EDP 1H25 presentation: Underlying growth drives improved 2025 guidance

EDP reported robust underlying H1 2025 results, with recurring EBITDA up 7% and net profit up 27% on an underlying basis, driven by strong performance in Iberia and 20% underlying EBITDA growth in its Wind & Solar segment. The company upgraded its full-year 2025 guidance, now expecting recurring EBITDA of €4.8-4.9 billion and net profit of €1.2-1.3 billion. This positive outlook is supported by favorable regulatory developments across key markets, continued investment in renewable capacity with 2 GW planned for 2025, and an improved operational efficiency, underscoring the resilience of EDP's integrated business model.

Analysis

Energias de Portugal (EDP) demonstrated strong underlying operational health in its first-half 2025 results, masking modest headline declines caused by prior-year asset rotation gains. Underlying recurring EBITDA grew 7% year-over-year to €2.6 billion and underlying net profit surged 27% to €752 million. This performance was driven by the company's integrated Iberian business, which benefited from exceptional hydro resources running 41% above the long-term average, and its Wind & Solar segment, where underlying EBITDA grew 20% on the back of an 18% increase in installed capacity to 19.6 GW. The Electricity Networks segment also showed resilience with 6% underlying EBITDA growth, supported by regulatory asset base expansion and consumption growth. Reflecting this momentum, EDP upgraded its full-year 2025 guidance, now projecting recurring EBITDA of €4.8-4.9 billion and net profit of €1.2-1.3 billion. The positive outlook is further supported by significant regulatory tailwinds, including a 30-year concession extension in Brazil that increases the return on regulatory asset base from 7.15% to 8.03%, and favorable proposals in Spain. While net debt is projected to temporarily increase to €17.2 billion due to investment timing, it is expected to decrease to approximately €16 billion by year-end, supported by H2-weighted asset rotation proceeds and improved operational efficiency, as evidenced by OPEX as a percentage of gross profit falling from 26% to 24%.

Key Decisions for Investors

• Investors should look past the headline year-over-year declines and focus on the strong underlying profit growth and the upgraded full-year 2025 guidance, which suggest EDP's core earnings power is accelerating.
• Monitor the execution of the 2 GW of new renewable capacity additions in 2025, as 70% of this is weighted towards Q4 and is critical for validating the company's growth trajectory and supporting the revised guidance.
• Consider the upcoming Capital Markets Day on November 6, 2025, as a key catalyst that could provide further clarity on long-term strategy and value creation, particularly following the recent positive regulatory developments in Brazil and Spain.