Edwards Lifesciences Corp

NYSE:EW

Good morning to all the people connected today. Welcome to the First Quarter 2025 Results Presentation, which will be hosted by Endesa's CEO, Jose Bogas; and the CFO, Marco Palermo. Following the presentation, we will have the usual Q&A session open to those connected on the call and on the web. Thank you. And now let me hand over to Jose Bogas.

Thank you, Mar, and good morning, everybody. First of all, in relation to the events of last week, allow me to thank all the Endesa workforce who from the different positions work tirelessly to recover the electricity supply in record time. The blackout is still under investigation by the Spanish government, and it is the system operator who is responsible for guaranteeing the continuity and security of the electricity supply.

From the very beginning, we have been working closely with the TSO to identify the causes of the power outage and to implement the appropriate measures.

Now let's continue with the highlights of the period. In this first quarter, we recorded a solid financial performance across all businesses as we will further comment on. This is -- this in a market context set by growing geopolitical instability, which contributed to further intensifying volatility across global market and put significant upward pressure on commodity prices.

On the regulatory side, this year has a special relevance since, as you know, we are in the midst of a regulatory review process to cover the next 6 years. We are still awaiting development on the update of the financial remuneration, a critical milestone to address electricity transition and distribution challenges, to attend to new demand patterns and integrate new renewables.

And finally, on a different topic, the 2025 Annual General Meeting held last week approved all the resolutions proposed with an 86% quorum. On Slide #4, I would like to start by highlighting the excellent result achieved in the first quarter. EBITDA reached EUR 1.4 billion, that is 33% higher than previous year. This remarkable achievement is mainly due to the strong performance of the liberalized business and the negative impact of the 1.2% levy that hindered last year's results.

Likewise, net ordinary income came in at around EUR 600 million, doubling last year's figure. These results turn into an outstanding cash generation, which compares very favorably with last year, which I recall was affected by the extraordinary gas arbitration paid in the first quarter 2024.

On the next slide, let's review our progress in capital allocation strategy. In February, we completed the acquisition of Acciona hydroelectric asset, implying a cash outflow of approximately EUR 0.9 billion. This transaction resulted in the addition of a portfolio of 34 hydro plants with a total capacity of 626 megawatts that had been consolidated since March.

This acquisition strengthens our position in renewable assets and brings our total mainland hydro capacity to nearly 5.4 gigawatts and total renewable capacity close to 11 gigawatts, increasing our future hydro output by more than 20%. In March, as a follow-up to our partnership business model Endesa and Masdar entered into an agreement for the purchase of 49.99% of around 450 megawatts of operational photovoltaic plants in Spain, which we hope to conclude in the second -- in this second quarter 2025.

Lastly, with the aim of optimizing the underlevered capital structure, I would like to mention our recent share buyback program announced back at the end of March, launched for a maximum amount of up to EUR 2 billion to be executed in several tranches until end of 2027. The Board of Directors approved an initial tranche of up to EUR 5 million -- EUR 500 million for 2025 to be executed not later than December this year. Through this transaction, we have alternative for efficient capital use and increase the attractiveness of shareholder remuneration while supporting share stability and demonstrating management trust in future growth.

Slide 6 illustrates the year-on-year evolution of commodity market dynamics, which has not only been driven by a general boost in prices, but also by a significant degree of volatility. In this sense, and in particular, the TTF spot prices have recorded a 70% increase on average and have moved in a wide band, mainly driven by geopolitical instabilities and the level of the European gas reserves throughout the winter.

Also, in average terms, pool prices almost doubled versus 2024 first quarter, although with an exceptional level of volatility. In this context, price about EUR 200 per megawatt hour have coexisted with 0 or even negative ones strongly influenced by high solar load factor and to a lesser extent, hydropower resources and the lower contribution of wind power. All these bring us to a new evolving scenario that present new challenges in terms of security of supply and system stability.

On Slide #7, we focus on demand evolution and in particular, on the implication for the power grid. Mainland electricity demand has shown a steady recovery leading to a 2.6% growth year-on-year or at 2.5% after adjusting for weather and calendar effects while Endesa's figure claimed to 2.9% and 3.9% relatively. The evolution of these figures speak for themselves and shows a clear upturn in both industrial activity and on the electrification of users in the rest of the segment.

This first -- this fitted well with the unprecedented growth in connection requests received over the last year, which even in a very conservative scenario would be pointing to a significant demand increase. Spain has a huge opportunity to become a major hub for industrial investment in Europe by attracting this new demand. All that is needed is an appropriate regulatory framework and rate of return to ensure that this opportunity is not wasted.

We are modern societies because we are electrified. And for the reason -- is for this very reason, ensuring the security of supply and the competitiveness of our electricity system is fundamental.

Let me now hand over to Marco for the financial results.

Thank you, Pepe, and good morning, everybody. Turning to the analysis of the key EBITDA drivers. I'm now on Slide 9. As we already mentioned in this first quarter of 2025, we achieved excellent results, marked by a robust 33% increase in EBITDA. This significant growth can be attributed to several key factors. Firstly, the absence of the 1.2% extraordinary levy, which represented an impact of EUR 0.2 billion in the previous year. Secondly, it must be highlighted the significant increase of 20% in the Generation and Supply businesses. Lastly, the Distribution business remained stable. This performance is consistent with last year margin and EBITDA, and it aligns with our guidance for this year.

Moving into a deeper analysis on the Generation and Supply businesses. We are now on Slide 10. The 20% improvement in EBITDA was driven by the performance in the gross margin, which grew 12% and by the stability of fixed costs remaining in line with the previous year. This good evolution in gross margin was explained by the improvement in conventional generation, which included mainly thermal, nuclear, non-mainland and gas wholesale with a gross margin increase of 14% from nonmainland increase by 17%, mainly thanks to 2020 final settlement, strong margin from gas management backed by positive previous hedgings. And all of this partially offset by lower margin from short position management as a consequence of the sharp increase in input prices in the period. And nuclear margin decreased due to higher taxation following the increase in the Enresa tax since July 2024 and also the full impact of the 7% tax on generation.

Likewise, the contribution from the renewable business remained stable, mainly explained by higher hydro margins offsetting the lower wind and solar output and also the higher generation tax impact.

Finally, strong performance in customers, both in power and gas. Fixed cost remained flat compared to previous year, in line with our plans to absorb the impact of inflation and growth.

Moving now to Slide 11. These dynamics are reflected in free power margin which was reduced by 7% compared to the previous year to EUR 54 megawatt hour. Its evolution is mainly due to the normalization of the share position in an environment of rising prices as well as the lower generation margin, mainly from lower nuclear results due to the higher fiscal pressure we have just mentioned. On the other hand, and despite the lower number of liberalized customers, the supply margin slightly improved compared to the previous year, reaching around EUR 17 megawatt hour.

The resilience of this margin comes from a strategy focused on the most valuable clients, promoting long-term loyalty with a personalized interaction with customers, also through a greater physical presence by increasing the number of service points.

Taking a look now on gas integrated business on Slide 12. Total gas sales were up by 3% mostly related to higher gas portfolio management activity and a slight improvement of CCGT's load factors, partially offset by lower liberalized sales. Sound improvement of gas margin backed by positive previous hedgings and the price resilience in the B2C segment. This sound gas margin will normalize over the course of the year to reach the target announced in the Capital Market Day.

Moving now to the analysis below EBITDA. I'm on Slide 13. D&A increased versus previous year, driven by higher amortization due to investment effort. The net financial results improved on the back of lower average gross debt in a context of lower interest rates. And finally, tax rate landed at around 24%, already not affected by the nondeductibility of the 1.2% temporary energy tax, which penalized the previous year's results.

As a consequence of the above, reported net income, same as net ordinary income, is up by a sound 100%, visibly improving the net ordinary income to EBITDA conversion ratio, which represented more than 40% in the first quarter and will normalize in the coming quarters.

Going to the next slide on cash generation. FFO reached an outstanding EUR 1.2 billion. That is EUR 1.1 billion higher versus previous year. Focusing on the moving parts, strong EBITDA growth, as seen before, positive working capital of around EUR 0.5 billion, with an improvement in both the regulatory and the remaining working capital strongly affected by the payment of the Qatar award in the first Q of 2024. And a slight improvement in cash out for taxes, partially offset by higher financial charges payments.

On Slide 15, net financial debt reached EUR 10.2 billion, an increase of 9% compared to previous year. In terms of recurring activities, the FFO generated in the period was sufficient to cover investment and the payment of the interim dividend. While in this first quarter, we also paid the acquisition of Acciona's hydro assets.

Gross financial debt remained stable, while cost of the debt decreased to 3.4% following the European Central Bank interest rate policy. Finally, our financial management has led us to enjoy healthy credit metrics. The strong cash generation is reflected in the FFO to net debt ratio at 46%, while net financial debt-to-EBITDA ratio kept the level of 1.8x.

Let me now hand over to Pepe for the final conclusions.

Thank you, Marco. Now on Slide 17, I would like to share some closing remarks to conclude this presentation. First, this quarter, we delivered solid results while generating strong cash flow. This achievement have significantly strengthened our financial position, enabling us to make progress towards our 2025 guidance.

In 2025, we initiated a share buyback program in order to optimize our capital structure. The ample margin offered by our balance sheet allows us to include this operation compatible with the investment plan and the dividend policy in order to contribute to the remuneration to our shareholders.

On a different note, demand is showing signs of recovery, presenting a unique opportunity to reindustrialize the country. To achieve this, we need a robust and resilient grid, which requires significant investment, as highlighted by [indiscernible] along with fair remuneration.

Furthermore, having a diversified and competitive generation mix is crucial. To that end, a review of nuclear taxation is essential to ensure its economic viability so that it can provide security of supply in the years to come.

Thank you for your attention, and let's now move to the Q&A session.

[Operator Instructions]

Okay. Thank you, Pepe, thank you, Marco. We start now with a different questions from our analysts. The first one comes from Pedro Alves from CaixaBank.

Two, if I may. The first one on the full year guidance. Just wanted to know if you are comfortable with the high end of the guidance given the solid delivery in this Q1. And perhaps if you can just explain a little bit more on the gas margin, which was perhaps surprisingly high in this quarter and why it should normalize so much to meet the full year guidance that you previously gave?

And secondly, I know you are still under investigations in Spain regarding the blackout, but I was interested in your thoughts on the potential implications for electricity system post the blackout, if you think the role of nuclear is really going to change? And where do you stand exactly in terms of conversations with both your partners in the nuclear plants and the government?

Okay. Pedro. I will try to answer the second one, and I will give the word to Marco for the first one. But let me say that we -- it's very early in the year, but we feel comfortable just to reach the guidance, and Marco will explain to you our view in the gas margin.

Having said that, with regard to the blackout, things are going to change in the strategy. Let me say that first of all, as you have said, this blackout is under investigation. I would say that we can only wait or we should wait and see the outcome of the inquiry.

Having said that, I don't like just to mix things. We have said many times that we are in favor of nuclear, that we are in favor of increased investment in the network. And we continue that shape, let's say that. Again, I don't like to mix things. But what we think is that, yes, because not of that, just because of the system that we have, perhaps we have one of the most secure and reliable system, but that doesn't mean that we are not in favor of extending or postponing the closure of the nuclear and that doesn't mean that we are not in favor of increasing the remuneration of the grid because it is needed, but it is needed prior to this blackout that we will see the outcome. Whatever the outcome of the investigation, we will continue with this. So the role of the nuclear is very, very important in our opinion and also the grid is very, very important in our opinion. And Marco?

Thank you, Pepe. Pedro, so first question on guidelines. I would say that actually, the range of the guidelines is only EUR 200 million. So I would say we stick to that. So we confirm the guidelines and then we will see at the end where we will place ourselves. But going deeper on the gas margin, actually, in a normal year, you should expect to have basically higher quantity and generally higher prices in the winter for gas. So basically, it's like first and last quarter, and lower quantities sold and also lower prices during the summer.

So basically, second and third quarter. We think that the result of the gas this year will be approximately EUR 600 million. So basically doubling the result of last year, there was EUR 300 million. But again, I said that the seasonality of the results is linked basically to the consumption and to the prices of the different quarters. So that's why, I mean, you see higher impact in this quarter. And eventually, you will see the same when the winter will get back at the end of the year again. Thank you.

Thank you, Pedro. The next question is coming from Alberto Gandolfi from Goldman Sachs.

I'll also ask three. Pepe, I think it was very clear what you said about the blackout, but you're talking about nuclear as a priority in grid. I think that nuclear was already there last Monday when the blackout happened. So I'm sure life extension will help, but will not fix the short-term problem. And grid investments might take a few years.

So I guess the question for you here is what level of investments do you need in the grid to make it state of the art within 5, 7, 10 years. And the second question is, is there a shorter -- well, second part of this question, is there a shorter-term solution that can actually help fix the problem. Are we talking about batteries here? Are we talking about different algorithms, a different way to remunerate reserve capacity? So more remuneration, more like available to go. So just trying to see the positives from the negative here of a blackout in the short or medium term?

The second question is that I think the big novelty seen the past 6 months in Endesa is that at last the company started to delever its balance sheet. You had positive leveraging. Is it more buyback? Or is it higher organic CapEx or you are done with the buyback now because the free float is limited? So I'm just trying to understand how you think about leveraging.

The last question is a question I ask and again, I'm trying to check in to see what you think here. Your electricity integrated margin is extraordinary. You've managed to protect it really well. But how can you protect EUR 54 megawatt hour if and when medium-term power prices will probably be 50, 55. So how are you thinking about it?

Okay. Alberto, thank you very much for the question. I will leave the leverage level to Marco and also the -- how we are going just to maintain, even increase the electricity integrated margin. Is not going to be easy, but believe us, we will continue with this or we hope or we work for maintaining this level.

Regarding the blackout. As you have said, this real, in my opinion, whatever the outcome of the investigation would be or will be, I think that it is clear that this situation again, and I don't want just to use this blackout because it has no sense, but it really support even more, let me say, the network remuneration needed just to invest more.

How much -- looking at the [indiscernible] we have to double the investment in the decade 2021 to 2030. So that means that we almost should triple the investment in the next year. That gives you a figure that what it is needed in this. And it has no relation with the blackout. That is prior to the blackout what we have independent, what we need just to integrate the renewables just to integrate the new electrification, et cetera, et cetera. But that is the first thing.

The second thing, in my opinion, prior to the blackout, we were pushing this area is the nuclear extension life or nuclear close or postpone, let's say that. Why? Well, yes, because it is not a question of nuclear against renewable or renewable against nuclear. I think that fit very well together, and we need these 2 technologies in our mix of generation. And that will give us the system more stability.

But again, I don't like just to use this situation because it's something that we have been explaining for a long time, use the blackout just to reinforce our idea. No, no, no, all is previous for that. And then what I think is that we need the capacity payments mechanism, which is necessary in the future. And let me say, I will be in favor of incentivized storage in the future, could be batteries or whatever, because that will give us this stability of the system.

In any case, let me say again, that one of the most secure and reliable system all over Europe is the Spanish system. We have some weakness, let's say, that the very low interconnection with the rest of Europe. That is clear. But I think that we are in the right way. We need, in our opinion, to change some things, and we need to continue with what we have started being a country with very low emissions, but very competitive price and continue with the security of supply that we have today.

What to do shorter-term solution? Well, the shorter term solutions, let me say, Red Electrica is trying just to have extreme caution in the operation of the grid, introducing combined cycles, mainly combined cycles, just to at least up to -- what we know the final causes of this blackout just to be sure how -- that we don't -- will have any other problem with the system.

Well, I agree with that, just to have a more secure and reliable system, we will see because these things should be normalized in the future because it's not what we are going to have is a huge ancillary services. We expect the situation to normalize in the near time to avoid any additional cost being passed to the customer because at the end, the customer will pay this way in which we are trying to secure the system. I think I have answered all but if I had to lost anything.

Okay. If I may, just -- Alberto, thanks for the question. Just addressing the #2 and #3 on releveraging. Actually, I mean, what -- given that we are still -- our plan has always been to understand exactly what is the level of CapEx in grid that we can actually put at work and for this reason -- and for this, we need more visibility on the WACC.

And then setting somehow the dividend policy. This is -- on one side, this is taking time. On the other side, the generation of cash is strong in the company. So what we thought is even though we believe that at the end, we really hope we could put and plug more investment in the grid because we really believe that more investment in the grid are needed, even more when compared to what we have in the plan. Still, in our balance sheet, we are creating a lot of space.

And therefore, that's why waiting for this to happen and waiting for then a new setting of dividend policy, we decided to go on with a buyback plan because as you have seen, we are EUR 1.8 million and this will continue until we have more visibility on the grid. Even though, I mean, we are starting to invest more.

So basically, in terms of releveraging, I guess that the correct level probably is something between 2.5% and 3% in terms of leveraging. So as you know, making the numbers, this leave ample space for more investment or for a different dividend policy. And -- so basically, I mean, what we probably will not -- it's not part of the plan. It's the M&A because, of course, there it's based only on what the opportunities will be.

And of course, don't forget that we are still waiting for answer on the tender on the islands. And also that is even though its generation is regulated. So also there, for us, it's an opportunity just to plug in more CapEx.

In terms of protection of the margin of free power margin the 54%, apart from the pressure that our CEO is putting, not even defending it, but even increasing, here the point is the margin is, on one side, related to the cost, so if the cost goes down, actually, the margin crumple. On the other side, of course, the dynamics on the market.

Now we decided just to put in our presentation the chart that I know that you know very well, like all the others that are listening to this conversation about the volatility, I think it was Page #6. That volatility was not there a few years ago, this kind of volatility. And we believe that this kind of volatility is here to stay. And it's an effect of the new generation mix and the future generation mix, not only of Spain, we hope of also of all the other countries.

So with this volatility and with what Pepe was commenting regarding the ancillary services, so there is need in the system for more ancillary services. So -- and this is a cost that you don't know ex-ante. You know it only ex post. So this is another element of volatility that as a supplier, you have to take into account when you set the prices. So if you take all these elements into account, for a supplier, there are so many volatility -- there is so much volatility embedded in the decision that it's super difficult just to have a simple and cheap price because then you can end up losing money or a lot of money.

Of course, for the integrated players it's slightly different because you have also the generation on the other side. So actually, you can commit your production despite of the volatility and in terms of ancillaries, basically, you end up receiving part of this. So this is to say that we really think that this margin -- this unitary margin is dependable. And by the way, that is also our forecast for the end of the year, we hope to stay actually in this level and something very similar to what we are showing in the first quarter. Sorry for the long answer.

Next analyst is Manuel Palomo from BNP Paribas.

Sorry, but I will insist on the 2 key topics this morning that seem to be nuclear and the blackout. On the nuclear and after yesterday's statements in Congress blaming utilities for not having presented the same proposal project for the expansion of nuclear, my question is going to be very direct. It's whether you will present it and when could we expect it.

Then when it comes to the blackout, I understand that you maybe don't want to share your views on the cost of the blackout, I'm fine with it. But I was wondering about the economic implications. And I wonder if you have already started receiving claims from customers for not having supplied committed energy volumes and what you expect to be the final impact on Endesa as a supplier?

And lastly, I wanted to ask you about something that I'm recurrently asking, which is the loss of customers in the electricity market in Spain. It's been 170,000 in the first quarter, if my numbers are correct. I guess, that this is becoming a concern. And my question is, well, what are you doing in order to keep or gain clients? And I'm saying this because I'm surprised about the loss because, unfortunately, as an electricity client, I'm not seeing any price competition in the market. So any color on this would be very welcome.

Okay. Thank you for the question, Manuel. Starting with the nuclear. Well, first of all, what I would like to say is that the government is responsible for defining the country's energy policy. That is clear for me. So the government must decide whether or not these plans are necessary for the system.

In our opinion, nuclear technology is CO2 free, it's safe and reliable, competitive, et cetera. So for us, it makes sense extending nuclear life or postponing the forecasted closure. Having said that, well, the government or the ministry have said that we -- they are waiting for our request for postponing because they base this decision in an agreement between the nuclear power plants in Russia. But on top of that, it is clear for me that the energy policy should be driven -- should be established by the government.

We will do it, trying to understand all the implications because, as you know, it is not only the question of extending the life, but also reducing the taxation. And it is not a question that we don't want just to pay something or we want to pass to the customer something. First of all, the ENRESA tax, that is the waste tax is going to be paid without any doubt by the nuclear power plants, that is clear for us.

The second thing is that we have penalized the nuclear power plants compared to older CO2 free generation. And what we are looking for and asking for is a reduction of distance taxation just to -- if we -- the government take the decision of the continuity of these nuclear power plants. But we will really -- we have some meetings with the government. We will ask what is the best thing to do it to extend 10 years or more years or we should take care about the next years up to the year 2030 or whatever. We will see really what we will do.

With regard to the blackout and the economic implication, economic implication well, you have said some ones that is the potential claims and compensation process, fines from the authorities once they really clarify the causes of this blackout. And also what we have told before, the cost of the ancillary services in the future.

The first thing that I should say is that the government is still not rejecting any hypothesis. So they are looking for cyberattack, sabotage, technical failure or a failure in managing the balance between generation and demand. That is all the hypothesis that we have just today. We should wait to the outcome of the inquiry that we have today.

Nevertheless, let me say the system operator has all the information and must analyze and give this information to the investing committee. This investing committee will determine what the courses were. We will continue given our full support in reaching the outcome. But it is very difficult just to do different things.

Regarding compensation, first we need to note, as I have said, the causes of the outage to establish where responsibilities lie. That is the first thing. Until we know what the causes were, as I have said, the TSO is operating the system with extreme caution, and therefore, increasing the ancillary service. So that is something that we are suffering now. We expect the situation, as I have said, to normalize as soon as possible in the near future to avoid any additional cost being passed on to the customer because at the end, this is a cost of the system. So -- and up to now, we haven't received any claims.

Manuel, thank you for your questions. Only just on #2, you were -- on the blackout, as Pepe was commenting on the economic implications, on this, only to say that all our generation plants operated basically in full compliance with the instruction that were outlined by the daily operating programs set by the system operator. So that is the one that the entity responsible for defining the final generation mix.

And also our distribution network was functioning normally. So basically, we believe that we were among the parties affected by the incident. So that's why on what are the economic implication there, I mean we were a victim like many others, unfortunately.

And regarding the loss of customers, actually, your question #4 -- #3, sorry, here, those clients remember that these clients, the clients -- part of the clients that we somehow have been losing were part of the clients that were somehow switching to the -- to us, like also to the other companies a few years ago with what happened with the spike with water, spike on gas and also with the regulated price and therefore, somehow many clients switching to traditional integrated players.

Of course, between those clients, there are some, there are high switchers or as we say, very high switchers. And we simply think that there makes no much sense just to fight for those clients, make offers and then having them basically capture them with very, very cheap prices and then losing them in a few months as soon as you actually reprice and you set the correct price.

So competing for those clients, it makes no economic sense. And that's why you're seeing somehow this reduction in customers at the very same time that you see an increase also in the supply margin. Thank you.

Next question comes from Javier Garrido from JPMorgan.

I will have two. First, still on the blackout and cost of the blackout. I know it's early days, but I'm sure you have some estimate of what could be the initial cost for you, even if in the end, you can claim compensation for those costs to whoever is found to be liable in the end. But I understand that initially, the clients will claim for compensations from their energy suppliers, and you are one of the biggest. So I was wondering whether you would have any initial estimate of what could be the cost given that obviously, it should be partially covered by insurance.

And then the second question is if you can update us on the guidance for financial costs and net debt for the end of 2025. And specifically, when talking about net debt, to which extent the strong FFO to EBITDA ratio of Q1 can be extrapolated into the rest of the year?

Okay, Javier thank you for the question. Again, first of all, we don't know -- we need to know -- first of all, we need to know the causes where the responsibilities lie. That is the first thing. I don't know if we are going just to be obliged to pay the claims of the customer and then reacts this payment to order. It could depend on many things. We will see. And we need to know, as I have said, what is the real cause of this blackout. So initially, I don't know, you could utilize whatever number you want, but it is very difficult just to evaluate this. Well, I don't know if Marco have better idea. But in any case, I will pass this question to him and also the financial costs and debt -- and net debt.

Javier, so basically, on insurance cost, on the cost of blackout, I mean we need to wait for the conclusion of the investigation because they are -- we will know whether this was kind of extraordinary event or what are the causes because then, of course, this triggers some component of the insurance liabilities and the different setting of liabilities. So we need to wait because, of course, the impact could be different. And by the way, for the time being, I mean, we are not seeing so big activity there, probably also all the others are waiting.

In terms of question #2, regarding financial costs and net debt, I will probably start on net debt. We are waiting for -- we see a net debt, taking into account also the buyback program that we launched and we are executing that should be slightly over EUR 11 billion at the end of the year. So with this net debt, with this component, we think that our financial cost for the year will be aligned with last year.

We paid approximately EUR 500 million. We think that it will be the same. True that the cost of the debt is lower this year, but as you're seeing, the net debt, it's higher, the average net debt is higher, and therefore, I mean, the cost is comparable.

So basically, this is to say that the current ratio that you're seeing between FFO and EBITDA, it's kind of a bit extraordinary, yes. So we do not expect this to stay at the end of the year.

Thank you, Javier. We move now to Jose Ruiz from Barclays.

I just have two very brief. First of all, if you can update on the share buyback, how many shares have you bought? And secondly, if you can give me the number of the contribution of -- to EBITDA from Acciona assets?

Thank you, Jose, and for your questions. So the first one on the buyback, as communicated to the market authority, basically with the last communication, I guess that we are in the range of approximately EUR 60 million of shares acquired. So on the base of the EUR 500 million size of the program for this year.

And regarding -- the second one was regarding the contribution of the assets of Acciona. When we -- actually, of course, these assets were just incorporating in our portfolio. It happened in March of this year. On a full year base, we were expecting from those assets approximately EUR 100 million of EBITDA. Now, of course, we were also expecting lower production when compared to what we are seeing right now.

I guess, that we've been pretty lucky in this case, because we've got those assets with more water than we thought. And in terms of hydraulic situation, just to comment that actually we are recovering towards the average of the sectors that actually is pretty high and pretty extraordinary when compared to the rest of -- to the average of 10 years. Thank you.

The next analyst is Peter Bisztyga from Bank of America.

Can I ask on the planned capacity market in Spain? Are we still expecting the first auctions to take place before year-end? And do you have any view as to what sort of level of capacity prices we could expect to see, that would be helpful, or any kind of thoughts as to what technology might set that capacity price.

And I'm also interested in the volatility that we've seen in the spot power price is Q1 where we've seen several periods of power prices kind of close to EUR 200 per megawatt hour. And I sort of get the gas and carbon prices have been a lot higher in certain periods than they were last year. But I was just wondering if you could give us a little bit of detail about what's sort of happening on a hourly or kind of daily basis in the system elsewhere that's kind of causing those price spikes. So is it kind of genuine sort of power shortages at those times or what's going on?

Thank you, Peter, for your questions. So the first one on capacity market and on expectation on price. Yes, you correctly mentioned possibly that could be some news in the first tender at the end of the year or maximum, I don't know, beginning of 2026. But regarding prices, I guess that it's early to say. I guess that in the past, we would have said probably a net-net not expecting much for this capacity market.

Now we should understand what the solution and the new normality of the system operator will be and what will be the solution to or eventually measures deriving from the blackout. So I mean we need to wait then to understand what will be this -- what the price will be and what the setting of the system will be. And in terms of spot power prices, I mean, yes, very high volatility. It is true that, I mean, as you were seeing over EUR 200, depending on our EUR 200 per megawatt hour. Part of it is, of course, related to the gas. There has been a spike in the gas prices. So then when you have the gas setting -- gas power plant setting the price with higher prices, that's why when you see this tight condition and therefore, this high power prices kicking in. Of course, I mean, this relates mainly to the gas price, but yes, then, of course, to the tightness of the system. And as we said, basically, this volatility, we think that, unfortunately, it's here to stay, and it's part of the new game as well as the prices that are at 0 or sometimes it's even negative. Thank you.

The next question comes from Jorge Guimaraes from JB Capital.

I have still a couple, please. Is it related to your -- the strategy that the company can take regarding the solar getting the energy from the spot. So what are your thoughts here on that? And the second one is related to the [ short ] position. If you can give us some more color about which part of the total short position is still open and if you really expect prices?

Thank you, Jorge. So basically, on solar technology, actually, what we signed during the quarter, as you have seen, it's the contribution of this 0.4 gigawatt to the joint venture that we have owned. So I mean, it's -- we know that there are other players that are still building. In our case, we want to wait and see what happens before taking a decision. And that's why, I mean, we are somehow going -- delaying this on the contribution of the share position, as you have seen in the first quarter and also along the year and as we also highlighted in the Capital Market Day for future years.

The next question comes from Rob Pulleyn from Morgan Stanley.

Just a couple of remaining questions, and thanks for all the color so far. Just coming back to the blackout, I do apologize for more questions on this. So since the blackout and the resumption of power, we've seen a significantly lower market share of solar. And I think you alluded to earlier that the systems operator was being quite cautious in running CCGTs. So is there any financial implications from the curtailment of solar and/or wind? And the part B to this is, would this potentially impact future solar farm downs of which you've been successful so far in and we assume would continue to pursue that if there is a buyer available.

So on this again, thank you, Rob. I would say that, first of all, coming from -- starting from the second one, future of solar farm downs. Our solar -- I mean, our project and the one that were highlighted in the Capital Market Day actually were not a solar project. Actually, they were in the very same connection point, there was an integrated renewable presence that was in the case of the project of Pego and Andorra. There were the 2 big projects in our business plan, were made of wind, solar, hydrogen and batteries. And all of this just to try to replicate kind of baseload profile in the very same connection point.

So I would not actually compare this to a stand-alone solar project. Despite this, of course, I mean, we are checking and see. There is no rush in that. We want to see how the situation evolves. Even though as we mentioned in this presentation, it looks like there is some sign of demand increase in the first quarter. As we said, we are expecting this not to happen right now, but to happen later on in the future, given the connection request on the system. But something -- let's see whether it is only something punctual on this -- at the beginning of the year or if it is something that will stay. And then we will set our investment decision.

And regarding on what will be the future role of the solar, I guess that probably in this moment, there is an extra, extra, extra guarantee for the system operator trying to -- waiting to understand exactly what happened to guarantee the system, extra, extra guaranteeing the system. Not sure this will go on forever. So therefore, I mean, yes, probably higher share now of CCGTs. But I mean, let's see what happens in the future, but with the increase of demand and with a more normal functioning, this should probably somehow reabsorb.

I'm very sorry, but I think we have some technical issues with the conference call and most of the analysts have lost the connection. So we still have 2 pending analysts. I will try to connect them. If not, I will call them later. Sorry for that. The next one was Javier Suarez from Mediobanca. I don't know, Javier, if you can hear me or not. Sorry for that again, we have to end here the conference call. And again, I will try to connect the 2 pending analysts. Thank you for your participation, and have a nice day.