Earnings call transcript: EDP Renovaveis reports solid Q1 2025 growth

EDP Renovaveis (EDPR) reported a robust financial performance for the first quarter of 2025, with recurring EBITDA reaching €477 million, marking a 5% year-over-year increase. The company’s stock saw a modest rise of 0.31% following the announcement, reflecting investor confidence in its strategic direction. According to InvestingPro data, EDPR maintains impressive gross profit margins of 77.6%, though the stock has seen a 40.45% decline over the past year. Despite a slight dip in the average selling price of electricity, EDPR’s installed capacity grew significantly, driven by expansions in the U.S. and Europe.

Key Takeaways

• Recurring EBITDA increased by 5% year-over-year to €477 million.
• Installed capacity rose by 17% year-over-year, reaching 19.3 GW.
• Stock price increased by 0.31% post-earnings announcement.
• Electricity sales totaled €624 million, up 5% year-over-year.
• Average selling price of electricity decreased by 5% to €57/MWh.

Company Performance

EDP Renovaveis demonstrated strong performance in Q1 2025, with significant growth in both its financial metrics and operational capacity. The company expanded its installed capacity by 17% year-over-year, largely due to its focus on the U.S. and European markets. This growth aligns with the broader industry trend of increasing renewable energy adoption. The company’s strategic investments in solar and storage technologies have positioned it well to capitalize on the rising demand for renewable energy.

Financial Highlights

• Revenue: €763 million
• Recurring EBITDA: €477 million (+5% YoY)
• Recurring Net Income: €66 million
• Total electricity sales: €624 million (+5% YoY)
• Average selling price: €57/MWh (-5% YoY)

Outlook & Guidance

Looking ahead, EDP Renovaveis maintains a positive outlook for 2025, with a recurring EBITDA guidance of €1.9 billion. The company expects to generate 41-43 TWh of electricity and aims to keep the average selling price stable at €55/MWh. EDPR plans to invest €3 billion in gross investments and anticipates €2 billion in proceeds from asset rotations by year-end. InvestingPro data shows analyst consensus expects 30% revenue growth this year, with an average price target suggesting 35% upside potential. The company remains focused on reducing net debt to €8 billion, particularly crucial given InvestingPro’s assessment of its current debt burden.

Executive Commentary

Miguel Stroud Andrade, CEO of EDP Renovaveis, emphasized the critical role of renewables and storage technologies in meeting electricity demand. He stated, "Renewables together with storage remain absolutely critical technologies to satisfy electricity demand." Andrade also expressed confidence in the U.S. market, noting, "We continue to see strong demand for power and that renewables is one of the chief technologies that can actually supply that power."

Risks and Challenges

• Potential impact from U.S. tariffs, estimated at less than $25 million.
• Fluctuations in average selling prices due to market conditions.
• Challenges in maintaining supply chain efficiency amid global disruptions.
• Competition from other renewable energy providers.
• Regulatory changes in key markets such as the U.S. and Europe.

Q&A

During the earnings call, analysts inquired about the potential impact of U.S. tariffs on the company’s operations. EDP Renovaveis reassured investors that the impact would be minimal, estimated at less than $25 million. Analysts also questioned the company’s asset rotation strategy, to which the CEO responded positively, highlighting a flexible approach and potential for larger disposals.

Full transcript - EDP Renovaveis (EDPR) Q1 2025:

Conference Operator: Good afternoon. We welcome you to the EDP Renewables First Quarter twenty twenty five Results Presentation Conference Call. During the presentation, all participants will be on a listen only mode. There will be an opportunity to ask questions after the presentation. If wish to ask a question during the Q and A session, you may do so by pressing the star key followed by five on your telephone keypad.

If you’re experiencing any difficulty in listening to the conference at any time, please make sure you have your headset fully plugged in or alternatively, please try calling from a different device. I now hand the conference over to Mr. Vikal Pianna, Head of IR and ESG. Please go ahead, sir.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Good afternoon, everyone, and thank you for joining us for EDPR first quarter twenty twenty five results conference call. Today, we have with us our CEO, Miguel Stroud Andrade and our CFO, Rutte Scherer. They will present an overview of the financial performance for the first quarter and also provide guidelines for the full year outlook. Following their presentation, there will be an opportunity for a Q and A session. Questions can be submitted through the conference chat or over the phone.

Call is set to run for sixty minutes. With that, I now hand over to Miguel Sulendran.

Miguel Stroud Andrade, CEO, EDP Renewables: Thank you, Miguel. Good afternoon, everyone. I guess I’d like to start off just by giving a a brief word on the blackout last week, which is obviously a highly exceptional and impactful event for for Portugal and Spain. And I really want to take this opportunity to both recognize and also congratulate the great work done by the EDP and the teams, the distribution business teams in Portugal and Spain, and for the really swift and and efficient restoring of the energy to the customers. So let’s say this is really an unprecedented event.

No one can ever really fully simulate this. I believe the teams reacted very well in difficult circumstances. As you know, the root cause of the event is still under evaluation. However, I think it’s safe to say that this incident really highlights the importance of ensuring the robustness, reliability, and adaptability of the electricity system. This includes continued investment in grid infrastructure, energy storage and other flexibility sources and also advanced control and frequency response mechanisms, including ancillary services.

I think it’s very clear for us, and I think for for most people in the sector, that renewable energy will play a crucial role in the energy system of both the present and the future. And so the energy transition is happening, and the increased penetration of renewables must be accompanied by an increased sophistication of electricity system to create a system that is clean, reliable, and affordable. And I think that’s a good starting point to to move over and talk about our first quarter twenty twenty five and give a brief update on our business performance. So I turn over two slides before and talk about just a quick summary. First, I think through solid first quarter results for ADP renewals, they were supported by capacity expansion, operational efficiency.

I’ll talk a bit more about that later on. Installed capacity reached 19 gigawatts 19.3 gigawatts, reflects a 17% increase year on year. Net additions of 2.8 gigawatts, including 3.4 gigawatts of gross additions and around half a gigawatt of asset rotations. So we’re talking about almost 20 gigawatts of wind, solar, and batteries. And I think this gives us a scale and, you know, the corresponding economies of scale that very few other renewable companies have.

Electricity generation grew 10% year on year, totaling around 10.9 terawatt hours, benefiting from renewable resources that was around 1% above the long term average. This compares to around minus 2% in the first quarter of last year. Onshore wind remains our primary assets. It represents 82% of our generation. And we had good wind resource in The US and in Brazil, certainly compared to last year.

But we had a very weak quarter of wind in Europe. It was, in fact, the weakest quarter in the last eighty six years. So this is relevant when we also talk about the average selling price for EDPR as a whole. Pricing dynamics. We saw an average selling price decrease of around 5% year on year, so it was around €57 per megawatt hour.

And as I mentioned, it was impacted by lower prices in Europe and South America, although it was partially offset by better price performance in North America. On the cost side, I think impressive numbers. Core OpEx per average megawatt in operation decreased 9% year on year. That’s reflecting an improved efficiency and very strong cost control measures. Excluding asset rotation gains, our underlying recurring EBITDA saw a 20% increase year on year, so that’s significant.

And it highlights a really strong business execution. So overall, recurring EBITDA reached around €477,000,000 and 5% up versus last year. Finally, recurring net income reached €66,000,000, 40 4 million more than last year, excluding the asset rotation gains we had last year. That underscores EDPR’s profitable growth despite market challenges. If you look at Slide five and then take a step back and just talk a little bit more about our premium existing asset base.

We’ve got a very strong position with high quality diversified asset base. Our installed capacity, as I mentioned, 19.3 gigawatts or 17 gigawatts, primarily focused on North America and Europe. These two regions represent around 85% of our global footprint. Looking at our technology mix, onshore wind, as I say, is the main pillar and 80% of our asset generation base, then around 20% of solar. Contracted profile also remaining robust, talking about 70% of our portfolio secured on the long term agreements with averaging around eleven years of remaining maturity.

I think this gives us good stability and predictability for our operations moving forward. So beyond our existing capacity, we remain well positioned for future growth opportunities.

: And and

Miguel Stroud Andrade, CEO, EDP Renewables: I think this diversified strategy, we’re also reinforcing our commitment to sustainable development and and long term value creation for the shareholders. If we look at slide six, talking about delivery of the two gigawatts for 2025. So we’re very focused on disciplined execution, making sure we’ve got, you know, delivering on time and on budget. For this year, we have clear visibility on the delivery of the two gigawatts of new capacity with all projects all projects already under construction and approximately 70% scheduled for commissioning in the fourth quarter. If we break this down by region and technology, so U US and Europe will have about 80% of the total additions, so we’ll keep this sort of balanced strategy across geographies.

In terms of generation mix, talking about approximately two thirds of our new capacity will come from solar and storage, so that reinforcing our diversification. In North America, around 80% of new installations will focus on solar and storage. And in Europe, it will be a combination of solar and wind projects too, and we’re deploying that in in markets like Italy, Germany, and France. So as I say, all projects actively progressing, scheduled for completion by the end of twenty twenty five with most of them coming in towards the end of the year. And, you know, really strong focus here on just making sure we’re delivering them on time and on budget, and I think we have a good reason to believe that that will be the case given the stage of progress that that we’ve seen on the projects.

On slide seven, k, talking about supply chain because I know this is something that comes up often in discussions with investors and with with many of you on the call. So taking a step back. Since our as you know, had issues in The US A Couple Of Years ago with the supply chain. We completely reconfigured our procurement strategy to focus on the supply chain, making sure it was more resilient given the the trade dynamics. And so we’ve prioritized domestically manufactured equipment, particularly in The US, and I think we’ve developed strong relationships and partnerships with The US based suppliers.

And this really helps us mitigate the risks associated with the import tariffs over the last couple of weeks. So for 2025 and 2026 secondured capacity, we’ve already ensured that we have the infrastructure to keep the projects on track. Most of the equipment is either already in The US or not subject to tariffs, either because they’re domestically made or because they’re specifically exempt. So we’ve done a, you know, relatively detailed analysis analysis based on the information that we have at the moment. So looking in terms of financial impact, we’re estimating the tariffs of relatively immaterial impact on our revenues and secured capacity.

I mean, talking about less than $25,000,000, 1 percent of CapEx for these projects. They’re mostly related to non major components imported mainly from either Europe, Canada, or Mexico. So I think having looked at where the tariffs are and sort of I think it was really important that we did this restructuring of the supply chain a couple of years ago too so that we can go through this time of uncertainty with much lower risk. Talking about the IRA. So the tax credits framework, that’s a key pillar for our investment strategy.

We have more than 1.5 gigawatts of projects secured under safe harbor agreements. We’ve protected our developments from, you know, changes to to legislation with this safe harbor. Also, and I I think I’d mentioned this on previous calls, new PPAs under negotiation, We are including clauses for changes to the IRA and potential tariff impact. So we see continued resilient PPA demand, good pricing levels across the markets. We see strong support coming from regulated utilities and corporate entities that are demanding, you know, good PPAs and and renewable energy from either because they’re reshoring manufacturing or building new data centers, electrifying installations.

I think all of this is contributing to to strong demand. So given these dynamics, we think that there will be reasonable flexibility in the market to adjust to prices depending on any changes to the ROA, which which are done. At the same time, we’re also leveraging our US supply chain, as I said, given the procurement adjustments that we did in the past. We have flexibility. We’ve mitigated the impact from import duties and tariffs.

We’ve got a multiyear agreement with First Solar. It was announced back in March of twenty twenty three, and that gives us access to US manufactured solar modules. And so it gives us good confidence on on our project pipeline for 26 and ’27. So given all of this, I think EDPR remains well positioned to capture growth opportunities in The US market while maintaining financial discipline and supply chain resilience in the years ahead. If we move on to Slide eight, I just like to give a word on electrification needs.

First, just to say the global energy landscape, it really continues to evolve, I mean, very quickly. But one thing is very clear. There is electrification is at the center of this transformation. I think we’re seeing that very clearly. In The US, we’re seeing growing demand for power.

There have been various various reports coming out even more recently talking about this this demand, And this is requiring accelerated renewable development despite the current market uncertainties. Renewables, and this has also been discussed, it’s really the only technology that’s ready to meet this demand today. I mean, you can talk about other technologies. Most of them, you’re talking about, you know, twenty, thirty, 20, 30 five, and beyond. Truth is if you want power delivered 25, 20 six, 20 seven I mean, you’re talking about solar.

You’re talking about wind. You’re talking about battery storage. These are immediate solutions. And and some of the other conventional alternatives are still, you know, away away sort of in the the decade of twenty thirties. That’s in The US.

In Europe, electrification continues to be a top priority. It’s been reinforced by the European Commission mandate and particularly given, you know, energy independence and reducing the dependency on gas. So I think there will be, you know, a strong push for industrialization and and energy security. You’ve had strategic plans like the clean and industrial deal. You’ve had things like the affordable energy action plan.

All of this driving decarbonization, they’ve set up targets. So we continue to see electrification rates continue to increase. We’re estimating around 32% by 02/1930 and around 100 gigawatts of renewable energy annually until then. So definitely also progress here in Europe. We still think that the issue is not at the European macro level.

It’s very much more at the country level, which still needs to where you still need some regulatory action to drive further investment. But all in all, I think we strongly believe that renewables and storage remain critical technologies for satisfying this electricity demand, both in the short and the medium term, and to reinforce security of supply and autonomy. With that, let’s move on to slide nine and talk about gross investment. So we’re estimating for 25 gross investment at around €3,000,000,000 That includes financial investments relating to Ocean Winds. Most of this, obviously, is directed towards capacity expansion and portfolio optimization.

We will have a decline in the payables to fixed asset suppliers in line with the decrease of construction activities. A big part of our investment strategy is the asset rotation program. As you know, we’re expecting to generate around €2,000,000,000 in proceeds throughout the year, so that’s helping finance this this gross investment. We’re expecting proceeds of around €1,000,000,000 from tax equity. That’s obviously also an important point.

And I’m sure we can then talk about that as well. We also expect a stronger year on year organic cash flow driven by operational efficiency and revenue growth. So that will also provide further support for investment execution. So combination of all of these things make us believe that we’ll have a, you know, good growth over the next couple of quarters, disciplines, keeping net debt at a stable level of approximately 8,000,000,000 by year end. And, obviously, there will be, you know, fluctuation on a quarterly basis, but but by year end, we think that we’ll have it around 8,000,000,000.

As we move forward, you know, the focus is clearly on balancing growth and financial resilience, the balance sheet, you know, just keeping a robust investment framework for the following years. And on that, I talk about Slide 10, just on the asset rotation. I think sitting here today, sort of May 8, saying that we’re feeling good about the asset rotation program. It’s progressing well. We’ve had solid demand in the various different regions despite the prevailing high interest rate environment.

So to be honest, we’re, you know, feeling pretty confident about about this. We secured already around billion in proceeds from asset rotation transactions already. We have some additional processes which are advancing, and we expect to be able to announce them this summer, some of them even in a much shorter term. The remaining transactions will be finalized then towards the second half of twenty twenty five. Overall, we are also planning to sell some 49 stakes in some cases, more in The U.

S. In Europe, we’ll be keeping sort of the 100% stakes. In terms of asset rotation gains, we’re expecting a contribution of around €100,000,000 this year. Let’s say, 2025 includes some high CapEx assets, but we’ll also be selling some minority 49% stakes that will optimize our investment profile, and, you know, they’ll also have some some specific balance sheet advantages for that. So all in all, I think feeling good about asset rotation program, seeing strong demand and good pricing.

So I think that’s certainly a positive note there. For 2025 guidance, so our recurring EBITDA guidance for 2025, we’re guiding as of today at around €1,900,000,000 That includes approximately €1,100,000,000 in asset rotation gains. In terms of generation, we’re talking about 41 to 43 terawatt hours expected for the year. This compares with 36.6 in 2024. And, obviously, this growth is driven by increased capacity.

Renewable resources seem to be more normalized. So basically, terms of volume, that’s our our base case at the moment. Average selling price, we’re expecting it at around €55 per megawatt hour, slightly lower than the €57 per megawatt hour in the first quarter, and that’s assuming lower European wholesale prices. We’re also assuming a ForEx at around EUR1.1 to dollar. So obviously, there’s been some devaluation in the dollar more recently.

And so we had around CHF 1,050,000,000.00 the first quarter, but we’re assuming sort of for the year at CHF 1,100,000,000.0. Regarding net debt, we’re, as I mentioned earlier, assuming around CHF 8,000,000,000 for the end of the year, euros 3,000,000,000 in gross investments offset by the €2,000,000,000 in asset rotations and €1,000,000,000 in tax equity financing. I mean, simplistically, that’s that’s how we’re looking at it. Moving forward, very strong commitment to cash flow discipline, executing growth strategy, leveraging our scale, leveraging our competitive advantages in the different markets, and just making sure that we’ll deliver our 2025 target successfully. And with that, I’d hand over to Rui to walk you through the first quarter financial results.

Thanks.

Rui Tasheri, CFO, EDP Renewables: Thank you very much, Miguel. Good afternoon to you all. So let’s go through the first quarter results. So if you go to Slide 13 and starting with the operational performance, EDPR delivered strong operational results, obviously underpinned by our growing installed capacity and also a normalized renewable resource. So let’s break this down.

The capacity addition or the capacity evolution, EDPR’s installed capacity reached 19.3 gigawatt, up from 16.5 gigawatt in the first quarter last year. So this is a 2.9 gigawatt increase year on year. The growth was primarily driven by capacity additions in North America and Brazil, complemented by new projects in Europe, particularly Spain, Italy and Greece. In the first quarter of twenty twenty five, our output increased by 10% year on year, reaching 10.9 terawatt hours generated, supported by a higher installed capacity but also stronger resource in U. S.

The Renewables Generation Index, as you know, reflects deviations of renewables resource versus the long term average gross capacity factor, stood at 101% for the first quarter this year, compares with 98% in the first quarter last year. I would highlight the notable recovery in North America. This improvement offset the lower resource in Europe and resulted, at the end of the day, in the stable output across our portfolio. So if you move now to Slide 14 and we look to sales. EDPR continues to see growth in electricity sales supported by increased generation capacity, also improved operational performance despite some pricing variations.

In the first quarter of twenty twenty five, total electricity sales reached €624,000,000 This is a 5% increase year on year. The growth was primarily supported by the 10% increase in electricity generation. As I mentioned, total nearly 11 terawatt hours for the quarter. This very strong performance is partially offset by a 5% decrease in the average selling price, which dropped to €57 per megawatt hour, and it reflects weaker pricing in Europe and Brazil. So if you look at the realized price in Europe year on year, we observed a 6% decrease.

And this is basically decrease year on year. And this is reflecting that hedging prices, mainly in Spain, came down from €86 to €72 per megawatt hour. There is also some adjustments in the feed in tariff in Portugal that has a partial indexation to the average pool price of the last twelve months. And also, the higher rate of solar versus wind in the generation mix, and this is partly offset by the higher electricity prices that we observed in Italy, Romania and Greece. On the other hand, North America saw a 12% increase in pricing, mainly driven by higher wind generation and better REX performance.

South America, the average price dropped 22%, impacted by market dynamics, the solar mix, but also because of the ForEx translation that impacted negatively. So if we exclude the ForEx, the price performance dropped 10% versus the minus 22%. So moving now to Slide 15 on EBITDA. Recurring EBITDA increased 5% year on year, reaching €477,000,000 in the first quarter. More importantly, when excluding the asset rotation gains, the underlying EBITDA increased 20% year on year, reflecting a very solid operational and also commercial execution.

So breaking down the key drivers, electricity sales contributed positively, supported by the higher generation output. Additionally, tax equity revenues increased by €41,000,000 In terms of asset rotation, as already said, there is no asset rotation gain in the first quarter twenty twenty five compared to €58,000,000 that we booked in the first quarter last year twenty twenty four. Core OpEx nominal costs increased year on year on higher megawatts in operation. However, in relative terms, the core OpEx per average megawatt in operation improved or decreased 9% year on year. Regarding other costs, net of other revenues, we see a positive €20,000,000 impact year on year, driven by the headwinds that we booked in last in the first quarter last year and that we shared with the market by that.

If we now look to Page 16, EDPR continues to enhance operational efficiency, maintaining a very disciplined cost control strategy while we keep on expanding the installed capacity. So as I commented in the previous slide, the core OpEx per average megawatt in operation decreased by 9% year on year and reflects a persistent introduction of efficiency measures and cost synergies. This improvement was driven by strong cost control, allowing to capture economies of scale across the different regions and some intercompany synergies as well, particularly North America and Europe. As a result, the core OpEx as a percentage of revenues decreased by four percentage points, dropping from to 25% compared to the nearly 29% in the first quarter last year. So we will continue to adjust the organization according to the current growth outlook.

Employees’ number is decreasing already by 4%, and we obviously target a very high or highly efficient workforce. EDPR remains committed to execution of this strategy so that we keep a very focused a strong focus on operational excellence, ensuring sustained efficiency gains and obviously maintaining a very strong financial discipline into the future. So now let’s move to Slide 17 and talk about financials. Financial costs increased by EUR 17,000,000 year on year to €125,000,000 and this is primarily driven by a €2,300,000,000 increase in nominal financial debt as we execute the growth targets. A key highlight here is that 76% of EDPR’s financial debt is at the fixed rate, providing resilience against potential interest rate fluctuations in the short term.

Additionally, we maintain a well balanced debt maturity profile, with 57% of our debt maturing beyond 2028, reinforcing long term stability. In terms of currency exposure, debt remains diversified, 45% in U. S. Dollar denominated and 37% in euro denominated terms. So we actually ensure a natural hedge against some market volatility.

So if you now move to Slide 18. EDPR remains committed to strategic capital allocation. So we look at and keep the investment focused in the core markets. The first quarter twenty twenty five total investments amounted to €600,000,000 This is a 60% drop year on year, with North America accounting for 60% of the investment with 1.1 gigawatts of project under construction. In Europe, 30 4 Percent of investments, mainly in Spain, Germany and Italy.

South America investment was predominantly in Brazil, supporting ongoing wind and solar expansion. From a technology perspective, 45% of investment focus on wind projects, 36% allocated to solar projects, and this obviously reflects the diversified strategy that we have in terms of technology. Additionally, 12% of our capital was allocated to offshore wind, mainly in France, supporting the projects such as in La Humautier and Le Trepro. Overall, EDPR’s investment strategy, as I said before, remains disciplined, and we will prioritize markets with the strong growth potential and obviously ensuring that we are allocating capital as efficient as possible. Net debt and looking at the cash flow evolution on Slide 19.

Organic cash flow totaled €140,000,000 that’s an increase of €81,000,000 year on year, showing growth in line with our recurring EBITDA performance, partially offset by noncash items, mainly the tax equity revenues, and some changes in working capital and distribution to minorities and partnerships related to tax equity structures. Here, I’d like to highlight the following. In the organic cash flow, it’s not including the tax equity proceeds from U. S. Projects.

So again, just to be clear, organic cash flow excludes tax equity proceeds from U. S. Projects, which, as you know, is cash flow that we typically receive around COD of the plant, of the project, and has an immediate positive impact of reducing net debt. In the first quarter twenty twenty five, we received €74,000,000 from tax equity proceeds. As Miguel mentioned, we expect to collect about €1,000,000,000 by the end of this year.

So as of March 2025, net debt amounted to $8,900,000,000 so that’s an increase of $600,000,000 since closing of December 24. This increase was mainly driven by 900,000,000 in net expansion investments, supporting the company’s growth. Throughout the year, we will we are expecting that the debt increase and then converge to about $8,000,000,000 as also Miguel stated. And this is much of a it’s a result of the timing of the different asset rotation closing that we’ll have throughout the year. Overall, financial strategy remains focused, balancing growth with efficiency and obviously ensuring that we keep a very healthy cash flow generation and long term liquidity position.

Finally, on the net profit. So if you look to recurring EBITDA, it increased 23,000,000 year on year compared with last year EBITDA accounting capital gains. If we exclude capital gains, it increased $81,000,000 year on year. There is a higher depreciation that reflected new capacity additions and the nonrecurring effect from an accelerated depreciation of an ongoing repowering wheat farm in U. S.

Additionally, the effective tax rate stood normalized at 30%, slightly higher than previous quarters due to the absence of asset rotation gains and the corresponding tax treatment. Minorities had a positive effect year on year due to the CDG minorities buyback completion in late twenty twenty four, further optimizing our portfolio structure and ensuring the long term value creation for shareholders. So all in all, recurring net profit reached €66,000,000 And so to compare apples to apples, underlying ex capital gains, this figure increased 3x versus last year. Just before ending, scrip dividend process will conclude on May 14, and the 2025 share option acceptance rate is more than 95%, in line with what we had last year, obviously, pending final execution. So now, Miguel, back to you for any closing remarks.

Thank you.

Miguel Stroud Andrade, CEO, EDP Renewables: Thank you, Rui. So just to close close-up before we move to q and a. I think first of all, as we mentioned, good first quarter results for EDPR and solid financial and operational performance. Operationally, generation increasing 10% year on year. Financially, recurring EBITDA excluding asset rotation gains growing 20% year on year.

Much improved efficiency and scale. I mean, we’re talking about 9%, you know, OpEx per megawatt down versus last year. Recurring net profit reaching 66,000,000 and having good underlying, you know, visibility and performance for certainly, for the the year on year and and big part going forward. Looking ahead, good visibility on the delivery of the two gigawatts. All projects under construction, 70% expected to be commissioned in the fourth quarter.

In The US, One gigawatt of capacity additions remains almost unaffected by import tariffs. I think that’s really important. So we have a smooth execution of our expansion plans. Asset rotation, we’re anticipating around a billion euros in transactions to be signed by the summer. Total target proceeds of around 2,000,000,000 concentrated then towards the second half of the year.

And these transactions will will obviously support our 2025 financial guidance. And so we’ll be targeting recurring EBITDA around €1,900,000,000 including around €100,000,000 in asset rotation gains. Net debt guidance, as we’ve mentioned, at around €8,000,000,000 supported by the €2,000,000,000 in asset rotations and the 1,000,000,000 in tax equity financing. Beyond 2025, what I’d say is we’re well positioned to capture growth. We’re backed by around one and a half gigawatts of projects secured under safe harbor agreements in The US for 2026 and ’27.

And, you know, just as a final note, and you’ve heard us say this often, but I think we certainly believe it to be true. Ultimately, renewables together with storage remain absolutely critical technologies to satisfy the electricity demand growth in the short, medium term, and in the long term, and to reinforce the security of supply for the years to come. So I think relatively solid start to the year. And with that, I think we can turn it over to Q and A. Thank you.

Conference Operator: Thank

Vikal Pianna, Head of IR and ESG, EDP Renewables: you.

So I would ask everybody to limit two questions in order to allow everybody to make its questions. So the first question comes from the line of Manuel Palomo from BNP. Manuel, please go ahead.

Manuel Palomo, Analyst, BNP: Hi. Good morning, everyone. I’ve got two questions. So then, Miguel, how is the two questions? First thing is, in the Q1, you had a negative one off of $30,000,000 impact, which is related to the repowering of Middle Lake for wind project.

You talk about accelerated depreciation, but my question is whether is it is equivalent to bring down to zero the value of the asset before repowering? I mean, we consider it kind of an impairment? And should we consider the asset is now fully amortized? Or should we expect additional impacts in coming quarters? And if

: you could please

Manuel Palomo, Analyst, BNP: quantify. That is the first thing. Second one, you’ve been very clear about the net debt target, 8,000,000,000. However, if I’m not wrong, usually that target does not include TAECE and IFRS 16. So I wonder whether you could also give us a guidance on case, how they’re going to be stable around the $1,500,000,000 And same about IFRS 16, whether they will be stable at around $1,000,000,000 Thank you very much.

Miguel Stroud Andrade, CEO, EDP Renewables: Manel, sorry. Just on the second question, you were talking about the target of what? Net debt or didn’t quite catch

Manuel Palomo, Analyst, BNP: it. K.

Miguel Stroud Andrade, CEO, EDP Renewables: Are you going to take that? Yeah.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Yes. No.

Rui Tasheri, CFO, EDP Renewables: I’ll take it. So maybe on the first one. So so just to be clear, the the way so when we decide a repowering of a U. S. Asset, basically, you look at the components that will be replaced.

So let’s say a tower is replaced or sorry, you keep the tower, you replace the nacelle, then you basically have to do a sort of an acceleration depreciation of the item being replaced. So that’s what’s happening here. And then does it effectively, this has to go according with the time line of the project. So to your point, so today, we have already year so by the end of the Q1, we have accumulated about $20,000,000 of depreciation or accelerated depreciation for this asset. The total depreciation will be around 30,000,000 So throughout the next quarters, we’ll according to the time line of the project, we’ll have an additional, let’s say, give or take, 10,000,000 for this project.

But again, it’s just following the accounting rules for these events. On the net debt guidance. So yes, net debt is targeting EUR 8,000,000,000. It’s not including the tax equity investment. So what we will have for tax equity, so this year, we are thinking that we’ll be cashing in about EUR 1,000,000,000, and then we have the typical reduction on the liabilities that follow also the what we have in in the P and L.

So, yeah, I mean, nothing out of the ordinary there.

Miguel Stroud Andrade, CEO, EDP Renewables: Manel, just to follow-up on on Meadowlake because I think this is a good example. As a result of the repowering, the we’re expecting the project to see an increase of around 50% in the annual energy production. I mean, it’s a really massive improvement in the in sort of the generation that we expect. Be able to get an additional ten years of PTCs. We’ll obviously be fully contracting a % of the project for twenty years going forward, so we’ll avoid sort of the the merchant revenue.

We’re contracting the PPA at busbar, and so this will have a significant increase in EBITDA. I mean, the combination of increased generation of the additional PTCs, so significant increase in EBITDA and, you know, potentially also a candidate for an asset rotation in a project that wouldn’t have been otherwise possible because of the the merchant exposure. We’re talking also about a PPA that’s in the high sixties. So a really good wind project, and so definitely worth doing sort of this accelerated depreciation to be able to do this repowering. You.

Thank you,

Vikal Pianna, Head of IR and ESG, EDP Renewables: Manoj. So the next questions come from the line of Fernando Garcia from RBC. Fernando, please go ahead.

Fernando Garcia, Analyst, RBC: Good afternoon, everybody. Thank you for taking my question. So my first question is on your comment about CapEx optionality and there are disciplined risk return criteria. So I wanted to know there how how this is working so far and how you see twenty twenty six and 2027 in terms of installations. Then my second question question is after Empire Wind offshore project in The U.

S. Stop, how secure you are from the legal point of view about 16 PTCs? And if you can quantify the potential level of risk there. Thank you very much.

Miguel Stroud Andrade, CEO, EDP Renewables: Okay. Thank you, Fred. So what was in relation to the second, and then I’ll talk about the first and and Jorge as well. But in relation to if I understood your question, it’s the PTCs. How comfortable are we that they’ll stay?

I think listen. There’s no precedence really of retroactivity in sort of these issues around the PTCs. You can discuss whether there’s any phase down in the future and stuff like that. And, obviously, the inflation reduction act is has been discussed as we speak. But but, certainly, there’s no track record or or or precedent of retroactive effect.

So I think we’re feeling, you know, very comfortable there. It’s also important to note that you have a lot of Republicans both in the congress and in the senate that are supportive of the IRA. So and and particularly of the investments that come out of the IRA in a lot of Republican states. I mean, 70% of new solar installations were in Republican states in in 2024. So I think there’s a lot of interest in keeping this going forward.

So I certainly wouldn’t read any parallel or any read across or anything like that between what happened to Empire Wind and and anything sort of surrounded the IRA sort of discussion on PTCs and ITCs. In relation to CapEx, so for 2026, what we said is, you know, round up to one and a half gigawatts that we’d be building. We’ve already got about half of that secured. We’re working on the remaining half and, obviously, making sure that we are very disciplined about the the returns that we lock in for for the remaining half. For 2027, as you know, we’re working on the the business plan.

We expect to do Capital Markets Day in November, and and so we’ll give more visibility going forward on that. But in any case, I think you can expect renewables to continue to grow profitably in the various different regions where it where it is.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Fernando. So the next question comes from the line of Alberto Gandolfi from Goldman Sachs. Alberto, please go ahead.

Alberto Gandolfi, Analyst, Goldman Sachs: Thank you, Miguel, and thank you for taking my questions. So my two questions are the following. The first one is on free cash flow. I was wondering, only recently, you really meaningfully reduced net CapEx. So can you tell us how much you expect to be free cash flow positive in 2025, ’20 ’20 ’6?

And if you can give us a bit of a feel for beyond 2026? And how long do you intend or do you need to be free cash flow positive for? I know you’ll tell us much more at year end, but given how eventful the start of the year has been, you can give us any indication of when EDPR might begin to increase investments back again? Or perhaps given the share price, if you can comment on any potential medium term buyback openness, that’d be very helpful. The second question is on power demand.

Spanish power demand is growing very nicely. U. S. Power demand has been growing. How is a growing power demand affecting your business when it comes to returns, when it comes to incremental megawatt needs?

Given you have cut CapEx, I guess it’s more about returns, but can you please tell us about this driver that seems not to be debated too much, if I if I might say? Thank you so much as usual.

Miguel Stroud Andrade, CEO, EDP Renewables: Thank you, Albert. So I don’t have the specific numbers here on on free cash flow, but maybe other Julio Miguel can then follow-up on that. But maybe just a more general comment on on your first question, which is how to increase investments. As you know, we have a couple of different levers and, you know, part of the asset rotation. It’s not just about, you know, sort of the the cash flow coming out of the business.

It’s also about the the ability to do the asset rotations and free up capital to reinvest back into the business and go on generating, you know, capital gains or go on generating proceeds to to invest in good profitable projects. And that’s really what we try to sort of also use as as one of the levers to calibrate the the level of investment and growth going forward. Obviously, we’ll always do a trade off between new investments or other you know, the opportunity cost of that investment. So you mentioned buybacks. As you know, we haven’t taken a decision to any buyback now, but, you know, that will also depend on how the balance sheet evolves, and it depends on on how the the opportunities for additional growth evolve.

I think it will be important to just let the dust settle a little bit on this discussion around the IRA in The US because that will obviously be a driver for how we see the, let’s say, the demand or the profitability of the project going forward. I think in Europe, we continue to see good opportunities, certainly profitable opportunities. And and so it’s a question then of having the capital to invest in them. Or if if we aren’t getting the sufficient threshold spread that we want, you know, what else can we do with that, whether it’s the buybacks or dividends or or other things? So maybe that’s just a more general comment on your first question.

And then in terms of specific numbers, we can see if we we’ll come back to that, but I’ll just turn it over to Troy. On on the Spanish power demand, just a quick comment here. I mean, obviously, increased power demand is good for business. Let’s be very clear. I mean, this is a question of supply and demand.

I think it’s going to depend obviously on what happens also, let’s say, to the to the rest of the generation mix. So, you know, our is nuclear phased down or not on one hand? You know, how much renewables continues to develop? But for our business, I mean, more demand is obviously better than not. And so that will drive, in principle, prices.

It will drive certainly a lot of value for, you know, opportunities like in batteries, certainly, that we think will will be a major not as of today, but probably given or not as of today. Like, we’re not given what happened last week, I think there will be a strong push to also start thinking about how to invest more in batteries in Iberia and and probably elsewhere in Europe as well. No. Probably stop here. Rui, I don’t know if you want to comment here.

Rui Tasheri, CFO, EDP Renewables: Yeah. Thank you, Miguel. And hi, Alberto. Maybe on the cash flow, you know, again, highlighting the following. And as Miguel presented on page nine, I mean, the the portfolio operating portfolio by year end, So pretty much excluding all of the new capacity coming online in ’25 and and, obviously, ’26.

So we are expecting it to generate around 800,000,000.0 in terms of organic cash flow. So, you know, that’s after interest and that’s etcetera. So I think it shows that it’s getting healthy cash flow generation out of the operating assets. Then it will depend, obviously, on the asset rotation execution, which is something that we are very focused on executing in terms of capacity additions. And actually, you know, as we are highlighting here, we are expecting a so an improvement in terms of the net debt and getting us to the $8,000,000,000 by year end.

And if you ask me for 2026, I will probably say, you know, slightly reduction versus the the 2024 sorry, the 2025 number. So, yes, on the back of, you know, strong cash flow generation and, obviously, the the asset rotation execution. But, yes, I mean, definitely, as we do some strategic update, we can provide more visibility on future cash flow generation.

Alberto Gandolfi, Analyst, Goldman Sachs: Sorry, Rui. Just to be clear, the 800,000,000 you gave us, you said it’s after interest. Right? And then and then your net additions are, you know, we’re talking about 500 megawatt, and it’s largely solar. So you’re gonna be comfortably free cash flow positive, right, for the next couple of years, even I mean, clearly, of of disposal.

Rui Tasheri, CFO, EDP Renewables: Again, so to be clear, the organic cash flow is is after interest. It it does not include the investment. So as you know, we, you know, we show what is the net investment, so the gross investment minus the tax equity and the cash the cash from the asset rotations. And then what is the cash flow generated by the operations after interest? So, basically, what is available to either, you know, invest, distribute to shareholders, etcetera.

And that’s how we’ll be then looking at how we manage that throughout the ’36 ’35 and ’26.

Alberto Gandolfi, Analyst, Goldman Sachs: That that that is really the case. What I meant is that on a net basis, EDPR is probably going to add 500 megawatts, right, and mostly solar. So it means that hundred million would comfortably cover for net additions, and you you’ll have quite a bit of the leftover. That’s what I’m trying to figure out.

Rui Tasheri, CFO, EDP Renewables: Yeah. I understand, but it will depend on the sort of mix between the gross additions, wind and solar, and what we are selling in terms of wind and solar as well. But yes, if you want, Albert, we can follow-up offline. Yes. I get your point.

Yes.

Alberto Gandolfi, Analyst, Goldman Sachs: That’s really kind. Thank you so much. Thank you.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Alberto. So the next question comes from the line of Jenny Ping from Citi. Jenny, please go ahead.

Jenny Ping, Analyst, Citi: Thank you very much. Two questions, please. Just firstly, on The U. S. Tax credit transferability, I think this is more of a topic that The U.

S. Investors have been a bit more focused on. Can you just give us a sense of where the discussions got to on the transferability? And is there any risk to the 1,000,000,000 that you’re talking to the end of the year in terms of if there’s further changes here? And then just secondly, I know Miguel, you said earlier that you’re going to be coming back to us in November with an update.

Just obviously, we still have a big unknown in The US, but rest of the world, the growth you’re talking about in terms of opportunities, are we still what are you feeling good about as we stand today? What’s got better? What’s got worse, in terms of, you know, supply chain returns? Just give us a feel of the direction of travel as we stand today. That would be helpful.

Thank you.

Miguel Stroud Andrade, CEO, EDP Renewables: Thank you, Jenny. So in in The US relating to the tracks tax credit transferability, I mean, to my knowledge, there’s not any issue around that. I mean, it’s well, maybe as part of the IRA, you can have a more general discussion around there’s the phase down of the tax credits, etcetera. But but as far as I know, there’s not any discussion specific discussion on the transferability, which was something that was introduced under the current IRA, which I think is was a good measure because it allows it or allows in certain cases to simplify the the sort of the monetization of those tax credits. So I don’t see the risk there or specifically on this mechanism which was introduced, but but if anything comes up, obviously, we’ll you know, we can get back to you.

On the on the growth opportunities, so listen. We we think Europe has some great opportunities. Quite frankly, it’s obviously more fragmented market. We would love you know, supply chain is good, as you know. So outside of The US where you have all these issues around tariffs and, you know, sort of much higher solar panel prices and all that.

I mean, in in Europe, we’re seeing super low solar panel prices, and you’re seeing good supply chain dynamics. So, obviously, you need to plan with, you know, with thinking ahead. But when we look at our projects that are being delivered, they are all on time and on budget. I mean, with absolutely no no deviations, in in some cases, projects even coming in under budget. So I think in a general way, we feel good about that that part of sort of the supply chain.

In terms of profitability, I mean, we continue to like markets here in Europe, whether it’s you’re talking about Italy or France or Poland or Germany. I mean, you know, we wish we could do even more. I think some of sometimes and we’ve talked about this often, you know, the frustration of sometimes of the permitting licensing. But when we get good projects or when we get the projects, they are good projects. And I think you’ll see that when we do our asset rotations, you know, when we come out with those numbers, you’ll see good multiples.

You’ll see, you know, we’ve had strong demand. And that for me is also a good market test. Right? You know, when you can the fact that we’re these are projects that are have been developed over the last couple of years. So it’s not like we’re talking about, you know, the there are, let’s say, recent projects.

And and I think that gives me confidence that, you know, we are able to generate significant value with the projects here in Europe. So I I feel pretty good about those. Brazil so just maybe going a little bit around the world. Brazil is very slow at the moment. Honestly, no real developments on renewables in Brazil.

It’s pretty slow. You know, maybe some auctions will come back at some point, but for now, there aren’t really there’s a lot of PPAs around, so not a lot of conditions to build new projects. So we’re just basically got our operational ones or finishing up older ones that we had sort of on that we’d already started developing earlier. Asia Pacific, I think we continue to see some good opportunities. I mean, obviously, places like Singapore, Japan, you know, you saw one of those projects there.

Australia, I think we’ve got a good project under development that we’ll see how that comes out, you know, with good, very solid returns and, you know, that we think will will create significant value and that we’ll be able to rotate if we want to at a later stage. So I’d say the rest of the world doesn’t have that uncertainty that The US does. And and as and I think you’re right to point it out. I mean, that’s you know, The US is obviously a big part of our business, but we’ve got over half of our over half of our growth in GDPR outside of The US, and that continues to to be a good driver. Thank you.

Oh, Rui, do you want to comment?

Rui Tasheri, CFO, EDP Renewables: Yeah. Because then I asked them. I think your question on the first one was also if we have reached for the 1,000,000,000 tax equity that we are expecting to close this year. So because on the transferability so the answer is no. This year, ’25, most, if not all, of the transactions are sort of traditional tax equity structures with with banks.

So we are not relying on any transferability bill.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Jenny. So the next thank you. So the next question comes from the line of Josh Kimurais from GB Capital. Josh, please go ahead.

Vikal Pianna, Head of IR and ESG, EDP Renewables0: Good afternoon. I have two questions. One is a clarification on the price evolution in The US. I understood that part of the increase in prices comes from having more wind energy in the mix and also from the evolution of green certificate. So I wanted to understand how much is mix, how much is green certificate, and how much could be underlying price increases either from new PPAs or or merchant price evolution?

And the second is related with the Spanish market. If if you see any risk of, of more curtailment in Spain after the after the blackout. Thank you very much.

Miguel Stroud Andrade, CEO, EDP Renewables: Josh, so on the you want to do with the first one?

Rui Tasheri, CFO, EDP Renewables: Yeah. Josh, let me follow-up online. I think there is a bit of detail here on the the mix, etcetera, so but maybe it’s better to follow-up online offline. Sorry.

Miguel Stroud Andrade, CEO, EDP Renewables: K. On the Spanish market. No. I I think in general, honestly, we don’t see any reason for more curtailment. I think if your reference is in relation to the blackout last week, we don’t see a reason for that.

So we’re seeing a little bit more thermal being included in the mixes sort of over the last couple of days by the network operators, but but you’re still seeing very, very high penetrations of renewables. And, you know, we haven’t had any recent curtailment over the last couple of days. And, you know, if if they were going to be more conservative, I guess they would have been in they would have been immediately after the blackout. And and over the last week, we haven’t we haven’t seen that. So but we we can go on, obviously, touching base on this issue, but but so far, no no signal in that sense.

Vikal Pianna, Head of IR and ESG, EDP Renewables0: Thank you very much.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, George. Next questions come from the line of Arthur Sitbon from Morgan Stanley. Arthur, please go ahead.

Vikal Pianna, Head of IR and ESG, EDP Renewables1: Thank you for taking my question. The first one was a follow-up one actually on revenues in The U. S. I think the previous question was on the realized prices, but there was also a very significant pickup in income from institutional partnerships. I was wondering if this is a trend that we’re going to see also for the rest of the year.

And basically, if you could give a bit of an indication of how much revenues you expect there for 2025? And if this is going to be sustainable for the coming years or given, well, maybe past the peak in installations, this might this might come down? So that’s the first question. The second one is on the on asset rotation, more broadly speaking. I know there there was a nonconfirmed press article a few weeks ago saying that you might consider selling a stake in Ocean Wind.

I don’t know if you can comment on that. But more generally speaking, would you be open or would you consider conducting larger disposals than the ones you’ve conducted so far in order to accelerate deleveraging? Or you think that you can basically make it work sticking to the same strategy that has been successful in the past? Thank you very much.

Miguel Stroud Andrade, CEO, EDP Renewables: Okay. Thank you, Arthur. So in relation to your second question, and then I’ll get back to your first one. But relation to asset rotation, so I also said it I I saw that speculation, and and I think I said it then publicly that, you know, we consider the stake in OW to be strategic. And so, you know, we we like the JV.

We we like I mean, obviously, we need to be very disciplined about offshore. But but, yes, I mean, that’s we’re comfortable with that position, and and that’s something we’ve been developing. We have to be just very disciplined about the way that we invest in offshore, and I think we have been. So we have good examples in France and, you know, up in Scotland, certainly more East and more West. The US, as you know, is now paused, but I I don’t think we had any major issues there.

So so maybe that’s what I’d say in relation to a w. Open to do larger disposals. Well, first, what I’d say is we’re we’re still very comfortable with our, you know, the the processes that we’ve run and the way we’ve run them. They’re sort of decent sized portfolios in specific countries, and, you know, we continue to see good demand for those portfolios and good pricing. And so as I said earlier, I think you’ll see that coming out over the next couple of months, certainly, you know, before the summer and then after that as well.

Would we do larger disposals? Yes. We could you know, we would think about doing larger disposals. In that case, we we might do, like, 49% stakes in larger disposals. If we think that that is a way of acceleration accelerating the the asset rotation and, you know, if it gets us if we still have, you know, good demand for larger transactions and with good pricing, then that’s something we could consider.

So something sort of in the, you know, gigawatt plus type range. In relation to your first question, I don’t know if we yeah.

Rui Tasheri, CFO, EDP Renewables: Thank you. Hi, Arthur. So just to take you through the tax equity revenues. So first quarter twenty five, let’s say, about twothree coming from PTCs, onethree coming from ITCs. The biggest driver in terms of increase is the fact that we have more ITCs contributing from last year installations, given it was predominantly an ITC type of project.

So as you know, we book ITCs in five years. We book PTCs in ten years. Full year of 2025, I think that you can consider something like USD $450,000,000 as the contribution coming from this line.

Vikal Pianna, Head of IR and ESG, EDP Renewables1: Thank you very much. That’s very helpful.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Arthur. Next question comes from the line of Olli Jeffrey. Olli, please go ahead.

Vikal Pianna, Head of IR and ESG, EDP Renewables2: Thanks so much, and good afternoon. The first question, from me is just on the sell down prices. So for this year, you commented you think you might see you’re having potentially seeing good pricing. Just thinking about your comments around previously around this year or so, you’re still selling vintages where returns weren’t as good as they have been in previous years. You’re now seeing those potential returns and kind of NPV over CapEx maybe slightly better than you envisaged at the start of the year.

So first question is on that. And the second one is just on the IRA, can you kind of conversations with potential off takers? If we did see a kind of worst case scenario where ITCs and PTCs were removed for new projects, do you think that, you know, demand is sufficient from off takers in The US that you’d be able to offset that really from high PPA prices? If also that’d be great, Ricky.

Miguel Stroud Andrade, CEO, EDP Renewables: K. Yeah. So so great question. On on on the first one, I think when I say, you know, we’re seeing good processes, it means we’re getting a lot of demand, and I think good multiples. But as I as I mentioned, these are some you know, some of these projects are high CapEx projects high, yeah, high CapEx projects, and so the capital gains, we expect might be lower.

So good multiples, but higher CapEx and so lower capital gains. Having said that, we are also considering doing the 49% stakes in some cases if we do larger transactions. And so that also means that, you know, we could get good multiples, but the capital gains don’t necessarily flow through the the p and l. And so that’s also why we guided to the point 1,000,000,000 of of asset rotation gains. We’ll see if we can beat that, but but I’d say that’s that’s what we’re using as as guidance for now.

In relation to the second, I mean, the the thinking has always been over the many, many years, you know, that ourselves and and other players have been in The US that if the ITCs and the PTCs were removed, and as you know, even before the IRA, there were many, many years when that was a possibility, that the market would adjust. I think particularly now, more so than in the past, when there’s such strong demand for power, and that’s demonstratable. You know, you can sort of actually see that coming out in the statistics. Yes. I think the answer is yes.

There is demand for renewable power. Even if the ITCs and the PTCs were removed, you would have an increase in the PPA prices. But I think it would still continue to be a competitive source of energy, and that could be delivered in the short, medium term. And in that sense, I think it’s it’s something that could be manageable. So that’s our our base case assumption.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Olli. So moving to the next question from Erico Bartoli from Mediobanca. Erico, please go ahead.

: Hi, good afternoon. So I have two questions as well. I would like to go back on the possible returns evolution in The U. S. For Project 26, 20 seven considering the inflation the possible inflation from tariffs on the procurement was linked to the previous question.

If you’re seeing that also in this case, the offtakers would be open to translate the higher CapEx cost into higher PPA prices? Second question is related to the indication for EUR 55 per megawatt hour, the average price for this year, which is lower than the EUR 57 in the first quarter. If you can provide some details on the evolution over the next quarters, if we can expect the same trend that we saw this quarter with U. S. Prices going up and downward pressure on the European prices?

Thank you.

Rui Tasheri, CFO, EDP Renewables: Okay. Eric. So it’s Rui here. Thank you very much for the questions. So on The U.

S. PPA prices, and as Miguel said, I think at the end, the way that we have observed how the market works is that price PPA price adjusts to the levelized cost of energy effectively. So interest rates, CapEx and obviously, the IRA. On the tariffs, basically, this has an impact in terms of the CapEx. And yes, what we have seen is that actually off takers are being willing even to take some of that risk, obviously, up to a certain limit.

But that means that if there is a tariff then imposed to a CapEx element, then this would translate into high PP prices. Again, here, I would like to highlight the following. Back in ’twenty three, we changed completely our strategy, our supply chain strategy. Basically, have now 100% U. S.

Supply chain for U. S. Deliveries. It means that we work with the so we have this framework agreement with First Solar for our U. S.

Domestic panels. I mean there are other components that have like the inverters or the racking system that we take through contractors. I would say most of those right now are being also sourced from U. S. Suppliers.

So we have mitigated substantially this tariff risk on our supply chain strategy. But ultimately, I would say that there will be a price adjustment overall, and specifically, in our case, PPAs being negotiated, including those adjustment mechanisms. As we look about the, I would say, the rest of the year, I think it’s also fair to say that in Q1, we have a generation mix where wind took a different role as opposed to what we are going to expect throughout, namely Q2 and Q3, where it’s obvious that we’ll have probably a bit more of the solar in the mix, and that would lower the price because it has lower prices. So I think it’s going to be also a it’s not only about some of these elements that we just stressed on the back, etcetera. It’s also about the mix as we expect Q2, Q3 to be more solar and less wind and then the reverse again back in Q4.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you. So the next question comes from the line of Jorge Alonso from Bernstein. Jorge, please go ahead.

Vikal Pianna, Head of IR and ESG, EDP Renewables3: Good evening and thank you very much. My two questions are the following, please. The first one is related to the asset rotation. Just to understand if with the asset rotation expected in 2025, the portfolio of these higher than expected CapEx projects and higher than expected cost of equity projects would be clean up. So basically, the price affected by those issues would have been already rotated and would be outside of the or the majority of them would be outside of the portfolio already.

So we can think that from 2026, the capital gains that we will see will be the ones according to the market conditions, the appetite, etcetera, etcetera. And the second question is related to ocean winds. I know that you have highlighted that it’s strategic for you, but if you can can provide some color about how do you see Ousen Weighten’s fitting in the current moment of of the company where it seems that restoring profitability, meaning getting more free cash flow, getting more cash from the assets from the beginning, it’s

Manuel Palomo, Analyst, BNP: what it seems is what

Vikal Pianna, Head of IR and ESG, EDP Renewables3: you are looking for. Because it seems that Ocean Wind’s contribution to free cash flow or to the earnings will take some time still? Thank you.

Manuel Palomo, Analyst, BNP: So

Miguel Stroud Andrade, CEO, EDP Renewables: thanks for the questions. And I think what I’d say is, yes, what we said before is that in 2026, we expect the capital gains to to sort of have normalized. And so we’d have an improving asset rotation gains per megawatt in 2026. Obviously, we might just have lower volumes of of asset rotations at that time, but we certainly expect the the gain per megawatt to have normalized. And so as you know, most of that sort of bad vintage is concentrated from the 2021 sort of or or before FIDs.

Part of that was already rotated last year. Part of that, we’re rotating it this year. And so ’26, we expect would be a clean year or certainly much cleaner. On OW, so would just go back to the point. So first, the structure that we have, the JV with with Angie, I think that gives us the ability.

So it’s not consolidated on our balance sheet. Obviously, it does consume some balance sheet between guarantees and and and the equity contributions. But when we actually start moving forward with projects, most of it is project financed, and it’s it’s not consolidated. So, yes, it it does require some balance sheet strength, but still versus the the amount of investments at stake, it’s it’s a really relatively efficient structure. What I’d say also is that what I mentioned earlier, I mean, we have to be very disciplined about the returns in offshore, and we have to be very careful in managing the risk around these projects.

And I think so far, we’ve avoided pitfalls and minefields. We’ve managed to sort of, in The U. S, avoid taking on large CapEx commitments. We’ve managed to you know, the projects that we have moved forward with, we’ve had them you know, been able to deliver them on time and on budget and with good returns. You know, we’re talking about, for example, the French projects are fantastic projects.

The Mara East was a fantastic project, and Mara West was a decent project. But these we’ve, you know, been able to deliver and rotate in some cases into sort of sell downs as well. So I’d say that it is one of the technologies that we have in a relatively or in a very efficient corporate structure to avoid, you know, stressing our our balance sheet. K. Thanks.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Josh. So the we are reaching one hour and and ten minutes. So I will go to the last question for from Jose Ruiz from Barclays. Jose, please go ahead.

: Yes. Good afternoon. Just one question left. Can you explain what is the potential impact on your $1,900,000,000 EBITDA target of the volatility of the U. S.

Dollar. I’m trying to guess a little bit if you benefited from the strength of the U. S. Dollar in the first quarter and considering that we have seen a devaluation or a depreciation, sorry, in Q2 if that is going to move a little bit the balance in terms of achieving the EBITDA target? Thank you very much.

Rui Tasheri, CFO, EDP Renewables: Hi, Jose. It’s Rui Tasheri here. So what I would say is the following. So if you take, for example, out of the 1,900,000,000.0, probably, I would say, if you take today’s FX, it could be sort of a $30,000,000 impact, give or take. So less than $50,000,000 less than $50,000,000 That’s my that’s what I would say.

Vikal Pianna, Head of IR and ESG, EDP Renewables: Thank you, Adesto. We move now just for some final remarks from from our CEO just to conclude the call.

Miguel Stroud Andrade, CEO, EDP Renewables: I mean, briefly. So I think a solid start to the year, good underlying growth, both in terms of generation and in terms of EBITDA and even net income, excluding asset rotation gains. We’re seeing good progress in terms of the processes, the asset rotation processes. And so, hopefully, we’ll be able to give you some news on that over the next couple of months. And, you know, and in general, I think one of the things that came out in this call is that we continue to see strong demand for power and that renewables is one of the sources for or one of the chief technologies that can actually supply that power, whether it’s in Europe, whether it’s in The US, whether it’s in Southeast Asia or or even South America.

So, you know, some regions are are showing more dynamics now. Some areas have some uncertainty like in The US. But globally, I think we continue to see good prospects for for growth going forward. So, you know, over the course of the year, I’m sure we’ll give you more visibility on not just how 2025 is going, but also how we’re seeing ’26 and beyond. With that, thank you very much, and talk to you soon.

Take care.

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