Investing.com — Shares of Snam SPA (MI:SRG) climbed 1.5% following the release of their strategic plan for 2025-2029, which outlined a higher-than-expected capital expenditure plan and an increase in their dividend policy.
The European energy infrastructure company announced a capital expenditure plan totaling €12.4 billion, a 12% increase over the Bloomberg consensus.
The strategic plan also revealed a regulatory asset base (RAB) compound annual growth rate (CAGR) guide that exceeds expectations set by Morgan Stanley (NYSE:MS), with a forecast of 6.4% compared to the anticipated ~5%. Furthermore, the plan indicates a net income CAGR of approximately 4.5% over the period, surpassing the Bloomberg consensus of close to 3%.
Despite a lower EBITDA CAGR guide of 5% compared to the previous plan’s figure of over 7%, it aligns with the current consensus, suggesting some positive adjustments below EBITDA to achieve these figures.
In a move welcomed by investors, Snam has revised its dividend policy upwards. While the year-over-year growth for 2024 remains at 3% compared to 2023, the policy extends to 2029 with an annual growth of 4% and a maximum payout of 80%.
Notably, the payout is based on adjusted net income rather than earnings per share (EPS), which is a significant detail given that EPS includes hybrid costs, whereas adjusted net income is calculated before hybrid costs.
Morgan Stanley analysts commented on the strategic plan, stating, “We expect a small positive reaction in Snam shares post this morning’s Strategic Plan release.”
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