of 2025 yeah.
Emilio Cerezo: I can only add that in terms of our subsidies, the level of subsidies we have, that 930 million from the PERTE funds, then we have about 600 million euros for the interconnection with France. Evidently, as we receive these subsidies over the next few years, they are booked as subsidies as a revenue, and that will improve our net financial position. You have to net out that in the investment figures that we have given you for the next few years. It is within the general environment of, yes, that 1.5 billion euros. Arturo Sitbon, thank you for your question. I think that we should wait to find out the proposed review of the remuneration model for our transmission, though we think that there is quite a high potential that it will be improved.
And I can only add that in terms of our subsidies the level of subsidies, we have that 930 million from the parity flung funds and then we've got about 600 million euros and for the interconnection with France and evidently as we receive these subsidies over the next few years.
The book to add subsidies as a revenue or on that will improve our net financial position and you have to net out that in the investment figures that we've given you for the next few years, but it's within the general environment of yes that 1.5 billion euros.
Yeah.
Well understood. Thank you for your question I think that we should wait to find out the proposed review of the remuneration.
Generation model for our transmission that we think that there's quite a high potential that it will be improved but we'll have to wait and see if you don't mind until we actually have the proposal before us. So that we can see exactly to what degree we can improve that rate. So we'll have to wait a bit.
Emilio Cerezo: We will have to wait and see, if you do not mind, until we actually have the proposal before us so that we can see exactly to what degree we can improve that rate. So we have to wait a bit. Thank you very much, Roberto Garcia Merino, for your question. Let us see. The investment of investment, obviously, we have to stick to what we have in the electricity planning. We have a plan in force, and we have got quite a lot of certainty already because we tried to get ready in advance, looking at the supply chain and the internal issues that we had to deal with. So over the next three years, we think that that benchmark of 1.5 billion euros is properly adjusted to the projects that we have incorporated into our planning.
Thank you very much on Roberto for your question, let's see the investment of investment.
Obviously.
We have to stick to what we have in the.
Electricity planning.
We have a plan in force and we've got quite a lot of certainty already because we tried to get ready in advance looking at the supply chain and the internal issues that we had to deal with so over the next three years, we think that that benchmark of 1.5 billion euros is properly adjusted to the projects that we've been.
Incorporated into our planning so.
Emilio Cerezo: So over the next three years, that was what we think we will have. We will have to wait and see the new planning proposal so that we can see clearly what kind of CapEx we will be expecting to roll out as of 2027. But we think it will be about 2.5 billion. So that is the benchmark we are using for that period. We will have to look at the supply chain and the execution capacity we have internally, but that is the basic level. The earnings per share, Roberto, we will have to wait again, I am afraid, to see all the other parameters within the model because they obviously come into play and have a significant impact on the bottom line. We will look at the volume of investment and exactly how we are going to roll it out in the next strategy plan.
Over the next three years that was what we think we'll have we'll have to wait and see the new planning proposal. So that we can see clearly what kind of capex will be expecting to rollout as of 'twenty 'twenty seven, but we think it'll be about $2 5 billion. So that's the benchmark we use them for that period and.
We will have to look at the supply chain and the execution capacity, we have internally, but that's the basic level and the earnings per share well Alberto will have to wait again I'm afraid to see all the other parameters within the model because they obviously come into play and have a significant impact on.
The bottom line and we'll look at the volume of investment and exactly how we're going to roll it out in the next strategy plan. So we'll have to wait and get the full picture and once we've got that full picture, Nevada analyzed all the details obviously, we will announce the new strategy plan and we will share it with the market before the end of the year.
Emilio Cerezo: We have to wait and get the full picture. Once we have got that full picture and have analyzed all the details, obviously, we will announce the new strategy plan, and we will share it with the market before the end of the year. We finish today's presentation. Investor Relations will be happy to help you if you have got any further questions. Have a good day.
Yeah.
And so we finish today's presentation Investor relations will be happy to help you if you've got any further questions. That's a good day.
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Okay.
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