Financial Highlights: A Year of Expansion

terna (TRN.MI),Italy’s national grid operator,has announced robust financial results for 2024,demonstrating significant growth in both revenue and profitability. this positive performance has enabled the company to increase its dividend payout and update its aspiring industrial plan for 2024-2028, signaling a commitment to future growth and shareholder value.

Revenue Surge Driven by Regulated Activities

The company reported revenues of €3.68 billion for 2024, a substantial 15.5% increase compared to the €3.19 billion recorded in the previous year. This surge in revenue is primarily attributed to the expansion of regulated activities,fueled by an increase in the Regulated Asset Base (RAB) and an updated Weighted Average Cost of Capital (WACC) recognized for 2024. The RAB, which represents the value of assets on which Terna earns a regulated return, is a key driver of revenue growth for grid operators.

Profitability Rises Sharply

Alongside revenue growth, Terna also experienced a significant increase in profitability. The gross operating margin (EBITDA) rose by 18.3%,from €2.17 billion to €2.57 billion. Net profit saw an even more impressive jump of 19.9%, reaching €1.06 billion compared to €885.4 million in 2023.This enhanced profitability underscores Terna’s operational efficiency and its ability to capitalize on favorable market conditions.

Strategic Investments and Debt Management

To support its growth initiatives, Terna made substantial investments throughout 2024. Total investments reached €2.69 billion, a 17.6% increase compared to the €2.29 billion invested in the previous year. These investments are crucial for upgrading and expanding Italy’s electricity grid, ensuring its reliability and capacity to accommodate the increasing integration of renewable energy sources.

Increased Debt to Fuel Growth

As a result of these significant investments, Terna’s net debt increased to €11.16 billion at the end of 2024, compared to €10.49 billion at the beginning of the year. However, the company’s strong cash flow generation, with operating activities producing €1.82 billion in cash flow during 2024, provides a solid foundation for managing its debt obligations.

Looking Ahead: Financial Targets for 2025

Terna’s management has outlined ambitious financial targets for 2025, projecting continued growth and profitability. The company aims to achieve revenues of €4.03 billion, an EBITDA of €2.7 billion,and a net profit of €1.08 billion. These targets reflect Terna’s confidence in its ability to capitalize on the growing demand for electricity infrastructure and its commitment to delivering value to shareholders.

continued Investment in infrastructure

The company plans to invest approximately €3.4 billion in 2025, demonstrating its ongoing commitment to upgrading and expanding Italy’s electricity grid. These investments will focus on projects that enhance grid resilience, integrate renewable energy sources, and improve the overall efficiency of the electricity system. According to a recent report by the International Energy Agency (IEA), global investment in electricity grids needs to double by 2030 to meet growing demand and support the transition to clean energy.

Dividend Increase Reflects Strong Performance

Reflecting its strong financial performance, Terna’s management has proposed a total dividend of €0.3962 per share for 2025 (related to the 2024 fiscal year). This includes an interim dividend of €0.1192 per share already distributed in November 2024, with the remaining balance of €0.277 per share to be paid out afterward. This increased dividend payout underscores Terna’s commitment to rewarding its shareholders and its confidence in its future prospects.

“Terna’s strong financial results in 2024 demonstrate the company’s crucial role in Italy’s energy transition. the increased dividend and continued investment in infrastructure highlight terna’s commitment to delivering value to both shareholders and the country as a whole.”
Analyst, Archynetys Financial Desk