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

14 Nov 19

H1: the US ensures growth

Solid H1 19/20, backed by the good progression in the UK and a slight increase in the UK Electricity Transmission division. After the promising investments, the group is well on track to meet its asset growth guidance of 5-7%. Positive view confirmed.

Companies: National Grid

13 Nov 19

H1: increase in the EPS guidance

SSE realised a good set of H1 19 results, driven by new renewables capacity and favourable weather conditions. However, the transmission and distribution activites decreased sharply, but were partially compensated by the good results in gas distribution. The group increased by 3.6% the mid-point of the FY20e EPS guidance.

Companies: SSE

19 May 16

Earnings boosted by one-offs; dividend below expectations. Gas distribution disposal gains momentum

Strong FY results for the company with the operating profit increasing by 8% yoy to £4.08bn and 6% yoy on an adjusted basis, which is in line with estimates. Moreover, profits before tax are up 15% yoy to £3.03bn and 9% on an adjusted basis, which is ahead of forecasts. Following the same positive path, reported EPS reached 69p which is a 30% yoy increase and a 10% increase on an adjusted basis to 63.5p, beating consensus. However, the dividend is slightly below expectations despite the 1.1% yoy increase at 43.34p, with net debt increasing more than expected to reach £25.3bn, a 5.8% yoy increase. The divestment of the majority stake in the gas distribution business is expected to be achieved in early 2017. The company expects a performance broadly in line with the level seen last year.

Companies: National Grid

16 May 19

Good FY18/19 results spoiled by nationalisation risk

National Grid released a good set of FY18/19 results. Activities in the US continue to lead the RAV growth and the group continues to invest in the UK to increase the quality of its network. But this good publication was spoiled by Labour’s suggestion to nationalise the energy networks. Although this seems unlikely, it will be a driver of the stock price in the short term.

Companies: National Grid

30 Jul 19

CEO steps down, dividend slashed

FY18 had raised concerns about the sustainability of the dividend, and Centrica has finally cut it by nearly 60% after the catastrophic figures for H1. The group has announced its intention to exit from oil and gas production in order to refocus its activities on services around the transition to low-carbon. The group tried to reassure about the outlook for H2, confirming its cash flow and net debt full-year targets.

Companies: Centrica

20 Sep 19

Cenkos: Fulcrum Utility Services Ltd - Long awaited FY19A results

Fulcrum's FY19A results (and FY18A comp) are the first prepared under IFRS15, which has masked underlying results in-line with earlier forecasts. IFRS15's impact has reduced revenues by £8m to £49m (yet still up +20% YoY), while Adj EBITDA remains relatively unscathed (-£1.0m) at £10m (+17% YoY). The positive underlying results include strong growth in the utility asset portfolio and order book. However, the group has not been immune to recent weakness in the construction industry, which is delaying pipeline conversion and shifting business into FY21E from FY20E.

Companies: Fulcrum Utility Services

13 Nov 19

Q3: promising customer base increase

The group continues its promising growth, driven by the Gas division thanks to the larger amount of trading and higher earnings in last resort services. The group was able to reduce its net debt/EBITDA ratio to 2.5x. We confirm our positive view regarding the group’s strategy, but with a limited upside for the share price.

Companies: HERA

14 Nov 19

Q3: back the higher allowed WACC

The group benefited from the increase in the allowed WACC for its regulated activities, and non-regulated activites increased after a positive scope effect. To a lesser extent, cost reduction was also an EBITDA growth contributor. Positive view on the stock confirmed.

Companies: Snam

10 Oct 16

Armadale Capital - Project Update

12 Jul 16

finnCap - Initiation of coverage, Fulcrum

Premium

10 Sep 15

Armadale Capital - Interim Results

25 Nov 15

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

21 Feb 19

OPG Power Ventures Investors Overview

09 Nov 18

Executive interview - ERM Power

27 May 15

Executive Interview - KTG Energie (German version)

26 Oct 16

Armadale Capital - 85% strike rate from drilling Tanzania

03 Aug 15

Developed process route for gold recovery

10 Dec 18

Executive interview – 2G Energy

12 Jan 17

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

24 Sep 15

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

07 Jul 15

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

23 Nov 16

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

08 Jun 15

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

Latest Content

Elecnor

Strong Q3; full-year outlook maintained

Elecnor progressed well in Q3 FY19. Both the top-line and profitability improved, but the business exposure outside Spain continued to decline. However, the dominance of international orders in the company’s backlog suggests the mix should improve next year. For FY19, management has reiterated its outlook of growth in sales and net profit on a yoy basis.

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18 Nov 19
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National Grid

H1: the US ensures growth

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14 Nov 19
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Snam

Q3: back the higher allowed WACC

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14 Nov 19
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RWE

Q3: guidance revised upward, but disappointing renewables outlook

After the solid Q3, driven by the acquired operations and the good trading performance, and considering the EU green light for the reinstatement of the UK’s capacity market, the group revised upwards its EBITDA guidance, from €1.4-1.7bn to €1.8-2.1bn and its net income one from €0.5-0.8bn to €0.9-1.2bn. On the negative side, pro forma figures for the renewables division are below expectations.

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14 Nov 19
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Electricite de France

FY guidance confirmed despite headwinds on nuclear

Satisfying 9m trading update. Top-line growth was driven by EDF Renewables, while EBITDA generated by the overall renewables activites suffered from unfavourable hydro conditions. Due to the earthquake in France, EDF had to revise downward its nuclear production guidance, mid-point decreased by 1%. In the current situation of EDF, a ‘less worse’ than expected news seems to be a positive one. Our positive recommendation is the result of the last three months stock performance, not a deep conviction.

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14 Nov 19
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HERA

Q3: promising customer base increase

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13 Nov 19
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SSE

H1: increase in the EPS guidance

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13 Nov 19
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Enel

Q3: well oriented

The group continues its asset expansion strategy in renewables, and benefited this quarter from the regulatory framework in LatAm for its networks division. An impairment with a net impact on the gross net income of €2.6bn was made concerning the coal-fired plants, but this will have no impact on the dividend. The group slightly raised its EBITDA FY guidance. We confirm our positive view on the group, despite the limited upside.

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13 Nov 19
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Veolia Environnement

Strong Waste and Energy lead a satisfactory 9M19

The trend seen in H1 19 persists in Q3 with top-line growth being driven by the Waste and Energy divisions, thanks to resilient volumes and favourable pricing. Still, a marked slowdown in France in Q3 sours the group’s otherwise solid performance. Group EBITDA continues benefiting from Veolia’s cost savings programme, which is well ahead of schedule to reach the €220m target. As the current strategic plan reaches an end, the expectations for the 2020-23 ought to be high.

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08 Nov 19
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Engie

FY guidance confirmed despite some headwinds

Q3 19 figures was broadly in line with expectations. Although Client Solutions continues to grow, the group slightly lowered its full-year guidance because of the fierce competition. Guidance for the Renewables division was also revised downward to reflect the adverse hydro conditions. However, even after these two headwinds, we confirm our positive on these divisions, which offer good long-term growth prospects. Moreover, the group confirmed its full-year guidance. We thus confirm our Buy recommendation.

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