Ladies and gentlemen, thank you for standing by. I am Gail, your host coordinator. Welcome and thank you for joining the Public Power Corporation Conference Call to present and discuss the six months' 2025 financial results. At this time, I would like to turn the conference over to Mr. George Stassis, Chairman and CEO, Mr. Konstantinos Alexandridis, CFO, and Mr. Ioannis Stefos, Head of IR. Mr. Stefos, you may now proceed.
Hello everyone, and thank you for joining us today for the 2025 first half results presentation. We will begin with an overview of the group's results from our Chairman and CEO, Georgios Stassis, and we will continue with the presentation of the financial performance for the period from our Group CFO, Konstantinos Alexandridis. Following the presentation, we will open the floor for your questions. For any follow-ups that may come up after the call, we at our IR department are at your disposal to further discuss. With that, I would like to hand it over to Georgios. Please.
Hello to everybody, and thank you for joining our earnings calls today. We have reported a solid set of results for the first half. As we can see in slide six, EBITDA has reached EUR 1 billion, marking a 7% increase year on year, driven by strong performance in the second quarter following the improvement of wind conditions, as well as the overall better performance of our integrated business. At the same time, we keep increasing our investments, with the focus being on renewables and distribution projects, which, along with flexible generation projects, cover the majority of our capital spending. Installed capacity in renewables has reached 6.3 GW at the end of June, while at the same time we have another 3.7 GW which are already under construction or in the ready-to-build stage or in the tender stage.
However, what is more important is that during the second quarter of this year, we have been able to further mature our pipeline by shifting 900 MW of renewable projects in the under-construction phase from the earliest stage of development. Lignite continues its declining trend, having now a participation of 14% in our energy mix, which, given its low competitiveness compared to other technologies, is our path towards full phase-out in 2026. Proceeding to the next slide, slide seven, our renewables installed capacity has recorded a significant increase of 34% or 1.6 GW year on year, representing now 50% of our total capacity, a percentage that will keep increasing given our significant investments in renewables, along with the full phasing out of lignite next year.
Apart from renewables, we have been also putting a lot of effort in flexible generation investments, which is more and more needed in the electricity system, given both the high penetration of renewables but also the volatility of the electricity market in the southeast European region, but we are also increasing our investments on the regulated part of our business in our distribution networks increase in Romania, given that we can enjoy stable and attractive regulatory frameworks in both countries. Even though we have been increasing our footprint in terms of solar and wind, this has not been reflected yet in CO2 emission intensity, which has recorded a slight increase versus last year due to increased output from gas power plants combined with a lower generation of hydro power plants.
Moving now to generation business on slide eight, total installed capacity has increased to 12.8 GW, driven by the significant addition of renewables during the last year, outweighing the reduction of lignite capacity. Our total generation output has increased by 5%, mainly driven by higher gas-fired generation, which has covered the lower hydro output as well as higher exports. In addition, wind and solar output has increased by 40% and 17% respectively compared to the first half of 2024, reflecting both the addition of new capacity and the improvement in wind conditions in the second quarter of 2025. In terms of generation market shares, there has been no material change in Greece, with our share standing at 32%. In Romania, our market share in renewable generation has increased to 23% this year compared to 14% a year earlier, following the addition of 700 MW of renewable capacity, mainly wind.
Scope 1 CO2 emissions have slightly increased, mainly due to the higher output from natural gas units and the commissioning of the Ptolemaida 5 lignite unit in the second quarter of last year. However, going forward, we expect improvements since we will cease our lignite operations by the end of 2026. Now moving to page nine, let me highlight the key areas of progress that we have achieved in the second quarter of 2025 in the renewables rollout plan. Building on the momentum from the previous quarters, we have completed the construction of another 83 MW in the Ptolemaida solar park, targeting to conclude the construction of the remaining 100 MW by the end of the year. This is the largest single solar PV project in Greece, in the former lignite mine in the region, showcasing that energy transition can be a win-win for both PPC and the local communities.
Most importantly, another 871 MW of renewable projects from various technologies have entered in the under-construction stage, getting us one step closer to the achievement of the targets we have set in our business plan. Starting from Greece, our home country, we have started the construction of 372 MW solar in various areas in northern Greece, including two new solar projects of 567 MW that we are co-developing with RWE. We have also started the construction of two new wind parks with a total capacity of 71 MW, 16 in Rhodope, 11 in Livadaki, Fokida, as well as 98 MW of two standalone BESS battery projects in Meliti and Ptolemaida that we have discussed in our first quarter 2025 results presentation back in May.
But we are also active in hybrid projects such as the 4 MW solar plant in Astypalea, a Greek island, which is also combined with a battery energy storage unit with a total capacity of 14 MWh . Apart from Greece, we are also progressing our plants in the border region of southeast Europe, having initiated the construction of 327 MW in total, including solar, wind, and batteries. Next, let me continue with our update on certain renewable projects currently under construction across Greece, Romania, Italy, and Bulgaria. Starting with solar projects in slide 10, in Greece, we continue the strong momentum with two projects in former lignite mines, the 100 MW in Ptolemaida and the 250 MW in Megalopolis, with active deployment of panels in both sites. Photos from the field show the progress so far, highlighting advanced installation stages.
In Romania, Project Kinisi and Project Mosteni 4, 210 MW in total, with the first one being very close to completion and the second one in advanced stage of construction. And in Italy, another two projects under construction of 27.5 MW in total, being at the stage of infrastructure and mounting. Altogether, these six projects total more than 580 MW under construction, a tangible reflection of our on-the-ground process progress. Moving on slide eleven for additional solar projects under construction and some color on hybrid projects as well. In the left part of the slide, we showcase two PV projects in Italy and Bulgaria, Project Comacchio of 12 MW and Project Kapana of 88 MW, supporting our expansion of the broader region of southeast Europe.
In the right side of the slide, two hybrid projects, Project Colosseum in Bulgaria, which is a hybrid system with 165 MW of solar and 25 MW of batteries, and Project Astypalea in Greece, a small hybrid facility in Greek island, combining electricity generation and battery storage. Moving on slide twelve for some color on wind projects. In Romania, the Prowind North project with 140 MW is one of the largest onshore wind developments in the regional portfolio. In Greece, we are advancing two wind projects of close to 100 MW, aiming to increase our footprint in a technology that we are missing in the country. And in the next slide, slide thirteen, let's have a look at how we are integrating energy storage into our strategy.
In Greece, we are developing two grid-scale storage projects of total capacity of 98 MW, and in Romania, we have initiated the construction of an additional 9 MW batteries, marking a significant first step in the addition of flexibility to the grid of the country. Apart from supporting renewables integration, batteries offer a hedge against volatility by capturing value from price fluctuations while increasing assets' flexibility and long-term returns. All in all, these pipeline projects evidence our commitment to increase our clean energy portfolio and diversify our footprint both in terms of technology and geography. All these are summarized in the next slide, slide fourteen, where we can see where we stand in terms of the 11.8 GW target that we have set for renewables in 2027. As I mentioned earlier, we are currently at 6.3 GW in renewables, following the 800 MW additions in the first half.
We continue to mature our pipeline, having shifted approximately 900 MW to another 900 MW to the under-construction stage from various phases of development, mainly from the ready-to-build, but also from the permitting and engineering. As such, we have projects of 3.7 GW in total that are under construction, ready-to-build, and tender process stage. Therefore, overall, we have 10 GW either in operation or secured, which corresponds to 85% of the capacity that we target for 2027. This is a trend that we expect to continue and practically intensify as we keep working on various projects both in Greece and abroad. Moving now to the retail activity in slide 15, which provides an overview of our retail operations and key market dynamics in our two core geographies. Starting with electricity demand trends, demand remained practically stable both in Greece and Romania.
PPC's electricity sales marked a slight increase compared to the same period of last year, reflecting the strength of our retail positioning and the resilience of our customer base across both markets. I will provide more color on the retail activity in the next slide, slide 16. Competitive landscape in Greece prevailed in the first half of 2025 with elements of market consolidation, aggressive pricing, and heavy advertising. PPC's market share and churn remained practically stable, holding the leading position in the market. Continuous sales strategies that shielded our customer base and new products that further diversify our offering portfolio were evident. Firstly, we announced the new offering of MyHome Enter 2, a residential fixed supply charge electricity product with a dual zone pricing that offers security for two years and applies competitive billing rates in both regular and reduced consumption zones.
In addition, as our synergy with Kotsovolos has continued to evolve, we introduced a service certifying the safety in the electrical installation of a property, increasing further our value-added service penetration. Finally, with a bold launch and strong in-store presence, we made the powerful debut of internet-only services over the PPC FiberGrid FTTH network in the Attica region. A faster and stable internet for all digital needs through three different ultra-high-speed plans and competitive prices was launched, capturing a broader spectrum of offerings other than commodity. Results up to now are encouraging, depicting the market dynamics going forward. I will provide more color on the overall telco business in the next slide. With respect to our store renovations, this progress is as planned, targeting to more than 50 renovations for 2025.
Switching our focus to Romania, the recent removal of price cap is driving market dynamics, and PPC is closely monitoring the churn evolution by putting in place all the actions needed, such as targeted campaigns of customer retention with tailored offers for specific segments. Launch of dedicated green energy tariff was performed, ensuring supply of renewable energy along with features like CO2 savings information. As our focus remains in providing solutions to our customer base, the implementation of Energy Coach platform was inaugurated, assisting customers to optimize their energy use and maximize efficiency also in Romania. Lastly, as value-added services are still ongoing, an end-to-end digital channel was created, empowering even more our other-than-commodity portfolio. We expect that the second half of 2025 will be challenging for the Romanian market, as competition is expected to intensify due to the lifting of price caps.
We have adjusted accordingly our plans and actions to introduce valuable offerings to our customers for 2025. Finally, as per Greece outlook in the second half of 2025, we designed new initiatives that will further enlarge the portfolio of offerings, leading to a better and superior customer experience for our base. Turning now to slide 17 for an update of our telco business and more color on recent retail fiber launch. We have launched our new internet-only services over our FTTH network, offering through an end-to-end fiber connectivity. With high speeds guaranteed and competitive prices, we are entering the market with a strong value-driven proposition. Installation is fast, free, and includes tailored setup for each home. The service is now available to over 600 households in Attica, setting the foundation for further expansion.
Our fiber grid rollout is built on a fully 10 gigabit capable FTTH architecture, future-proofed for even higher speeds. Each home enjoys a dedicated fiber line to the cabinet, delivering today's high availability and tomorrow's unlimited scalability. In under two years, we have covered 1.3 million households and businesses, almost double the number of homes covered compared to the end of 2024, making FiberGrid one of Europe's fastest-growing state-of-the-art networks in terms of deployment. Our construction plan remains on track, and we are confident in meeting our year-end coverage target of 1.5 million households. Moving on slide 18, let me provide a bit more color on the distribution business. CapEx remains strong in the first half of 2025, rising by 25% year-on-year, continuing the upward trend of previous years.
This growth is particularly evident in Greece, where digitalization needs remain high, as also reflected in the lower smart meter penetration compared to Romania. However, the smart meter rollout now underway is expected to accelerate this transformation. It's clear across Europe that substantial investments are needed to support digitalization, renewables integration, and system resilience, and both Greece and Romania are no exception. Towards this end, during the last years, we have been increasing investment in our distribution networks while making sure that we secure the necessary regulatory support for stable, attractive returns. Both countries follow the European Union target model, have a RAB-based model with remuneration based on WACC and long-term regulatory periods allowing for optimization of planning and operations.
WACC is at 6.94% in Romania, providing for an additional 1 percentage point return for digital projects, while in Greece, the decision for the WACC is imminent, and based on our discussion with the regulator, we are confident that we will be able to secure the return needed for our investment plan. Operationally, performance continues to improve. Smart meter penetration has increased in both countries, and both SAIDI and SAIFI indices have decreased in Greece and Romania as a result of our ongoing efforts to enhance the reliability of the networks. Moving on to slide 19, we can see that PPC initiatives have translated into measurable progress in key areas, resulting in the continuous improvement of several ESG ratings and scores.
Towards this end, following the recent upgrades by CDP and S&P Global and ISS, one more global rating agency, Sustainalytics, has assigned an improved score to PPC, reflecting a lower risk profile. Specifically, our risk profile has shifted from the severe risk category into the high risk category, marking a step towards better rating, but still being moderately above the industry average. Carbon-owned operations, emissions, effluents, and waste and community relations are notably material ESG issues for Sustainalytics, and as we progress with our decarbonization plan, we expect to further improve our score.
The recent score improvement reflects tangible progress in several key areas, notably in the below categories: community relations, showcasing engagement with communities. Carbon-owned operations, indicating improvement in management of risk linked to greenhouse gas emissions. Occupational health and safety, recognizing our efforts for a safer work environment. Product governance related to the management of the entire life cycle of products. And land use and biodiversity. These improvements not only reflect our operational commitment to sustainability, but also support de-risking of our businesses and long-term value creation for all our stakeholders. We keep engaging with ESG rating agencies to communicate our performance on ESG issues that will also be reflected in the respective scores and ratings. Let me now pass it on to Konstantinos for the financial performance analysis.
Thank you, George, and good afternoon to all.
I'm now on slide twenty-one for a brief overview of key energy commodity trends in the first half of 2025. Starting with gas, TTF prices rose by 39% year-on-year, averaging about EUR 12 per megawatt hour, above the same period last year. The increase was driven by early concerns around Ukrainian transit risks, cold weather, and supply constraints. Prices briefly corrected mid-February as geopolitical sentiment improved, but regained momentum in May and June with renewed supply concerns and geopolitical tensions before easing again following the de-escalation in the Middle East. Turning to carbon, EUA prices were up by 10% year-on-year, with an average increase of EUR 6.8 per ton. The market was initially supported by tightness in gas supply, but saw downward pressure in March and April due to microeconomic uncertainty and trade tensions.
However, prices recovered in the second quarter following easing of tariffs and rising gas prices before softening again towards the end of the period. Finally, looking at power prices, we saw strong year-on-year increases, with day-ahead market prices up by 37% in Greece and 43% in Romania. These were driven by higher gas and carbon prices, weather-related volatility, and broader commodity movements. While we saw some softening in April and late June, power prices remained elevated overall. Moving now on to slide twenty-two, where we can see the key financial figures for the period. Solid operational profitability for the first half of 2025, with adjusted EBITDA amounting to EUR 1 billion, increased by 7% compared to the first half of 2024.
Following a resilient performance in the first quarter, with headwinds related to hydro and wind, as well as the soft performance in the distribution activity, mainly in Greece, in the second quarter, we experienced improved wind conditions and a normalization of the profitability in Romania, resulting in a stronger performance for the quarter. Adjusted net income post-minorities amounted to EUR 0.2 billion, increased by 9% compared to the first half of 2024. Investments at EUR 1.3 billion, with a focus remaining in the renewables and the distribution business. Free cash flow was negative, reflecting mainly the acceleration of our strategic investments in line with our business plan, as well as some seasonal working capital effects. Net debt at EUR 6 billion at the end of June, with net debt to EBITDA ratio at 3.2 times, in line with our strategic priorities as we progress our investment plan.
Moving on to slide twenty-three and the revenues evolution of the group, where we can see a 15% increase. A major contributor to this increase is the energy-related sales, with approximately EUR 0.5 billion, almost fully justified by the higher power prices we experienced both in Greece and Romania. The remaining increase of EUR 0.1 billion is mainly driven by the additional Kotsovolos's contribution. Moving to slide 24 for the EBITDA performance by business activity. As you can see in the left side of the slide, there is an increase in EBITDA compared to the first half of 2024 by 7%, with the integrated business offsetting delays in distribution performance, especially in Greece. I will provide more color on this in the coming slides. International contribution in terms of EBITDA, mostly driven by Romanian operation, stood at EUR 193 million.
Moving now to slide twenty-five for the detailed view of the integrated business, broken down between Greece and international. Starting from Greece, our performance has improved by EUR 132 million, with the main driver being higher profitability in the generation activity as a result of higher power prices, despite the lower output from hydros, with increased generation from our natural gas units contributing as well. Our retail arm, profitability, has remained at the same level as in the first half of 2024, absorbing competition dynamics, higher power prices, and achieving better collection rates. In Romania, first half 2025, profitability has slightly increased due to the higher installed capacity and despite weaker wind conditions we experienced in Q1. Throughout the first half, we operated under the energy crisis measures, which were finally abolished as of 1st of July. Proceeding to slide 26 for a view of the distribution activity.
With regards to Greece, the delay in the implementation of the new distribution network usage charges that we had also discussed in Q1 results explains the variance compared to the first half of 2024. The new network charges have been approved by the regulator and are already implemented as of 1st of July. For this reason, we feel comfortable for the full-year performance of distribution in Greece. In Romania, the distribution business marked a slight decrease, mainly driven by seasonal effects. Following the lower performance in the first quarter of this year as a result of lower distribution volumes and higher network losses cost due to increased power prices, there has been a reversal of the trend in the second quarter. Specifically, in Q2, we had the opposite effects with higher distribution volumes and lower power prices compared to the respective period of last year.
Proceeding to slide 27 for a deep dive on the EBITDA to net income bridge. The improved performance in terms of EBITDA that we discussed in the previous slide has also been reflected in the bottom line, with adjusted net income after minorities standing at EUR 195 million, that is a 9% increase versus last year. In terms of EPS, the year-on-year increase is even higher, reaching 13% given the cancellation of 13 million shares that we did at the end of 2024, as well as the ongoing share buyback program. Adjustments in net income include special one-off items like the ones that we have been discussing in previous quarters, such as the provision of incentives for voluntary exit schemes, PPAs valuation, as well as the incremental depreciation from the revaluation that we did in December 2024.
Moving on to slide 28 for the analysis of the investments that reached EUR 1.3 billion. Significant investments on the distribution side, which amounted at EUR 0.6 billion, in line with our strategic priority to enhance and digitalize our networks. Regarding renewables, we have reached EUR 0.4 billion, with a figure expected to further increase in the coming quarters as we progress with the construction of renewable projects. We are also investing in flexible generation at a higher pace, given that the new CCGT unit in Alexandroupolis is underway as well as in batteries. Overall, renewables and flexible generation investments represented 45% of the total CapEx for the first half of 2025, and we have also the capital deployment for the rollout of the fiber-to-the-home network in Greece, which, as we saw earlier, has already covered 1.3 million households and businesses.
Let's now move on to slide 29 for the free cash flow analysis of the group. Our strong operational performance absorbed the seasonal working capital outflow, a typical trend for this time of the year, leading to a strong FFO, reaffirming the underlying strength of our cash-generating capability. Specifically for the working capital, this amounted to EUR -0.2 billion, mainly driven by two elements, as you can see on the right-hand side table. Firstly, the seasonality of the CO2 emission rights, and secondly, the timing of the Greek state advance payments settlement. Therefore, as it was the case in previous years, we expect these two seasonal effects to normalize in the second half of the year. With respect to customer trade receivables within working capital, and despite the improvement in collection patterns, as already mentioned, the increase in energy prices affecting average customer bill resulted in increased customer receivables.
Overall, our free cash flow is in line with our projections, remaining in negative territory as we progress with our investment plan by deploying capital into strategic projects. Turning to slide 30, let's have a look at the debt profile and liquidity position. Despite our ongoing investment program, liquidity remains strong, backed by a well-balanced mix of fixed and floating rate debt. Our ongoing initiatives to secure more favorable financing terms, along with favorable interest rate trends, have led to a lower average cost of debt, which has declined for another quarter, standing now at 3.9%. We also maintain liquidity headroom with EUR 3.4 billion in undrawn credit lines as of June 30th. Our debt maturity profile is quite balanced, as you can see in the slide.
Debt maturities for the next two years stand at EUR 2.1 billion, out of which EUR 775 million refer to our sustainability-linked bond that matures in March 2026. And towards this end, we are closely monitoring the market to identify the proper time window for the refinancing. The remaining debt maturities relate to the repayment schedule of long-term loans and revolving credit facilities from committed credit lines that will be refinanced. Next, on slide thirty-one, for the net debt evolution in our leverage position. Net debt and, accordingly, net leverage have increased, as anticipated, given the implementation of our investment program in line with our business plan. With regards to our net leverage, which stands at 3.2 times, we'll move along our plan, being committed to our financial policy and the 3.5 times ceiling we have set.
Next, on slide thirty-two, for an update on where we stand in terms of our guidance for the full year. Based on the first half performance, we have already delivered 50% of the EBITDA guidance for 2025. Having said that, we remain confident in achieving the full-year targets of EUR 2 billion in adjusted EBITDA and over EUR 0.4 billion in adjusted net income after minorities, leading to an EPS of more than EUR 1.1, demonstrating a more than 11% increase versus 2024. These results highlight our continued commitment to shareholder returns, with a dividend per share expected to increase to EUR 0.60 per share from EUR 0.40 in 2024, an increase of 50%. Let me now pass the floor to George to conclude today's presentation.
Thank you, Konstantinos. Proceeding with slide thirty-four, for a few words on the shareholder remuneration we have achieved.
Since our latest capital markets day, we have reset our dividend policy to a dividend per share approach in order to provide a clear and transparent guidance on future dividends, but also to showcase our confidence in the achievement of our net income targets. Following the dividend payment for 2023, we distributed at the end of July a dividend per share of EUR 0.40 for 2024, marking a DPS increase of 60%. This distribution is fully in line with the guidance we have provided in our capital markets day back in the previous November, based on which we aim to reach the EUR 1 dividend per share in 2027. On top of this, we continue our buyback program, having currently treasury shares, which correspond to 4.9% of our share capital.
In this number, we need to also take into account shares of another approximately 5% of our share capital that have been acquired within the existing program, part of which was canceled, another part was used in transactions with Copelouzos-Samaras Group, and another one was granted to PPC executives for the achievement of the LTI plan targets. Thus, given that the current program approaches to its conclusion, the AGM provided a few weeks ago its authorization for a new plan to be initiated once the existing plan is concluded, and most probably this will happen within September or October. The terms will be the same as the current plan, that is, up to 10% of the share capital, including the shares already owned and with a two-year maximum duration. In our concluding slide, slide 35, let me try to wrap up with a few final points.
We delivered solid results in the first half of 2025, driven by a strong second quarter, which reflects the consistent execution of our strategic priorities. Investments reached EUR 1.3 billion, with a clear focus of strengthening our distribution networks and accelerating the rollout of renewable projects, both central pillars of our growth strategy. Our balance sheet remains robust, giving us the financial flexibility needed to support our ambitious investment plan. Renewables now represent 50% of our total installed capacity, and we are actively expanding this further. In the second quarter, only approximately 0.9 GW of additional capacity progressed into the under-construction phase as our pipeline continues to mature at a steady pace. We are also making tangible progress on our decarbonization goals and remain firmly on track to phase out lignite from our energy mix by 2026.
All of this underpins our ability to combine a compelling growth story with attractive shareholder returns. We are reiterating our full-year 2025 targets, which remain fully within reach based on our year-to-date performance. Looking ahead, we will provide a more detailed view on our medium and long-term outlook at our upcoming capital markets day in London this November. We will share the exact date with you in September. Hope to see you all there. Thank you to everybody, and now looking forward to get your feedback and your questions. Thank you very much.
The first question is from the line of John Karidis with Deutsche Bank. Please go ahead.
Thank you. Good evening to you. Thank you for letting me ask a question again. I just wanted to ask a question about the telecoms business in Greece, please.
I'd like to know, please, by the end of 2025, what is likely to be the aggregate amount of money that you've spent on this project, both in terms of CapEx and OpEx? I see you do things like TV advertising, for example, so it'd be interesting to figure out what the total sum is. And how many customers do you think you should have by the end of the year in order to feel that this money has been well spent to date? Thank you very much.
Well, we have spent something like around EUR 250 million to date on this project yet, and we had a very well reception. I mean, we launched, it's almost one and a half months that we have launched.
Just to give you an idea, we are receiving something like. I mean, we have a very small area that we have launched, around 550,000 lines area, geographic area. We have something like averaging around, in this one and a half, 40 days, 4,000 applications, people requesting the service in the specific area. Of course, we are moving with connecting them. We are very happy because it's going very well. This is around 800-1,000 per day in a very small area. We see how it goes. I mean, this is not our core business for us. We feel very happy the way we launched it. We launched on purpose within the summer so we can have the time to digest properly the applications. We were expecting to have a good reception, and we did so.
So, August, traditional holidays in Greece, slowing down all activities is helping us mature our connection activity. And we will be moving gradually to the fourth quarter of this year. And as we will be moving there, we will be learning and improving our service day by day, the way we, our passive cycle and our activity. So far, so good. We will see how the year will go. We are very optimistic, but we are not right now moving on a projection on a month-by-month basis. Our overall activity, as we have said, is an investment of between EUR 600 million and EUR 700 million, and we want gradually in the coming years to reach 400,000 - 500,000 customers. And I think the way we are starting, given the very small footprint we opened, we will be very soon increasing the footprint year by year.
I mean, in terms of infra, we will be closing the year with 1.5 million of coverage. So targeting at 3 million in the coming years, I think by 2027 we will definitely be at around 3.5 million coverage. So as the geography will increase, the applications will multiply, and the connections will bring the result we want. The initial question mark we had always was, what if the Greek market would have a good reception on only internet service? And it seems it does. We are very happy with that, and we will keep going. Thank you.
Thank you very much.
The next question is from the line of Nestoras Katsios with Optima Bank. Please go ahead.
Hello, and thank you for taking my question.
So considering that you expect a better performance in your distribution business in the second half and also the solid performance of the rest of the businesses, is there any headroom for exceeding the guidance of EUR 2 billion EBITDA this year? Thank you.
You are very right. Underlining that we are expecting a better performance on the distribution is going well. Also, our renewables progress is going well. However, I have to remind everybody that we had the first quarter where we didn't have the water we wanted. Our hydro operations were not optimum because simply this year does not have a good hydro. So we recuperated our result in the first half. We did a very good result, I believe, and we are on track to reach the annual target.
In other circumstances, I would have guided higher, but because the water will not improve throughout the year, we will be waiting from November now to see if we will have rains or not. That's why right now we want to be very secure in the sense that we can definitely deliver what we have promised, and we will see how the year will evolve. Thank you.
Okay, thanks.
The next question is from the line of Clément Lefebvre-Ballerie with Cottes Filles Gestion. Please go ahead.
Hello. I have two questions. Can you walk us through first the work in Greece and in Romania? And do you have an idea of the leverage at the end of this year? What will be the leverage at the end of this year? And when the leverage will decrease, in 2026 or in 2027? Thank you.
The work in both countries are in the region of 7%. And with respect to the net debt, the projection that we have at this point of time is close at the region of EUR 6.7 billion, the way we operate and the investments that we have planned for this year.
Okay, but in terms of EBITDA, net debt on EBITDA, now it's 3.2 times. What it will be at the end of 2025, and will it decrease next year?
The approach would be close to 3.3 times. And the way that we have set up our business plan, we do not expect things to be de-escalating from this 3.3 because we need to keep investing, and this is the plan that we have set. Therefore, our business plan is about above 3 times, but for sure below the 3.5 times that we have set as a ceiling.
Okay, thank you very much.
Thank you.
The next question is from the line of Bram Buring with Wood & Co. Please go ahead.
Yes, sorry. With regards to the distribution business, which has been weak, so you're flagging an improvement in distribution EBITDA in the second half of the year, and this is on the back of a change in Greek tariffs. So you've received a tariff, you've received an increase in tariffs for the second half of the year. Is this the way to understand it?
Yeah, the way I think this is. I don't believe the operation in distribution is going very well. Actually, it's going as per our plan.
The issue is that from the regulatory point of view, the tariffs, you execute the CapEx, and as it is happening in all the countries, therefore, the regulator is approving initially the plan and then is checking and approving that you correctly did the investments you promised, and in this rolling process, which is happening every year, the tariff had to increase. We were waiting this to be increased. We were waiting to increase a couple of months earlier. We got the approval, and it is already agreed, and it will apply, therefore, the increase in the second half, so this is not something that we are waiting. It is already, let's say, determined. That's it, so the tariff is increasing as a result of the past investments, as the regulatory is working, therefore,
But WACC has not changed, if I understand what you're saying correctly.
WACC has not changed.
Yeah. Okay. That's what I wanted to confirm. So where is your regulatory WAC at the moment?
At 7%, which is in line with.
Sorry, regulatory RAB, I meant to say, if I didn't.
Can you repeat?
Yeah. What RAB is the government or is the regulator recognizing for you?
RAB is talking about around EUR 3.9 billion.
EUR 3.9 billion. Okay. And with regards to integrated markets in Greece?
Greece. I'm referring to Greece.
Yeah, yes, yes. Of course, of course.
Romania is an additional distribution.
Yeah, of course. And in regards of the integrated margin in Greece for the third quarter, let's just say the second half of the year, can you maintain these very high margins that you have now in view of the competitive market and in view of the recent trends in power prices?
Well, as you said, these are margins from the integrated business.
It's not coming from either the supply or the generation or the trading on its own, but it is a mix of the integrated position. And because of our overall position in the energy trading, in the generation, and in the supply, in all, in the total integrated position, therefore, our answer is yes. We are absolutely certain because we have our internal natural edges, no matter the weathers, let's say.
Okay. So you will maintain similar EBITDA in the second half as you generated in the first
in the integrated segment,
okay, despite the weaker hydro and despite poor renewables conditions in Romania?
Yeah. That's why we are giving a guidance to meet the budget as per our plan.
Okay. Thank you.
Thank you.
The next question is from the line of Ella Walker-Hunt with Citigroup. Please go ahead.
Hi. Thanks for taking my question.
I just had one quick one on the price caps in Romania. Now that they've been lifted, I was just wondering what your kind of strategy will be in the retail business in Romania. I guess, is there a similar dynamic in terms of the customers in Romania? As in, are they price-sensitive, or do they act in a similar way to the customers in Greece? And I guess, yeah, what's your strategy in terms of that business going forward?
The strategy is quite simple. I mean, we will continue applying the most competitive prices we have. We have a good position in the market because we have our own strong generation fleet as well. And in the coming years, we will try to add flexibility.
We are already installing batteries, so this will give us the opportunity to participate in the flexibility markets as well, balancing markets and other. We are considering some small gas investments as well. So what I'm trying to say is our overall position is complemented with supply, generation, and renewables and flexibility. Therefore, as a result of this mix, we will continue being quite competitive, I believe. Of course, now that the cap has been lifted, we are seeing some hikes, let's say, some ups and downs in the market, but we are not concerned. I mean, eventually, this will stabilize gradually. And although we had the first month, we saw customer movements, we are not expecting this to be a long-term phenomenon. There will be some turbulence in the market for one or two months or three months, and then things will recover and stabilize again.
This is our overall position. So for one or two or three months, we might see movements in the supply businesses from operator to operator. But on a longer view, still in Romania, we have the fundamentals which we believe will keep us competitive.
Thank you.
Ms. Walker-Hunt, are you finished with your question?
Yep. Thank you very much .
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Stassis for any closing comments. Thank you.
Yes. So I think the company has delivered well for the first six months, delivering the result that we were expecting. I want to stand in the fact that both the two growth pillars, distribution business and renewables business, are delivering properly. These are the important activity.
On the distribution, we have reached a very good rhythm of execution of investments, and we see those translated in tariffs, and this comes eventually in our cash flows. And on the renewables, we are very glad because we are standing at 6.3 GW of installed capacity right now, while an additional four, almost four, are in construction. So adding those, which will execute it, we are already at 85% of our business plan for the three years. So we are very glad we have reached this point in the first six months of this three-year plan. So our execution risk for the coming years versus our business plan is minimal. This is what I wanted to outline. And with that, I would like to thank everybody for participating in our call today. Thank you very much.