Elia Group Re-initiate with new 95.0 Euro target price
This week, Elia completed its EUR 2.2bn equity package. An earlier 850m private placement (PIPE) through key investors (ATLAS Infrastructure, BlackRock, Canada Pension Plan and Publi-T) was completed with a 1.35bn rights issue at the same issue price 61.88/share. This means that all investors had access to the same conditions. In this note we re-initiate with a new target price of 95 Euro. This equates to a 20% premium the RAB25. While the dilution of the equity raise is higher than expected, strong FY24 results largely compensate this impact. Elia Group reported FY24 Net profit (Elia Share) of EUR 421.3m, +29.8% yoy vs. our 365.3m expected. The GE net profit came 37m above our expectation on higher remuneration and the Non-regulated loss was much better than guidance (FX hedge). The Net profit outlook FY25 amounts to a 490-540m range. Capex FY24-28 was raised by 1.6bn to 31.6bn. We revert back to an Accumulate rating.Elia System Operator develops, operates and maintains very-high-voltage (380 kV, 220 kV and 150 kV) and high-voltage (70 kV, 36 kV and 30 kV) networks, providing its customers with consultancy and engineering services. Whether in Belgium, Germany or elsewhere in Europe or the U.S., Co. ensures that electricity flows reliably from energy producers to distributors and large corporate customers. Co.'s main activities include transmission operator, system operator and market facilitator, developing and maintaining grid infrastructure, connecting electrical installations to grids, providing transparent access to grids, while taking initiatives to improve electricity market operations.
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