Moody’s improved the outlook for the evolution of REN’s debt quality, from stable to positive, with the agency justifying the decision by announcing the power company on May 14 on Capital Markets Day. Update your strategy for 2021-2024.
The agency said in a report today that the decision “reflects Moody’s expectation that the company will maintain a strong financial profile during this period.”
Under the terms of its new strategy, REN plans to invest €235 million annually, “which is a 35% increase over 2015-2020,” Moody’s explains, noting that 75% of this capital expenditure will go to transportation. In Portugal, specifically to connect new renewable energy generation capacities.
The change from outkook to positive takes into account that there are several measures to partially fund the capital spending programme, including direct agreements negotiated between developers and grid operators to connect solar plants to the electricity grid. [de forma a escoar a eletricidade] Moody’s says that already covers 3.5 gigawatts.
But not only. The agency also considered reviewing the REN dividend policy for the period 2021-2024, with a 10% reduction, it notes. Remember, the Rodrigo Costa-led company set its minimum annual dividend at 15.4 cents in the 2021-24 cycle, versus 17.1 cents per share it has been paying since 2018.
The agency maintained its REN rating at Baa3, which corresponds to the last level of its good investment class – one level above rubbish (speculative investment class).
With a positive outlook, the REN rating is likely to improve soon.
(news last updated at 6:26 pm)
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