ENGIE (ENGI) Q2 2024 earnings summary

Executive summary

• Delivered strong H1 2024 results in a normalized energy market, leading to an upgrade in full-year earnings guidance and strong progress on ESG targets.

• Added over 1GW of renewables, with a 95GW pipeline and 6.9GW under construction at end-June 2024; significant execution in battery energy storage systems (BESS) and integration of Broad Reach Power with 800MW battery capacity completed.

• Progressed on coal exit in Chile, with regulatory approval for conversion of a coal-fired unit and continued reduction in greenhouse gas emissions.

• Managed regulatory and political developments, including Belgian parliament's approval of a 10-year extension for Tihange 3 and Doel 4 nuclear reactors and ongoing EU review.

• Employee share ownership plan expanded, with 35% of employees subscribing.

Financial highlights

• Revenue at €37.5bn, down 20.2% year-over-year; EBITDA (ex-nuclear) at €7.8bn, down 11.2%; EBIT (ex-nuclear) at €5.6bn, down 16.2%.

• Net recurring income group share: €3.8bn, down 6.9%; reported net income group share: €1.9bn, a €2.8bn improvement year-over-year due to non-recurrence of nuclear provision costs.

• Cash flow from operations: €8.9bn; growth capex up 78% year-over-year to €5.2bn.

• Net financial debt: €30.2bn (up €0.7bn vs Dec 2023); economic net debt: €45.8bn (down €0.8bn); net financial debt/EBITDA: 2.07x; economic net debt/EBITDA: 3.1x.

• Average cost of gross debt: 4.75%; liquidity at €26.6bn, including €18.1bn in cash.

Outlook and guidance

• Upgraded 2024 net recurring income group share guidance to €5.0–5.6bn (from €4.2–4.8bn); EBIT (ex-nuclear) now €8.2–9.2bn.

• Dividend payout ratio reaffirmed at 65–75% of NRIgs, with a floor of €0.65/share for 2024–2026.

• Targeting economic net debt/EBITDA ratio ≤4.0x long-term; strong investment grade rating maintained.

• Guidance includes contingencies for potential tax and regulatory uncertainties.