Terna S.p.A. Earnings Call Highlights Strong Growth Amid Challenges

Terna S.p.A. Unsponsored ADR ((TEZNY)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call of Terna S.p.A. Unsponsored ADR painted a generally positive picture, highlighting robust financial performance and significant strides in infrastructure projects. However, the call also brought to light some concerns, particularly regarding the stagnant contribution from renewable energy sources and an increase in net debt.

Significant Infrastructure Progress

Terna has made remarkable advancements in its grid development projects, including the Tyrrhenian Link, Central Link, and Sardinian Link. These projects are notable for their innovative designs and the use of advanced technology, which are crucial for sustainable growth. This progress underscores Terna’s commitment to enhancing infrastructure and supporting the energy transition.

Strong Financial Performance

The company reported a 9% increase in group revenues and a 7% rise in EBITDA for the first nine months of 2025. Group net income reached EUR 853 million, reflecting a 5% growth compared to the previous year. These figures highlight Terna’s strong financial health and its ability to generate consistent growth.

Record CapEx Growth

Terna’s capital expenditures reached approximately EUR 2.1 billion, marking a 23% increase compared to the same period last year. This record-setting growth in CapEx is a testament to the company’s aggressive investment strategy aimed at bolstering its infrastructure and operational capabilities.

High Procurement Coverage

The company has effectively managed potential supply chain risks, with 88% of the 2024-’28 CapEx plan already covered by procurement contracts. This high level of coverage demonstrates Terna’s proactive approach to securing necessary resources for its ambitious projects.

Successful Storage Auction

Terna’s first auction under the MACSE framework was a success, awarding 10 gigawatt hours of storage capacity. The auction attracted strong market interest, with bids exceeding demand by more than four times, indicating a robust appetite for energy storage solutions.

Stagnant Renewable Energy Contribution

Despite the overall positive performance, renewable energy sources covered only about 43% of national demand, remaining unchanged from the previous year. This stagnation highlights a challenge for Terna as it seeks to increase the share of renewables in its energy mix.

Flat Interim Dividend

The 2025 interim dividend was approved at EUR 11.92 per share, remaining flat compared to the previous year’s interim dividend. This decision reflects a cautious approach in dividend distribution amidst other financial priorities.

Increased Net Debt

Net debt rose to EUR 11.7 billion by the end of September 2025, an increase of approximately EUR 500 million from the end of 2024. This rise is attributed to accelerated capital expenditures and dividend payments, posing a potential concern for the company’s financial stability.

Forward-Looking Guidance

Terna’s guidance for the full year 2025 remains optimistic, with expectations of achieving revenues of EUR 4.03 billion, EBITDA of EUR 2.7 billion, and a net profit of EUR 1.08 billion. The company aims for approximately EUR 3.4 billion in investments for the year. Despite achieving around 80% of the full-year net income guidance in the first nine months, the guidance remains unchanged due to uncertainties surrounding dispatching incentives.

In summary, Terna’s earnings call reflected a generally positive sentiment, driven by strong financial results and significant infrastructure progress. However, challenges such as flat renewable contributions and increased net debt were also highlighted. The company’s forward-looking guidance remains optimistic, with substantial investments planned to support its growth and energy transition initiatives.