WOOD Flash – Terna Energy: strong 1H18, with wind parks driving profitability

Terna Energy has reported solid 1H18 results, in line with our estimates. Turnover came in at EUR 139m vs. our estimate of EUR 138m, recording a marginal decline of 0.7% vs. the first half of 2017. The strong numbers from the wind parks segment offset the lower revenues from construction and concession services. EBITDA grew by 20% yoy, reaching EUR 82m (vs. our EUR 81m), due to the EBITDA in the RES segment, which was eroded previously by the lower margins in the construction and concession divisions. The bottom line recorded a rise of 75%, with net profit standing of EUR 18m vs. EUR 10m in 1H17. In terms of net debt, at the end of 1H18, the company’s position stood at EUR 482m, vs. EUR 518m in the same period last year, posting a drop of 7% yoy. The company had already that it intends to proceed with a capital return of EUR 0.30/share, implying a dividend yield of 4.7%, above our estimate of 4.3% for FY18E (pending EGM approval on 18 October). This would be a 15% increase vs. the previous year’s cash payment to shareholders.