Research Update: KELAG Outlook Revised To Stable From Positive On Ratios Aligning With Current Rating; 'A' Ratings Affirmed

Austrian utility KELAG has exhibited strong performance over the past two years, benefiting from elevated electricity prices. However, we do not foresee KELAG sustainably maintaining a funds from operations (FFO) to debt of above 60% any longer. We expect it to be about 55%-65% by 2025. We forecast KELAG's discretionary cash flows (DCF) to be negative, ranging from about €80 million-€200 million annually over the next three years. This is due to expected increases in investments, rising to about €440 million from €304 million in fiscal year (FY) 2023, to fund the growth of its renewable power assets and grid infrastructure, as well as to support increasing dividend distributions. We therefore revised our outlook to stable from positive and affirmed

...- Austrian utility KELAG has exhibited strong performance over the past two years, benefiting from elevated electricity prices. However, we do not foresee KELAG sustainably maintaining a funds from operations (FFO) to debt of above 60% any longer. We expect it to be about 55%-65% by 2025. - We forecast KELAG's discretionary cash flows (DCF) to be negative, ranging from about 80 million-200 million annually over the next three years. This is due to expected increases in investments, rising to about 440 million from 304 million in fiscal year (FY) 2023, to fund the growth of its renewable power assets and grid infrastructure, as well as to support increasing dividend distributions. - We therefore revised our outlook to stable from positive and affirmed our 'A' long-term issuer credit rating and 'A' issue credit rating....

Research Update