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Introduction & Market Context
ERG (BIT:ERG) reported its second quarter and first half 2025 results on August 1, showing improved quarterly performance despite continuing challenges from below-average wind conditions across Europe. The renewable energy company, whose stock rose 2.48% to €19.45 following the presentation, demonstrated resilience in the face of what it described as a "persisting wind drought" that has affected operations since October 2024.
The company’s presentation highlighted that average wind speeds in the first half of 2025 were approximately 5% below the long-term climatological mean, according to Copernicus data. This weather phenomenon has been characterized by a dominant high-pressure anomaly over northwestern Europe, significantly impacting wind energy production across the continent.
As shown in the following wind speed departure map:
Despite these challenging conditions, ERG managed to improve its quarterly performance compared to the same period last year, suggesting the company’s diversification strategy and operational improvements are yielding results.
Quarterly Performance Highlights
ERG reported second-quarter 2025 EBITDA of €128 million, a 10.3% increase from €116 million in Q2 2024, with an improved EBITDA margin of 71% compared to 69% in the prior-year period. Net profit for Q2 2025 reached €34 million, up 21.4% from €28 million in Q2 2024.
For the first half of 2025, however, the company recorded an EBITDA of €274 million, slightly down from €281 million in 1H 2024, while net profit decreased more significantly to €83 million from €106 million in the comparable period.
The following chart illustrates the key financial figures:
Energy production remained relatively stable, with total production of 1,720 GWh in Q2 2025 compared to 1,723 GWh in Q2 2024, and 3,697 GWh for 1H 2025 versus 3,670 GWh in 1H 2024. The slight increase in first-half production came despite the challenging wind conditions, primarily due to contributions from new assets.
The breakdown of production by region shows Italy remains ERG’s largest market, followed by France and the United States:
Similarly, the EBITDA breakdown reveals Italy’s dominant contribution to the company’s earnings, accounting for approximately 63% of total EBITDA in 1H 2025:
Strategic Initiatives
ERG continued to execute on its strategic plan during the first half of 2025, with several notable achievements. The company completed construction of its first Battery Energy Storage System (BESS) plant in Vicari with a capacity of 12.5MW, representing an important step in its technology diversification.
Other key accomplishments included the completion of Italian Solar Revamping/Repowering projects totaling 28MW, obtaining permits for 50MW of Wind & Solar projects across France, Germany, and Italy, and the startup of the Corlacky wind farm in Northern Ireland with 47MW capacity.
The company has also made significant progress in securing long-term revenue streams, signing a 15-year Power Purchase Agreement (PPA) with A2A for 182GWh per year from its Salemi Castelvetrano repowering project, and winning a 5-10 year supply contract for 185GWh per year to the FS Group.
As illustrated in the strategic progress overview:
In total, ERG secured PPAs for new capacity (360GWh/year) and existing assets (390GWh/year) during the first half of 2025, helping to lock in long-term revenue stability amid volatile energy markets.
Detailed Financial Analysis
ERG’s adjusted profit and loss statement shows the impact of increased depreciation and amortization costs, which rose to €138 million in 1H 2025 from €127 million in 1H 2024, reflecting the company’s continued investment in new assets. Despite this, the company managed to improve its tax rate to 24% in 1H 2025 from 26% in the prior year.
The company’s net financial position increased to €1,949 million as of June 30, 2025, from €1,793 million at the end of 2024. This increase was primarily driven by dividend payments of €147 million, share buybacks of €20 million, and capital expenditures of €274 million, partially offset by the positive EBITDA contribution.
The following cash flow statement provides a clear picture of the changes in ERG’s financial position during 1H 2025:
Capital expenditures and acquisitions totaled €364 million in 1H 2025, down from €444 million in 1H 2024. The geographic distribution of investments has shifted, with a greater focus on European markets in 2025 compared to significant US investments in 2024.
Forward-Looking Statements
While ERG did not provide specific updated guidance in this presentation, the company’s performance suggests it is working to overcome the challenges posed by unfavorable wind conditions. The Q1 2025 earnings report had set full-year EBITDA guidance at €540-600 million, and the improved Q2 performance may help the company achieve the mid-range of this target if wind conditions normalize in the second half of the year.
The company’s focus on securing long-term PPAs and diversifying its technology mix with battery storage solutions indicates a strategic approach to mitigating market volatility and weather-related risks. With approximately 750GWh of annual production now secured under long-term agreements in the first half of 2025 alone, ERG is building greater revenue visibility for the coming years.
The persistent wind drought remains a key challenge, but ERG’s improved Q2 performance despite these conditions demonstrates the company’s operational resilience and the benefits of its geographic diversification across multiple European markets and the United States. Investors will be watching closely to see if wind conditions improve in the second half of the year, which could provide a significant boost to the company’s full-year results.
Full presentation:
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