Acciona Sa

Good morning, ladies and gentlemen. Welcome to ACCIONA's first Have Results presentation for the year 2024. As usual, we will start with ACCIONA Energía and then we'll follow on to ACCIONA Results as a whole. On the table on my right, Rafael Mateos, CEO of ACCIONA Energía, To his right, Jose Entre Canales, Chief Financial Sustainability Officer at Acciona Energía. And to my left, Jose Ángel Tejero, Chief Financial and Sustainability Officer at Acciona SA. Global commitment to climate action is unquestionable. Despite slower than necessary, we are, however, advancing towards building a net-zero economy. Fossil fuel consumption declining, peak oil expected to happen within this decade, a consistent reduction in global emissions and renewables accounting for more than one-third of global generation by as early as next year. However, like All transformations, the energy transition is not linear and it has cycles. Some of them, like the one we have been through, involve challenges that require adjustment and adaptation that always offer opportunities for improvement and growth. First semester of 2024, as you all know, was characterized by a series of of exogenous factors that combine into an atypically negative period for the renewable energy sector. In Spain, weak electricity demand due to mild winter temperatures, exceptionally high hydro and wind production together with high LNG reserves have resulted in some of the lowest pool prices in the Spanish power market history. Consistently with these low prices, we have had to significantly reduce production, as it was often not economically viable. As for our non-Spanish operations, it has also been an adverse semester. In combination of weak volumes with grid output limitations, ACCIONA Energías However, substantial share of regulated and contracted volumes and our ability to actively manage our fleet have been crucial to navigate these unfavorable circumstances. As for the rest of the year, lower risk of excess energy in the market, normalized electricity prices, a reduction in curtailments, Good levels of our hydro storage and the absence of regulatory accountant one-offs should contribute to a significant relative improvement in the end-of-the-year results. Needless to say, but our assets are all long-term and nature-based. So, though difficult to forecast on a quarterly basis, highly predictable in the longer run. In fact, renewables are the most predictable source of electricity known to date, probably the most foreseeable P&L in the energy sector, and hence by far the fastest growing source of electricity in the world's highest and the world's highest infrastructure capex destination. Those are indeed Acción Energía's strengths and its greatest opportunities. 14 gigawatts of highly liquid renewable assets, P&L predictability, and an immense global investment opportunity by one of the best and most experienced teams in the sector. Going back to 2024, we reiterate our most recent EBITDA outlook and are on track to deliver another record year in capacity additions with significant growth in all levels of our pipeline. By the end of the year, we anticipate having approximately 15 gigawatts capacity prior to asset rotation of high-quality assets in various technologies and geographies that, as expected, are generating great interest from investors. Since we made public the asset rotation policy some six months ago, we have observed increasing market interest to the extent that we have received formal offers, many unsolicited, for approximately six gigawatts of our asset base, hence giving us considerable flexibility in optimizing the outcome. Certainly, we will prioritize those deals where we see the best value and strategic fit. Along those lines, today we have announced our first transaction. We have an obvious limitation regarding how much detail we can share on the possible transactions as each potential rotation is competing against the rest of the options. And as I said, we will prioritize in favor of those where we see the best value and strategic fit, regardless of region or technology. However, the successful completion of only a small portion of these asset rotations will allow us to comfortably deliver our targeted proceeds and fund our many growth opportunities while protecting our credit profile. And with this brief introduction, I give the floor to Rafael Mateo.

Thank you. Thank you, José Manuel, and good morning, everyone. Let me start by explaining where we put in the management focus at present. Firstly, we need to assimilate the close to 4.5 billion euros of cumulative investment carried out during the 2023-2024 period. Materializing these unprecedented levels of growth has been a great opportunity, but it has also involved very high work in progress depth while ABTDA lags behind, and it's also softer in the present environment. Secondly, there is a substantial value crystallization opportunity through asset disposal, given the disjuncture between private and public markets. Today's transaction announcement, our first rotation in this new phase, is a clear evidence of this. Thirdly, we are focused on our target of adding another 1.7 gigawatts for the second year and getting new projects with final investment decisions underway. The completion and connection of the McIntyre project is a critical milestone for the next 12 months. We are keeping a firm eye on the evolution on the renewable energy markets and preparing the company and the pipeline for the medium-long term. There is also an opportunity to work on efficiency and optimization of our geographical footprint. Another of our priorities for the year is to increase our long-term hedging in Spain. And finally, we are working hard to maximize our financial results for the year with a target of EBITDA around 1 billion euros. and the containment of the temporary increase in our leverage ratios in 2024. Starting with our capacity plans in the slide six, in the first half of the year we installed 442 megawatts of new capacity, of which more than 250 were in the McIntyre project in Australia. This huge project will start injecting energy into the grid towards the end of the year. The wind farm will be connected in a stage or hold points at a rate of around 150 megawatts every six weeks. In the second half of the year, our plan is to install approximately 1.25 gigawatts, completing McIntyre, the erection of the majority of the turbine fleet of 40 miles in Canada, and around half of each of Aldoga and Juna projects, which are two large solar projects that started the construction in late 23 and early 24 in Australia and India, respectively. These two projects should have around 500 megawatts in the year 2024. Also, Cotopedi in the Dominican Republic started the construction recently and we saw this stall, its entire capacity, 163 megawatts in the second half of the year. And we will also complete opal wind project in Croatia, as well as Logrochan, 50 megawatt biomass plant under construction now in Spain. For next year, 2025, we are aiming to offer around one gigawatt of new capacity. One gigawatt of capacity is still twice that we used to add on a yearly basis before the IPO. And it's the result of the timing of our pipeline. But we are also consciously happy to temporarily cap investment at that level in order to better synchronize our work in progress in our emitter. In terms of new developments, we are also advancing with our pipeline of battery storage projects in Erco, Texas, for which we have made a preliminary FID for two projects totaling 400 megawatts. We are also working hard to reach financial close by the end of the year or early 2025 for two wind farms in South Africa under PPA with private uptakers with 200 megawatts. Last Friday, we received the good news from Croatia. Our PV project, Promina, with 190 megawatts, was successfully awarded a 12-year PPA at the system operator Arxion at 57 euros megawatt-hour, implying a very attractive rate of return. This project will add new capacity during 26 and 27. Beyond 2025, as we said before at the full year result presentation, our approach to more capacity will be more flexible and probably more modest in the current environment of higher interest rate and elevated wind capex cost. We will focus our projects only in the best return projects in line with the opportunities in the asset disposal market and our credit rating commitments. We are seeing 1.25, 1.50 gigawatts of annual growth from 2026 and worse in the current situation in the markets, always in the combination with some healthy recurring asset rotation. And let me say that it's not a target, but it's more an indication of how we see our business plan for the future. Moving on the next slide, seven. Our total pipeline stands at 36 gigawatts that include 16 gigawatts of long-term opportunities. Our pipeline is of the right size and mix to support our expected growth path in the future. Let me say that we recently reduced the near team Brazilian development projects as we unfortunately didn't see this market being able to provide reasonable returns for us in the next few years. given the low hydro driving prices and the high capex and interest rates. And we decided recently to reduce our activity and development costs in this market. We are seeing more and more evidence on the problems that arise of the penetration of renewables energy increases, often with surplus of solar PV and transmission blades and electricity demand falling behind. This is what we call the new trilemma. This emerging conundrum is making us think hard about the markets where we want to deploy our best efforts in the markets with high electricity demand that can digest any renewable energy capacity that is constructed with little risk of annualization or lack of grid integration. Policy objectives with respect to renewable energy capacity growth should be more sophisticated in the future, attending the correct integration of this new capacity into the grid. because we see a deficit of wind power every day more because of the difficulty to obtain the social license. This wind deficit and the current challenge in developing wind projects is highlighting the extraordinary value of our operating assets and the opportunity to repower and increase the capacity in existing sites is the low-hanging fruit that we think regulators around the world will gradually grasp. Now, I'd like to spend a couple of minutes on the typical conditions that we have seen in the Spanish market during the spring. We have tried to illustrate the situation in the month of March, April, and May in the slide number eight. Spain saw an extremely high hydro generation during this quarter. exceeding in terms of reserves, not just the average in the last five years, but also above the peak levels on the 15, 16 hydro season that was the worst seen in the recent times. The situation this spring was quite unusual, and as the result, there were a large number of zero price hours, and for the first time, the market saw negative pricing as well, following the new Spanish electricity market price limits introduced in 2021. In the slide, we can see a couple of examples of two very different days, one spring day in May with strong hydro and wind, and the last Friday, which was a very typical hot summer day. Resulting from the penetration of solar PV, daily volatility has increased, and solar is obviously the most affected technology. But I'm very glad to say that ACCIONA Energia has very limited solar exposure in PV and all our plants solar in PV are contracted. Our plants are very modest in terms of additional solar investment in our home market, just hybrid projects or well-contracted plants. With respect to the operation of our fleet and the participation in the market during this tricky period, we have produced less than our potential with curtailments equivalent to 9% of the potential output. Some of these curtailments were imposed by the grid, but mostly our curtailments have been self-imposed as each asset has a minimum price below we think is not economically feasible to operate. We will keep the extra hour of useful life for later. Additionally, we have been very active in the ancillary services market during the first quarter as the transmission system operator requires more and more regulation on the part of the generators. particularly in situations like this. So let me say that during March, April, and May, we increased our ancillary services revenues by more than 60% relative to the same period in the past year. We think that such a combination of strong hydro and low demand was very unusual, but it's a warning sign about the dangers of excess investment in solar PV and the need to incentivize the demand growth. When the spring is over, the Spanish prices have recovered strongly to values closer to what the market expected. For the rest of the year, the prices are going to be around 80 euros per hour, driving by higher demand for power in the hot summer, as well as higher rush prices in Europe. The full year 24 price is expected to be close to 60 euros megatower and the forward market price sees more than 70 euros megatower for next year, which is a very healthy price. I want to also give you our views on the very topical and typical theme of data center implications for renewable energy production as a very positive driver for demand. Data centers and cloud computing are not new, but the recent emergence of artificial intelligence could result in a huge potential for electricity demand and power prices. As of today, Bloomberg say that there are 7,000 data centers around the world consuming just over 500 terawatt hour. That is equivalent to the consumption of Italy or Australia, to put the things in context. According with Bloomberg, in the next 10 years, we could see the demand from data centers multiplying by three, which we have estimate that is roughly equivalent to add another 400 gigawatts of new capacity generation. And green energy will be a key player in this new demand, not just because the hyperscalers want clean, but also because clean is affordable, fast, scalable, and adaptable. Batteries and other film renewables will act as a backup. For us, for Action Energia, we believe we are in a unique position to take advantage of this potential new electricity demand. We are already a player in this market with a long-term record with some of the key players, such as Google or such as Amazon, because we signed before close to 30 hours with them of contracts, PPAs, long-term PPAs. We see our company as a leading PPA partner for these types of companies, given our scale, experience, reliability, and long-term alignment with our clients. On top of that, our geographical footprint is very complementary with the main data center growth markets. Data centers are in a strategic capability, not just for Acciona Energia, also for Acciona Group, with more than 20 years of experience in constructing infrastructures, expertise in project development, concession, real estate, and expertise in the provision of water and energy demand solutions. to have in-house the access to all of these capabilities is no doubt a key differential factor for Acción Energía in this new market. In the slide 11, we want to update you as usual on the Spanish energy balance and the future hedging strategy. With respect to 2024, the year is basically set. We may increase some hedge volume for the last quarter of the year. But we are basically around 80% covered in between regulation, long-term PPAs, and financial derivatives. The average hedge price is around 80 euros megawatt hour, similar to the price we will obtain on the regulated volumes. That leaves us with two and a half megawatt hour merchant this year, where we expect to achieve 55, 60 euros megawatt hour, taking account the compliance. With respect to 2025, our current long-term contracted position is going to be higher to increase into 4 terawatt-hours, with prices in the low to mid-60s. And we have set ourselves the target of signing another 0.6 terawatt-hours of long-term as-produced contract based on our portfolio of existing wind assets. We have already signed a portion of this volume target, and we are close to signing the rest. in a market that is very hungry for clean energy. Clients that need energy now, today, need to go for us producing energy from our existing generation portfolio, and we can use our energy as a bridge to additionality that is providing energy to them from our existing assets until the greenfield projects is put in operation and then the PPA starts. Our target is to add another 0.3 terawatt-hours as us produce long-term contracts in 2025 and the same in the future, reducing in the future our use of short-term financial hedge. In this context, let me say that we have reinforced our commercial activity of the group as we are becoming more and more a customer-oriented business. In this respect, we recently did a full reorganization of our commercial unit to give the team the full preeminence and weight in between the organization to deliver the full potential in front of our customers. In the international front, the appetite for renewable energy PPAs remains strong. Our focus at the moment is in progressing and finalizing the PPAs on the commercial arrangements for projects as rated hogs in the U.S., Yuna in India, Kalayan in Philippines, or the two South African wind farms in South Africa. With that, let me hand over to Jose.

Thank you, Rafael. Good morning, ladies and gentlemen. Let me pick up on slide 12. As Rafael was saying, one key priority for us is to ensure we assimilate the high investment cycle of years 2023 and 2024 without compromising our investment grade ratings and our ability to fund our growth. This is not a structural challenge. but a temporary one. We want to contain the extent of the increase in leverage in 2024 and bring back the ratios to more normal levels by the end of 2025. Part of this is achieved by letting EBITDA play catch up with our indebtedness, reducing our work in progress as projects such as Macintyre start generating by the end of the year, but also as a result of more moderate levels of investment in 2025. Another key element of that equation is asset rotation. The strategy we announced at our four-year results is well underway, as evidenced by the transaction we announced today. Other positive developments so far this year include the following. The next to full monetization of the 30% stake in McIntyre with roughly $335 million already realized by early July. Secondly, we have continued to work on monetizing the tax credits related to our Union and Red Tail Hawk projects in the US, expecting around $250 million in the year, of which $40 million were received in the first half. and these two items have a material effect on our net investment cash flow for the year. Thirdly, in recent weeks Fitch reaffirmed its investment grade rating which stays unchanged at BBB- with a stable outlook. DBRS has also performed its annual review and we have been downgraded to BBB- from BBB- as a result of the situation of peaking gearing and lower energy prices. We consider BBB Flat to be a solid rating and we feel comfortable in being able to maintain it. All in all, we see this annual rating review of Fitch and DBRS as a success, given the tougher operating environment and the more stretched ratios in the short term. CapEx for 2025 is more modest, given the timing of our projects, and we are aiming at circa 1 billion euros as part of our commitment to bring back our ratios to more normal levels next year. Finally, a comment on asset rotation. This is a critical ingredient of our credit value crystallization and growth strategies. As the chairman mentioned, we have several processes and negotiations running in parallel with more than six gigawatts of assets currently on the table. We don't necessarily plan to execute on all of them, perhaps two or three deals in the year, but we do want to keep sufficient flexibility when it comes to delivering our 24 and 25 disposal objectives. We are finding a constructive environment and good levels of interest from potential investors across the vast majority of these processes and negotiations, as was the case in the transaction we signed last night. Moving on to the next slide, we have been active in prioritizing some transactions that we believe to be more attractive than others. This is the case with the hydro disposal we are announcing today. Following the receipt of binding offers last week, we have signed an SBA with Ella One Energy for the sale of 175 megawatts of hydro assets in Spain. This portfolio is composed of 23 hydro plants that are 100% owned by Acción Energía, located in Aragón, Cantabria, and Cataluña. 77% of the capacity is reservoir and the rest is run of river with an expected production of around 500 gigawatt hours per annum and the remaining concession life of 23 years. The portfolio is debt free and the price agreed is 287 million. The transaction is signed but subject to foreign direct investment approval for closing and we expect that to happen before the end of the year. Given that we received binding offers before we formulated our H-1 accounts, we are required to register the reversal of a past impairment affecting these assets related to the regulatory reform of 2013. As a result, we have recorded a pre-tax gain of $76 million below the EBITDA line as the book value of the assets has increased. This accounting treatment is consistent with the industry standard, and we believe it is the right way to do it. and it will reduce the expected capital gain at closing to around $95 million. This gain, the additional gain over and above the $76 million impairment reversal, that gain will be recorded at the BBDA level once the transaction is closed. In total, the capital gain from this transaction is approximately $170 million. We're very pleased with the outcome, and we believe it is an important step in showcasing the hidden value within our generation portfolio. I want to touch briefly on the work-in-progress topic, which I think is important to understand the temporary effect of the ramp-up in our investment in the last two years. The slide shows how debt associated with work-in-progress peaked in December 2023 at around 3 billion euros, and that as of June 2024, it stands a bit lower at 2.6. The way we have defined work in progress is the cash CapEx invested at each point in time, net of any proceeds received from partners like McIntyre or proceeds from tax equity or other subsidies. In the chart, we have highlighted that 1.8 billion of work in progress relates to assets that are under construction and that have thus not generated a single kilowatt hour of output and therefore no revenue. McIntyre is a particularly large item, or the largest item, with €1.1 billion of net investment diversed as of the end of June, netting off the first payment received in early May. The first payment from our partner, that is. Additionally, there is work-in-progress debt related to assets that have not been contributing for a full year, in which we adjust to better reflect reality. For example, as of June 2023, we had net investment in recently commissioned union projects in Redtail Hawk of almost 800 million, but these projects barely contributed to H1 EBTA, so we have included this investment in work in progress. The 2.6 billion of work in progress as of June represents 65% of the total investment in the underlying projects. Some are just completed, others are still early in their construction phase. This total investment is expected to generate around 350 million of recurring annual EBITDA. So 65% already invested would correspond to approximately 200 million of latent or embedded EBITDA that should come to light in the coming years. It is obvious that high and rising work in progress implies some mismatch between net debt and EBITDA. And as we pass the peak of this investment phase, work in progress will reduce and EBITDA will catch up. In terms of the outlook for the year, let me finish this section by turning to slide 15. In terms of operating metrics that drive EBDA, we see the following. Consolidated production at around 25.5 terawatt hours, lower than our initial expectations, given the output deviation so far this year due to the low international production in key markets such as Mexico and curtailments in Spain, which have not been fully compensated by the strong hydro production in Spain. This is on the basis of realized output to date and P50 for the rest of the year. In terms of achieved prices and on the basis of an average Spanish pool price of around 60 euros per megawatt hour in the year, we see a total achieved price of around 65 euros per megawatt hour, with Spain at circa 75 euros per megawatt hour and international at 55. We have around 3 terawatt hours of merchant exposure in Spain for the year, and as a whole, as Rafael was describing, so you can easily do the math of the sensitivity of our results to movements in Spanish pool price. Consistent with this, we see EBDA pre-capital gains at around 1 billion euros, probably with some moderate downside more than upside, given the evolution of generation volumes so far this year. We're still aiming at generating 200 to 300 million euros capital gains for the year. At closing, the sale of the hydro asset sale will deliver a capital gain of 170, as I was saying before, even if a portion is recorded below the EBDA line due to the accounting treatment of the transaction. And now let me briefly take you through the actual results of the first half. I'll be brief since this information has been available for some time. In slide 17, you can find the key financial operating metrics. As discussed, the financial results reflect lower than expected growth in output and lower prices. Consolidated capacity grew by 1.5 gigawatts in the last 12 months and consolidated output grew by 14% to 11.9 terawatt hours compared to the first half of 2023. While the average price fell by 27% to 62.7 euro per megawatt hour with flat international prices and a steep decline in Spain. which was also affected by the one-off booking of regulatory liabilities as more asset vintages go back to the regulatory accounting in the lower price environment that we have experienced in Spain. As a result, lower prices have not been offset by growing output. Generation revenues fell by 17% to $749 million, and total revenues, including supply business, are down 24% to $1.3 billion year-on-year. EBDA in turn fell by 39% to 419 million due to the Spanish business, whilst the contribution from the international business stayed relatively flat. Earnings before tax and attributable net profit fell to 98 million euros and 65 million euros respectively, reflecting the lower EBDA and high depreciation and net interest charges, as well as the negative contribution from the mark-to-market of PPAs and power derivatives. Non-recurring items in the P&L contributed to the negative delta. As in H1, last year we had 145 million positive gain arising from the full consolidation of Renomar. In this first half, we have a net positive of 44 million, reflecting on the one hand the impairment of the Taivilla project in Spain, which is being dismantled and repowered ahead of the end of its accounting useful life with a negative effect of around 30 million euros. which has been more than offset by the reversion of the impairment of the hydro perimeter we have just sold, and I was describing with a net positive effect of 76 million. Net investment cash flow in the period amounted to roughly 850 million and compares to just over 1.5 billion euros in the same period last year. Net debt increased by around 900 million relative to December 2023 and stands at 4.6 billion, reflecting the large investment effort as well as the payment of the dividend. Moving to slide 18, you can see our key ESG metrics for the period. I would highlight on the environmental front, the full alignment of our CAPEX with the EE taxonomy, our scope one and two emissions grew by 46% with more assets in operation that increase our energy consumption, our scope two, And in particular, the Cunningham battery storage, which has roughly a 15% energy losses between charge and discharge, and that is energy consumption contributing to scope two. In any case, our emission intensity per gigawatt hour is extremely low, and the ratio of emissions to emissions avoided is around one emitted to almost 400 avoided. Two thirds of our emissions are scope two, and those will be offset by year end with a purchase of guarantees of origin or certificates. With respect to social metrics, we are very sad to report a fatality in early July with an O&M worker who passed away while doing some works at a nacelle in one of our wind farms in Mexico. This is not captured in the data as of 30th of June, given the accident happened in July, but it is the negative highlight of the period and the accident is currently under investigation. In governance, we have audited 100% of all strategic suppliers, and we have run almost twice as many due diligence processes of business partners compared to last year. On slide 19, I will highlight that the majority of the cash outflow related to the investment during the period was concentrated in North America with the completion of the Redtail Hawk and Union projects in the U.S. and the ongoing construction of the 40-mile wind project in Canada. The figures for Australia reflect the first payment from our partner, Arc Energy, which reduces net investment during the period. For the full year, we expect to invest around 1.8 to 1.9 billion net of the McIntyre monetization and tax equity monetizations, and including the amount spent on buying back our own shares during January and February of 2024. On slide 20, we present the evolution of net debt with $277 million of operating cash flow, while investment amounted to almost $850 million and shareholder remuneration of more than $200 million, whether via dividends or the share buyback. Starting with a review of the operating results in Spain and international, on slide 21, we show you the revenue drivers for Spain. Consolidated output grew by 16%, partly due to the full consolidation of Renomar in late H1 of last year. The underlying volume growth is of 8% thanks to very good hydro production in the period. Close to 80% of output was regulated or covered by long and short-term hedges. The average achieved price falls by 43% to 64 euros per megawatt hour, with lower market prices and lower prices also in the contracted volumes due to the financial hedges. The regulated price recorded is 43 euros per megawatt hour and is penalized by the one-off regulatory liability accounting of around 60 million, which is booked in the period. This effect will be smooth as the year progresses and the banding uplift builds up, so we expect an average regulated price for the year as a whole of around 85 euros per megawatt hour. Moving to slide 22, the Spanish EBITDA falls to 154 million, driven by lower prices not offset by higher production and lower contribution from the equity accounted, which included Renomar last year. Switching now to the international business, the drivers are laid out on slide 23. On average, the international prices were relatively flat, with better prices in Chile and Australia and lower in the rest of our markets. In the US, the higher weight of solar PV reduces our average price, while in Mexico we had a positive capacity payment resettlement from last year. On the volume side, consolidated output grew by 12% thanks to new assets in operation, but this is somewhat lower than we expected and with a particularly poor resource in important markets such as Mexico and Australia and to a lesser extent in North America. All in all, generation revenues in the international portfolio grew by 11% to $371 million. EBDA in the international business stayed relatively flat. Mexico, our largest contributor, fell by 20%. As discussed, volumes were particularly weak in the first half, and we expect some improvement in the second part of the year. Chile improved significantly thanks to better generation margins and a tariff deficit revenue recognition ahead of our expectations, even if output was somewhat below budget. In North America, EBITDA grows less than we expect given the new assets in operation as output was weaker than expected. New assets like Union and Red Tail Hawk have started to operate during the first half and their contribution was quite small in the period with some delays in connecting Union. At the equity accounted level, the contribution is negative relative to positive contribution last year as the mode of PV asset in Portugal reached the end of its regulated tariff and is also now fully consolidated. Additionally, Puerto Libertad in Mexico was affected by a negative capacity payment resettlement in the period. With that, let me hand back to the chairman for the Q&A session. Thank you.

Very good. Thank you, José. I forgot to mention that we have on the floor the rest of the management team of the company, so we'll be passing on some of your questions to the responsible executives. Okay, thank you for your questions. Let's start. We have a question from Flora Trindale from CaixaBank, Alexander Roncier, Bank of America. Enrico Bartoli, Mediobanca, and Jorge Guimaraes from JV Capital. The question is to give an update on asset rotation for the rest of the year, geographies, portfolios, size, valuation. It seems there is a big appetite for deals in our geographies. Open brackets and this, Mazda, with closed brackets. I want to know if our cut-off euros make a valuation. Okay. I have mentioned in my introduction that we have to be very scarce and we have to limit... our information on this topic for obvious reasons as all different transactions are competing and we are deciding upon the individual quality of each potential transaction, quality defined as strategic fit and price mainly. And swiftness of execution and trustworthiness of the buyer and all these elements that one analyzes when in an M&A transaction. So I can add very little information on this other than we have, as I said, a big amount of capacity in conversations, in different conversations with different buyers around the globe. And What I can say is that there is big appetite and the good quality assets will be expected to – we expect to be able to close transactions within the next semester to meet our targets. There is a coming question which I will take the opportunity to answer on why sell high-quality assets. We have a standard valuation of our assets. We have our own curves. We have our own analysis of what each of the assets is worth. And whenever all these elements, all these intangible elements, which I mentioned, strategic fit and so on and so forth, and quality of buyer, trustworthiness of the buyer, stiffness of the operation, when all those elements meet price, are target price or are above price, those transactions will go forward. But I can say little else. I'm sorry. The second question from Flora Trindale and Enrico Barteli, CaixaBanca, Mediobanca, respectively. is about PPAs and the increase in closing PPAs in the supply. Are you seeing a pickup in demand? Now, the head of marketing and sales, Javier, would you kindly take that question? Yes, thank you very much.

The appetite of corporates for clean energy as part integral part of their carbonization strategies which underpins their delivery and sustainability commitments remains very strong across the world and therefore across our key markets. It is remarkable that this appetite is also translated into an increased desire of contracting energy from existing operational assets particularly wind asset which is the main technology in our fleet because of its ability to deliver clean energy immediately and reliably, and this is in high demand. And we believe that the combination of this strong appetite from corporates together with somewhat healthier demand, providing support for wholesale power prices in several of our markets, and high and resilient renewable energy certificate prices provides a positive environment going forward.

Thank you, Javier. Regulatory banding mechanism. Could you explain the effect of the Spanish banding in the second half? Fernando Garcia from RBC. Jose, would you take that one, please?

Sure. The regulator, the CNMV, requires us to account for the – to record the banding mechanism of our assets depending on the probability of those assets of requiring regulatory income to reach the regulated rate of return of the 7.39%. When prices are high, some of our vintages will not need, presumably would not need, as we saw in 2023, regulatory income to reach that level of return. And therefore, those assets did not require, came out of the regulatory system. This year, with the normalization of power prices in the beginning of the year and the end of 2023, Two vintages came back into the regulatory system, meaning that we do expect them to require some level of regulated income to reach the regulated rate of return. And therefore, in the period in the first half of 2024, we have had to record a 60 million regulatory payable on our balance sheet, which goes through our P&L and affects our revenue line, which is a one-off, but will unwind throughout the rest of the year. In the period, you have a $60 million one-off, and by the end of the year, due to the banding mechanism and the regulatory asset that we record every month, we expect that to unwind and have a net positive effect by year-end. We expect the average regulated prices, as I was saying in my presentation, The average regulated price to be around 85 euros per megawatt hour, which is much higher, obviously, than the 43 euros per megawatt hour recorded in H1, which includes the 60 million one-off regulatory payable that we have recorded.

Thank you. Question number four from Fernando Garcia, RBC, and Paul Chavron from Kempen. What do we mean with the target includes the 76 million of impairment reversal related to the Spanish hydrotransport? This is the one we just answered, right? Not exactly. No, which is recorded below EBDA line. Is it part of the EBDA with capital gains target?

So the hydro, the deal that we announced today, or we published yesterday and announced today, generates a capital gain, a total capital gain of €170 million. 76 million of that 170 is recorded below the EBITDA line because that is the reversal of a past impairment. And 94 million when the transaction closes, which hasn't happened yet and we expect to happen by November or December of this year, that will add an additional 94 million euros of capital gain that will be recorded in the EBITDA line. What I meant to say or the way we think about it is the full 170 million we consider capital gain with respect to our full year objective of 200 to 300 million euros of capital gains. Whether that part of that capital gain is recorded below the EBITDA line or above the EBITDA line is an accounting treatment which we can do little about and it has to do with the timing of the transaction. And we think it doesn't affect the underlying nature of the transaction and the value that is generated. And therefore, we think that the full 170 million should be counted towards the 200 to 300 million euro of capital gain objective that we have for the year. Having said that. As we have also mentioned during the presentation, if we do materialize one of the other transactions that we have on the table at the moment, we feel relatively comfortable that we will be able to meet our objective despite of the treatment of EBDA.

Next question from Enrique Bartoli, MedioBanca, installations in 2024. Could you provide some details on the installation timing for new assets in 2024? Will most capacity be operational in the fourth quarter? Arantxa, why don't you take this one? Arantxa is COO. Please take this one.

Yes, sure. Good morning. So the capacity additions for 2024 will be mainly back and loaded with approximately 1.2 gigawatts of additional megawatts that will be installed in the second half of the year. Projects like Aldoga, Juna, Cotoperi, Logrosan started construction early in the year, but will start having meaningful contribution more towards the end of the year. 40 Mile will also start installation from second half of the year onwards, and also it's important to consider that Logrosan, the biomass plant in Spain, will add its full 50 MW capacity in the second half of the year.

Thank you, Arantxa. The next question comes from Alexander Ross here, Bank of America. With Nordic's reentry into the U.S. market, do you expect to also shift more investments there at the energy level? Let me take this one. We do not invest. or the Nordics presence or not is not a major variable in our targets. Nordics, we are very strongly focused on the U.S. and in terms of capacity additions in the next few years, it will be a very important target together with Australia. So for capital allocations, the Nordics presence is not a significant element of change in our strategy. It does help, however, and I think it will be a great opportunity for Nordics and may help us in some ways, but it's not a big issue at this stage. Now, question number seven is sensitivity to volumes and power prices from Oscar Mazar de Santander. The impact on one euro per megawatt hour, lower average price. or one terawatt hour lower output on revenues. Why don't you take this one, Santiago Gomez, strategy and power marketing. Okay.

Thank you, José Manuel. Okay. In the local slide, we have provided in our expectation of consolidated output of 25 terawatt hour at 65 euros per megawatt hour. That implies that one terawatt hour would be around 65 million in terms of volumes. Speaking about prices, I understand you refer to power prices, merchant power prices, given that our structure, our portfolio, designed as a consequence of our commercial policy. Finally, in Spain, one megawatt hour in power prices, in merchant prices, implies 2.5 million euros, and in international portfolio implies 4 million.

Thank you, Santi. Next question from Jorge Jimenez at J.B. Capital, Enrico Barton at Mediabanca, and Victor Perot from Gaesco is the capacity additions, one gigawatt installation objective for 2025 is conditional to a certain level of asset rotation proceeds, main areas where capacity will be added in 2025.

Thank you. The one gigawatt that we are going to install in 2025 is almost committed, so it's not dependent on our asset rotation policy for next year. The capex involved within this one gigawatt is half of the capex that we used to install to spend in 2024, so it will be a good contribution to improve our ratios. In 2025, we will complete Aldoa in Australia, 40 Mile in Canada, Juna in India, and some other smaller projects, as Kalayan in Philippines, Peru Porto in the American Republic, in Morones, both in Spain. The one gigawatts of new addition in 2025 is the result of the timing of our pipe line. It's not including asset rotation.

Next question is on the EV to EBITDA multiple for the hydro divestment. Jose, why don't you take that one, although I'm not sure we want to go into that detail. Okay.

Well, roughly the implied multiple with the price that we published yesterday is around nine times. So we think it is an attractive deal, a fair deal, a fair price for a high-quality asset. And the EV per megawatt multiple is around 1.6 million euros per megawatt. So we think it's a... A decent price, well above where we believe are traded or some of the parts is trading today.

Question number 10 from Oscar Najara Santander. Implication of potential republic administration under Trump. Go ahead.

Well, we are not expecting any special surprise with a potential change of the administration in the U.S. Let me remember that we invest in several projects in Texas during the past Trump administration, and the fundamentals of the markets are still being the same. The demand is growing a lot by 3% in the next future because the data centers and all the computing and the high-tech industries And U.S. today is exporting the Texan gas to Europe, so they need to increase the local capacity based in autonomous production and renewables. So we are not expecting any dramatic change for our portfolio.

Besides, our most successful states are Republican in the U.S., so we shouldn't, based on experience, we shouldn't be concerned. There's an 11th question, rather... unusual, which is from S&P Global Commodity Insight over whether we see risks on the growth of AI on our ESG or reputational impact. Can we vet the activities of our potential data center customers I think, frankly, the ethic standards in the AI environment ecosystem is under scrutiny and remains to be defined. So as a supplier of electricity, I think this is a far-fetched risk for the time being. That would be my thought. So with that, I will start on the rest of the presentation on the rest of the group of Acciona Per Se, where our consolidated results have been very good this semester. And particularly, I would like to highlight the good performance of the infrastructure and Nordics. In infrastructure, the excellent performance of the construction business during this first six months, both in terms of financial results and new project awards, has been greatly driven by the operations in Australia and Latin America. With the successful ongoing execution of several large projects such as the Western Harbour Tunnel in Sydney or the North East Link in Melbourne or the Line 6 at Sao Paulo Metro. All our infrastructure businesses continue to do well with EBITDA margins at 7.6. Valuable new assets having been added to our concession portfolio with about 1.7 billion of associated equity investment. or the continued positive evolution of our water projects with significant new awards in Australia, MENA and the US. As for Nordics, it continues to improve its profitability while consolidating its position as the second largest non-Chinese wind turbine manufacturer in the world. Major operational improvements Post-COVID market stabilization and product excellence have resulted in historic record order intake, contributed to a current EBITDA margin of almost 3.5%, and enhanced our conviction over our 8% midterm target. In other businesses, Westinberg continues to grow healthily with a 16% year-on-year increase in assets under management and the launching of a second infra fund and our first real estate investment, institutional investment vehicle. We have recently integrated our real estate, hotel, and cultural activities into a new business area called Living Design and Culture, whose objective will be to enhance the synergies and growth opportunities in unique living, design, or cultural projects while narrowing our real estate focus onto smaller number of special projects, freeing up capital from the more capital-intensive conventional development sector. Since 70% of the yearly project deliveries are expected in the second half, first half P&L should not be extrapolated as a full-year indication. Lastly, our commitment with urban sustainability has been materialized this month with the launch of our electric nanocar, the Silenz SO4. for which distribution we are partnering with Nissan in European markets. As one of the few global suppliers of brownfield sustainable assets, and in order to broaden our portfolio, we have launched a business unit fully dedicated to the development of data centers, which integrates our expertise in real estate, energy, and infrastructure. Our asset base includes 14 gigawatts of renewable real estate assets worth close to $2 billion, $34 billion in construction backlog, and a fast-growing portfolio of transport, waste treatment, water, or grid concessions with total investment committed equity of $1.7 billion. But even more important than an excellent asset base is our capacity to replicate and multiply those assets, or in other words, our goodwill. We are a well-coordinated team of engineers, economists, financiers, experienced machine operators, artisans, and a long list of growingly rare business traits, united under a solid brand and a shared objective. a team of 65,000 employees, including over 17,000 graduates, of which more than 10,000 are STEM professionals. is what really makes a strong, and if I may say, unique. I am confident that this privileged position, together with a solid base of liquid assets, a successful track record, a global foothold, and a continuously growing social demand for our solutions, are a best credential to ensure a positive short, medium, and long-term outlook. And let me now hand over to José Ángel Tejero, Chief Financial Sustainability Officer at ACCIONA. Thank you.

Thank you.

I will make a short review of ACCIONA's financial results in the first half of the year. Starting with the key financial highlights, revenues grew by 24% to $8.7 billion, and EBITDA increased by 7% to $990 million. driven by the strong EVDA growth in infrastructure and knowledge that have offset the lower resources of energy. The EVDA of energy amounted to 419, reflecting the normalization of power prices in Spain and the weak output. In the extraordinary situation we had in the spring, we had high resource and low demand. Infrastructure was very strong in the first half, contributing with 331 million of EVDA, a 42.9% increase versus the first half of last year. We have achieved very high profitability at our construction business, driven by the successful execution of large profitable projects, reflecting the high quality order book incorporated in the last years. Nordex released very strong first half results last week, having achieved 3.4% EBITDA margin, to 118 million versus 114 million negative EBITDA in the same periods of last year, driven by higher activity levels in installations and the normalization of the supply chain. In this performance, Nordic has tightened its full-year EBITDA guidance to the upper end of the range, to 3% to 4% EBITDA margin from the 2% to 4% previously announced. The contribution of Nordex to ACCIONA's VDA was 220 million, including 102 million reverse provisions identified under the purchase price allocation exercise done by ACCIONA at the time of consolidating the company that are no longer needed after the quality improvement programs review made by Nordex and the specific provisions accounted by them made no need to have those provisions in the consolidated books of ACCIONA. Profit before tax. reached 204 million, and attributable net profit reached 116 million in the first half. These figures include 75.6 million positive impact due to the reversal of past impairments of the 175 hydro megawatts in Spain, which sale has been announced today. And also the negative impact of 30 million due to the impairment of the Taibilla project, which is being dismantled and repowered ahead of its accounting useful life. Talking about CAPEX, we have invested 1.7 billion in the first six months of 2024, mainly in the deployment of new energy capacity and in our portfolio of infrastructure concessions. We are on track to install 1.7 gigawatt of energy capacity in 2024 for the second year in a row, and we're investing in the equity of concessions, a key area of growth for us, where we continue incorporating new assets to our portfolio. Net debt amounts to $8.2 billion, an increase of approximately $1.7 billion versus December 23. About our credit rating, its recent annual review, DBRS, has adjusted our investment credit status with a BBB low rating from a flat BBB previously with a stable outlook, which is mainly driven by the corresponding adjustment applied to Acción Energía to BBB flat, also a stable outlook. Acciona's strategy is to strengthen its balance sheet through an active capital rotation policy through asset sales. Looking ahead in the year and considering the expected better performance of Acciona Energy in the second half of the year, Nordics updated guidance for 2024 for the BDA. the high profitability of infrastructure business, the sustainability of property development, and the potential impact of asset rotation, we remain confident about finishing 2024 within our targeted leverage ratio of around 3.5 NDA. In the next slide, you can find our ESG key metrics for the first half of the year. In the social aspect, there has been a notable increase of almost 20% in the total headcount, driven by the incorporation of Nordics in a full-year basis and also by the increasing operations in Chile, Spain, Mexico, Australia, Qatar, and Brazil. Shifting focus to environmental data, the proportion of taxonomy-aligned CAPEX over eligible CAPEX remains at 99%, exceeding the target of keeping the ratio above 90%. Greenhouse emissions have increased by 11.6 due to the incorporation of Nordex, which continues six months of the semesters versus three months in the first half of the year, and the growth in construction and water. Nonetheless, the latter emissions are expected to be below the SBDI target. In terms of financing, progress continues to be made in the inclusion of sustainability structures in the new issues. with 80% of the company gross corporate debt now categorized as green or sustainable link debt. In the next slide, we provide details on the investment made in the first half, the total $1.7 billion. Aside from the $847 million invested by Xcel Energia, the most relevant investment has been infrastructure, with a total amount of $667 million. Within construction, With $553 million, it includes the investment made in a waste-to-energy plant in Australia, Coquinana, following an agreement with Macquarie Capital and DIF, which implies an investment of $395 million. Acciona has finished the construction of the plant, which is scheduled for commercial operation in late 2024. The plant is owned by Acciona and, therefore, will operate it indefinitely. Accordingly, Acciona has included this asset in its long-term project portfolio. Nordex has invested $88 million, other activities $29 million, and the property development $85 million. In the next slide, you can see the main cash flow items that explain the evolution of the net debt during the first six months of the year. The most important moving part has been the $1.7 million net investment just explained. Working capital flow of 570 million in the first half of the year includes 63 million working capital consumption by Accion Energia, 216 in Nordics and 381 of the rest of the group, which is consistent with the usual seasonality and the growth achieved by the non-energy business revenues. As a result, we have finished the first half of 2024 with 8.2 billion of net debt, including 809 million from accounting of IFRS 16. It is important to highlight that 3.5 billion of the total net debt corresponds to debt associated to work in progress related to renewal assets and real estate assets that we have under construction now and will be EBTA contributors once they are finished. In energy, the assets under construction will contribute with an additional 200 million EBTA once in operation, and the real estate assets are projected with a gross margin of approximately between 18 to 20%. Before moving into the performance of other different activities, let me give you an update of the group outlook for 2024. Our current expectation for the full year is an MDA of around 2 billion, 1 billion coming from energy, and 1 billion from the rest of the group, excluding capital gains. On top, we aim to generate between 200 to 300 capital gains per year. In terms of net investment cash flow, we expect to be around 2.5 billion for the group as a whole, 1.8 to 1.9 coming from Action Energia, and around 600 to 700 million from the rest of the group. Going through the businesses, and given that Actio Energia has just presented its first half result in full detail, I'm not going to go through the specific slides, but in the documentation we have provided you with all the details. Moving into infrastructure, we have already mentioned that its good performance both in terms of financial results and new projects awards is a key milestone for the first half of the year. In this slide, you can see that the aggregate infrastructure backlog continues at historically high levels, reaching almost $34 billion as of June 2024, including the equity account projects. In the first half of 2024, we have obtained $4.7 billion in awards, including some very relevant contracts, such as the Suburban Rail Loop East Tunnels Project in Melbourne and Artemis Desalination Plant in Perth, both in Australia. In addition, we have been pre-awarded contracts pending to be signed for another 4 billion euros, such as I-10 in Louisiana, Central West Orana Transmission Line in Australia, the Lima Peripheral Ring Road in Peru, and three transmission lines of Hapo Roma also in Peru. We are positioning ourselves as a reference. EPC developer and owner-operator for transmission lines projects, with nine contracts under construction, all selected as preferred bidders in Australia and Peru. The beauty of this order book is not only its size, but its well-diversified profile in terms of geography, with around 80% being OCD countries, and in terms of low-risk profile, with an increasing weighting of collaborative contracts, that represents 35% of the construction order book having signed this semester our first collaborative contract outside of Australia. We continue in concession assets, we continue making significant progress in concessions, a key area of growth for the group, with a focus on greenfield profitable projects that can provide long-term steady cash flows. We are building a geographically diversified portfolio of 79 assets, as you can see in this slide, with a well-balanced risk profile considering that some assets have demand risk and some others are subject to availability payments. Our current portfolio is young, the largest being under construction and all recently awarded, and with a weighted outstanding life of 46 years. This portfolio has equity contributions already incurred of $659 million and additional commitments of $1 billion to be gradually disbursed over the next eight years. This portfolio, once in operation, will generate around $14.2 billion in dividends and cash distributions for ACCIONA. And finally, it's important to highlight the relevant commercial and operating synergies between concessions and construction activities with more than 5.2 billion and growing of the construction backlog coming from our own concessions. In this slide, you can see some of the most important concessions that are in our portfolio. You can see them. I will not go over the details. In the next slide, you can see the main first half figures of the division in terms of sales, Let me give you some more details of the different businesses. In relation to construction, the performance of the construction activities in the first semesters of 2024 has been outstanding, with 60% increase in EBITDA to 236 million, implying a 7.6% EBITDA margin. The margin increase has been driven by the higher contribution of the most profitable projects and by the good execution of the large capital-intensive projects, mainly the Line 6 of Sao Paulo Metro in Brazil and the Sydney Western Harbour Tunnel in Australia. Key geographies remain unchanged. Australia accounts for almost 39% of the revenues, Spain represents 17%, of the total and Brazil another 8%. And looking ahead, we are very comfortable with our 16.5 billion construction backlog as of June 2034, which implies that more than two and a half years of sales, and out of which 35% are collaborative contracts. The concession business also performed well in the first half of 2024, with the BDA growing by almost 35%, driven by the good progress of Sao Paulo Metro Line 6 in Brazil. which is already 55% complete. As we have already explained, our portfolio is young, and therefore its contribution to group financial results will increase gradually as the different projects start operation. Looking ahead, we have enormous growth opportunities with an identified pipeline of more than 60 greenfield projects with around 100 billion associated investments to be tendered in the next years in our key geographies. In the next slide, you have all the details of the performance of the water business, which have obtained 545 million revenues, 10.6% lower than the first half of 2023, as a result of the lower contribution due to the delivery of the projects under construction in Saudi, still not compensated with recently awarded projects. EBITDA margin improved to 7.6% due to the greater weighting of the higher margin operation and maintenance businesses. Moving into Nordex, its first half results were published last week and the company held a conference call explaining them, so I will go very briefly over the main magnitudes. Nordex reported a 19.5% gross margin and a 3.4% EBITDA margin in the first half of 2024. to 118 million EBITDA versus a negative 114 million EBITDA in H123. Given this good performance, knowledge, as I said before, has tightened its EBITDA range to 3% to 4% EBITDA margin and has confirmed that they remain on track to achieving its mid-term target of 8% EBITDA margin. The contribution of Nordex to ACCIONA, as I said before, was 220 million, including 102 million reverse provisions identified under purchase price allocation exercise that was done by ACCIONA at the time of consolidating the company that are no longer needed after the quality improvement programs review made by Nordex, and the specific provisions accounted for by them may no need to have those provisions in the consolidated books of ACCIONA. Regarding operating data, Order intake of turbines increased by 27% to almost 3.0 gigawatts, with prices remaining stable at 0.89 million per megawatt. Total backlog, including turbines and services, stood at 11 billion at the end of June, which is a 4.7% increase compared to the end of last year. Moving to other activities, property development has sustained a negative EBITDA in the first half of the year, affected by the usual seasonality of the business and the calendar of deliveries. We have delivered 165 units in this semester, which is 305% more than in the first half of 2023. But most of the 2024 schedules, deliveries will take place in the fourth quarter. ACCIONA plans to deliver 1,200 units in 2024 and therefore the VDA of the property development unit will materially improve. The gross asset value of our property development portfolio has increased by 3% versus December 2023 to more than 1.8 billion. And lastly, Westinberg has had a very good semester with 7.8% increase in revenues and 22% growth in VDA to 53%. 52 million and 23 million respectively, obtaining an EBITDA margin of 45%, higher than the 39.7% in the first half of 2023. This growth has been driven by the increase in assets under management, which have reached 6,526 million at the end of June, which is a 10% increase versus 2023. Thank you for your attention, and let me now hand it over the floor back to José Manuel for the Q&A. Very good.

Thank you, José. Okay, so with the Q&A from Flora Trindale, CaixaBank, Oscar Najar, Santander, and Fernando Garcia, RBC, construction margin, fiscal year EBITDA margin expectations, and the next question, which is from B of A, Alexander Roncia, Santander, Oscar Najar, Infrastructure will continue to be in good health backlog of 400 million, but can you give more color about the lifespan of this backlog and how it has evolved recently on projects more specifically? Please, I don't think we can go on to projects more specifically in this venue, but we can obviously give you details in a direct conversation if you're interested. How well should it transcribe into EBIT performance? Let me pass on that to CEO Infrastructuras, José Díaz-Caneja. Please, José.

Thanks. Good morning. So we believe that the EBITDA margins are all 7% for the food year 2024 sustainable giving. high quality of the order book with 85% of the construction backlog on OECD countries, the good progress of the projects currently under construction, which still have some years of execution ahead, projects which are machine intensive, increasing weight of corruptive contracts, which account for more than 70% of the construction backlog in Australia, our main market, and 35% of the total construction order book, and the higher weighting of works for our own concessions, representing more than Euro 5 billion order, backlog and preferred status, with projects such as Central West Orana transmission lines in Australia, the I-10 bridge in the U.S., or the Peripheral Ring Road in Peru. Going forward, we see construction revenues growing at an annual rate of around 5%, and EBITDA margins between 6% and 8% higher than our historical levels.

Okay. Thank you very much. Let me just add that the market is very strong. We are, in general, in a position to be selective, both in type of projects, both in contractual terms, in markets where we participate or we actively bid. So in a very general sense, And as a very general statement, I would say that it is the best moment of infrastructure development and construction in particular in my professional life. And I do not expect it to be temporary because another – characteristic of this market is that there aren't that many agents like Acciona who can provide all the capacities that are required in very big projects. That is a solid balance sheet, technical capacities, the manpower, high quality name, all these elements make it a relatively short number of players in the world. And that gives us the opportunity to be more selective in the types of job we undertake and the type of the regions and the contractual terms would be the three main areas where we can be selective. As for question number three on real estate, do we consider reducing our exposure to this business? From Alexander Roncier, BOA. I'm going to pass it on to the CEO of the Living Design and Culture Business Unit, Andres Pandes Reluzos, responsible for the real estate activity also.

Thank you, José Manuel. I will not call it reduce it. I will call it a more segmented and selective one based on iconic offices. Mezena is a very good example. In build-to-sell, based on create new destinations in a very solid, where the demand is very solid. Mixed-use development. And DTR with the most exciting project, which is already in our balance sheet. and very strategic logistic projects.

Having said that, in actual financial terms, we are going to be reducing our assets, our GAV, our gross asset value, and involving the activity in the coming cycle by the rotation of assets. So, expectedly, we should be reducing our GAV in the next few years and financing all the growth with the resources that are already in our balance sheet. Is there anything you want to add there, Jose Angel?

No, I think that just to complete the real estate business is going to be in the coming cycle. It should be a cash flow, a net contributor to the group on top of financing its own activity with the cash flow generated.

And the question is complemented by asking by Alexander Orsier, why... No, don't take the... Why... Why don't we sell assets, real estate assets, even at a discount to finance growth? I don't think we need to sell anything at a discount, so that would be my answer. And we do not see ourselves in a position to sell assets at a discount. Question number four on energy buyout from CaixaBank, from Flora Trindale. What is your view on the current share price of Acerergia? Will you consider a buyout? The answer is very obvious. We consider the price to be far below our valuation levels. And we will, at this stage, we're not considering a buyout. However, we will opportunistically be buying shares. of Acción Energía, so should these low prices prevail. Question number five, Nordics, the asset rotation strategy, could you consider setting a partial stake in Nordics as part of the asset rotation strategy? And GB capital markets. The answer is no, it is not currently within our plans. The expected evolution of Nordics is excellent. The prospect is very positive and we do intend to ride that wave. As for number six, debt held for sale, how much debt do you have as assets held for sale? Specify. Yes, we will specify for sale.

We have basically three packages of assets that are here for sale. In the energy division, there is a set of Spanish wind farm hydro assets of around 500 megawatts, which accounts for 375 million of debt. Also, in the infrastructure divisions, There are negotiations on selling a significant stake of the waste to energy plan in Kwinana, which was recently acquired, which accounts for another $290 million of debt. And also, we are in negotiations, and this was already set in December, in some real estate assets that carry $90 million of debt. All of the sale process are in well-advanced status.

Just a clarification of why the waste-free energy plant of Kuinana was recently acquired and now has itself for sale is because there's a strategic, there's a possible strategic operation which will add value to the continuing business of the plant. But we will stay within the plant. Question number seven on could you carry assets from Fernando Garcia to RBC? Could you carry out asset sales at Acciona level? Other than the mentioned ones and the reduction on gross asset value in the real estate assets, we will opportunistically sell concession assets when the maturity of the assets so recommends. That is not there yet, but as you no doubt are aware, we are a greenfield to brownfield transformer of assets, and that is normally what we will do with concessional assets. Build them, operate them, and then normally... normally sell partially or totally to a lower cost of capital holder. What are your expectations for ANA and ANA fiscal year 24 net debt? José Ángel, please.

At any level, we expect the net debt to be lower than H1. Basically because of the potential asset change under the asset rotation program, although

I'm sorry. I will repeat. At ANE, we spent that debt to be lower than H124 because of the potential asset sales under the asset rotation program that has been explained by our colleagues of energy, although it is difficult to estimate that accurately due to the wide range of potential deals. As for the rest of the group, we spent the debt to remain at similar levels as H124 as there will be a positive cash from operations to cover both capex and dividend payments.

Question number nine, you take it to working capital and capex, how much extra capex or working capital is required to obtain the margins in first half? Should we assume capex to sales above 4% in 2024?

Okay. The answer in respect to one-year capital, we don't expect any additional outflow for the rest of the year. Therefore, it should remain at similar levels as H-124, even it could be a slight reduction. As for the CapEx infrastructure business, in the second half, we expect additional investments of $150 million in concession assets, including the projects fully consolidated that are not only in equity contributions. and around another 50 million in heavy machinery that are the ones that account for the operations of the big construction works.

Question number 10 from Jose Ruiz at Barclays. What gave rise to the reversal of the purchase price allocation of Nordics?

Jose Antonio.

I think I have explained that reversal relates to the provisions regarding some uncertainties identified at action level when the purchase price allocation of Nordex was done last year. Nordex has updated the cost assumptions of the quality improvement programs in the first half of 2024. And therefore, we now consider that some of the uncertainties can be partially released.

Question number 11 on Taivilla. What was the justification of the 30 million write-off? It's basically from Jose Ruiz at Barclays. We have started the repairing of Taivilla wind farm in Cadiz, which had not yet achieved the end of its accounting life. The 1998... The 1998 turbines, so the 24, 26-year-old turbines, will be dismantled and replaced. Sorry, yeah, no, 16 years old, no, 28. Will be replaced with 13... Nordic's new turbines and the return will improve significantly despite the write-off. So it's a financially sound operation. As for question number 12, from Arthur Sidburn at Morgan Stanley, you talk about being back to leverage metrics of 23 by 25. I see that in 23 you had FFO net leverage of 4.3 according to Fitch, and I think the ceiling they consider for your current credit rating is 4.5. With that in mind, is there a plan to keep the leveraging beyond 2025 and keep doing asset rotation after that year? Or would you be happy with just a ratio slightly below the 4.5 ceiling Fitch considers? Jose Angel, you may get into the details. However, let me say as an opening statement that asset rotations will continue and we will try to maximize the quality investment opportunities with the rotation opportunities so as to maintain the investment grade level. That is the basic rule of thumb. Do you want to develop any further?

I mean, you are right about Fitch metrics, but Fitch not only looks at one particular year, but looks also at the evolution of the cycle. Last year, we were within the ratio, and in 2024, Fitch expects us to momentarily exceed it. But when we come back, then we come back below by the end of 2025 and stay within going forward. Once we digest the work in progress and come back to good ratios at the end of 2025, thanks to substantial asset rotation in this period and CAPEX moderation, as was explained by our colleagues of energy, we think that we can be comfortably within the FITS ratios with CAPEX or capacity additions between 125 to 115 gigawatts per annum combined with asset rotation. Obviously, there is another important element, which is the commitment of the company, as the chairman just stated, that we have in protecting our investment grade rating.

And question number 13 on tax rate charge, which looks low. What can be expected for the fiscal year 2014?

Well, tax rate in H1 seems exceptionally low, but it is due to the one-off item, which is namely the reversal of the provision of Nordic's PPA for $102 million, which has no corporate tax impact. If you exclude that effect, the tax rate would be around 25%, which is within the range we expect for the rest of the year, which is between 24% to 28%, excluding capital gains.

Okay, we have no more questions, so thank you very much for attending this results presentation, and we'll stay in touch with all of you directly or through our next presentations in the coming months. Thank you very much. Goodbye.