This article first appeared on GuruFocus.

Release Date: May 12, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

EnBW Energie Baden-Wuerttemberg AG (XTER:EBK) reported a solid start to fiscal year 2026 with adjusted EBITDA of EUR1.2 billion, in line with expectations.

The company successfully issued EUR1 billion in green hybrid funds, attracting high investor interest and securing a significant share of funding needs for 2026.

The offshore wind project at Wright is progressing well, with 45 of 64 turbines installed and the majority of capacity secured to long-term PPAs.

EnBW expanded its e-mobility infrastructure by adding 500 fast charging points, bringing the total to over 8,500, supporting growth in smart infrastructure.

Liquidity remains strong with nearly EUR10 billion in cash and cash equivalents and almost EUR10 billion of undrawn facilities, positioning the company well to absorb market volatility.

Negative Points

Sustainable Generation Infrastructure earnings were lower than last year, mainly due to weaker performance in thermal generation and trading.

Hydro levels across Germany were lower than expected, impacting earnings from renewable energy sources.

Thermal generation and trading contributed less to earnings, reflecting lower hedge generation margins and weaker trading performance.

Gross investment for the first quarter was 21% below the prior year level, reflecting the maturity of the project portfolio rather than a slowdown in execution.

Higher personal and maintenance costs partially offset the positive development in regulated grid revenues.

Q & A Highlights

Q: Can you provide an update on trading conditions in Europe and gas trading for EnBW? Do you expect stronger trading results in 2026 compared to 2025? A: The trading environment remains volatile, with gas trading performing better than expected in Q1, while electricity trading was below expectations. It’s challenging to make accurate trading decisions due to reliance on political decisions rather than fundamentals. We hope for a good trading result by the end of the year, but it’s difficult to predict with certainty. – Deputy CEO and CFO, Thomas Gustere

Q: With the first quarter’s adjusted EBITDA at EUR1.16 billion, how confident are you in achieving the full-year guidance given lower generation margins and reduced capacity? A: We are confident in meeting our full-year guidance due to normalized trading results, weather conditions, strong e-mobility performance, and increased renewable capacity, particularly from the ramp-up of new projects. – Deputy CEO and CFO, Thomas Gustere

Q: Do you expect any political movements to reimpose windfall taxes or alter the ETS affecting electricity prices? A: We do not anticipate any risks regarding windfall profits due to current market conditions. Gas prices are significantly lower than during the 2022 peak, making political movements towards windfall profit unlikely. – Deputy CEO and CFO, Thomas Gustere

Q: Are all your natural gas requirements fully covered for 2026, and can EnBW pass through costs to customers? A: Yes, we are fully covered for 2026 with no exposure to Middle Eastern LNG sourcing. Most LNG is procured from the US and other countries, and we do not expect any impact on our customer base from price developments. – Deputy CEO and CFO, Thomas Gustere

Q: Can you update on the auction process for new hydrogen-ready gas plants in Germany? A: We expect the first auction to occur in September and the second in December. Although we’ve been waiting for these auctions for several years, it seems likely they will happen as planned. – Deputy CEO and CFO, Thomas Gustere

For the complete transcript of the earnings call, please refer to the full earnings call transcript.