Edison cuts 2026 guidance yet again due to weak hydro and Qatari gas

The Italian utility Edison cut its earnings guidance for full-year by a second time in a row on Thursday, as the first-half results had been affected by disruptions of Qatari gas supply and weak hydroelectric production. Edison, one QatarEnergy’s major gas customers in Europe now expects to earn before interest, taxes, depreciation, and amortization (EBITDA), of EUR1.1-1.2billion this year. This is down from an earlier guidance of EUR1.2-1,4billion. Edison first reduced its EBITDA forecast when it announced first-quarter results back in May. The company announced on Thursday that the first-half EBITDA had fallen to EUR607 millions ($695 million) from EUR736million a year ago. Edison stated that the decline was due to a drop of 27% in hydroelectric production, but also to lower volumes of gas received from Qatar, and voluntary measures taken to help vulnerable retail customers. Edison, an EDF unit, has a contract with QatarEnergy to supply 6.4 billion cubic meters (bcm), or 10% of Italy's gas consumption, on a long-term basis. QatarEnergy was forced to close liquefaction trains, declare force majeure for deliveries and suspend exports due to the U.S.-led war against Iran. The renewed Iranian attacks on tankers that transit the Strait of Hormuz this month have further 'clouded' prospects for a recovery of energy flows prior to conflict. QatarEnergy has announced that it will not be delivering 24 LNG cargoes (liquefied natural gases) to Edison from April until the end of September. Edison has replaced 17 cargoes - equivalent to 1.6 billion cubic meters of gas - so far, in order to fulfill its commitments towards customers. Edison reported that despite lower earnings it had increased investments by 13% in the first six months, pushing forward with renewable energy projects. The group reported a credit position at the end June of EUR254million, compared to EUR219million at the same time last year.

(source: Reuters)