Edp Sa S/Adr

and regulated asset base and organic growth in Brazil as well. Additionally, there's a 71 million euros capital gain resulting from the transmission deal closed in the first quarter this year, leading to a total impact of 0.1 billion euros from the network segment to the group's EBITDA. Excluding these capital gains, electricity networks represents an important 30% of total EBITDA. Finally, I would like to highlight here our efforts on efficiency in a growth context. OPEX registered a slight reduction in absolute terms versus the first half last year, reaching $966 million in the first half this year. So very tight cost control, which allowed us to keep OPEX stable against inflation and in a business that is growing. So we move to slide 11. The line EBITDA grew 4%. and improved performance year on year. And this is reflecting 10% growth in installation or in the installed capacity year on year. Better wind resources with renewables index in line with long-term average versus minus 5% or 5% below the average last year. This is supporting naturally a 5% increase in electricity generation. And with a solid average selling price, pretty much flat year on year, supported by the higher prices in US and the hedging strategy that partially offset the decline in electricity prices in Europe. Additionally, the first half this year positively impacted by around 171 million euros of asset rotation gains versus the absence of gains in the first half last year, which were much more back and loaded throughout the year. If we now move to slide 12, going through the EBITDA for generation and supply business, hydro clients and energy management recurring EBITDA broadly resilient with only a 4% drop year on year in a context of a 56% drop year on year of electricity spot prices in Iberia that came down to around 39 euros per megawatt hour in this first half of the year. And this is also the reflection or the outcome of the very solid strategy, hedging strategy that we have for this business. Also, we benefited from strong hydro volumes, which, of course, allows us to keep this recurring EBITDA, as I mentioned, broadly resilient. EBITDA in 2024 compared to 2023 also reflects the implementation of the coal-free strategy with the deconsolidation of Abonio, a coal plant in the north of Spain, the same coal plant in Brazil, whose contribution to EBITDA last year amounted to 66 million. I would also like to highlight that for the full year, we expect that the EBITDA from the integrated business in Iberia will be in line with 2023 numbers, which was around 1.4 billion euros. If you now look to the networks on slide 13, networks Epita increased 15% year-on-year. In Iberia, Epita increased 10 million euros backed by an increase in regulated revenues of 5% year-on-year and a diligent OPEX management in Portugal. In Spain, Epita stood relatively stable with revenues increased due to the RAB growth compensating higher maintenance costs. And in Brazil, Epita increased 102 million, for which contributes both the organic growth and operations, including lower overcontracting in the distribution business in this first half of the year, and the capital gain of 71 million euros from the asset rotation of two transmission lines. With this, I would like to move to the financial costs on slide 14. Financial costs in recurring terms increased 8% year on year, with the first half 2023 being positively impacted by 37 million euros from the settlement of US dollar pre-hedge. Cost of debt decreased from 4.8% in the first half last year to 4.6% in the first half of this year, following the decline of the Brazilian denominated or Brazilian real denominated cost of debt and rebalancing the US dollar euro denominated debt as part of the strategy to reduce the dollar in the mix. As you can see in the right-hand side of the slide, the dollar weight over total debt decreased from 35% last year to 22% in the first half this year, Also highlighting that if we were to exclude the Brazilian real debt, average cost of debt was 3.3% this year compared to last year, 3.1%. So despite the average cost of debt decreasing overall, financial results reflect the higher average debt in the period, which was offset by capitalized financial expenses due to higher volumes of construction activity in the renewables, particularly in the renewables. So if we now look to slide 15, I would like to highlight again our strong financial liquidity positions. So as of June this year, we had around 9 billion euros of available liquidity, of which 1.1 billion cash equivalent, and the remaining 7.1 billion of available credit lines, covering refinancing needs until 2027, as one can see on the right-hand side of the slide. Also important to highlight here that currently most of our debt is fixed. So around 78% of the debt is fixed. And finally, we continue to be active in the debt capital markets. And as you may have seen, we issued 750 million euros of hybrid notes in May this year. The final maturity date, May 2054 at the 4.875% yield. So keeping active in the market business as usual. I would like now to highlight an aspect that impacts the balance sheet, which is regarding the regulatory receivables. So on slide 16, as you know, in 2023, we faced an increase in regulatory receivables in Portugal up to 2 billion, resulting from deviations in the electricity wholesale price that was being verified during the year versus the regulator's assumption for the tariffs, which we then securitized in December of 2023. This year, until the end of the first half, we experienced also some deviations that led to this regulatory receivable stock in the balance sheet to stay at 0.4 billion, and this includes 0.2 billion of securitizations. I guess the good news this year is that there was an exceptional tariff revision from June onwards, which includes excess tariffs increased from 40%. hour and this is expected to seize regulatory receivables growth for the remaining of the year and therefore we expect to that the stock that we currently have in the balance sheet to remain stable and we are naturally considering that we will be securitizing it until the year right so commenting on the net debt evolution we've closed the first half of 2024 with 17.4 billion euros net debt. And the main drivers throughout the last six months were strong organic cash flow of 1 billion, dividend payment 0.8 billion, regulatory working capital of 0.1 billion, as I just explained, net cash investments amounted to 1.9 billion, again, mainly from the investment in renewables, and including 0.7 billion of asset rotation proceeds. The asset rotation in Italy that achieved financial closing already in July is not captured by the 17.4 billion number. But obviously, if we had received that still by the 30th of June, the net debt for the period would actually have been at 17.1 billion. Towards the year end, as we bring U.S. projects online, we'll be closing tax equity funding. We also expect to conclude some of the ongoing asset rotation transactions. And as I just mentioned as well, the tariff benefit securitization is expected to be cashed in by year-end as well. So overall, we maintain solid credit ratios, namely the FFO net debt at around 19%, and remain fully committed to our BBB credit rating. So finally, recurring net profit amounted to €775 million, a very strong bottom-line figure. If we exclude capital gains, the underlying net profit shows a strong 15% increase versus last year. And this is the result of the EBITDA growth. DIN provisions pretty much in line with last year. Net financial costs increasing 32 million year on year. Again, if we were to exclude the first half impact of that positive effect of 37 million euros from the settlement of the US dollar pre-hedge, we would have a broadly in line net financial cost. Income tax is pretty much in line as well with last year, and this follows the lower effective tax rate due to the tax treatment of asset rotation gains versus no gains recorded last year. And an important decrease in non-controlling interests, primarily supported by EDP Brazil. If you remember, we successfully took it out of the market and buy out the minorities by beginning of the, so let's say in July, so beginning of the second half of the last year. So we still have that positive impact here as we look year on year to the first half of 2024. So finally, just to highlight that if including asset rotation gains, net profit showing a very strong increase, 50% versus last year, compounding the positive performance of the underlying business and the asset rotation strategy. And with this, I would hand over to Miguel for final remarks. Thank you.

Thank you. So just to wrap up before going to Q&A, I think first, I just wanted to highlight the value of GDP's diversified and balanced portfolio. We're talking about hydro, we're talking about client solutions, energy management, EDP renewables, wind and solar, electricity networks. So I think these underpin our performance, which is extremely strong for this first half and shows some of the value of the diversification and that all of these different businesses are pulling their weight. If we actually go then through some of these points here on the slide. So first, the first half numbers are very good. I don't think there's any other way to say it. 50% up net income growth year on year. Good generation supply business in Iberia, good growth in renewables. EDP Brazil minorities buyout obviously also helps to this. So we remain confident in our 1.3 billion net income guidance for 2024. I think we're also, we touched on this, I just wanted to reiterate that good efforts on the efficiency side in terms of keeping a flat OPEX despite inflationary environment and growth. So I think that was also an important effort. And as you know, we've committed to keeping that OPEX flat over the next couple of years. On the network side, clearly this is, you know, brings or continues to bring stable low risk cash flow. It contributes around 31% to EBITDA. We had very positive developments, mainly in Brazil. I mean, with the concession renewal process ongoing, I think the market was perhaps already discounting that risk or discounting the sense of not considering the risk, but the fact that we actually have that visibility on that process and it doesn't have any additional financial burden, I think is extremely good news, and a good precedent also for other geographies. On the asset rotation side, good execution, around 0.8 gigawatts of wind and solar rotated in the first half, so three transactions, a good multiple of around 1.6 million euros per megawatt. Capital gains of around 171 million and 0.4 billion of proceeds from the transmission asset rotation deal in Brazil. Overall, I think continuing to deliver on the asset rotation transactions. Balance sheet, we certainly talked about that, but just to reiterate, I mean, solid balance sheet, good FFO net debt at around 19%. I mean, yes, we recognize there's a net debt or seasonal increase now, and that includes the dividend payment also in May, working capital issues, we've gone through that, but I just wanted to reaffirm our commitment to the BBB and to, let's say, converge into the $16 billion or around $16 billion plus at the end of the year. And finally, on the investment plan, very much focused on leading the energy transition. I think the fact that 97% of our capex is all allocated to renewables or electricity networks is, I think, worthy of note. And also the fact that we're doing good progress on all of the key ESG metrics. So again, reiterating this data point of 98% of our total generation output came from either hydro, wind, or solar sources. So I think that really shows how we've done this energy transition in a very successful way. So I'll stop there. I'll turn it over to Q&A and be back in a second.

Ladies and gentlemen, the Q&A session starts now. As a reminder, if you wish to ask a question, please press star followed by five on your telephone keypad. Thank you.