GREENCOAT REN. (GRP) Q2 2026 Earnings Call Transcript

Good morning, all, and welcome to our H1 2026 semi-annual results. I'm here with Paul, so Bertrand Gaultier is speaking. Let's turn to slide three. And before getting to the detailed agenda of the day, let me start with a reminder of who we are. Greencoat Renewables is a pan-open renewable platform with a gross asset value of 2.3 billion and operating 1.4 gigawatt capacity-wise. Since our IPO in 2017, we have generated close to a billion of cash and paid a cumulative dividend of 55 cents per share. In H1, the business continues to perform strongly with net cash generation of 60 million euros and depending a 1.6 times net dividend cover on track to deliver 1.5x dividend cover for the full year, well exceeding the 1.2x that we indicated in December 2025. Moving on to the next slide. In March, we set out a six-pillar capital allocation framework, and I want to anchor this presentation on it because it is the lens through which we run the business. The first three pillars are about enhanced capital allocation, prioritizing the return of capital to shareholders in the short to medium term. Those are buybacks, deleveraging, and dividend. The next three are about value-accreditive growth, positioning the company for higher return opportunities. Six months on, the headlines are there. The initial $25 million buyback is complete. A second $25 million trench has been announced as in progress. The portfolio review is now complete and formal disposal processes are underway to deliver 45 gearing levels by end of 2027 and unlock the residual 50 million of buybacks to get us to 100 million euros, as we indicated. In parallel, we have established our green digital infrastructure platform and our hybridization site screening now is complete with land and pre-planning work ongoing. We'll work into each of these in more detail. In terms of agenda slide five and running order, I will cover financial performance first. Then Paul will give you some perspective on five variable market developments that GRP can capitalize on. And we will detail our progress in respect of our capital allocation. With Paul focusing on our value-accreditive growth initiatives. On slide 7, focusing on financial performance from a cash P&L perspective, we see that net cash generation for the half year was $60 million, compared with $65 million in the first half of 2025. That equates to net dividend cover, as I said, of 1.6x against 1.7x last year. We would expect full dividend cover to well exceed the 1.2 times we projected at the beginning of the year, and to be around 1.5x, benefited from favorable power price upside. Revenue was 157 million for the period, down 2% on a reported basis versus last year. And I need to stress that on a like-for-like basis, revenue actually increased by 4% and production by 6%. This is when we adjust for the disposal of the 156 million Euro-Arish portfolio in early 2025. As we flagged at the Q1 update, wind resource was weaker in the first quarter, standing at minus 10%. However, the second quarter was on budget, and the net result is that production was 6% below budget for the first half. Operating expenses were well under control at $67 million, down for $70 million, which meant that EBITDA was flat at $90 million. Turning to the balance sheet on slide 8, the fair value of investment was $2.1 billion, giving a gross asset value of $2.3 billion, down 2% from your end, borrowing where Brolyon changed at $1.2 billion, with net asset value at $1.1 billion, a reduction of 4%. As a result, Gearing stood at 53%. I will walk through the drivers of that in the NAV bridge shortly. On the next slide, slide 9, breaks down production and revenue by market. Ireland remains our largest contributor, generating 47% of production, but 55% of revenue at an average of just over €100 per megawatt. Irish revenue structure remains highly appealing as revenues are 100% contracted and a portion of those, circa 45%, benefit from elevated merchant price when exceeding the refit pricing level, which stands around €95 per MW. Together the three markets, which are Ireland, Germany and France, are mostly contracted, generated 91% of our revenue at an average price of more than 95 euro per megawatt hour. Swedish, Sweden and Spain are lower priced, more merchant, fully merchant, exposed market. Productions there was affected by weaker wind in the first quarter and in Germany we also had temporary operation constraints on the offshore assets which has now been resolved. Importantly, merchant price, power price remained materially above budget, which have set the weaker production in both of those countries. So the picture is one of revenue resilience. The higher price contracted markets and the portfolio exposure to merchant prices mitigated the impact of lower production on the first half. Moving to slide 10, no update, I mean, material since this was published in early August. NAV in H1 or June of this year was down 1.8 cents versus December to 97.2 cents. Operating performance, as you can see on the graph, contributed 5.7 cents of net cash generation against 3.4 cents of dividend and depreciation of 3.2 cents. the major headwind came from a longer lower longer term power price in germany and revived by an aggressive expected buildup of renewable capacity as announced by the government and suffering from an expected slowdown of electricity demon from industrial needs as a result our german curve has been reduced by close to 10 percent however as you will see later we are taking steps to contract German power pricing, which will also offer upsides, certainly in the short term. Slide 11 talks about the debt structure of the business, which underpin what I would qualify as solid. Sorry, we're a bit of confusing on the slide number, so we don't want to lose you. So on slide 11, we talk about the debt structure of the business, which underpin what I would qualify as solid. Our financing is cost effective with a weighted average cost of 3.5%. The aggregate date of 1.2 billion is 89% fixed rate. So we have limited exposure to interest rate movements and it's secured throughout 2030 with a stage and well distributed maturity profile as you can see on the draft. The first maturity is coming due in March 2027. We've already began proactive discussions with lenders and I would characterize those lender engagement as strong. Liquidity is strong with 139 million of cash on balance sheet and an RCF unload capacity of 240 million euros. Disposal program, we'll talk about it in more detail but this will add further in excess of 250 million of liquidity which we are planning to allocate to deleveraging. This combined with organic excess cash flow is paving the way for gearing to reduce from current 53 percent to mid 40s by the end of 2027. On slide 12 this table sets out illustrative dividend covered three through to 2030 of the existing portfolio on current assumptions you can see that the net dividend cover would average 1.7 x over the period ranging from 1.5 to 1.9 times in the later years contracted cash flow represents 73 percent now 75 percent when you factor the recent Bokong PPA that we have assigned post period and of the total across the five years that we are showing here and it's well on target. Key is that this underpins a potential for 600 euro million for cash generation which offer great flexibility in terms of strategic allocation and support the capital framework that we put forward. The sensitivity at the bottom of the table apply different capture merchant price to a merchant volume only and this illustrates that even in extremely low power price environment the ability of the portfolio to support the dividend of the business on slide 13 we are showing you a short-term power price affected by the middle east crisis as one would expect you can see that around 25 percent of our 2026 volume is merchant and therefore directly exposed to power price movement and this figure of 73 percent increased to 78 percent when we factor the borkum pp that we sign as we say during the summer what i think it's interesting that you can see is that the forward price which are those small dotted curve in h2 sits significantly above what was our q2 nav assumption in most markets without surprise gas prices have continued to strengthen since the period end which supports the outlook that we currently are expecting for dividend cover of 1.5x for the year And in Ireland, only second half future are 42% above the level assumed in our Q2.5. However, I would caveat, as always, that forward curves are not forecast. But as you can see, the trend is quite positive for the business. Moving on to the next slide. In this positive environment, we wanted to recap our strategy to maintain contracted revenue in excess of 70% on a rolling five-year basis. So this is something that we have been continuously focused on. And as we just talked about, we are well on target with 75% already of those revenue to be contracted in 2030. So this is a dynamic strategy. The way we've done it has been to lock in PPAs when pricing support both NAV and cash flow visibility. This is now a proven capability. We started this in 2022. You can see on the left inside that we've signed eight PPAs. This has covered roughly 870 gigawatt of annual generation. Now, to put things into perspective, this will represent 20% of our annual generation with an average tenure of seven years. What is interesting is that the counterparties range for big tech to utilities and multinational. The most recent example is a Borkum offshore asset in Germany. As you might recall, our first other offshore asset in Germany, Butendik, we contracted for a period of 6.5 years. In this instance, vis-à-vis Borkum, we signed a short-term 15-month PPA for 450 gigawatt air with a utility company and the ppa is sitting at 96 euro per megawatt air which compare well to a h1 of price of 90 euros so a premium of six euro per megawatt air and more importantly it's securing the cash flow in the period where what can go down can go up can also go down so looking ahead our value accretive growth strategy will further enhance our potential to locate those premium corporate ppa capitalizing on our unique position in ireland market dynamics we just talked about it certainly on a short-term basis and our data center platform so listen on this basis i will pass it on to paul to go in more detail on markets thank you bertrand um what i'd like to do uh over the next three slides on 16 17 and 18 is just actually reset the scene in terms of how we see the market outlook today.

Because I think the market outlook has really turned very favourable across the broader renewable and energy outlook in Europe. So when you look on slide 16, we've been taking advantage and playing into the trends around decarbonisation, the need for increased renewable electricity, and the policy framework in Europe has really led that opportunity over the last number of years. But really over the last 6 to 12 months, As we've seen the demand for AI power emerge into Europe, and as we've also seen the need for increased energy security at a country-by-country level, that policy is essentially creating significant near-term opportunities for platforms like Greencoat Renewables to provide a solution. when you look back on the policy changes over the last six months in march we saw the eu clean energy investment strategy in april we saw accelerating eu in june we saw the eu digitalization ai energy roadmap and then finally in july we've seen the eu electrification action plan all of these are designed to increase the capital deployment to the energy and digital sector And we estimate today that there'll be over 660 billion of capital needed between now and 2030. Much of this will go into supporting grids and allowing the grids to take on board more flexible power and increase amounts of renewable electricity. But we see below the line the 28 gigawatts of new data center capacity being increased from 13 gigs today. And in addition to that, the increased renewables overall. This means that we expect to see Europe continue the strategy of using renewable electricity to solve and to be the way to decarbonise Europe's power. But there will be increased focus on flexibility and being able to use the grid connections to unlock increased amounts of power onto the grid today. When you turn to slide 17, we've set out for businesses like Greencoat Renewables what the opportunity sets are and how we can take advantage of that in the short term and the medium term. Today, there are a range of ways that we're playing into this new market dynamic, including taking advantage of the power price volatility that we see by having the capability to lock in PPAs when we need to do that. Playing to the increased green PPA demand, And that's something that we'll touch upon a bit later in our data center platform, as we see the increased opportunity to link, being able to provide a whole solution to tech companies and being able to sell green power directly to them. We see the increased value in our portfolio of having grid connection scarcity and the firm access premium that our portfolio has, being able to do more with our existing grid over the long term. And in addition, co-location hybridisation has now become core strategy opportunities, where today the opportunity to use the grid and add storage, to add solar and use the grid on a more continued basis provides both a near-term opportunity and taking advantage of the long-term embedded strategic value that we have. Nowhere more particularly is that clear than in Ireland. And you can see on slide 18 today that the Irish market is one of the first markets to link through policy and growth opportunities. When you look across the Irish market today, you see a continued opportunity for growth into clean electrification. And Ireland has set the 80% renewable target for 2030. In addition to that, given Ireland's significant exposure to data centres already and the fact that data centres are expected to consume 30% of electricity, this is creating the near-term need for significant investment into generation, storage and grid reinforcements. all of this is underpinned by the fact ireland has a very clear policy and infrastructure approach and there is clarity as to how ireland intends to allow large energy users i.e mostly data centers to intersect with the grid with a clear message that it will be driven by renewable generation increased storage investment and continued using of the network What this results in is a scarcity value, with the grid access being the key constraint for large energy users and the demand for renewable electricity supply now increasing, with a key message that Ireland is now a leading clean energy investment market, which sits at the intersection of renewable generation, grid expansion and digital infrastructure When we overlay that to our business, we see a market that will require up to £40 billion of investment into renewable generation. And given Greencoat Renewables' position, where we produce over 4% of Ireland renewable electricity, we have an operating portfolio of 680 megawatts, and we have deep relationships across the utilities, the developers and the off-takers. this is positioning us to consider increased growth opportunities as the opportunity for growth emerges in the future so with that i'll hand back to bertrand who will give you an update on our capital allocation progress to date thanks so moving on to slide 20 you might be familiar with this chart our capital deployment plans have not changed since the full year results

this is a self-funded plan and it doesn't rely on raising new equity as we talked about on the right side you see the five-year sources and uses table and on the left side you see how we are planning to allocate capital to each of the six pillars broken down on an annual basis to 2030. As we said in the past, we are focusing the next two years on returning capital to shareholders, which is what the enhanced capital allocation dark blue segment covers. However, in parallel, but with moderate level of investment, we are gearing up our value accretive initiatives where capital recycling and allocation will ramp up as of 2028. On the next two slides, starting with 21, I would like to detail the milestone we have delivered for each of those pillars since March. So starting with short-term plan, by BAX, we announced a 100 million program, of which 50 million has been formally kicked off. 25 of those 50 million is now complete has been completed over the summer and we are now on the second trench of 25 million which is in progress this has been funded and is funded from existing cash and has been navacreative continuing shareholders with an average discount of 23 percent in respect of deleveraging we are accelerating with gearing expecting to reduce to 45 percent by the end of 2027 and to be mostly funded by our disposal program proceeds. Four more, and lately, key focus for the business is around disposal processes which are underway with refinancing discussion, having comments underpinning by or showing a strong interest from our lenders. On slide 22, those are the three value accretive initiatives that we're pursuing. Hybridization we have an attractive set of projects and we have pre-qualified 11 of those with a combined potential capital deployment of 100 million plus of which three are moving to the next phase in the next six months. Second the green digital infrastructure platform has been established operational The first asset is progressing well and we are targeting cash on cash return of more than three times. We are seeing strong customer and partner engagement, by this I mean big tech companies in Ireland, with an attractive growth pipeline emerging. And lately, in respect of H&M's PPA, this remains a medium-term objective, and we build up on our ability to unlock premium price PPA and invest into earlier stage contracted assets in the later phase of our capital allocation strategy. Next slide. Portfolio disposal. So, in this stream, it's probably the top priority that we have for the business. The portfolio review against a number of criteria you can show here have been completed. We have kicked off those processes.

We have good response from the market, and we expect that more than 300 million of assets will crystallize and be complete by... mid to end of next year i'm going to hand it over to paul which will be going to go in more detail in each of those initiatives thank you bertrand um so maybe just turning to slide 25 and hybridization and i guess is becoming one of our key focuses when we think about unlocking the embedded value that sits in our portfolio and using our existing assets potential to create this incremental value creation. To remind our investors, we've been actively doing this since 2022, and we're looking back on the progress in that business model with now five years of run rate revenue. And you can see that over that period, the cash yield has averaged about 15%, and the unlevered IRR that we can see in these projects, I guess, has been around the 10% level. So when we think about unlocking value in our portfolio today it's based off the existing experience that we have and the capability that we have in the platform not just to to unlock those sites and to get to get the projects developed on a fast-track basis we're very pleased in terms of the opportunity in Ireland today we see the policy continues to be supportive of co-location we see the ability to use storage to provide additional services to the network and capture ancillary revenue is increasing and we're now able to benefit from access to the wholesale market and so what that will mean for our business as Bertrand touched upon we have a range of projects today that we're moving towards pre-planning phase and we would therefore expect through the next 12 months to bring those projects through the next phase of development and allow the business to become ready for FID type investment. Turning then to slide 26 we wanted to give a more detailed update on where we stand with our with our data centre platform and in particular where we sat with the first project which is the draw to energy park again to remind investors we we made that we close this investment in February 2026 you know and over the last six months we have been focused around securing planning enabling the grid works to be finalized with grid operator taking control of the site and making sure the site was getting would be ready to move at a fast track pace and aligning the regulatory steps that are required in Ireland in terms of the large energy user action plan. Over the next six months we expect planning permission to get to a more finalised position. We are awaiting a final decision from the Uncommissioned Planola, which is the Planning Appeal Board, to tie down the renewables that we would want to use in that project and to secure access to those, to start to commenced site preparation to allow the project to move towards a construction phase, and then in particular working with the customers who we expect to be some of the larger hyperscalers to align their interest in the site with our development phase. In addition to that, we've put in place a fully operational management team to run the platform, and that team is focused day to day on managing the draw out of site, as well as focusing on some of the earlier opportunity sets the emerging opportunity sets that we can see uh in emerging now outside of drada on slide 27 we wanted to clarify to investors how we see value being created and bertrand touched upon uh you know the 3x cash on cash return that we expect to deliver for sites that we then take through development our business model today is around unlocking new sites managing the development of those sites and then securing the customer and the clean energy that are required to allow the project to move into its construction phase today we are in that second phase so we're kind of moving moving from site secured land control and we're and having local planning secured and therefore we're moving through second phase at the moment with the view that we would hit a power land phase on that project on a fast-track basis our intention is to take the sites further in terms of then tying down the customer and essentially securing the renewables that are required in Ireland to allow the project to move to a construction phase where we then have the ability to sell the project through to the type of long-term capital or hyperscaler that are more more more typical owners of long-term data centers the valuations that we can see today in Ireland are attractive and for powered land we see a sort of 1.5 to 2 million a megawatt opportunity and then if you can take the project all the way through to ready-to-build phase that valuation range increases further from 2 to 4 million a megawatt. Today's project in Drahada sits at an initial 32 megawatts with the capacity to scale further through multiple phases so this opportunity creates and creates a chance for Greencoat to demonstrate not just the upside that we can capture from this development but in addition to that to allow us to provide renewable electricity to these projects and as virtual which is a key part of our value accretion opportunities in the long term turning to slide 28 and you know we've seen over the last six months the opportunity in the data center market become much clearer with utilities with hyperscalers and with site owners now very engaged in terms of how we fast-tracked access to new sites. Our evidence has been, you know, that hyperscalers are very focused on getting access to power and that is a key criteria when it comes to site selection. In addition to that, having access to grid remains a critical constraints with most hyperscalers focused on the short-term access they can get to power. And in addition to that, we see that access to flexible generation storage will become increasingly important due to policy a second part set of partners that we've worked with on a long-term basis our utilities and we're taking a number of in inbound interest from utilities who are looking to partner who can see opportunities to be much more collaborative in delivery models and have the ability to provide a range of services alongside our development platform ultimately to fast-track the access to new sites. And then site owners more generally. There's a recognition today that having the capability and credibility to secure power is as important as having access to the land. And therefore site owners have a clear preference today to have access to credible delivery partners, which is what the Greencoat Renewables platform is able to do. When you bring that back together, and I think we've seen this over the last weeks as we've seen some of the big tech companies move into other European markets. What we see is any solution is going to require a power first solution. It's going to require capability to manage the grid and capability to add flexibility and is going to require access to significant amounts of renewable electricity. And we think that opportunity set over the medium term is one that's a very attractive one for the Greencoat Renewables team. So therefore maybe in conclusion I'll bring it back to what Bertrand touched upon in terms of where the business sits today. And for us, the focus over the next 12 months really is focused around our enhanced capital allocation. I won't repeat the feedback Bertrand gave, but for us, delivering the buybacks, sorry, delivering the sell-down of assets, delivering the increased buybacks, and the focus on the deleveraging is really critical over the next period of time, which then gives the flexibility to the business to unlock the value creative opportunities that we can see over the long term so with that um i'll hand back and hand over the questions thank you very much thank you ladies and gentlemen if you wish to ask a question over the phone please signal by pressing star one if you wish to cancel your request please press star two you may also submit your questions via the webcast again it is star one to ask a question over the phone

Our first question is from Alex Wheeler from RBC. Please go ahead.

Alex Wheeler Good morning, thanks for the presentation. Two from me, please. Just firstly on policy momentum, you clearly highlight a good policy momentum at the EU I was just interested to understand whether there was anything else within the geographies you're operating in that you're looking for in terms of policy that could be helpful in the future? Or do you now see that most of the investment targets and necessary policies are in place for you to deliver? That would be question one. And then my second question here um was just just paul just on your point around um partnering with utilities um and potentially and the services that can offer there can you just elaborate slightly on on how that that may look in the future if if that was a an avenue that you you ultimately decided to go down thank you yeah yeah i can take that and um i guess firstly on policy no i think we feel pretty comfortable now we have a strong policy and what is really needed i think is is the opportunity to to invest at the right types of return so so we see the european market being one where it's a very good

long-term market to invest into and for us the the the criteria to do so has really been able to deliver the attractive returns to investors and being able to invest at the right cost of capital and i think we can see that opportunity set emerging as we touched upon across the value accretive opportunities but we we look at policy today of being stable uh we look at the countries where we're investing as being stable and having a growth outlook and therefore the criteria that we would approach in terms of increased investment into the future is one that will be led by the returns that we can secure on those incremental investments which we think are the backdrop to that looks really interesting and just to touch upon the utilities i think it's a really interesting point and you know when you look at what large energy parks are going to require into the future and you know they're going to require in terms of from an energy perspective they're going to require increased investment into renewables they're going to require increased investment into backup flexibility and storage and they're likely going to require investment also into some thermal generation to provide the stability on a long-term basis and really that's many of those areas play to the strengths of what traditional utilities are wanting to invest into so you know the green coat renewables capability is more led towards renewables it's more led towards energy storage such as batteries and etc whereas I suspect utilities are more focused today on a mix of that but also capacity to build power plants and be able to build out the the backup gas that might be required and so that type of investment need lends itself very well to partnerships in addition to that the fact that we have our own platform that can fast track development and that has experience of working alongside utilities uh for the last um you know for the last 10 years in our case at least means that sort of opportunity to find new sites and to unlock new sites in a partnership model works very well with utilities perfect thank you

our next question is from kate nurse from dv please go ahead hi guys good morning hopefully you can hear me okay um just two questions uh firstly just on the draw to energy park and the new platform there um has your thinking changed on the opportunity there since it was first announced and then i guess beyond that pilot project is there additional sites you could acquire and when would that take place and then just looking at slide 27 and the valuation framework there that two to four million range of FID can just talk about the evidence kind of underpinning these ranges and like in particular is there transactions benchmarks or discussions that

support them thank you thanks Kate yeah look I'll take some of those and Bertrand might come in if it wants to add to that i think the first thing is no our our view of of what the platform the development platform we've created hasn't changed we are best positioned to develop these sites to unlock the the kind of milestones that we touched upon in terms of planning in terms of grid and in terms of customer engagement and prepare these sites to be able to be built moved into into a more long-term finance strategy and so our view is the capital that we're investing into this platform is development capital designed to create the value uplift associated with de-risking these projects and there's a very active access to longer-term capital that then can step in and become the construction and operating partner for these assets these assets tend to be well project well asset financed and project financed um you know under secure terms and there's access to capital you know that is more akin to the the data center sector that invests on a long-term basis into that space um and so we we see a natural uh you know evolution or transfer i guess um at that point of fid where uh other more traditional digital investment can come in and own these assets on a long-term basis. I think to evidence it, yeah, look, the benchmarks are pretty clear in terms of that transfer of value. And we've done a lot of work, you know, understanding the long-term finance that will step in to own these assets and the types of returns that, you know, long-term digital investors are seeking for these assets essentially allows the capturing of that sort of one and a half to four million per megawatt valuation and so what's what's important from our perspective is that we secure planning that we secure grid and that we're able to then provide the other assets or the other aspects critical for the hyperscalers which is really the renewable energy that will they will require to allow them to then step in and become the tenant or the owner of that site um and then that with that i think given in particular the competitiveness of ireland you know where each of the larger hyperscalers have their european headquarters as well as there being an increasing number of players looking to get access to that market the competitive dynamics are favorable towards the sale of these assets at FID.

If I may add, I mean, two things, two observations. One, since we have a nuanced strategy in Ireland, since we have a real site on the goal, it did trigger and credentialize quite seriously the combination of green energy that we could offer to site so it really and we are the only one being doing this into the into the Irish market which is the best market you want to be in from a data center perspective and as you know we have been active to a strike and enter long-term PPA with a range of corporate I mean tech company in Ireland 15 years so so this is quite it's interesting to see how the phone in Ireland has been ringing from those guys and it has completely transformed our level of engagement with those people so when I was referring to our capability to seek PPA it's not only PPA but more importantly is to extract premium value for the green electrons that are asset able to deliver and this is this is really the strategic angle to all of this beyond making good investment and good cash on cash returns. The second piece, and when you look at the value creation, there's two metrics you should think of. One is a value per megawatt you are able to extract from the market. It's a bit like a real estate. You have land and you have a planning and you have secure tenant. So those kinds of value creation which convert into those euro per megawatt pricing. And it's also, and to me it's quite interesting, your ability to scale up your campus so you may find that those are per site with regard how indicated 2032 megawatt but there is a capacity on the site itself to ramp up to 100 megawatt and you have a neighboring country I mean neighboring land which could make you run up to a much larger scale which is exactly the strategy so the value creation of those is number of megawatt multiplied by the value you can extract at which point in time in your strategy you decide to monetize those is not so much is that so much difference between powerland and fid in terms of risk you're taking it's more the time it will take for you to secure the

different component to get the project to this level of maturity thank you as a reminder if you wish to ask a question over the phone please signal by pressing star one alternatively you may submit your questions via the webcast we'll now take our next question from corner finn from Barclays. Please go ahead.

Morning all. Just one for me on the Drogheda Energy Park. So if you soon say final planning is secured later this year, what sort of timeline then do you expect for the final grid connection offer?

Morning Conor. Yeah look I think so there are two milestones that we need to go through to be a three milestones we need to go through to allow this project to move into its construction phase. The first is a final planning decision. We we would hope to receive that in h2 of this year and the second is a grid offer i think which will follow that planning decision but we would expect that to be um months not you know years given uh we have an existing grid connection on the 38 kv line uh you know that will take a significant amount of phase one power so we have the capacity on site to get access to that and then thirdly um under the new large energy user action plan you are also required to to have access to backup capacity plant so that may mean that we put in for planning just to allow the building of that backup capacity plant on site and i think if you put all of those together it means we will probably be going through final development phases in in 2027 to allow us to move towards into that sort of more fid slash construction phase in 2028 right thank you thank you there are currently no further questions over the phone.

With this, I'd like to hand the call for any webcast questions.

Okay, thank you. And we do have a few questions here. So following on the same theme around Drogada, there's a couple of questions. Firstly, is the asset still held at cost? And how should we think about valuation over the coming months as you progress? And maybe already partly covered, but when do you expect the first meaningful value creation from DROCADA?

I was expecting those to come, so good point. So, short answer, yes, all the assets are held at cost. In terms of the value creation and we are thinking about when it is appropriate to record those into the reported value. we just went through a number of milestones which actually does underpin those value we'll come back to market i think what is important from our perspective is that we are very transparent under which which are the basis of the valuation for those assets when we go forward and what are the milestone associated to the value creation such that people have clarity and can factor views on the probability and the value equation potential into the NAV. As you can imagine, those are not operating assets per se, so it's not the same reading of free cash flow multiplied by a timeline. So it's something that we have to refine as we go forward.

Okay, so the next question is on a different topic and comes to the court case around compensation and curtailment. Firstly, can you update on the likely timetable of the ECJ and Supreme Court proceedings? And secondly, what's the scope for further NAB increases, either from historic compensation or higher future curtailment revenues?

Yeah, look, I think firstly, you know, for those that weren't aware, we took the decision as a business to take the regulator to court because we felt that we were clear in our view that the assets that we owned which had firm access to grid should be compensated for any curtailment or dispatch down that they were suffering and each the way through that process we've been successful we've been successful in the irish courts we've been successful under appeal in ireland and then we've had and then we've been challenged again in the european court of justice which we've been successful as well which I think is which was a you know a process that was you know led by ourselves we're really pleased that that's the case and therefore gives us and gives our investors that you know the the right returns associated with these assets which is important for those people that see Ireland as a low-risk long-term market to invest into and I guess to answer your question we probably don't have visibility yet as to when the final decision will be will be written up by the ecj we're tracking that uh i think that will then allow us to engage properly with the regulator and others and determine how historical compensation will be addressed and how then the payment mechanism associated with future uh compensation for dispatch down will be addressed but i think the short answer is yes we think the the there is scope for us to and it's something in our nav that we have under under review uh with opportunity that we obviously haven't reflected anywhere near the long-term compensation that we feel we've been entitled to yet into the NAV.

Okay, there's a few questions here which I'll try and group on disposals. So firstly, can you give any market colour on your sales processes in terms of demand and timing and also what you're seeing in other processes? And then secondly, had there been any meaningful change in buyer appetite over the course of the current year, particularly around what's going on in the Middle East? And I'm sure you won't answer this, but can you give indication on pricing relative to NAV?

Happy to start there. The market remains very strong for long-term renewable assets. And these are across all our portfolio. There is a scarcity factor in many markets today and and we see good competitive dynamics um our broader business in across shoulders green code are one of the larger investors into the sector um you know we we've actually we pay across all different markets and we can see today particularly in the private markets there remains really really strong appetite for access to renewable assets and in particular wind assets and so when i play that to what the current market conditions are like. I guess that's something that we are tracking in terms of the process that we're running, the bidders that we're engaging with, and the kind of key conditions of selling the assets in terms of the cash flows that we're forecasting. And in that particular view, I guess what we're seeing in the short term in the Middle East is beneficial because we are, as Bertrand highlighted through his presentation, we're currently now seeing a much more attractive short-term perspective and power prices across europe um so yeah i guess we are busy on the on the disposals we can't give any guidance today as to the specific timing associated with those sales but we've always been clear that we would intend to sell at an and or around nav that that was a key criteria for us allowing that to happen and we remain really confident that that is the case uh into the future so just just two more questions and

then I think we can we can draw it to a close so and I'll ask them separately because they're not related so firstly on hybridization you give the Killala case study at a 10% unlevered IRR 15% cash yield on slide 25 how does this relate to the projects that you're looking to initiate and can you break down those returns between what is contracted and what would be sort of merchant style returns um so you're correct the metrics are the one in the presentation you might also have picked up that the 10 of the killer battery on unlevered basis differs from what we

have indicating in our capital allocation at 13 it's not a typo and you may have also picked up that when we set up the kilala battery project the market for battery revenue in ireland was nascent yes and we established this in 2021 2022 and you have picked up that the ibida since those earlier years have doubled versus where they used to be at the time so there is a matter of timing and there is a matter of the market have not coming through at the time which we anticipated which which have eroded what the run rate IR would have been if you were to consider current market pricing and market dynamics. So this explains the gap within those two. But the 13 is something we are quite confident the market is now set up to deliver. In terms now of the mix, so it's going to be from, and bear in mind that the regulation framework is evolving. It has made good progress, but we will anticipate that the contracted mix will sit around two-thirds plus of the revenue mix and the residual to be merchant-driven. Acknowledging that when we took contracted revenue framework, as you see today, it's around five to six to seven-year contract. It's not 15-year contract as we see today. So this is something also to consider when we get there.

Okay, and final question, and maybe you can end with any closing comments afterwards. Given the recent strength in power prices, do you see upside risk to your H2 cash generation guidance? And how are you looking to take advantage of those power prices?

So maybe I'm doing this. So we don't have a crystal ball. We are not traders, so obviously the caveat comes with it. now I if you look at what we've done I think the risk associated to power price is very limited even if there was short resolution in the Middle East a we have contracted a bulk of our merchant exposure here's a broken PPA that we talked about seventy percent of the outcome and two our current means the pricing we've built the nav and our projection are underpinned by the pricing we knew at the end of june and we've seen that those pricing have strengthened in the last two months so as in addition to this we're entering the winter period and the winter period given how low the current gas storage level are it will take quite a long time for the even if the situation politically was normalizing for those to be reflecting into the pricing into those storage so I'm afraid to say from a customer perspective that electricity and power price are going to remain elevated no matter what in the upcoming winter period so just to finish I think thank you all for your time and like to just start and finish on the same message you know we have a clear capital allocation plan you know that really is focused over the next period around disposals buybacks and reduction of debt I hope you've had a chance to hear how

we can see the the pillars of growth really starting to take take we can take advantage of those and we look forward over the next 12 months really starting to execute and closing out on the first phase of enhanced capital allocation and then moving towards the increased growth opportunities that we can see across the business today so thank you all for your time and we look forward to engaging with you again.

Thank you.