In This Article:
Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cenergy Holdings SA (XBRU:CENER) achieved an adjusted EBITDA of 272 million, a 27% increase from the previous year, with a margin improvement of 200 basis points.
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The company's revenue grew by 10% to nearly 1.8 billion, driven by strong demand in the energy sector and a solid order intake.
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Free cash flow generation was robust at 48 million, allowing the company to finance capital expenditures and reduce debt.
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The balance sheet remains disciplined with a leverage ratio below 1, close to 0.6 times.
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Cenergy Holdings SA (XBRU:CENER) proposed a 75% increase in dividends to $0.14 per share, reflecting confidence in future financial performance.
Negative Points
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There was a small decrease in revenue from cable products, although demand remained strong.
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The geographical sales to the Americas decreased slightly, indicating potential regional challenges.
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The company faces geopolitical risks and increased protectionism, such as US steel tariffs and EU safeguards.
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Steel prices remain unstable due to low demand and competition from lower-cost Asian manufacturers.
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The company's working capital is negative due to timing of milestone payments, which is not a sustainable long-term target.
Q & A Highlights
Q: How should we consider the medium-term guidance of adjusted EBITDA of 400 million given the guidance for 2025 of 300 to 330 million? A: The medium-term guidance is based on 2023 as the base year, targeting 2026 or 2027 for reaching 400 million. The 2025 guidance of 300 to 330 million is part of this trajectory. Unidentified_1
Q: Do you think Cenergy will benefit from Germany's infrastructure spending increase? A: Yes, Germany is the biggest market in Europe, and we are well-positioned with framework agreements and approvals from major TSOs, allowing us to benefit from infrastructure investments. Unidentified_2
Q: How much of the 2024 CapEx was due to cost overruns versus additional or brought forward investments? A: There were no cost overruns. The higher CapEx was due to ongoing efforts to improve and increase capacity, particularly in the cables segment. Unidentified_1
Q: Have you increased capacity in steel pipes, and what are the details of these investments? A: Investments in the steel pipes segment focused on resolving bottlenecks and marginally increasing capacity for profitable segments, particularly for LSAW lines. Unidentified_3