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TERNA-Q1’19 Results Review

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Terna Energy reported a strong Q1’19 performance, exceeding our estimates, driven by higher wind capacity, as well as by more favourable wind conditions.

In more detail: Group top line rose by 15.5% y-o-y to €82.7m (6% above AFe), with RES revenues increasing by 16.9% y-o-y to €65.1m. Wind conditions supported the improved performance with wind load factor standing at 36.9% vs. 35.1% in Q1’18. As for the rest activities, construction sales fell to €0.6m from €4.7m in the previous year and e-ticketing retreated by 19.8% y-o-y, whereas electricity trading revenues more than tripled.

Regarding profitability, EBITDA coming from RES rose by 24.3% y-o-y to €51.9m, whereas the rest activities posted €2m gains combined vs. €4m in the previous year. Overall, group EBITDA improved by 17.9% y-o-y to €53.9m, with the margin rising to 65.1% from 63.8% in Q1’18, reflecting RES division’s improvement. Furthermore, the group net income after minorities doubled y-o-y, reaching €23m, (exceeding by 29% our estimates), also supported by one-off gains from financial instruments. Excluding the latter, net income stood 15.7% above our call.

Note that Terna Energy’s RES portfolio currently includes 1,011MW (or 1,032MW in nominal terms), vs. 986MW in Q1’18. Furthermore, the company recently agreed to acquire a 200MW wind farm in Texas, USA, which should start contributing by August 2019. On top, it has currently c280MW under construction (120MW in Evoia, Greece and 158MW in Texas, USA).

Our View: Terna Energy delivered another strong quarter owed to higher load factors and increased capacity. Its ongoing investment plan remains intact, offering a strong earnings' growth potential, while the geographical diversification of its RES portfolio implies that load factors should remain at high levels. We remain positive on the stock.


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