Elia Group Model Update after 1H23 results

We publish a model update, despite some uncertainty about the final ROE calculation formula's for the German an Belgian regulated activities. The German BnetzA new remuneration formula draft is proceeding on onshore. The Offshore consultation takes place in Oct, but a complete decision still expected by FY23 end. Elia guided towards a 20bps uptick for the GE Onshore ROE. On BE regulation, no formal process is going on to adjust the remuneration formula, but Elia will propose a remuneration for new projects and hopes to get a step by step adjustment. CFO sees no urgent need for capital raise over the next 12mths, but if an opportunity arises, they could move faster. On Windgrid, the CEO explained that the pipeline is building up, but no capital commitment over the next 2-3 yrs and actual asset base only by FY29-30. On Tennet Q&A, the company ensures that their relation with KfW ensures a foot in the door, but awaiting further negotiations. We lift our estimates slightly for FY23 and initiate a EUR 5.0 EPS for FY25. We model 2 capital increases over 2H24 and 2H25 in order to keep the debt/RAB level below 60%. The company is putting “soft” pressure on governments and regulators to create favourable financial conditions for the E-transition.