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Great performance in line with the market’s expectations. Earnings growth was driven by the growth in the RAB and the July commissioning of the new Piombino Floating Storage Regasification Unit (FSRU), an operating floating LNG import terminal approved in Q3 22.
Companies: Snam (SRG:BIT)Snam S.p.A. (SRG:MIL)
AlphaValue
Revenues increased in 1H23 on the back of a higher Regulated Asset Base for 2023 at €22.4bn vs €21.4bn in 2022. This higher RAB generated an additional contribution of €37m, whilst an increase in volumes regasified contributed €20m, offsetting a y €11m decline in volumes of transported gas.
Snam benefited from a higher Regulated Asset Base (RAB) and +100% growth in the energy efficiency business resulting in a strong 12.9% growth for the top line. However, EBITDA remained almost stable with a modest 1.5% growth as the group had to sell gas inventory excesses accumulated at higher prices in the past quarters. The guidance was confirmed for 2023 with an EBITDA target of €2.4bn and a €70m contribution from the Energy Transition business.
Despite the solid 11.1% growth in revenues to €3.32bn, Snam’s results were negatively impacted to the tune of €130m owing to a reduction in the WAC, combined with a rise in utility costs that weighed on earnings amidst an unprecedented volatile energy market environment. The group intends to leverage a higher contribution from the unregulated businesses, through the energy transition activities, to boost its growth.
As part of its 2022-26 strategic plan, SNAM focused on three pillars around supply security, sustainability and affordability. The Italian group aims to allocate a large proportion of its €10bn investment plan to gas infrastructures, through Floating Storage and Regasification Units (FSRUs) and pipelines to optimize storage and network systems, but also to clean energy sources, hydrogen and biomethane. However, there are reasons to remain sceptical about the group’s strategy, due to a lower-than
Snam delivered a solid performance, enabling the group to confirm its FY202 guidance, with 10.3% growth in revenues to €2.4bn. The reported EBITDA for the 9M2022 period declined by 0.6% to €1.716bn, mainly due to the reduction in WACC amounting to €95m, of which €76m concerning transport. Over the 9M2022 period, the decrease in regulated revenues was again offset by the revenues of the non-regulated activities as well as the energy transition business segment.
Snam’s recent diversification strategy is now paying off. The decrease in regulated businesses due to a lower WACC (EBITDA down 0.7%) has been more than offset by the contributions from Associates, mainly Interconnector Limited in the UK. This is another step forward for the non-regulated businesses, which are becoming ever more important within Snam’s business model. As a result, thte net income guidance for the full-year has been increased to €1,130m (+2.7%).
Companies: Snam S.p.A. (SRG:MIL)Snam S.p.A. (0NQP:LON)
Snam’s Q1 22 EBITDA was up 5.2% yoy to €588m driven by RAB growth, higher volumes and a one-off sale of gas inventories that more than offset a cut in the regulated WACC. The continuing expansion of the non-regulated businesses (+98% yoy at revenue level) is a positive. Moreover, a larger perimeter for associates also pushed net income. Overall, a sound set of results although the growth drivers below the top-line are not that exciting. FY22 guidance has been confirmed.
Snam released FY21 figures in line with estimates, even if we welcome a slight beat at the net income level. Guidance for FY22 appears rather weak, projecting a 10% decline in net income. The group’s direct exposure to Russian gas is confirmed to be low, in the order of 1.5% of transported volumes. Our neutral view is confirmed given the current dividend yield of 5.5%, below the long-term average, even if it can admittedly embody a safe-haven in these turbulent times.
The Italian utility has unveiled its new strategic roadmap towards hydrogen. In 2021-25, it will invest €8.1bn with a clear shift from networks to green projects, especially hydrogen. As a future catalyst, we note the possibility to list De Nora in 2022 depending on ‘market evolution’. The financial targets are relatively in line. In all, we like this new strategic framework. Our model and investment case are under review and will be updated soon, even though nothing clearly surprising was ann
Snam released relatively good results for its 9M 21, slightly above expectations, driven by regulated businesses and riding on the bullish energy efficiency’s wave. The strong performance of equity investments also pushed net profit by +7.4%. Note, however, the negative impact of staff costs on EBITDA. Next trigger: the new strategic plan on 29 November.
H1 came in slightly below expectations. Total revenue increased by 13.4% yoy, mainly due to the growth in regulated revenues, the energy transition business, and the overall recovery from business customers. Adjusted EBITDA came in at €1,163m (+5.1% yoy) due to the continuation of its efficiency plan. Technical investments, increased by 23.9% yoy, were in line with the investment plan announced earlier this year. Thus, FY21 guidance was confirmed.
No major surprise for the Italian utility that published Q1 results in line with expectations. Growth in the energy transition business (+113% yoy) was the main driver, especially regarding efficiency activities. EBITDA came in at €559m (+0.7% yoy, +3% vs Q1 19) as the positive impact from increasing sales and good cost management were offset by continuous investments in hydrogen and mobility platforms. FY21 guidance tentatively confirmed.
FY20 figures came in line with expectations. Adjusted EBITDA came at €2,197m (+1.3%). The dividend proposal of €0.25 was also expected. The good news came from the FY21e adjusted net profit guidance, which is expected to be around €1,170m. We confirm our positive recommendation on the stock, considering the above 5% dividend yield is highly attractive.
The €7.4bn new investment plan aims to develop its green transition related activities, mainly hydrogen, with the objective to be carbon neutral by 2040. We confirm our positive view that Snam has a secondary and judicious means of obtaining indirect exposure to the hydrogen ramp-up while maintaining a prudent risk/return ratio.
Companies: Snam S.p.A.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Snam S.p.A.. We currently have 26 research reports from 3 professional analysts.
Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price
Companies: Supreme PLC
Zeus Capital
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Cavendish
Shore Capital
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SP Angel
Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-
Companies: Headlam Group plc
Edison
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
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Hardman & Co
Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr
Companies: Vianet Group plc
Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the
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Liberum
24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
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Hybridan
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