Terna closed on 2023 with revenues for over 3 billion with a growth of 7,5%, but the path in the coming years outlined by the new industrial plan presented by CEO Giuseppina Di Foggia will be of further improvement with a forecast of 3,55 billion in 2024 which will lead to an Ebitda of 2,42 billion from 2,17 billion in 2023, already up 5,3% on 2022 thanks to the better result of Regulated Activities. Looking further, Group revenues in 2028 are expected to grow to 4,60 billion euros and Ebitda to 3,25 billion euros, with a average annual growth (Cagr) over the Plan period of approximately 8% for revenues and over 8% for Ebitda.
Today S&P confirmed the rating of Terna at BBB+.
Net profit 2023 +3,3%. Dividend 33,96 cents per share
THENet income of the Group, which in 2023 stood at 885,4 million euros, an increase of 3,3% from 2022, is expected to increase in the current year and lead to earnings per share (EPS) of 49 euro cents in 2024 and 55 cents in 2028, with an average annual growth over the Plan period of approximately 5%. The board of directors will propose to the Shareholders' Meeting the approval of a dividend total for the 2023 financial year equal to 33,96 euro cents per share and the distribution - net of the interim dividend relating to the 2023 financial year equal to 11,46 cents euros per share already paid from 22 November 2023 - of the remaining 22,50 cents per share, gross of any legal withholdings, to be paid from 26 June 2024 with 'detachment date' 24 June. “The new dividend policy guarantees constant and predictable growth, as well as full visibility” says a company note.
Nellfloor arch the new policy provides for a minimum annual growth of the dividend per share (DPS) equal to 4%, taking 2023 as the reference year. For 2024, the dividend per share (DPS) will be equal to the higher of 4% growth compared to 2023 or a payout ratio of 75%. Any increased dividend distributed in 2024 will not have an impact on dividends from 2025 onwards.
Di Foggia: in the 2024-8 Plan the highest investments ever recorded in Terna's history
- investments overall have been confirmed at 16,5 billion euros in the plan, 65% more than the previous plan, of which 2,6 billion euros in 2024, the highest in the history of the group, to accelerate the decarbonization process of the country, considered 99% sustainable according to the criteria of the European taxonomy. Compared to the total planned investments, approximately 80% was already authorized and over 70% is covered by purchase contracts already stipulated. In 2023, total investments made by the Terna Group amounted to 2,29 billion (+30,4%).
“I am proud to present the Industrial Plan with the highest investments ever recorded in Terna's history: 16,5 billion euros in five years, with approximately 80% of the works already authorized and over 70% already covered by contracts with the suppliers,” he said Josephine of Foggia, Chief Executive Officer and General Manager of Terna.
The key objectives
As Transmission System Operator and enabler of transition, Terna has identified one set of key objectives. In a scenario where you are passing from a traditional system with centralized generation plants to a complex system and decentralized, characterized by growing integration of renewable sources which will require a paradigm shift for their management.
But, Terna underlines, alongside the energy transition there must be a contextual one digital transition. Thus, at the foundation of Terna's new Industrial Plan is the concept of Twin Transition with an allocation of approx 2 billion euros in digitalization and innovation, up 60% compared to the previous Plan. “These investments in digital technologies and tools, such as Artificial Intelligence and robotics, will allow the grid to be increasingly connected, smart and secure” says Terna. “The digital transformation will also involve network management systems, as well as the control of the supply chain and the efficiency of the Group's people.”
“The development of the network will inevitably have to be accompanied by a significant growth in digital technologies to support and accelerate the country's energy transition process: an energy and digital Twin Transition will guarantee a faster, more sustainable, fair and inclusive transition for all our stakeholders” says Di Foggia
The highest investment ever in Regulated Activities in Italy
Le Regulated Activities in Italy they will continue to represent the core business of the Group and Terna has planned the highest investment ever, equal to a total of 15,5 billion euros, of which approximately 1,1 billion euros financed through non-repayable public contributions, to strengthen and expand the transmission network, as well as to develop interconnection capacity with foreign countries .
In the Plan 2024-2028 Terna has forecast an increase in investments for the development of the electricity grid of national transmission, which total 10,8 billion euros. The interventions are linked to the implementation of direct current lines and building connections in submarine cable, to the resolution of network congestion, the increase in transport capacity between the different market areas, the integration of renewable sources and the improvement of the quality of the service.
Italy as an electricity hub of the Mediterranean
Furthermore, interconnections with foreign countries will make the country increasinglyelectric hub of the Mediterranean, increasing the reliability and safety of the system. The most important infrastructure projects of the Industrial Plan 2024-2028 include the Tyrrhenian Link, the underwater power line that will connect Sicily to Sardinia and Campania, contributing to the better use of renewables and the phase-out of the most polluting coal and oil-fired power plants; L'Adriatic Link, a submarine connection that will connect Abruzzo and the Marche, the Sa.Co.I.3, the infrastructure between Sardinia, Corsica and the Italian peninsula, e the power line at 380 kV Chiaramonte-Gulfi-Ciminna in Sicily. Interconnections with foreign countries will also play a crucial role: above all the invisible Elmed energy bridge, which will unite Italy and Tunisia promoting the optimization of resources between Europe and North Africa.
Projects such as the connection complete the panorama of network development investments Milan-Montalto, which will exploit direct current energy transmission technology, and the Central Link, aimed at achieving energy transition and security objectives. These projects will be developed following a modular planning approach, based on the evolution of demand and generation capacity.
Around 1,7 billion euros will be allocated to Security Plan, aimed at strengthening and enhancing the technical and technological functionality of the electricity system and, therefore, interventions necessary for voltage regulation and the dynamic stability of the electricity system, such as for example synchronous compensators and Statcom for the management of energy flows. Finally, existing infrastructure will be rationalized and obsolete components will be replaced with an allocation of approximately 2,9 billion.
Thanks to all the planned investments, the value of the regulated assets (Regulatory Asset Base, RAB) will reach 30,6 billion euros in 2028, with a Compound Annual Growth Rate (CAGR) over the Plan period of 8%. At the end of 2024, the RAB will be equal to 22,5 billion euros, while at the end of 2023 the figure stood at 20,4 billion euros.
