EVN profit falls 9.4% as weak wind and hydropower offset revenue gains

EVN AG reported a 9.4% decline in nine-month profit to €434.7 million for its 2024-25 financial year, primarily due to a significant drop in financial income and weaker renewable energy generation, which fell 17.5% due to unfavorable weather conditions. Despite this, revenue rose 5% to €2.36 billion and EBITDA increased 14.2% to €713.6 million, supported by strong performance in distribution networks and contributions from equity-accounted companies. The Austrian utility confirmed its full-year profit guidance of €400-€440 million, increased investments by 22% to over €530 million focusing on grid and renewables, and is divesting its international project business, signaling a strategic focus shift despite near-term profit pressures.

Analysis

EVN AG's financial results for the first nine months present a mixed but operationally resilient picture. While net profit fell 9.4% to €434.7 million, this was primarily driven by non-operational factors, notably a decline in the financial result to €93.5 million from €164.7 million due to a reduced dividend from Verbund AG and adverse currency effects. Operationally, the company demonstrated strength, with EBITDA rising 14.2% to €713.6 million and EBIT climbing 18.3% to €447.1 million. This core earnings growth was fueled by higher prices and volumes in its distribution networks in Bulgaria and North Macedonia, as well as stronger contributions from equity-accounted holdings. A significant headwind was the 17.5% drop in renewable energy generation, a result of below-average wind and hydropower conditions that new capacity additions could not offset. Strategically, EVN is intensifying its focus on its core Austrian market, evidenced by a 22% increase in investments to over €530 million for grid infrastructure and renewables, alongside the planned divestment of its international project business. The confirmation of its full-year profit guidance of €400-€440 million and a dividend floor of €0.82 per share signals management confidence despite the bottom-line pressure.

Key Decisions for Investors

• Investors should look beyond the headline 9.4% net profit decline and focus on the robust underlying operational performance, as indicated by the 14.2% increase in EBITDA driven by the stable network business.
• The strategic divestment of the international project business, coupled with a 22% rise in investment into core grid and renewable assets, warrants monitoring for signs of improved long-term capital efficiency and a more focused business model.
• Given the confirmed full-year profit guidance of €400-€440 million and a dividend floor of at least €0.82 per share, the shares may appeal to income-oriented investors, but they must consider the inherent volatility from weather-dependent renewable generation, which impacted current results.