Utilities

Utilities equity research

Explore the most viewed and latest equity research and media content for companies within the Utilities sector. Companies within this sector provide services including electricity generation, water, gas and multiservice utilities.

Utilities equity research

10 Sep 15

Armadale Capital - Interim Results

12 Jul 16

finnCap - Initiation of coverage, Fulcrum

Premium

12 Jan 17

Capital Network's Stacey: 2017 is the year Mytrah Energy will unlock value

15 Feb 16

Armadale Capital - Update at 121 Mining Investment

27 May 15

Executive Interview - KTG Energie (German version)

24 Sep 15

Armadale Capital - Remains on track for commercial production in H1 2016

23 Nov 16

Armadale Capital - Full assay results confirm exceptional high-grade graphite deposit

26 Oct 16

Armadale Capital - 85% strike rate from drilling Tanzania

09 Jul 15

Armadale Capital - Landmark agreement

10 Oct 16

Armadale Capital - Project Update

03 Aug 15

Developed process route for gold recovery

07 Jul 15

Armadale Capital - Andrew Tunks: Key to a successful gold operation

25 Nov 15

Armadale Capital - Update on the development and expansion of the Mpokoto Gold Project

08 Jun 15

Armadale Capital - Agreement to fund and develop the Mpokoto Gold Project

Latest Content

E.ON

Debt reduction means room for growth opportunities (and dividends)

E.on released a positive set of results for the second quarter, offsetting the weak performance posted in the first quarter. H1 revenues were down by 3% to €19.58bn, adjusted EBITDA decreased by 6.4% to €2.7bn and adjusted EBIT fell by 12% to €1.8bn. Net profit rose by 46% to €881m, beating market expectations. Cash generation for the first half was strong with a threefold increase in operating cash flow to €4,88bn. This was mainly due to the refund of the nuclear-fuel tax of €2.85bn in June. Adjusting for this exceptional item, operating cash flow grew by c. 26%. Net debt has been reduced by 18% ytd reaching €21.5bn. This was largely affected by the aforementioned NFT reimbursement coupled with the €1.4bn capital increase realised in March. Yesterday, the group announced that it plans to increase the dividend payout to at least 65% from FY2018 onwards. Overall, the company confirmed its full-year guidance on the back of the good Q2 performance: adjusted net income in the €1.2bn-€1.45bn target range and adjusted EBIT of between €2.8bn and €3.1bn.

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09 Aug 17
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Centrica

Solid H1 and a price rise amid the transition

Centrica’s solid H1 numbers and 12.5% electricity tariff increase announced yesterday morning were both in line with market expectations. Operationally, the business was resilient given this year’s warm weather and challenging competitive dynamics. The political impact of the tariff hike was mitigated by protecting 200,000 vulnerable customers, a move we view as sensible given especially high levels of political risk in UK retail energy currently. The bigger story for Centrica shareholders remains the long-term shift away from upstream ‘asset businesses’ to tech-enabled customer businesses. Yesterday’s announcements do not change that strategy and the reality is that Centrica is very early in its strategic change of direction.

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02 Aug 17
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Centrica

The last member of the “Big Six” to hike prices

Centrica reported a mixed set of results for the first half. The company achieved higher revenue (+7% to £14.29bn) and EBITDA (+2% to £1,293m) despite unfavourable weather conditions and competitive pressures. However, the group saw an 11% contraction in adjusted net earnings to £449m. As a direct consequence, it announced a 12.5% increase in the price of electricity on the British Gas standard tariff, effective from mid-September onwards. This is the first increase in four years, while gas prices will remain the same. Adjusted operating cash flow (AOCF) fell by 9% to £1,242m, reflecting a one-off working capital inflow in 2016. However, net debt has improved to £2,941m (a 22% reduction), on the back of the portfolio rotation strategy. Moreover, the group confirmed its full-year guidance as its strategic transformation and efficiency programme are well on track: adjusted operating cash flow >£2bn net debt in the £2.5-3bn range by year-end a further £250m efficiency savings The company proposed a flat interim dividend of £3.6p/share (30% of the FY2016 dividend), in line with historical practices.

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01 Aug 17
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Veolia Environnement

H1 17 in line; nothing really exciting though

Veolia released H1 17 numbers. Revenues reached €12,346m (+4.3% and +4.4% comparable at CER), EBITDA €1651.4m (+0.3% and +0.4% comparable), EBIT €773.8m (+0.3% and +0.6% comparable) and net income €295.2m (-8.6% and +4.2% excluding capital gains on divestitures). Net debt at the end of H1 was €8,561m vs €8,430m at the end of Q1 and €7,811m at the end of FY16. The group confirmed its guidance for FY17 (resumption of revenue growth, stable or moderate increase in EBITDA, cost savings of over €250m).

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31 Jul 17
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Electricite de France

Guidance confirmed, but nothing to be impressed about

EDF has published unsurprising H1 results, with all financial figures falling in line with what we expected. H1 sales have reached €35.72bn, down 1.1% organically. H1 EBITDA amounted to €7.0bn, down 20.6% organically. Reported net income fell by 3.7% to €2.0bn, while net income excluding non-recurring items decreased by 53.8%. These weak results were mainly affected by unfavourable market conditions and a decline in nuclear generation in France (-3.9%). However, the group still confirms its financial targets for 2017 and beyond, and expects a rebound in 2018 thanks to its transformation plan (CAP 2030 strategy). Operating cash flows amounted to €4.16bn in H1 2017 (down 48%) due to the decrease in EBITDA and the increase in income taxes. Net debt significantly improved from €37.4bn to €31.3bn due to the €4bn capital increase, asset disposals and favourable changes to working capital.

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31 Jul 17
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Engie

Accelerating organic growth in Q2, guidance confirmed

Engie reported an encouraging set of results for the first half, showing an acceleration of organic growth during the second quarter after the weak Q1. H1 revenues rose by 1.6% to €33.1bn (+2.6% org.). EBITDA was flat at €5.0bn (+4.0% org.), while net recurring income amounted to €1.5bn, a 4.2% increase (+15.5% org.). The group continued to improve its financial structure with a net debt reduction of €2.1bn ytd (corresponding to €22.7bn in net debt) on the back of the portfolio rotation programme. The interim dividend came to €0.35/share, to be paid in October 2017. Following the positive H1 results, management confirmed its FY2017 financial targets: Net recurring income of €2.4-2.6bn, expected at mid-range Net debt/EBITDA ratio <2.5x Cash dividend of €0.70/share with respect to 2017 Note, the disposal of the E&P activities is now treated as discontinued operations, with retroactive impacts on the P&L and cash flow statements. Thus, the 2016 figures have been entirely restated.

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31 Jul 17
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APF ACP ATYM ASO BKY CAML FDI GEMD HZM PAF PDL SAV SHG WTI WLF

Tailings

We are following Rio Tinto's recent lead in taking a look at the outlook for copper. Rio Tinto is currently allocating 61% of its global exploration budget (US$497m in 2016) to look for copper with 16 active large copper exploration projects in hand. We look at the major drivers and consider the outlook for three copper producers within our current coverage universe: Central Asia Metals, Atalaya Mining and Weatherly International.

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28 Jul 17
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Enel

Resilient H1 figures in spite of challenging conditions

Enel has published positive H1 figures in spite of adverse conditions in Iberia and a weak hydro environment. H1 revenues increased by 6.3% to €36.32bn. Ordinary EBITDA fell by 5.0% to €7.53bn, mainly due to one-offs and perimeter effects. Net of perimeter, EBITDA would have been slightly down (-3.3%). The decline was mainly attributable to the weak results in Iberia, partially offset by the good performance in Italy and Latin America, higher prices and retail volumes. Adjusted net income rose 3.8% to €1.8bn on lower financial expenses and minorities. On the cash flow side, free cash flow (before dividends) was up 18% yoy, while net debt has deteriorated by 3% to €38.83bn, mainly affected by acquisitions and the payment of interim dividends for 2016 (€0.09/share, corresponding to €915m). Overall, the guidance is confirmed (i.e. positive EBITDA development, high double-digit net income growth and net debt of around €38bn), which is very positive. Moreover, the board announced a minimum DPS of €0.21/share for 2016, corresponding to a 65% payout ratio.

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28 Jul 17
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EDP - Energias de Portugal

Weak hydro in Iberia, disappointing cash generation but deleveraging is under way

EDP reported a mixed set of results for the first half. H1 EBITDA fell by 8% to €1,902m, mainly due to difficult conditions in Iberia. Net income decreased by 5% to €450m, despite a lower tax rate. On the positive side, the renewables segment and regulated networks should continue to boost earnings in the second half of the year. H1 net debt has deteriorated from €15.9bn in December 2016 to €16.89bn, essentially due to the annual dividend payment. However, the sale of gas networks in Spain and Portugal will represent a €2.8bn debt reduction in Q3 17. The firm maintains the €6.75/share price for the tender offer on its EDP Renovaveis subsidiary, which we see as positive. Management feels “very comfortable” with any outcome of the ongoing offer and reaffirmed that it may request the delisting of EDPR shares from Euronext Lisbon if it reaches the 90% hurdle. Overall, the group maintained its guidance as follows: higher 2017 recurring net profit than in 2016; recurring FY17 EBITDA of c. €3.6bn; a large debt reduction.

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28 Jul 17
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KSK Power Ventur

FY 2017 results

KSK has reported its FY 2017 results, which demonstrate the challenges the company and the wider Indian thermal power sector have been experiencing over the last few years. Power generated was behind our forecasts (particularly for VS Lignite), having an effect down the P&L, as did a higher interest charge, though there was still good cash generation at the EBITDA level. We have adjusted down our FY 2018 forecasts accordingly. KSK continues to pursue reliable and sensibly priced coal supplies and power offtake agreements, and is also making good progress with the build out of Mahanadi – the next 600MW unit is expected to be commissioned in Q4 2017. Project-level equity funding discussions also continue, primarily aimed at facilitating a further project debt refinancing for Mahanadi, but also now to help take pressure off the debt structures on Wardha and VS Lignite. KSK focused on managing its current position, and government-driven reform is likely to be required in order to the company to realise the full cash generation potential of its portfolio. The recently announced coal allocation SHAKTI policy is encouraging in this regard, and we look for further developments going forward.