Naturgy Energy Group’s Earnings Call: Achievements and Challenges

Naturgy Energy Group ((GASNY)) has held its Q3 earnings call. Read on for the main highlights of the call.

Naturgy Energy Group’s recent earnings call presented a mixed sentiment, reflecting both strategic achievements and ongoing challenges. The company has successfully increased its free float and maintained a robust financial position, yet it faces declines in network EBITDA, renewable generation issues, and currency depreciation in Latin America. Despite these hurdles, Naturgy remains committed to its strategic plan and dividend targets, navigating margin pressures in its supply business.

Increased Free Float and Liquidity

Naturgy has made significant strides in increasing its free float from 10% to nearly 19% in record time, which has enhanced share liquidity and positioned the company for a return to the MSCI indexes. This strategic move has resulted in a doubling of monthly average trading volumes compared to the first half of the year.

Strong Cash Flow and Dividend Commitment

The company reported a free cash flow after minorities of almost EUR 2.2 billion. In line with its commitment to shareholders, the Board approved a second 2025 dividend of EUR 0.60, keeping Naturgy on track for a minimum annual total dividend per share (DPS) of EUR 1.7.

Robust Financial Position

Naturgy’s financial health remains strong, with net debt standing at EUR 12.9 billion and a comfortable net debt to last 12 months 2025 EBITDA ratio of 2.4x. This robust balance sheet provides the company with flexibility and optionality for future strategic moves.

Positive Energy Management Performance

The energy management sector showed positive results, with EBITDA increasing by 18% to EUR 718 million. This growth was driven by higher margins on hedge sales and effective hedging strategies, alongside a diversified procurement portfolio.

Decline in Networks EBITDA

Despite the overall positive performance, Naturgy reported a decline in Networks EBITDA to EUR 2,098 million in 2025, an 8% drop from the previous year. This decline was attributed to one-off positive impacts in Chile in 2024 and currency depreciation in several Latin American countries.

Challenges in Renewable Generation

Renewable generation in Spain faced challenges, with an 8% decrease in production compared to 2024, primarily due to lower wind and hydro generation. This was partially mitigated by new capacity and higher electricity prices.

Currency Depreciation Impact in Latin America

The financial performance in Mexico, Brazil, and Argentina was adversely affected by currency depreciation, which impacted Naturgy’s overall results in these regions.

Supply Business Margin Pressure

Naturgy’s supply business experienced a 16% decrease in EBITDA to EUR 500 million, driven by incremental margin pressure, increased competition, and regulated tariffs.

Forward-Looking Guidance

Looking ahead, Naturgy provided robust guidance for the remainder of 2025. The company expects to maintain its strategic focus on value over size, organic growth, and a strong balance sheet. With an EBITDA of EUR 4.21 billion and net income of nearly EUR 1.7 billion reported for the first nine months, Naturgy is well-positioned to continue its strategic initiatives. The company plans to maintain a total DPS of at least EUR 1.7 per share annually, with the second 2025 dividend set for payment on November 5.

In summary, Naturgy Energy Group’s earnings call highlighted a balanced narrative of achievements and challenges. While the company has made significant progress in increasing liquidity and maintaining financial strength, it continues to face pressures in renewable generation and currency impacts in Latin America. Nevertheless, Naturgy’s commitment to its strategic plan and dividend targets remains steadfast, providing a positive outlook for the future.