Acciona Energia Earnings: Hit by Lower Power Prices; 2023 Guidance Reduced

No-moat Acciona Energia ANE released first-half results that were hit by lower power prices and cut its 2023 EBITDA guidance a bit more than we expected. We maintain our EUR 32 fair value estimate. We don’t see enough margin of safety to buy the shares at their current level.

First-half EBITDA fell 25% to EUR 0.69 billion while net profit grew 4%, as the decline of the former was more than offset by a capital gain related to the full consolidation of Spanish wind vehicle Renomar following the increase of Acciona Energia’s stake in it to 75% from 50%.

Spain’s first-half EBITDA tumbled 38% to EUR 0.42 billion, chiefly because of the 34% drop in achieved power prices, reflecting the fall of wholesale power prices versus the first half of 2022 and the high merchant exposure of the group. Spanish power output grew only 3%, as the 14% increase in consolidated capacity was largely offset by poor wind and hydro conditions.

International fared better, with EBITDA growing 14% to EUR 0.27 billion, although the main driver was a positive foreign-exchange effect. The achieved power price receded 8% year on year to EUR 62/megawatt-hour, but was somewhat improved from the first quarter’s EUR 61/MWh. International power output grew only 1%, as the 19% increase in consolidated capacity was largely offset by poor wind conditions.

The firm lowered its 2023 EBITDA guidance to EUR 1.2 billion-EUR 1.3 billion from EUR 1.5 billion-EUR 1.6 billion, below our EUR 1.38 billion estimate. The key driver of the cut is an assumption of 2023 average Spanish pool prices of EUR 100/MWh—close to our estimate—versus EUR 130-EUR 150/MWh previously. The downside to our estimate is driven by our too-high output estimate because of poor wind and hydro conditions in the first half, as the bulk of new projects installed in 2023 will be back-loaded. Incorporating this will not affect our long-term estimates.