Finance
Italian renewables company ERG scales back investments on cautious outlook
Published by Global Banking and Finance Review
Posted on March 12, 2025
Last updated: March 12, 2025
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on March 12, 2025
Last updated: March 12, 2025
By Alberto Chiumento
(Reuters) -Renewable energy company ERG lowered its outlook for asset growth and investment to 2026, citing market volatility, and will instead focus on existing investments until conditions are more stable.
The company is also taking a more cautious approach towards the U.S. market amid uncertainty over President Donald Trump's green energy policies, it said in a statement late Tuesday.
CEO Paolo Merli said ERG was reducing its investments for the next two years, and would focus on assets "currently under construction, organic development, and re-powering."
The strategy is part of the company's 'value over volume' approach, with a priority on maximising returns on existing investments rather than increasing expenses in new investments.
Shares in ERG traded down 6.3% to 17.35 euros at 1212 GMT after falling as much as 9% earlier in the session.
ERG, one of Italy's leading oil companies before transforming into a renewable energy firm last year, has reduced its planned 2024-2026 capital expenditure by 20% to 1 billion euros ($1.09 billion), it said in a statement.
It revised its asset portfolio growth to 4.2 gigawatts (GW) from 4.5 GW previously.
The company estimated core profit of between 540 million euros and 600 million euros in 2025, due to expected volatility in market prices and volumes.
Brokerage Equita said that ERG's targets and guidance for 2025 and 2026 were below expectations.
ERG entered the U.S. market in 2023 through a joint venture - in which it holds a 75% stake - with Apex Clean Energy Holdings LLC (Apex), which includes a wind farm and a solar plant in its portfolio.
It made a profit of 535 million euros last year, in line with expectations, and said it will return 1.15 euro per share to shareholders, made up of 1 euro in dividend and 0.15 euro per share, in a 23 million euros buyback programme between November 2024 and January 2025.
($1 = 0.9179 euros)
(Reporting by Alberto Chiumento in Gdansk; Editing by Tom Hogue and Rachna Uppal)
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