Grenergy Renovables SA (STU:5GR) Q2 2026 Earnings Call Highlights: Record Half-Year With 55% ...

Negative Points

• Grenergy Renovables SA ( STU:5GR ) experienced delays in commissioning large plants in Chile, including Gabriela and Elena, by 2-3 months, impacting the timing of revenue recognition.

• The company recorded a EUR10 million impairment on its pipeline due to project reviews, indicating potential challenges in project development or permitting.

• Net debt to EBITDA remains elevated at 4.6x, although improved, and the company continues to carry significant debt to fund its aggressive growth plan.

• Grenergy Renovables SA ( STU:5GR ) faces regulatory uncertainty in Spain, with the government's proposed Royal Decree potentially creating an unfavorable environment for renewable development.

• The company's share price does not fully reflect its fundamentals, prompting a EUR50 million buyback, which may signal limited organic investment opportunities or a need to support the stock.

Q & A Highlights

Q: On the Iberian Oasis, the strategy seems to be buying ready-to-build projects. How does that affect CapEx and IRR outlook, and what is the market for those projects like? A: David Ruiz de Andres (CEO) explained that the EUR3.7 billion CapEx plan remains in line with May guidance, with roughly 45% going to Europe across Greenbox and hybrid plants. The value per megawatt for acquired projects is close to zero because developers facing drastic changes in PV conditions want to exit; Grenergy typically buys the projects, changes the bonds, and in some cases repays part of the CapEx already invested under CP conditions. Permitting for hybridization takes about 8-9 months, with connection expected by end-2028. He noted the projects are being acquired at even lower CapEx than initially expected, which is IRR-accretive, but availability is limited since many projects have CODs in 2030 or cannot be hybridized (no grid charging demand).

Q: What is left in the asset rotation program after Gabriela, and do the new acquisitions increase the need to sell more assets? A: David Ruiz de Andres (CEO) said everything is according to plan. When the 1-gigawatt Spain target was announced, only 200 megawatts (Escuderos) existed, so 800 extra projects had to be sourced from developers, and not every project is eligible they need grid demand to charge batteries. They are halfway there, with no extra rotation needed. Gabriela and Colombia represent about 30% of the EUR800 million target, and Grenergy keeps exploring rotations in several jurisdictions.

Q: Can you give more detail on the BESS tolling agreements how is that market and how are they structured? A: David Ruiz de Andres (CEO) said every tolling agreement differs by market. The two closed in Spain (Oviedo and Escuderos) are day-ahead hedges via a financial product for 12 years, with upside from frequency regulation, secondary/tertiary markets, tension market, and technical restrictions. Other tolling agreements under negotiation in Germany, Italy (MACSE), Poland, and the U.K. will be more complete, covering more than just day-ahead. He added that structures can be fixed price or a floor plus revenue sharing with the offtaker, and that so far the closed deals are fixed prices.

Q: Regarding the new share buyback, how do you prioritize it within capital allocation, and how will shares be used between cancellations and incentive plans? A: David Ruiz de Andres (CEO) said the buyback was included in the May plan of up to EUR100 million in shareholder remuneration, with this program capped at EUR50 million and a maximum of 500,000 shares (about 1.7%-1.8% of total shares). The trigger was the larger upside seen in the share price versus a few months ago plus the materialization of Gabriela (around USD150-160 million inflow) and progress on other rotations. Execution is limited by a percentage of traded volume and requires weekly CNMV reporting; it is Grenergy's fourth buyback program, following three successfully executed before.

Q: Can you provide an update on GR Data versus the May investor update, and your view on Spain's Royal Decree and the data center opportunity? A: David Ruiz de Andres (CEO) said GR Data is a key growth area; Grenergy is seeking the right partner for its projects, has mandated a large U.S. bank, and is advancing well close to ready-to-build for the first phase of South Santiago. He highlighted strong Chilean government support (Chile Day) and hyperscaler interest in AI training in Chile, calling Atacama Data a flagship project. On Spain, he said the excess regulation proposed in the government's latest draft is not good for industry development.

Q: What is PPA demand like currently, both for the remaining Atacama phases in Chile and for the new Iberian Oasis projects? A: David Ruiz de Andres (CEO) said Chile is more mature and Grenergy has nearly contracted everything needed for its 2028 plan, with only Antofagasta (expected 2029) outstanding. GR Power now acts as in-house offtake, selling to large incumbents and mining companies directly, and may become investment grade if it issues bonds and includes the Pelequen plant the culmination of Grenergy's transition to an integrated utility. In Spain, deals are being closed with investment-grade counterparties; pure solar PPAs are more challenging, but flexible products like Greenbox and night PPAs attract strong interest, with several tenders open and 8-9 interested offtakers.

Q: What were the key financial highlights for the first half of 2026? A: David Ruiz de Andres (CEO) said it was the best half year to date, with all metrics growing double digit. CapEx closed near EUR300 million and is expected to decrease significantly in the second half as batteries and storage arrive for Teno, Tamango, Planchon, Monte Aguila, and the first hybrid stand-alone projects in Spain. Net debt to EBITDA fell to 4.6x from 8.1x in the previous quarter, mainly due to the Gabriela closing, which affected both EBITDA and debt deconsolidation.

Q: What drove revenue and EBITDA growth in the period, and what is the outlook for the second half? A: Daniel Herrera (Chief Strategy and Capital Markets Officer) said revenue and EBITDA rose 55% year-on-year, boosted by the Gabriela capital gain of at least USD120 million in Q2, with up to USD150 million more expected in the next period. Energy EBITDA and revenues are moving up, with Elena a major contributor in Q4, and the GR Power retail division growing as more contracts come online (revenue EUR43.9 million, EBITDA EUR1.5 million). Total CapEx was EUR275 million, mainly in Central Oasis, and is expected to add at least EUR600 million more before year-end. A small EUR10 million impairment was booked related to pipeline review.

Q: How is the balance sheet and leverage positioned, and why launch a buyback now? A: Daniel Herrera (Chief Strategy and Capital Markets Officer) reported a solid cash position of EUR272.7 million versus EUR305.4 million at the start of the year, despite EUR275 million invested, with a EUR110 million net working capital impact mainly from Gabriela proceeds received in Q3. Total leverage stands at 4.6x, or 3.8

For the complete transcript of the earnings call, please refer to the full earnings call transcript .