Ignitis Group AB (FRA:IGV0) Q2 2025 Earnings Call Highlights: Strategic Investments and ...

Adjusted EBITDA: EUR300.8 million, a 3.8% year-over-year increase. Adjusted Net Profit: EUR146.2 million, an 11.2% decrease year-over-year. Investments: EUR343.2 million, with 48.1% in Networks and 45.6% in Green Capacity. Return on Capital Employed: 8.6%, a decrease of 1.8 percentage points. Net Debt to Adjusted EBITDA Ratio: 2.99 times. Dividend: EUR0.683 per share, a 3% increase from last year. Green Capacity EBITDA: EUR166.6 million, a 23.9% increase. Networks EBITDA: EUR132.6 million, a 14.6% increase. Reserve Capacity EBITDA: EUR29.1 million, a 15.5% increase. Customers & Solutions EBITDA: Negative EUR27.7 million. Free Cash Flow: Positive EUR64 million. Net Debt: EUR1.6 billion, a 0.1% decrease. 2025 Guidance: Adjusted EBITDA between EUR500 million and EUR540 million; Investment between EUR700 million and EUR900 million.

Warning! GuruFocus has detected 8 Warning Signs with FRA:IGV0.

Release Date: August 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Adjusted EBITDA increased by 3.8% year-over-year, reaching EUR300.8 million, driven by strong results in Green Capacities and Networks. Installed capacity increased by 0.3 gigawatts to 1.8 gigawatts, reflecting strategic growth in renewable energy projects. The company maintained a robust balance sheet with a net debt to adjusted EBITDA ratio of 2.99 times, despite ongoing investments. Dividend distribution for the first half of 2025 is planned at EUR0.683 per share, a 3% increase from the previous year. Significant progress in smart meter rollout, with 1.18 million smart meters installed, nearing the target of 1.2 million by 2026.

Negative Points

Adjusted net profits decreased by 11.2% to EUR146.2 million, mainly due to higher depreciation and amortization expenses. Green share of electricity generation decreased by 21 percentage points to 63.8%, due to higher generation at Elektr?nai Complex. Total greenhouse gas emissions increased by 26% year-over-year, driven by a significant rise in CO1 emissions. Customers & Solutions segment reported a negative EBITDA of EUR27.7 million, impacted by lower natural gas B2B supply results. Investments in Green Capacity decreased by 42% year-over-year, as several projects reached completion or are nearing completion.

Q & A Highlights

Q: Has Ignitis Group officially decided to participate in the second offshore wind farm tender? Has an application been submitted for the tender? Could you confirm that Ignitis Group intends to participate in the second tender without a partner? A: We don't have updates on this matter. The partner selection process is ongoing. No decisions on participating in the second onshore tender have been made yet. We will announce all relevant information in accordance with legal requirements. - Darius Maikstenas, CEO

Story continues

Q: On the recently announced seven-year supply agreement with Litgrid, can you confirm whether the price is fixed at EUR74.5 per megawatt hour for the entire term without indexation? A: Yes, the price is fixed without indexation. It was a public tender organized by Litgrid, and we submitted the offer based on what we see as a fair market price for such an instrument at the moment. - Jonas Rimavicius, CFO

Q: Electricity supply volumes in Q2 were up 9.2% year over year, driven mainly by Polish markets. Was this growth fully backed by our own generation capacity through PPAs? A: In the Polish markets, the majority of our assets are either with CFDs for most of the volume or with external PPAs, meaning this growth was mainly through external purchases. These purchases are properly hedged, so we are not taking the price exposure. - Jonas Rimavicius, CFO

Q: On the debt side, regarding bond refinancing or potentially new issuance, when should we expect initial actions here? A: Our earliest bond maturity is in 2027. We are likely to start preparatory works for refinancing next year, with the transaction taking place when market conditions are right. We continue to monitor the situation on the capital markets. - Jonas Rimavicius, CFO

Q: Working capital was negative at the end of Q2. Is this normal, and how should we think about working capital movements going forward? A: We like our negative working capital, but it's not the base case scenario. The base case level is closer to EUR100 million in positive territory with seasonal fluctuations. The current negative working capital is due to collected balancing services fees, which will be returned to consumers in the second half of the year. - Jonas Rimavicius, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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