Elia Group Model Update after Capex Upgrade
Last week Friday, Elia surprised with a bumper Capex update FY24-28. Especially the GE Capex expectation took flight with a near doubling vs. expectations. We believe that Elia is feeling some pressure to get started on certain projects as the German elections are closing in (fall 2025). Elia translated the NEP 2024-37 that on its turn takes clues from the EU climate plans. The tension rises between what is needed and what users are accepting as well as what can be financed in current market conditions. We take a haircut on the GE Capex plan and now also expect more dilution from future capital increases of 3bn over FY24-27 (vs. 2bn before). Our rating and TP however remain unchanged as both factors cancel out. We also welcome the appointment of an interim CFO (the 50hz CFO) to relieve Interim CEO/CFO Catherine Vandenborre. Elia operates as a holding with 2 main entities that each have a CEO/CFO that run the operational activities. We expect a new CEO for the holding by 1Q24 end. Elia holds a CMD on 8/12.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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