Acciona Energia Trading Statement: Fall in Power Prices Puts 2023 Guidance at Risk

We don’t plan to materially change our EUR 35 fair value estimate after no-moat Acciona Energia ANE released its first-quarter trading statement. Although the group confirmed its 2023 guidance, we see it at risk given the fall in wholesale power prices in Europe. Shares are in 3-star territory meaning there is not enough margin of safety to buy them.

The firm indicates that it has 5.6 terawatt-hours or 50% of its expected 2023 Spanish power output contracted at an average price of EUR 122/megawatt-hour. Assuming the remaining open position is sold at current forward power prices for the rest of the year, this points to an average achieved power price of EUR 117/MWh, below our EUR 124.5/MWh estimate. The average achieved power price of the international assets in the first quarter fell by 10% to EUR 61/MWh, mainly due to price declines in the U.S., Chile, and Italy. This is below our full-year estimate of EUR 64/MWh. All in all, lowering our power price estimates by incorporating current forwards would lower our 2023 EBITDA estimate of EUR 1.57 billion by 8% to EUR 1.45 billion and our net income by 15% to EUR 0.5 billion. However, the impact on our long-term estimates based on normalized power prices of EUR 60/MWh would be limited.

Acciona Energia said at this stage it is not reassessing its 2023 EBITDA guidance range of EUR 1.5 billion-EUR 1.6 billion as the easing of Spanish forward power prices for the rest of 2023 could be offset by a perimeter change, that is an acquisition. The firm mentions that potential acquisitions may be decided in coming months. All in all, the company’s wording suggests an implicit reduction of the guidance at constant scope.

First-quarter consolidated power output grew 6.7% to 5.7 TWh, chiefly on the improvement of wind conditions although it remained below the long-term average. Capacity of 128 MW was added in the first quarter and the group states it is on track to deliver its target of 1.8 gigawatts of capacity additions in 2023.