Hello, good morning to you all, and welcome to REN's nine-month, 2024 Results Conference Call. As usual, I'm here joined by Rodrigo, the CEO, and João, the COO. Madalena is still on maternity leave, so I'm still here with João Pedro, who's filling her shoes for the next couple of months also. Let me start going over the presentation. This has been, I'd say, a good, in fact it's very well inside our expectations, a good quarter, but not very, very eventful. If you want to go to slide number four with the key messages, we can go over them. We have EBITDA coming down a little bit, below 2% versus last year. This is slightly better than the first six months, and it's probably more or less in line with what we expect for the full year. No major news.
The main trend in what you were seeing in the first six months is what you are seeing here. And it's mainly also impacted by some positive non-recurrence that we have both domestically and in Chile last year, okay? In terms of net income, and given this decrease in EBITDA, it's coming down also around 12.5%, mainly driven by EBITDA, also by higher financial costs, which were very much expected. They will probably end up a little bit better than we expected given the lowering rate environment that we are seeing. Net debt increased 3%, but it is actually decreasing versus year-end. And it is decreasing, I'd say, at a slightly faster pace than we anticipated, given the fact that we are recuperating tariff deviations at a slightly faster pace also. In CapEx, it's increasing 20%.
We'll talk to you, but we are, I'd say, pretty confident on a positive increase this year, more than we were in the previous call. I think execution has been strong. So we are, I'd say, delivering with the numbers that we promised on the Capital Markets Day this year, okay? I'll pass it on to João to give you an overview of the main operational highlights of the quarter. João?
So thanks, Gonçalo. Good morning to you all. On the operational side, and on slide five, one of the most important issues is the fact that this year, compared to 2023, we had an increase on the hydro production from 23%- 31%. And that's together with the fact that solar is picking up, in Portugal. We managed to raise the renewables penetration from 55%- 73%, in this first nine months of 2024. On the natural gas side, what we see is the flip side, which is the fact that, due to the increase in electricity generation from renewables, we decrease the electricity generation from combined cycle plants. And as a consequence, the volume of natural gas decreases accordingly. In terms of quality of service of our operations, no big issues to report.
We managed to continue above the thresholds that the regulatory framework gives us on terms of quality of service and on regulatory incentives. And on the regulation highlights, besides the ones that you have reported in this slide, I would add the fact that we received by the end of July the approval from the government of this CapEx related to the Sines industrial area with a significant amount of EUR 536 million to be done on the next years. Moving to slide number seven, you have a bit more detail in terms of the operational figures. And in addition to the ones that I've already mentioned, we see the consumption the electricity consumption increase slightly 1.7%. But if we make the normal correction on the workdays and the temperature, this increase comes to 2.3%, which is approximately what we are forecasting for the full year of 2024.
So an increase in electricity consumption. Another point that is normal, more renewables means inevitably a little bit increase of the transmission losses, but nothing, nothing substantial. And we are also working internally to develop the generation of renewable electricity from solar in our sites, precisely one of the points to compensate this, these losses on the grid. In terms of natural gas, no big issues besides the ones that I mentioned. In terms of availability, quite high, both in transmission and distribution activities, and as well as the fact that we keep assisting a decrease on the consumption, as I mentioned, derived from the decrease on generation from for use of natural gas to generate electricity. And with that, Gonçalo, we'll back to you.
Thank you, João. And so, slide number eight is just the main highlight. I'll jump to slide number nine directly with an evolution of EBITDA. As I said, the main explanations are very much in line with what we had told you in the second quarter. So this decrease in assets and OPEX has much to do with, on one side, a decrease in rates on the gas side. So not only because of the review of the regulatory period, but also the evolution of rates. And also the issue of the OPEX that, as you may remember, last year we had a particularly strong OPEX contribution given the electricity cost at LNG terminal. And this year they are more normalized. And so we have that positive impact this year that we had last year that we don't have this year.
On top of that, you start to see the contribution also on the positive side of solar agreements. It is already around five million EUR at this stage at this quarter. In terms of other revenues, it's mostly own work, given that we are doing more CapEx. So it's normal. It's also services that we render to connect other promoters, and we do that. And it's also some corrections in terms of tariff deviations of previous years. So all of those increase a little bit the other revenues. OPEX. So are coming down a little bit, mainly because of personnel costs. And we'll go to that. And in international, it's mostly driven by the non-recurrent last year of around four million EUR. There is a small decrease in electricity, given that the previous year was also a record year in terms of volume.
But so I'd say that those are the main reasons. So I'd say very much in line with what you had already seen in the first half. In slide number 10, you see the evolution of the rates of return. You see this trend in terms of stabilization of rates and decrease in the last time. And you see mainly that that has a very small impact in electricity, but it does have a larger impact in gas because of the change and the new regulatory period that we started this year. In terms of investment and overall, as you know, this now is going to be the stronger quarter, the last quarter of the year. But what we are seeing is clearly in terms of CapEx pickup. We were in the first half of the year a little bit concerned about some delays of licenses and other things.
Things have now, I'd say, picked up again. And I think we are on the route to achieve the numbers that we had in the business plan. So you'll see, I'd say, a strong increase already in CapEx this year, versus last year, okay? In terms of REN returns, and on slide number 12, this is a little bit what I already told you. So you see in terms of rates, negative impact across the board, but mainly in gas transportation and distribution. And then in terms of asset base evolution, you see positive impact in both electricity and gas. And electricity, as we start to see more transfers to REN, which will, you'll start probably next year, given the strong CapEx this year, you'll start to see a more positive evolution here in terms of asset base.
But in gas transportation, you still see a negative impact, given the decrease in REN that we all know of. In slide 13, and in terms of OPEX, so you are seeing OPEX increasing. As you see, it is basically driven by personnel costs. These are not only driven by salary increases that you still have this year on the back of inflation that came from previous years, but also because we have been making an effort to increase people. We are increasing operational activity. So we have to increase people. And we have been increasing last year, this year. And I would say that next year we will still see that. I think that probably to 2025 will be a top year in terms of growth of people.
And then it will kind of start to level, and we'll probably be at levels that we want to be in terms of personnel. We are now at 753, but still increasing a little bit this year. In terms of external costs, it's what I told you; most of the impact comes from electricity costs. That, in the LNG terminal, I have a positive evolution versus last year. In terms of maintenance costs, there's some delays. So it's decreasing, and there's some delays. And some of them we'll probably see next year. But I'd say nothing material. Most of the impact comes from the electricity costs. Chile, a little bit the story I told you. So the main impact is because of that non-recurrent on in Transemel. If you adjust for that, what you see is that this year in Transemel is a little bit flat here.
Some of the new constructions that we had forecast for this year were a little bit too late. So they are coming online now. So the impact in the year is not going to be that meaningful, given that the new CapEx is basically going to be done next year. So you'll, you'll probably see the, the organic impact of doing the CapEx there in Transemel start to reflect itself more next year and don't expect any major growth, this year. In terms of electricity, there is a slight decrease, given that, last year was a record year in terms of gas volumes. The volumes are a little bit below. That being said, we do not expect that it is much lower than the previous year. It will decrease a little bit, but not by a, a very large amount.
Below EBITDA, in terms of financial results, what I want to highlight is that we, given the lower interest rate scenario that we are now living, see our own average cost of debt coming down a little bit, despite the fact that we refinanced everything with longer maturities. We see now this cost stabilizing. It's now at 2.8%. At year end, it should be at 2.8%-2.7%, around that. We see it more stabilizing at that level rather than the 3% that we had told you about in the Capital Markets Day. So slightly better. In terms of versus the end of the year, it is decreasing, the level of debt. Versus the end of the year, it's decreasing a little bit. Versus nine months on nine months, it's increasing a little bit.
But that was also compensated by the higher dividends that we registered this year. In terms of taxes, the effective tax rate, except for the Special Levy, is more or less in line. This year it's 26%. Last year it was 27%. So it's more or less in line. We recuperated some things last year with this year also. As I said, so no major change, quarter on quarter versus last year. In terms of Special Levy, there are no significant news. But what we can tell you is the things that we have already told you in the past. First, this year we have one, two court cases in the constitutional court as of now. We are now waiting for those decisions to be completely final, which they are not. But we are not expecting them at all to be reversed.
But we are expecting them to be completely final as we are conservative in the way that we treat them. And the second thing that we can tell you is that the government has still included this in the, in the budget as of now for next year. So the preliminary version of the budget still has that. On the plus side, you also have a 1% decrease on the corporate tax rate that is in the budget. And this government is saying that their aim is to decrease 1% in the following years every year. So, at the end of some years, that should have some impact. And 1% is, is 1%. And we should see that flowing through the P&L next year. So in terms of net profit 16, slide 16, it's kind of all of these impacts together. So you have this 12.5% decrease, versus last year.
We'll see how it is at year end, okay? But perhaps a little bit better. In slide 17, net debt. So this is something I've already told you about. So what you see is a very positive evolution. This is mainly driven by a decrease of around EUR 120 million also on the tariff deviations. This was a little bit faster than we anticipated. But even in terms of net debt without tariff deviations, it is decreasing. As we are having now very strong quarters of CapEx, I would assume that without tariff deviation evolution, net debt should be more or less stable on a year-on-year basis. But you should still see some decrease in tariff deviations until the year end, okay? In terms of cost of debt, I already told you.
So I would say that this level 2.7, 2.8 is where we are going to be. In terms of maturities, what you see here is at the end of September. At the end of September, we had not renegotiated all the loans. As I told you, we have now signed all the renegotiations of the loans to extend maturities above five years. We are now not at these accounts, but we are now above five years or 5.3, 5.4 years. We should end the full year at five or slightly above in terms of maturity. So this was the effort that we did and we promised on the capital markets side. In terms of ESG, and not to go into much detail, basically the main news is that very strong decrease that you see there in Scope 1 and 2 greenhouses.
This is on the back of what João told you about the evolution of renewables. So as you can see, there is a strong evolution in terms of greenhouse intensity. The intensity of greenhouse gas emissions is decreasing quite a bit, given the fact that renewables increased to 73%. Last quarter is not expected, and João can comment. But normally it's a good quarter in terms of renewables. Typically, it's not worse than the other quarters. There's already rain. There's wind. So we are not expecting this to change significantly. It could even improve, but we are not expecting this to change significantly. What you can see is that this is clearly putting us very much on track in terms of the evolution of the promise that we made in the capital markets side, okay?
You have a little bit more detail in terms of ESG in slide 20. But as you can see, it's about the 73%. We also expanded our self-consumption. We already certified our network to have hydrogen. So we are all doing all of these tests to increase and to show our commitment in terms of ESG, which has been translated. And you can see that on slide 21 has been translated in terms of the impact that you have in terms of the ratings in terms of ESG, okay? So closing remarks, mainly the main numbers. So this decrease in EBITDA that was already expected. And in net profits, I'd say strong signals in terms of CapEx and good evolution also of net debt.
So I'd say everything much in line with what we said in the Capital Markets Day , very much in line with what we already also told you in the first six months, okay, so with this, I conclude the presentation, and we'll open the floor to any questions that you may have. Thank you.
Thank you. As a reminder to ask a question, you will need to press star 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 11 again. We will now take our first question. Please stand by. The first question comes from the line of Enrico Bartoli from Mediobanca. Please go ahead. Your line is now open.
Hi, good morning, all. Thanks for taking my question. The first one is related to the outlook for next year for 2025. If you can provide some comments on the drivers, particularly on what you expect in terms of evolution of the rate of return in the current interest rate environment or RAB, and if possible to have an indication on the CapEx that you expect for next year. A general question regarding the regulatory environment, if you can have any update on any discussion that you can have with the government on the regulator on, let's say the level of investments in electricity transmission going forward, and particularly on a possible improvement on the regulatory framework starting in 2026, through a better rate of return.
The last one is on the transfer to RAB that, as I say, from the nine months numbers is still significantly lower than the CapEx. If you can give us an idea of when we will start this figure to ramp up, considering that you are accelerating investments and then the investment you are making now to start to flow significantly into the RAB evolution. Thank you.
I will start with, you know, just a brief comment, and then I'll pass to, to João.
Oh, okay.
You, you first? No, no, no. Okay. On just overall, it's important to say where are we? We, in terms of, you know, comments on negotiations or talks with the regulators, as you can expect, we don't do that. But when we look forward, where are we? You know, this is the energy transition is a task that, you know, the country decided to move on. You know, we had very recent talks from the new Minister of Environment. And, you know, I think she's fully committed, and the government is fully committed to keep the levels of investment, and at some point, even to increase from what was expected before. Then I would say that the situation is, when we look to it and in the coming, you know, let's say two, three, four years, it's quite positive.
I think João mentioned the fact that we got the approvals for a series of projects that they were being under evaluation for some time already. We've finally got the green light. That green light will allow us to do a lot of work in the coming years. Those investments will be a catalyst for industrial investments that are being prepared in the country, which is also, you know, quite positive. That means, you know, a higher demand for electricity. It means that, you know, this is basically unstoppable. And with that, João?
Thanks, Rodrigo. Regarding the last question on the transfers to RAB, lower than CapEx. First, this is normal because usually we have a seasonal transfers to RAB, which concentrates some of our works on the end of the year. Actually, this year, that's what is going to happen. We have a big project that we are expecting to put into operation by the end of the year, which will increase importantly an important increase with the values of transfer to RAB. Having said that, bear in mind that much of the CapEx that we are doing now refers to multi-year projects that will be transferred during the next year. This is not a one-to-one relationship between CapEx and transfers to RAB on the current year. That's all. I don't know if you want to.
No, just to add a little bit. So we don't really give any outlook, and you know that, okay? But just to give some color. So on the rates, I'd say on steady state, we are not expecting any major changes in terms of rates. So the market is decreasing a little bit. But I don't think that will impact materially or very much the rates of return that you see next year, okay? Second comment I can give you is that we are expecting a strong year in terms of CapEx execution next year. So we are, I think, to be a little bit ahead even of our expectations. So I think it will be a good year. Just a final comment, we'll see what comes out in terms of regulation from Spain.
I think we are all at the moment expecting regulators to recognize the increasing cost of capital in the market and that that will be reflected somehow and compensate all of the TSOs. So this is the expectation that we told you in capital markets today, and it's what we are expecting, okay? Thank you.
Thank you.
Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Ignacio Doménech from JB Capital. Please go ahead. Your line is now open.
Hello. Good morning. Thank you for taking my questions. Just the first one, follow-up on the next regulatory review. Just wanted to know if you can give us a timeline on when the regulator will publish out the, as they say, first draft? Then my second question is on the EUR 600 million investment plan in Sines. If you could clarify this first, the calendar of this investment, and if all of these were already embedded on your business plan, or if we could expect further upside in terms of investments. And my last question is just a clarification on taxes in the third quarter, okay? I think you received the reimbursement from 2023 of EUR 25 million or somewhere around 25 million.
Just wanted to clarify the mechanics or the reason behind this, and if you had accounted already for this. Thank you very much.
João.
Oh, great. For the regulatory review, the timeline, we are expecting to follow the normal timeline. In the first semester, typically the regulator puts into consultation the basic regulatory pieces, so the regulatory framework. And by October 15, he presents its first proposal on the parameters. Typically we are expecting them to follow exactly this normal procedure. Regarding your second question on the CapEx of Sines, this is divided in three phases. Roughly, the first phase is going to happen until mid of 2026 and includes, I would say, one quarter of the total CapEx, rough numbers. Then you have a second phase that goes up to the beginning of 2029, which is half of the total amount.
And then the last phase up to mid-2031, and it's the last quarter of the values. And as this goes beyond the timeframe of the investment plan considered in our business plan, we only consider a small part of it on our investment on our business plan.
Okay. Relative to taxes, this is only a cash flow thing. If you may remember, in the last quarter, in the fourth quarter, we registered a sizable tax benefit, okay? That was around EUR 20 million. And so what happened is that we had been paying too much, given that fiscal benefit, the amount of taxes that we paid was too high versus what we have actually to pay. So it was kind of a correction that we received now in September. So it's a normal thing. The difference is that sometimes it's EUR five million. This year it was larger because we have that very, I'd say, sizable tax benefit at the end of the year that made this kind of, but it's a balance sheet thing. It's not, okay? Thank you.
Understood. Thank you very much.
Thank you. As a reminder to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. As there are no further questions, I would now like to hand back to Gonçalo Morais Soares, CFO, for any closing remarks.
Oh, thank you very much for joining. I think that, as you see, was a good set of results, very much in line with what we have expected, and hope to see you at the final year and if you have any other questions, please reach out to me or to João Pedro. Thank you and have a very good day and a great weekend. Thank you very much.