Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Elia Group SA/NV (XBRU:ELI, Financial) reported a strong financial performance with a net profit increase of 11.8% to EUR181.6 million.
- The company invested a record EUR1.7 billion in the first half of the year, with significant investments in both Belgium and Germany.
- Elia Group SA/NV (XBRU:ELI) has shown strong progress in digitalization and innovation, including a EUR12.5 million investment in a venture capital fund for digital innovation in the energy sector.
- The company has made significant strides in talent management, with an expected increase of 458 new employees by the end of the year.
- Elia Group SA/NV (XBRU:ELI) has secured substantial funding, raising EUR3.2 billion in the debt capital markets and securing new liquidity of EUR4.2 billion across the group.
Negative Points
- The company faced significant challenges due to extreme weather events, including heavy storms in Belgium and Germany, causing extensive material damage and requiring long-term repair efforts.
- There are ongoing concerns about the impact of climate change on critical infrastructure, necessitating continuous adaptation and risk management plans.
- The company is under pressure to deliver its ambitious investment program on time, within budget, and to a high standard of quality.
- Elia Group SA/NV (XBRU:ELI) is facing increased scrutiny from regulators regarding investment costs and the need to justify expenditures.
- The company is dealing with the complexities of international supply chains, which have been affected by global disruptions and require careful management.
Q & A Highlights
Q: How is Elia Group addressing the impact of extreme weather on its infrastructure?
A: Catherine Vandenborre, CEO, explained that Elia Group is working on risk plans to adapt infrastructure to climate change. This includes mapping risks, conducting audits, and collaborating with European countries on risk preparedness plans. They have procedures in place for crisis management and operational procedures like defense and restoration plans.
Q: What actions have been taken to protect infrastructure against climate change?
A: Marco Nix, CFO, mentioned that Elia Group is moving critical infrastructure to higher positions, constructing additional walls to prevent flooding, and using heat pumps to cool equipment during heatwaves. They are also reinforcing pylons and installing new conductors to carry more electricity.
Q: What is the rationale behind Elia Group's investment in a venture capital fund?
A: Catherine Vandenborre, CEO, stated that the investment aims to gain access to European startups working on digitalization in the energy sector. This aligns with Elia Group's strategy to make system and asset management more efficient, manage business complexity linked to renewables, and unlock flexibility at the consumption site.
Q: How did the recent political developments in the EU impact Elia Group?
A: Catherine Vandenborre, CEO, noted that the European Parliament's confirmation of Ursula von der Leyen's second term and her emphasis on the European Green Deal and energy union are promising for Elia Group. This aligns with their focus on clean energy infrastructure, digitalization, and reducing administrative burdens.
Q: What are the financial highlights for Elia Group in the first half of the year?
A: Marco Nix, CFO, reported that Elia Group invested EUR1.7 billion, with strong performance leading to an 11.8% increase in net profit to EUR181.6 million. The group also secured EUR3.2 billion in debt capital markets and new liquidity of EUR4.2 billion.
Q: What are the key focus areas for Elia Group in the second half of the year?
A: Catherine Vandenborre, CEO, highlighted five focus areas: CapEx delivery, strengthening financial foundations, talent management, securing supply chains, and digitalization to unlock system flexibility. They will also engage with new policymakers post-elections.
Q: What is the status of the CEO search at Elia Group?
A: Catherine Vandenborre, CEO, mentioned that the process is ongoing and progressing well, with an announcement expected after the summer break.
Q: How is Elia Group managing the recruitment of new employees amidst a competitive talent market?
A: Peter Michiels, Chief Human Resources Officer, and Sylvia Borcherding, Chief HR Officer 50Hertz, explained that Elia Group uses real-time dashboards to monitor recruitment progress, emphasizes corporate culture, and invests in diversity and inclusion. They also provide early access to company information for new hires.
Q: What are the financial projections for Elia Group for the rest of the year?
A: Marco Nix, CFO, provided an updated net profit range guidance of EUR355 million to EUR395 million, with investments of EUR1.4 billion in Belgium and EUR3.3 billion in Germany. The non-regulated segment and Nemo Link are expected to report a loss of EUR30 million to EUR35 million.
Q: How is Elia Group addressing the issue of negative electricity prices due to increased solar energy?
A: Catherine Vandenborre, CEO, stated that market parties are responding well to avoid overproduction. Long-term solutions include more automated flexibility, storage, and making consumption more flexible through market-based solutions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
