EDP 1H25 presentation slides: Underlying profit surges 27%, guidance upgraded

EDP Energias de Portugal (LISBON:EDP) presented its first half 2025 results on July 31, showing strong underlying performance despite modest headline numbers. The company reported a 27% year-over-year increase in underlying net profit and raised its full-year guidance, driven by renewable energy expansion and operational efficiencies.

Executive Summary

EDP reported recurring EBITDA of €2.6 billion for the first half of 2025, representing a 3% year-over-year decline on a reported basis but a 7% increase on an underlying basis. Similarly, recurring net profit reached €752 million, showing a 3% decline on a reported basis but a robust 27% increase on an underlying basis when excluding asset rotation gains.

The company’s strong performance prompted management to upgrade its 2025 guidance, with recurring EBITDA now expected to reach €4.8-4.9 billion and recurring net profit projected at €1.2-1.3 billion.

As shown in the following summary of 1H25 highlights and financial performance:

"We had a strong first half. Underlying EBITDA up 7% year-on-year, underlying net profit up 27% year-on-year," said CEO Miguel Stilwell d’Andrade during the earnings call, highlighting the company’s solid performance.

Detailed Financial Analysis

EDP’s financial results reflect strength across multiple business segments. The company’s electricity networks showed resilience with a 6% increase excluding gains and foreign exchange impacts. Meanwhile, Wind & Solar underlying EBITDA grew by 20% year-over-year, supported by new capacity added in the fourth quarter of 2024.

The integrated business in Iberia performed well, benefiting from above-average hydro generation and increased demand for flexible generation services. Hydro reservoirs stood at approximately 83% in July 2025, 20 percentage points above early 2025 levels and 20 percentage points above the historical average.

The company’s Wind & Solar segment continues to expand, with capacity additions on track and high visibility on asset rotation for 2025. EDP plans to add approximately 2GW of new capacity, with 70% scheduled for the fourth quarter.

The following chart illustrates EDP’s Wind & Solar capacity additions and asset rotation strategy:

EDP has also made significant progress in improving operational efficiency. The company reduced its recurring OPEX from €0.97 billion in the first half of 2023 to €0.93 billion in the first half of 2025. This improvement is reflected in the OPEX-to-gross profit ratio, which decreased from 26% to 24% over the same period.

Strategic Initiatives

EDP’s strategic focus remains on expanding its renewable energy portfolio while optimizing its asset base through rotation. The company is also investing in electricity network modernization and digitalization to support the growing integration of renewable energy sources.

In Brazil, EDP secured a significant regulatory milestone with the signing of a 30-year concession extension for EDP Espírito Santo in July 2025, extending the concession until July 2055. The preliminary regulatory parameters for EDP ES include an increase in the regulatory return on RAB from 7.15% to 8.03% and a 46% increase in net RAB to R$5.5 billion.

In Iberia, regulatory developments are also favorable, with Spain proposing to increase the regulatory return for electricity networks from 5.58% to 6.46% for the 2026-2031 period. This improved regulatory framework is expected to support EDP’s investments in network modernization.

The company continues to accelerate OPEX efficiency through organizational streamlining and digital transformation, as illustrated in the following chart:

Forward-Looking Statements

Based on its strong first-half performance, EDP has upgraded its 2025 guidance. The company now expects recurring EBITDA of approximately €4.8-4.9 billion, recurring net profit of approximately €1.2-1.3 billion, and net debt of approximately €16 billion.

The following chart presents EDP’s improved 2025 guidance:

The integrated business in Iberia’s EBITDA guidance has been upgraded to €1.2 billion, driven by above-average hydro generation and demand for flexible generation services. The electricity networks segment is expected to show underlying business growth driven by increasing electricity consumption and inflation-linked revenue updates.

For the Wind & Solar segment, EDP projects EBITDA of €1.9 billion, including asset rotation gains of approximately €100 million expected in the second half of 2025.

The company has announced that it will provide a strategic update at its Capital Markets Day scheduled for November 6, 2025.

"We are working on a business plan which allows us to continue to deliver on long-term value creation," d’Andrade noted during the earnings call, emphasizing EDP’s strategic focus.

The key takeaways from EDP’s first half 2025 results presentation are summarized in the following slide:

Despite the positive outlook, EDP faces potential challenges including market volatility, regulatory changes in key markets, and competition in the renewable energy sector. The company’s net debt to EBITDA ratio increased from 3.5x to 3.8x, while the funds from operations to net debt ratio decreased from 21.5% to 19.5%, indicating some pressure on the balance sheet.

Nevertheless, EDP’s strong underlying performance and strategic initiatives position it well for continued growth in the renewable energy sector, supported by favorable regulatory developments and operational efficiencies.

Full presentation:

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