Operator : Good morning. We welcome you to EDP's First Half 2026 Results Presentation Conference Call. During the presentation, all participants will be on a listen-only mode. There will be an opportunity to ask questions after the presentation. If you wish to ask a question during the Q&A session, you will need to press star one and one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Alternatively, you may submit your question via the webcast. If you are experiencing any difficulty in listening to the conference at any time, please make sure you have your headset fully plugged in, or alternatively, please try calling from a different device. I will now hand the conference over to Mr. Miguel Viana, Head of Investor Relations and ESG. Please go ahead.
Miguel Viana : Good morning, ladies and gentlemen. Thank you for attending EDP's First Half 2026 Results Conference Call. We have today with us our CEO, Miguel Stilwell d'Andrade, and our CFO, Rui Teixeira, who will present you the main highlights and our strategy execution and first half 2026 financial performance. We will move to the Q&A session, in which we will be taking your questions, starting with the written questions that you can insert from now onwards at our webcast platform and then by phone. I will give you now the floor to our CEO, Miguel Stilwell d'Andrade.
Miguel Stilwell d'Andrade : Okay. Thank you, Miguel. Good morning to everyone, and welcome to the EDP first half results conference call. I will jump straight into slide three and start off by saying that EDP delivered a very strong first half of 2026. We had recurring EBITDA of around EUR 2.7 billion, that is up 5% year-on-year. We had a recurring net profit at around EUR 0.8 billion, broadly flat versus the last year. However, the key message really is that the group is performing very well across its core platforms. You have a very visible growth in the networks business, I will talk a little bit about that later on. The sound performance in the FlexGen and Clients and continued delivery at EDP Renewables that we also discussed in more detail yesterday. Starting with networks, EBITDA increased 14% year-on-year. That was driven by the new regulatory periods in Iberia, both Portugal and Spain, started beginning of January, but also growth in Brazil. This is an important confirmation that the regulatory framework in place now is really translating into much higher investment, better returns, and stronger earnings contribution. At EDP Renewables, EBITDA increased 8% year-on-year, or 12% excluding foreign exchange, that is mostly supported by the growth in the U.S. and improved asset rotation gain. In the FlexGen and Clients, performance remains sound. It is supported by flexible generation in Iberia, you can see the hydro realized prices and volumes, the hydro pumping and storage, all of that contributed to the FlexGen. Despite the year-on-year comparison being affected by the lower electricity prices and higher ancillary services costs. Overall, the first half gives us additional confidence in the execution of the business plan. It also supports the guidance upgrade that I'll cover later on both the EBITDA and the net income level. We move to slide four, going into depth on electricity networks. This is one of the clearest examples we have of the improved visibility that we have across the group. Electricity networks investments increased 25% year-on-year in the first half, reached EUR 555 million. The acceleration is mostly in Portugal, where CapEx increased 40%. Also in Brazil, where it increased 20%, and in Spain, where it increased 4%. Importantly, this investment growth is supported by positive regulatory development in all the geographies. In Portugal, the investment plan for 2026 to 2030 increased by 66% to EUR 3 billion, with an all-in pre-tax return on RAB of around 8% for the 2026 to 2029 regulatory period. In addition, the government has ordered a study on the rationale for reinforcing the climate adaptation investment and giving more resilience to the networks. That may support future investment needs or additional future investment needs. That's expected for around the end of the year, and we should have visibility on that. In Spain, the plan we proposed to the regulator increased CapEx by 40% to EUR 1.1 billion. As an all-in pre-tax return on RAB of around 9% for 2026 to 2031, we're still assessing the impact from the latest royal decree released by the Spanish government on the investment plan limits. It may present some upside on the 2027 to 2030 investments. Generally, we consider it positive news. In Brazil, we now have a very strong long-term visibility, as you know, with both EDP Espírito Santo and EDP São Paulo electricity distribution concessions extended for 30 years. Overall, networks clearly moving into a new investment cycle with attractive regulated returns and strong visibility across Iberia and Brazil. Going to slide five. You can see here some of the key trends in Portugal. I think the first thing is to really highlight that Portugal continues to stand out as a market where the demand growth is accelerating, supported by electrification, population growth, electrical vehicles, heat pumps, air conditioning, also by the development of data centers. We expect electricity demand in Portugal to grow at around 4.5% CAGR between 2026 and 2035. As I mentioned earlier, this growth is driven by just a broad set of factors, including a big part of it, around 60% of it, to data centers over the next couple of years. Here I'd highlight that Portugal really has an important structural advantage. This growing demand is improving the network's utilization. It helps dilute fixed system costs over a larger consumption base. This, together with the high renewable penetration abundant resources leads to competitive electricity prices versus other European countries, which is increasingly relevant for industrial demand and for large-scale electricity users. I just stress this point. Often when you have a large increase in consumption, the first thought is that this will lead to higher power prices, but it's very important to bear in mind that it also dilutes the fixed costs. The net impact, for example, in this case, is expected to be relatively neutral on power prices, on overall tariffs for the customers. On data centers specifically, Portugal is positioning itself as an emerging hyperscaler data center hub. There's a significant pipeline of grid connection requests. We have around 4.6 GW already requested. That's the equivalent of roughly 50% of the current peak demand. We're also benefiting from a strong sub-sea cable connectivity and robust telecoms infrastructure, and we're seeing that advantage in action. Just recently, you may have seen Google. There was an inauguration of Google new transatlantic cable that landed in Sines, just south of Lisbon. It's part of the company's broader $40 billion investment in AI and cloud infrastructure, coming to Portugal. Ultimately, data centers are more than just digital infrastructure, and I just wanted to also reinforce this. They attract investments, they create skilled jobs, they boost GDP growth, and they strengthen the country's digital competitiveness. It obviously has to be done well with good regulation and regulatory frameworks, but it can create significant amount of value added for the country. All in all, we see Portugal nowadays as a huge growth opportunity across networks, supply, renewables, and potentially integrated solutions for large customers. Portugal is definitely a very hot market at the moment, and I think we're very happy to have a strong presence here. On slide six, talking about FlexGen. What we're seeing is a structural improvement in the value of flexible generation. You have solar and wind penetration increasing, and the system also needs backup and more flexibility. The integrated margin of FlexGen's clients in Iberia has materially increased over the last decade, moved from EUR 19 per megawatt hour in 2017 to EUR 48 per megawatt hour in the first half of 2026, and we expect it to remain in the range of EUR 40-EUR 45 per megawatt hour over 2026-2028 period. This reflects structural increase in the price spreads between solar and non-solar hours, between high and low demand periods, and across months. These spreads increase the value of hydro pumping and CCGTs as backup technologies. The ancillary services are also becoming more relevant. The ancillary services component reached EUR 23 per megawatt hour in the first half of 2026, compared with up to EUR 18 per megawatt hour in the first half of 2025. Looking ahead, reservoir levels remain above average in June, around 70%, and forward baseload prices in Iberia at around EUR 110 per megawatt hour for the second half of 2026 and around EUR 67 per megawatt hour for 2027, while still remaining below that of other European markets. Still more competitive than other markets. The key point here is that we're seeing a structural increase in the results from our flexible and clients portfolio, highlighting the value of our integrated management. That takes me on to slide seven, talking about retail electricity supply in Portugal. I just wanted to highlight this here. We've been reinforcing our competitive positioning on the retail side. The clear focus on pricing, on efficiency, and quality of service. EDP has around 4 million customers in Iberia. If I just focus in on the B2C business in Portugal, I just wanted to stress the impact that we're seeing from some of the commercial initiatives we've been implementing. Client losses have reduced materially. They'down 13% year-on-year. We have new client additions increasing 24% year-on-year. Importantly, we already saw a monthly net gain in March of 2026, which is a positive sign of stabilization in the client base. This improvement has been supported by three key levers. First, a more competitive pricing strategy with offers in all the key B2C electricity segments. Second, a very successful mass market communication campaign, which has helped improve visibility and competitiveness of our offers. Third, continued improvement in the customer experience and digitalization. That's been complemented by targeted local commercial actions. The team has really pulled out all the stops here to deliver, I think, a very successful execution of the strategy. Overall, it supports the resilience of the integrated FlexGen and Clients platform, and it reinforces our ability to capture value in both the generation and the retail business. If I move on to slide eight, EDP Renewables. The fundamentals here in the U.S., particularly speaking about the renewables, is very strong. I mentioned this briefly yesterday. According to the July 2026 EIA outlook, U.S. power demand is expected to grow at around 2.3% CAGR between 2025 and 2027. This demand is expected to be sourced mainly by wind and solar, as they are cheapest and fastest solutions to deploy, particularly as coal capacity fades down. This demand growth continues to support the increase in PPA prices, and it creates a very constructive backdrop for EDP Renewables commercial activity. Since the approval of the One Big Beautiful Bill Act, the July 4th of last year, of 2025, EDPR has contracted already 1.5 GW of new capacity through nine deals. The risk-return profile of this contracted capacity is attractive. Just a couple of key metrics. Around 290 basis points of spread IRR to WACC above the target of more than 250 basis points, and 90% of the NPV is contracted above the target of more than 60%. With very little risk on the backside of this contract. Additionally, looking ahead, we have around 1 GW of PPAs under active discussion, around 6 GW of safe-harbored wind and solar projects with 2025-2030 CODs. A pipeline of more than 20 GW, with around half in MISO and PJM. Finally, just highlighting that we continue to reinforce our domestic content procurement strategy. We have a diversified supplier base. We have increasing resilience, supporting the execution of our pipeline and the projects under construction. In the U.S., combination of strong demand, attractive PPA pricing, low regulatory risk, and a high-quality pipeline continues to support our growth strategy. Moving on to slide nine, and a quick update on the asset rotation and secure capacity. The asset rotation execution in 2026 is progressing very well. We continue to demonstrate the attractiveness of the investments we're making. I mean, very clear data points that we can show, and show you all, about the value creation of these investments. Far in 2026, we've signed asset rotation transactions representing a total enterprise value of around EUR 0.9 billion, if we consider at 100%. These include 68 MW in Italy and 384 MW in the U.S. of solar and battery. The U.S. transaction in particular, I highlighted this also yesterday, was the first asset rotation transaction of a project approved post the Big Beautiful Bill in the U.S. last year, and it really showcases our ability to capture value in this geography. I think we were very happy with that transaction. Implied enterprise value per megawatt remains attractive. It's around EUR 2.2 billion per megawatt in Italy and around EUR 1.8 billion in the U.S., with a total average of around EUR 1.9 billion per megawatt. Very importantly, the gain on the invested capital is around 40%, so well above the target of the 15%. The proceeds, as mentioned earlier, are expected to be concentrated in the second half of 2026, and we do have some additional transactions in the pipeline expected to close either still this year or the first half of 2027. On secured capacity, EDPR now has 3.4 GW secured for the 2026-2028 period, which represents approximately 70% of the 5 GW additions target. 2026 additions, as you know, are fully secured under construction. 2027 is already 80% secured, again, with very attractive risk-return metrics and an IRR to WACC spread of around 285 basis points. Overall, this provides very strong visibility on execution while maintaining the discipline on returns and risks. I'll stop there. I'll pass it now to Rui, who will take you through the financial performance in more detail, then I'll come back for the guidance and the questions.
Rui Teixeira : Thank you very much, Miguel, good morning to you all. Let's start with the EDP first half results. Again, we delivered another solid set of results, recurring EBITDA increasing 5% year-over-year to EUR 2.7 billion or 6% excluding FX. This was driven fundamentally by the growth in the networks and the renewable segments. Let me break this down. Electricity networks now represent almost one-third of the group EBITDA and continue to increase their contribution to the earnings. This is a segment that is obviously delivering a very strong performance, with EBITDA EUR 109 million year-over-year, reaching EUR 874 million. This was driven by the start of the new regulatory period in Iberia, combined with continuous rapid growth and operational discipline. FlexGen and Clients EBITDA declined by EUR 39 million to EUR 808 million, representing 30% of the group EBITDA. This was primarily driven by the normalization of average electricity prices in Iberia and higher ancillary services cost in the supply business that we also highlighted in the first quarter. These effects follow exceptionally strong conditions in the first half of last year, when we benefited from both hydro, very high hydro resources, and also high power prices. EDPR delivered EBITDA of EUR 1.03 billion, up EUR 73 million year-over-year, supported by the capacity additions, particularly in the U.S., and also the capital gains from asset rotations. Geographically, around 90% of EBITDA continues to come from core low-risk markets, Iberia, North America, and Brazil. If we now move to slide 12, cost discipline remains a clear priority, as we have been highlighting for quite a while. Despite the continuous growth of the business, recurring OpEx remained broadly stable in nominal terms and declined on an inflation-adjusted basis. Recurring OpEx was down 3% year-on-year and 7% over the last two years on an inflation and FX-adjusted basis, driven by a strong cost discipline. At EDPR, as we highlighted yesterday, OpEx per megawatt decreased 5% despite the portfolio growth. There has been a group-wide continuous deployment and development of digital and AI tools, improving O&M efficiency, and also the internal organization that is currently aligned with the growth outlook. As a result, productivity continues to improve. EBITDA per headcount reached EUR 235,000, OpEx per gross profit improving over the last two years. This obviously demonstrates the ability of the company to grow earnings while keeping the cost base under control. Let me move now to the EBITDA by segment. Let's start with the FlexGen and Client segment. EBITDA decreased 5% year-on-year, reaching EUR 808 million in the first half of 2026. This is actually a very sound first half of the year, although the negative evolution that is mainly driven by lower hydro volumes year-on-year, given that the first half 2025 was an extraordinary quarter or semester, 41% above in resources versus the average, versus the 19% above the average in 2026. While 2026 we have a good performance, actually 2025 was abnormally high. Lower electricity prices in Iberia, with the average pool price in Spain declining 19% year-on-year. It is basically an average of EUR 50 per megawatt-hour this semester compared to EUR 62 last year. Higher ancillary services cost in the electricity supply business. This has been compensated by higher pumping activity that increased actually 4% year-on-year. Let me move now to slide 14 and cover the network segment. Recurring EBITDA in this segment increased 14% year-on-year, reaching EUR 874 million. Iberia was the main contributor, EBITDA of EUR 536 million, up 16% year-on-year, reflecting the new regulatory frameworks, the RAB expansion, and obviously the continued efficiency in operations. Brazil also delivered a solid performance, with EBITDA increasing 11% year-on-year to EUR 338 million. This is, on one hand, supported by the economic activity growth in our concessions areas. Also the transmission construction that offsets the deconsolidation of Lot 21 and Lot Q following the asset sales. Networks definitely continues to be one of EDP's highest quality growth business, combining visibility, attractive returns, and increasing earnings contribution. We can now move to slide 15 to EDPR, which we committed yesterday. EDPR delivered an 8% growth in EBITDA, 12% if we exclude FX, on the back of the capacity additions, particularly in the U.S. Also higher asset rotation gains. A 4% increase in generation, operational efficiency gains. This partly was offset, or was slightly offset by slower or lower prices in Europe, as well as lower renewable resources in Europe. Overall, a good performance for EDPR. On costs, financial costs. Net financial costs remained broadly flat at EUR 472 million. Higher interest expense, mainly driven by a modest increase in Europe funding from 3.3% to 3.4%. Also affects impact on the Brazilian debt. This was largely offset by improvement in other financial results that include higher capitalization of interest costs. Our debt profile remains very conservative, actually, with around two-thirds of debt denominated in euros and continued access to attractive funding markets, including our May issue of a seven-year, EUR 750 million senior green bond with a 3.75% coupon. On net debt, it stood at EUR 17 billion from EUR 15.4 billion at year-end 2025. This reflects the temporary expected increase following the annual dividend payment, continued investment in some of FX impacts. We maintain strong credit metrics, 20.4% FFO to net debt and 3.5x net debt to EBITDA. For the year-end, we remain fully comfortable with the guidance of approximately EUR 16 billion, considering that asset rotation and tax equity proceeds will be concentrated in the second half of the year. On net profit, just to finalize, recurring net profit reached EUR 753 million, pretty much flat year-on-year or 1% higher if we exclude FX. This is the result of higher EBITDA by EUR 131 million versus the first half 2025. Slightly lower D&A and provisions in line with our investment profile. Higher net financial costs due to what I mentioned about the average cost of debt, partially offset by other impacts. Also lower income taxes. In reported terms, net profit reached EUR 732 million, increasing 3% year-on-year. This includes EUR 21 million of non-recurring items that were already booked in the first quarter of this year, 2026. With this, I will now pass on to Miguel for final remarks. Thank you.
Miguel Stilwell d'Andrade : Thank you, Rui. Let's move on to the slide on the earnings upgrade, which I think is what most people are probably waiting for. Based on the strong first half performance and also the improved visibility that we have on the remainder of the year, we're upgrading our 2026 earnings guidance versus the Capital Markets Day assumptions, and also versus the previous upgrade that we'd already given in the first quarter results. We're now expecting recurring EBITDA of around EUR 5.3 billion and a recurring net profit of around EUR 1.4 billion. This is a 12% upgrade in net profit versus the CMD guidance range. The upgrade is supported by all three main business platforms. On the network side, it obviously reflects good execution of investment plans, better regulated returns and efficiency, as well as the favorable Euro-Brazilian real evolution. On the FlexGen and Clients, it's supported by hydro reservoir levels in Iberia, that are above average in July of 2026 and higher forward electricity prices for the second half of the year. At the EDPR level, the guidance reflects the upgrade on the asset rotation gains that are now expected at around EUR 0.3 billion. On top of all of this, we have significantly improved efficiency and productivity, as Rui has already mentioned, which I believe is best in class, leveraging on AI and digitalization of our operations back office, and just general improvements in productivity. All in all, this guidance upgrade showcases, I think once again, the quality of our business plan execution across all of the different business lines. Looking forward, on slide 21, the positive momentum we're seeing today is not limited to the current year. It also includes visibility for the 2027 and 2028 years, and it creates additional opportunities beyond the current plan period. Starting with 2026, the outperformance versus this CMD guidance is supported by FlexGen and Clients, backed by strong peak off-peak price spreads and higher demand for backup services, as well as the successful execution of our asset rotation strategy with two transactions signed and gains expected at EUR 0.3 billion, leaving us to increase the net profit guidance to 12% versus the CMD numbers, as I have already mentioned. For 2027 and 2028, the outlook is also positive. You have here a couple of comments, positive evolution of forward electricity and gas prices, Iberian FlexGen market dynamics, better than expected regulatory outcome for the electricity networks, strong investment execution, and from a macro perspective, we expect favorable evolution of the Brazilian and the dollar versus the euro. Post 2028, we also see several emerging opportunities. We see wind repowering, batteries, hybridization, PPA repricing, data center-related powered land opportunities. We continue to see low to mid-single-digit electricity demand growth supported in the U.S., in Europe, primarily in Iberia, Portugal in particular, data centers, electrical vehicles, and the broader electrification trends. Network investments are obviously also expected to continue to grow well beyond 2028, so into 2030 and beyond into the next decade, both in Iberia and Brazil. Renewables and batteries, extremely competitive generation technologies, so they'll continue to also have growth post 2028. Overall, a much stronger 2026, a positive outlook for 2027 and 2028, and an increasing set of opportunities beyond 2028. As commented yesterday in EDPR's conference call, we expect to provide visibility on this post-2028 guidance by the second quarter of 2027. With that, I'll stop there and happy to take Q&A, and I'll pass it back to Miguel. Thank you.
Miguel Viana : We go now to the Q&A session, and we'll start with the questions that have arrived from the web. We have some questions from Fernando Garcia, RBC, Pedro Alves, CaixaBank, Gonzalo Bordona from UBS, Jorge Alonso from Bernstein, Skye Landon from Redburn, and Arturo from Jefferies. First one is regarding the evolution of data center development in Portugal, including questions around the 4.6 GW grid connection requests and the MERLIN and Start Campus data centers development. What can be the impact of this strong growth of power demand projected for Portugal over the next decade for EDP business?
Miguel Stilwell d'Andrade : I don't have specific updates for now, but what I would say is these are real projects which are being built. I was just recently in Sines visiting also Start Campus and earlier also in MERLIN, Carregado. These are on track to be built over MERLIN by next year, and Start Campus already has the first parts built and are already beginning to move forward with the additional sections. Overall, this is just bringing a very strong demand growth over the next decade. I very stressed this in the presentation, but it's definitely something that will support and provide support for the electricity networks investment growth, on top of what was already needed to modernize, to digitalize, and things around climate resilience. Definitely this is positive for the networks. It's also going to be positive for the generation business because you will need new capacity. I think we have a strong pipeline of projects, wind, solar, batteries, hydro pumping storage. It's also positive for the existing FlexGen capacity. All of our hydro pumping storage that's already built, as well as the combined cycle. Just generally all-round positive for the business. We do see some opportunities that we can also develop around the PPAs or for some of these projects or co-located generation powered land. We continue to work on these. As I say, as soon as we have any specific transactions or commercial agreements, we will obviously provide them. I would just add one additional note, which is that on the powered land, we are leveraging our renewable portfolio and the grid connections that we have and some land positions that we have. We have around 500 MW already secured and over 1.5 GW of additional opportunities identified. Our goal is definitely to capture value from these digital infrastructures that are being built. The fact that, as I said, the number one thing that you need for these data centers is power. I mean, the chips without power are not worth anything. We are obviously well-placed to provide that power and to support all the development of that infrastructure, and help create value for the country and, obviously, for EDP as well.
Miguel Viana : Next question comes here from several analysts, but also about the impact of upgraded 2026 guidance. What does it mean in terms of the second part of the year performance? Miguel.
Miguel Stilwell d'Andrade : What do we see for the second half? First, we see a second half which will deliver year-on-year growth versus the first half across all business segments. On the underlying business, the EBITDA growth we're expecting will accelerate from 5% in the first half to around 8% in the total for 2026, which means that the second half has a double-digit EBITDA growth. Obviously, the 5%+ the double digit will get us to the 8% for the full year. Just going by parts, by the different parts, FlexGen client solutions. Obviously, there is seasonality of hydro generation, between winter and summer. We do see in the second half a positive year-on-year EBITDA evolution. We are seeing good peak off-peak spreads, hydro optimization. We're seeing that EBITDA margin I mentioned of at least EUR 40 per megawatt hour. On the EDPR side, we are also seeing EBITDA growth year-on-year for the second half, both on the underlying EBITDA. We expect the underlying EBITDA to grow in the second half of 2026 year-on-year, but also obviously, a significantly higher profitability in the asset rotations, with gains expected to almost triple versus the previous year. On networks, mostly this is supported by Iberia. We see here strong year-on-year growth in the second half, in line with the first half. We had positive regulatory updates in Portugal and Spain, at the beginning of this year. That's obviously going to carry forward from the first half to the second half. Bottom line, we're guiding for double-digit growth of recurring net profit in the second half of 2026, including an acceleration of the earnings growth versus the first half of 2026, even excluding asset rotation also contribution to the net profit. I'll probably stop there, Miguel.
Miguel Viana : The next question, it's about the recent news on the approval of the royal decree on further investments in distribution in Spain. What is our assessment from the news flow of the royal decree not yet published?
Miguel Stilwell d'Andrade : I'd say it's a positive step. We've been waiting for this for quite a while. It's different in Spain from in Portugal. In Portugal, you typically, already last year, more than a year ago, there was already an investment plan that was submitted to the regulator. Approved by the regulator and then the government. We already had full visibility coming into this regulatory period on what was the investment criteria. Case of Spain, the milestones are less clear. This is an important step to give visibility for these additional investments in the networks. It does seem to recognize that accelerating electrification requires stronger, more resilient, just better-equipped electricity networks. I think we all recognize that, but it's good to see it in the royal decree. Generally, the new framework seems to increase the current investment cap, provide some room for additional increase in the annual investment. We were already incorporating part of this in the current business plan, but this provides some potential additional upsides towards the back end of this decade. We still need to go through all the details when it's finally made public, but the first impression is it's positive.
Miguel Viana : We have some questions regarding the message from the presentation is clearly optimistic regarding years beyond 2026 following today's guidance upgrade and considering 2028 target. What we see as our targets in terms of guidance for 2028, and that's around what we see also in terms of targets for 2028 and the visibility on post-2028.
Miguel Stilwell d'Andrade : We expect to give more guidance and have greater visibility on both the 2028 target and the post-2028 outlook as part of the strategic update on the second quarter of next year. Obviously, since the Capital Markets Day last November, it's only been a few months. It hasn't even been a full year. Just in these months, the underlying market conditions have improved. The stronger demand fundamentals, slight increase in forward power prices, and we expect some of these drivers that we're seeing in 2026 and in these upgrades to carry through into 2027 and to some extent 2028. As I say, we see the demand outperformance on OpEx, all that. I'll get into this probably more in the update, next year. I would just say the generally positive outlook for 2028 and beyond.
Miguel Viana : On integrated margin and on FlexGen, we see 2028 forward prices below the assumptions. How do we reconcile that, given that the margins that we are presenting in the presentation are stable in the EUR 40-EUR 45 per megawatt hour?
Miguel Stilwell d'Andrade : Yeah. The integrated margin guidance is relying on EUR 40-EUR 45 per megawatt hour EBITDA, sold for this period, 2026-2028. What we've been seeing, and to a certain extent was expected, but is really a structural increase in the value of the flexibility. As there is a higher penetration of solar and wind, that has increased the need for hydro pumping storage and the combined cycles as well. We've seen all of these, the value of these, really shining This is something we've talked about, I think, for years, but we're actually seeing that materializing in numbers. On the 2028, I think it's important to note that the forward market has very limited liquidity, so we don't use it, or we don't consider it a reliable reference at this stage. We would typically look more to either our own internal modeling or even just externally to the TTF gas prices and the CO2 prices, sort of as having more liquidity for that time period. I just want to reinforce, the integrated margin is not driven just by the base load pool prices. It also benefits from the intraday balancing market spread. It depends on ancillary services. It depends also on the value of this integrated generation and customer portfolio. Overall, we are very confident that the structural market trends continue to support the resilience of our integrated margin, and I think that's the important point.
Miguel Viana : We have a question regarding guidance for the net debt of 2026. If we reiterate the guidance, how do we see this evolution until the end of the year?
Rui Teixeira : Thank you, Miguel. We remain fully comfortable with the guidance of around EUR 16 billion for the end of the year 2026. It is typical that we have in the second quarter, this increase in debt given the dividend distribution, and also the fact that in the second half of the year is typically when we have the tax equity proceeds as well as the asset rotation proceeds. That is our expectation for the year. Fully comfortable with this 2026 guidance. Just also to add, cost of debt, we are also expecting to be around the same level that we have at this first half of 2026.
Miguel Viana : We have here, maybe we go to a last question from Alex from Bank of America regarding power prices. If you can give us an update in terms of hedgings and levels for 2027, on EDP Hydro and EDPR.
Rui Teixeira : I will take this one. Thank you. The way we have been managing this is obviously integrated, and looking at the entire volumes, generation as well as clients. I think more and more, what we are highlighting is the value of the FlexGen, which is obviously not correlated to any hedging. We keep the conservative approach where we try to close all the positions that we have with customers. Again, just highlighting that what we will expect for the remaining of the year is actually an improvement versus what we have in the second half last year. Second half versus second half, better this year than last.
Miguel Viana : Going now to the questions on the phone. First question from Pedro Alves from CaixaBank BPI. Pedro, please go ahead.
Pedro Alves : Hello, good morning. Thank you for the presentation. On data centers in Portugal, it is indeed striking that we have 4.6 GW of grid connection requests, representing half of the current peak demand in the country. I'll be interested in knowing how do you assess this generation and demand balance here. I also wanted to check if you have had any relevant update from the high-demand area framework in Portugal, the so-called Zonas de Grande Procura, that could eventually accelerate the power land opportunities for you. The second question is on the evolution of some of the building blocks in net debt. On financial investments, caught my attention that there was a material increase in the second quarter. I guess this relates to something temporary on equity investments in Ocean Winds, will be helpful to get additional color here. Also on the regulatory receivables in Portugal, which also increased. Would be great to know the expected build for the remaining of the year and recovery schedule. Thank you.
Miguel Stilwell d'Andrade : Okay. Thank you, Pedro. On the data centers, as you say, the 4.6 GW is indeed quite impressive. Just as a background, actually there were 40 GW initially requested, sort of, if you go back about a year. Then what happened was that the government ran this process of the high-demand zones. They demanded that to participate, that you had to provide strict guarantees or higher guarantees, bank guarantees, and also that you had to commit to certain timetables and calendars to actually then implement those projects if you were awarded that capacity. That meant that a lot of people sort of dropped out, and the 40 GW went down to 4.6 GW, which as you say, is still a huge amount. It just shows you sometimes a little bit of the speculation that exists in the market, when you just don't have any commitments or any costs associated with actually asking for these interconnections or requests. On the high-demand zones, we don't have a final calendar, but what we are expecting is that over the next few months, so before the end of the year, that we would have visibility on that, and we would know who has been awarded megawatts and how many. It is foreseen that in some cases, if there is more requests than availability, that there might be an auction, but as far as we understand, that won't happen, so there will be There won't be the need for that. That's on the high-demand zones. On the generation balance, as you say, demand is certainly growing very well in Portugal and has been growing over the last couple of years and is expected to grow going forward. It has been growing faster than generation. I think what we've been calling attention to is that at a certain point, we need to get the general demand-supply balance in order. That means that you need to speed up the licensing and permitting of projects, and that's being done. The government has moved and, as you know, has actually started to move forward with the acceleration zones for renewables in Portugal. I think that's a very important initiative. It already was recommended by the European Commission way back in 2022 as part of the RED III directives. That's now being implemented under public consultation, that should be moving forward. They're also doing restructuring of some of the agencies to make sure that they are faster, and they can really speed up some of these processes. We're actually feeling quite optimistic about what we're seeing and the movement on the ground. To your point, as demand grows, it can outpace generation for a while, but at a certain point, generation will also need to start moving faster to keep pace and keep that supply-demand in balance.
Rui Teixeira : Hi, Pedro. On the financial investment, this is related to Ocean Winds, and specifically to one of the U.K. projects, where we have equity bridge loans, and then when the project starts to run into operations, basically convert that into equity. That's the impact. This was already foreseen in our strategic investment in the CMD plans.
Miguel Viana : We can go now to the next question on the phone, from the line of Arthur Sitbon from Morgan Stanley. Arthur, please go ahead.
Arthur Sitbon : Yes. Thank you very much for taking my question. The first one is a follow-up question on data centers. The first thing I was wondering is, you talk about very strong demand growth in Portugal, and there's this big Start Campus project and other projects. I was wondering if you think that this could eventually, at some point, lead to some gradual divergence in power prices between Portugal and Spain, and if that were to be the case, how could that impact your business? The second question linked to data center is just, you talk about grid connections that you have. I think you mentioned 500 MW in Iberia. I was just wondering if you could give us a little bit of color on where those connections are located. I imagine it's not the same if they are located, let's say, near Madrid or outside in places further away from data center hubs. My last question is on curtailment in Brazil. I think there's been progress made regarding the compensation of past curtailment. I was wondering how much that will impact you and if you've already booked anything for that. Thank you very much.
Miguel Stilwell d'Andrade : Thank you, Arthur. On the first point, on the demand growth, could it lead to basically market splitting between Portugal and Spain? Fortunately, what I'd say is that Portugal and Spain have a very high level of interconnection. It's probably one of the most interconnected, or two of the most interconnected countries in Europe. Even recently, there was another line that was sort of upgraded in terms of its interconnection capacity. Yes, it's possible, but what we've been seeing so far is that there is a significant amount of volume that can flow both from Spain to Portugal and Portugal to Spain. Actually, what we've seen, Spain has significantly more solar than Portugal on a relative basis, for many of the hours in the middle of the day, there is a flow of solar from Spain into Portugal. At a certain point, if the demand continues to grow in Portugal and there is not additional generation, it could lead to some market splitting. That would have to be incorporated into the pricing then that has been done for customers. At the moment, what I'd highlight is really the high level of interconnection that we have. There hasn't been market splitting even with that growth in Portugal over the last couple of years. I'll take the one on curtailment in Brazil, just to say that what came out essentially is we think it's a step in the right direction. We still don't think it's enough. It essentially does allow us to be compensated for a significant part of the past curtailment, but it would require us to give up the right to fight for reimbursement of the curtailments going forward. We're still assessing the proposal, and we still have to take a decision on whether we will move forward with that or continue to try and find other ways of being reimbursed for that curtailment. It's something which is impacting all of the sector in Brazil. It has been now for a while. It's obviously incorporated directly into accounts. Curtailment is less production. You see that in the volumes in the Brazilian generation. That's already in the business numbers that we're seeing. There are other solutions that are being discussed to also sort of get around this issue of curtailment, bringing demand further up to the Northeast of Brazil, where you have all of this power, trying to leverage also on the batteries. There's going to be a batteries auction also in Brazil. The idea is to really try to solve this curtailment issue in Brazil. On the grid connections in Portugal, sorry, I didn't get whether the question was in Portugal or just generally Iberia.
Arthur Sitbon : Generally speaking, Iberia.
Miguel Stilwell d'Andrade : Generally speaking. A lot of our interconnections are located close to urban centers, at least the ones that we are considering. In Portugal in particular, Setúbal, Carregado, Sines, those are some of the key ones. We also have some near Madrid, just on the outskirts of Madrid, which we're also considering. They're typically where we think they would be more attractive for data centers, which means closer to urban centers because of the latency, apparently it's a more attractive sort of area. That's what the teams have been working on.
Arthur Sitbon : Thank you very much.
Miguel Viana : Thank you, Arthur. We have now the next question from Jenny Ping from Citi. Jenny, please go ahead.
Jenny Ping : Hi. Thank you very much. A couple of questions from me, please. Firstly, just following up on Arthur's question around Brazil. Two questions there. Curtailment, can you give a size of the historic recognition if that indeed is a path that you choose to take up? Secondly, relating to that, where are we now on the regulatory recognition of CapEx in terms of faster recognition? That review, I know, is still ongoing, but any updates on the timeline in terms of decisions and recognition there? That's my first cluster. Secondly, if I look at your slide 20, if I add up the low and upper range of the different divisions that you give, it gives us EUR 5.2 billion-EUR 5.5 billion EBITDA for 2026, and you obviously average at a level of EUR 5.3 billion below the midpoint. Can I just check what you need to see, or what needs to play out in terms of the business? Where is the most uncertain part of the business which will effectively allow you to get to the top end of the range? Then just very lastly, can we just go back to the 500 MW powered land position that you say you have secured. Sorry, maybe I missed it, but can you just outline what that being secured actually means? Is it just the grid connection in itself, or is there a contract behind it already, in terms of data center? Thank you.
Miguel Stilwell d'Andrade : Hi, Jenny. I didn't quite catch the beginning of your first question, but I think I then caught the second part of it, which was around RAB, right? The recognition of the RAB. The first part, was it on curtailment?
Jenny Ping : It's just on the curtailment, back to Arthur's question in terms of if you were to recognize the entire historic curtailment benefit, what size are we talking about? If that's something that you choose to recognize and give up future curtailment cost as a result.
Miguel Stilwell d'Andrade : We're talking about around BRL 100 million of value. Seeing rough numbers. It would be basically the volumes of the path that's sort of under curtailment that would be recognized by this proposal from the regulator. On the second part, which is on the RAB recognition. Since we're the first company to have the concessions renewed, we're also the first ones to start raising this issue around the RAB recognition on the interest cycle. As far as we know, we are, but since then, other companies have also started having their distribution concessions renewed, and so also facing the same issue. There's a working group that has been discussing this with the regulator. Listen, I don't want to create any expectations, but let's say the messaging has been positive. At least they recognize the issue. I think it'll still be some time before you can get a firm proposal. As you know, we have presidential elections this year in Brazil, November. They may make things a little bit slower because people's minds may not be very focused on this over the next couple of months. Not our mind is totally focused on it, but on the counterparties not necessarily 100% focused on it. I'd say probably a 2027 type moment to take a decision. We do think it is important. I think people recognize, on the counterparty also recognizes, so the regulator and the government also recognizes it. It makes sense. It's now a question of how do you translate that into something concrete from a regulatory point of view. On the second point on the guidance, sorry if I understood, if you sum up the pieces 5.2 to 5.5, I think when we gave the 5.3, it wasn't that we were trying to say anything that we were being conservative. For us, that was around the midpoint of those numbers by giving the ranges. If it then depends on hydro, what will happen to hydro in the fourth quarter? It depends on what happens to prices. There are different factors that may impact, let's say, the gen tailor piece, which obviously has more uncertain. The networks, I think, is very predictable. On the EDPR side, I think we've also talked about the asset rotations. We've given a very clear guidance on that. On the underlying, we're expecting an acceleration or sort of an improvement on the underlying. Again, it then depends on the wind, on the sun. There's a certain amount of volatility on the volumes, which we also try to just manage for the P50 in those scenarios. On the powered lands piece, what does secured mean? First, I think we will have hopefully some good news still over the next couple of months, where you have some data center developers that want to use some of our existing sites to essentially co-locate a data center and potentially use part of our existing land. Those are situations where we are taking advantage of our existing sites, and leveraging on them to create value because of a data center that actually wants to use part of that site or co-locate there. On new greenfield developments, essentially it's having interconnection, so being able to consume from the network, having a size which is relevant. Typically hundreds of megawatts is when it starts to be relevant for data centers. Having some sort of options on land around it that would enable them to build the actual data center. That's when we talk about powered land, essentially that's it. It's sort of having that land with some degree of licensing and permitting to be able to actually develop the site there and having that interconnection to be able to consume from the network, which as you know, is a scarce resource in many countries. Hopefully, that helps.
Jenny Ping : Yes. Thank you. Sorry, just to clarify-
Miguel Stilwell d'Andrade : Yeah
Jenny Ping : that 500 MW, that's still yet, although it's secured based on what you said today, the announcement to come to the market has yet to be announced effectively.
Miguel Stilwell d'Andrade : Yeah
Jenny Ping : In terms of which data center, et cetera, that to come, as you say, in the next few months.
Miguel Stilwell d'Andrade : Yeah. When we say, it means that we have, let's say, the basics in place to be able to have a package which is marketable. It then depends on finding a counterparty that is willing to transact on that package or on those packages on terms that we think are attractive. Having the powered land secured means that we have those things in place. We then need to have someone to transact with to actually crystallize that value.
Jenny Ping : Got it. Perfect. Thank you very much.
Miguel Stilwell d'Andrade : Okay, thanks.
Miguel Viana : We will close here the session of Q&A, and I'll hand over to the final remarks by our CEO.
Miguel Stilwell d'Andrade : The final remarks, I'll just make a couple of points. First, I think we had a great first half. I think there's no denying it, and I think that makes us very positive for 2026, and that's why we're also upgrading for the second time this year our guidance for the year. This is good performance across all the different segments, FlexGen, Networks, EDPR. We do see improving network, improving outlook post 2026, 2027 and 2028. Not going to give specific numbers on that, but obviously, just given the general tailwinds that we're seeing, it's positive. Strong demand growth, I mean, all the things that we talked about on the call. That's good. We are seeing improving visibility post 2028. As I mentioned earlier, we will update sort of in a couple of quarters on that. We're working to basically firm up some of the different assumptions and get back to you on that. All in all, I think we're in a great position, proving to be a great year for EDP. Great prospects also for the next couple of years. I think in general, very good. I didn't want to finish without wishing you great holidays if you are going off on holidays, and I hope to catch you on the way back in probably early September. Talk to you soon. Thanks.
