Grenergy Renovables has announced its financial results for the first quarter of 2024, exceeding consensus expectations by a small margin.
Overall, energy revenues remained stable, showing an 8% growth on a like-for-like basis. The positive contribution of services to EBITDA and the lack of significant changes in the project pipeline, currently including 872 MW COD, 823 MW UC, and 1,000 MWh UC storage, indicate strong operational stability.
One of the key highlights of the quarter was the sale of 77 MW of wind capacity in Peru to Engie for USD 60.3 million, with a potential additional earn-out of USD 3.2 million. This transaction, along with the sale of the Matarani photovoltaic park to Yinson Renewables for USD 90 million, significantly contributed to the group’s EBITDA, accounting for 20 of the 23 million euros generated in the first quarter.
In terms of financing, Grenergy successfully secured a bridge loan of 175 million euros for the construction of 297 MW in Spain, which will be sold to Allianz in the first half of 2025 for 271 million euros. Additionally, the company is in advanced negotiations to secure project finance for phases I and II of the Atacama storage project in Chile.
Grenergy also completed its share buyback plan on May 7, reducing its capital by 4.30% through the amortisation of treasury shares. This move, initiated in October 2023, aimed to reward shareholders and take advantage of the stock price drop. In total, shares worth approximately 35.6 million euros were repurchased at an average price of 26.98 euros per share.
Regarding capital investments, the company maintains its forecasts unchanged. The CAPEX for photovoltaic projects remains at 0.4 million euros per MW for 2024, while the cost per storage unit is 0.18 million euros per MWh, in line with previously set targets. Grenergy continues its partnership with BYD for battery supply for the Oasis Atacama project.
Despite a 16% drop in Grenergy’s stock price year-to-date, there has been a 24% appreciation in recent weeks, suggesting that the strong results may already be factored in by the market. Analysis firm Renta 4 maintains its “overweight” recommendation and a target price of 35.20 euros per share, highlighting the significant catalysts ahead for the company, such as the commissioning of additional capacity and new asset rotations.
In conclusion, although the first-quarter results did not surprise the market, Grenergy continues to demonstrate firm execution of its strategic plan, solidifying its position in the renewable energy sector and laying the groundwork for sustained growth in the coming months.
