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Investing.com -- Enagas (BME:ENAG) stock traded lower on Tuesday after the company reported earnings that fell short of analyst expectations, with weaker operating cash flow and a decline in EBITDA.
For 2025, the Spanish energy company expects EBITDA to reach about €670 million, slightly below the market consensus of €677 million.
Net profit is projected at €265 million, above the consensus forecast of €255 million. Net debt is expected to stand at €2.40 billion, roughly matching market expectations.
The company also confirmed its dividend per share guidance of €1 for 2025 and 2026, keeping it unchanged from the previous outlook.
Enagas anticipates steady long-term growth, forecasting an EBITDA compound annual growth rate of 2.5% between 2024 and 2030 and a more aggressive 9.5% growth rate from 2026 to 2030.
The company’s regulated asset base is expected to expand from €3.1 billion in 2024 to €4.8 billion by 2030, with €2.1 billion allocated to gas infrastructure and €2.7 billion to hydrogen investments.
Capital expenditure for the 2025-2030 period is projected at €4.04 billion, with a strong emphasis on hydrogen infrastructure, accounting for €3.13 billion of the total.
Despite these long-term projections, the latest financial performance painted a mixed picture. Enagas reported an annual EBITDA decline of 2.5% to €761 million, slightly above consensus estimates of €742 million.
The company had previously guided EBITDA to exceed €730-740 million, meaning results technically met expectations but lacked upside.
Earnings from affiliates totaled €186 million, down 6.9% year-over-year, due to the deconsolidation of its stake in Tallgrass from July 2024.
Net income, excluding exceptional items, rose 3.2% year-over-year to €310 million, surpassing the company’s guidance of at least €270-280 million.
However, reported net profit took a severe hit, swinging to a loss of €299 million due to a €364 million impairment related to the sale of Tallgrass and a €246 million loss from an arbitration case involving the Gasoducto Sur Peruano (GSP) project.
Cash flow was another area of weakness. Operating cash flow dropped 19.2% year-over-year to €615 million, weighed down by negative working capital of €73.7 million.
The funds-from-operations-to-net-debt ratio stood at 28.7%, a modest improvement from 27.2% in the prior quarter.
Meanwhile, net debt was reported at €2.404 billion, slightly lower than the €2.421 billion recorded at the end of September 2024 and broadly in line with expectations. The average cost of debt fell slightly to 2.6% from 2.7% in the previous quarter.
Investments in 2024 totaled €140 million, while divestments reached €911 million, primarily from the sale of Tallgrass. Dividend income from associates fell 16.4% year-over-year to €161 million, adding another pressure point on cash flow.