Romande Energie Holding SA (0QQG.L) QQ2 2025 Results — Solid Q2 2025 performance driven by renewables and regulated assets
Executive Summary
Romande Energie Holding SA reported a strong Q2 2025 with revenue of CHF 192.89 million and a gross margin of 50.84%, reflecting a favorable mix of hydro, solar, wind, and biomass generation along with the company’s regulated distribution activities. EBITDA stood at CHF 35.18 million, operating income CHF 51.68 million, and net income CHF 19.38 million, translating to earnings per share of CHF 0.76. YoY improvements were pronounced across key profitability metrics (revenue +86.8%, net income +288.9%, EPS +290%), while QoQ changes were broadly muted given seasonality and quarterly cadence in the Swiss utility sector. The balance sheet displays solid liquidity and modest leverage, supported by a current ratio of 2.29 and a debt ratio of 0.125, alongside a payout ratio of 95.3% and a dividend yield of 3.41%. However, free cash flow per share remains negative at CHF -0.57, reflecting ongoing capital expenditure and network investments that weigh on near-term free cash generation despite solid reported earnings. Management’s focus on renewables expansion, distribution network optimization, and energy marketing services should support earnings durability, though sensitivity to hydrological conditions and regulatory dynamics warrants monitoring. Overall, Romande Energie appears well-positioned to sustain regulated cash flows and a growing renewable generation mix, with favorable valuation metrics (P/E ~6.99, P/B ~0.52) supporting a constructive but cautious investment stance.
Key Performance Indicators
Revenue
192.89M
QoQ: 100.00% | YoY:86.81%
Gross Profit
98.07M
50.84% margin
QoQ: 100.00% | YoY:108.02%
Operating Income
51.68M
QoQ: 100.00% | YoY:110.68%
Net Income
19.38M
QoQ: 100.00% | YoY:288.96%
EPS
0.76
QoQ: 100.00% | YoY:290.00%
Revenue Trend
Margin Analysis
Key Insights
Revenue: CHF 192.89m; YoY +86.8%; QoQ flat-to-moderate change (QoQ data indicates no material delta vs prior quarter).
Net Income: CHF 19.38m; Net margin 10.05%; YoY +288.96%; EPS CHF 0.76; YoY +290%; QoQ flat.
Financial Highlights
Key metrics and trend takeaways (CHF unless stated otherwise):
- Revenue: CHF 192.89m; YoY +86.8%; QoQ flat-to-moderate change (QoQ data indicates no material delta vs prior quarter).
- Gross Profit: CHF 98.07m; Gross margin 50.84%; YoY +108.0%; QoQ broadly flat.
- EBITDA: CHF 35.18m; EBITDA margin 18.24%; YoY strength supported by stable cost base and favorable generation mix.
- Operating Income: CHF 51.68m; Operating margin 26.79%; YoY +110.68%; QoQ flat.
- Net Income: CHF 19.38m; Net margin 10.05%; YoY +288.96%; EPS CHF 0.76; YoY +290%; QoQ flat.
- Cash flow and liquidity: Current ratio 2.29; Cash ratio 0.867; Quick ratio 2.29; Cash per share CHF 5.42; Operating cash flow per share CHF 2.04; Free cash flow per share CHF -0.57; Dividend payout ratio 95.3%; Dividend Yield 3.41%.
- Valuation and leverage: Debt ratio 0.125; Debt to capitalization 0.141; P/E 6.99; P/B 0.518; Price to Sales 2.81; EV/EBITDA 18.46.
- Efficiency and working capital: Receivables turnover 3.03x; Payables turnover 5.56x; CCC ~13.5 days; Capital expenditure coverage 0.78; Free cash flow metrics show near-term headwinds due to capex intensity despite earnings power.
- Balance sheet health: Strong liquidity with a current ratio above 2x supports ongoing regulatory-driven investments and dividend policy.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
192.89M
86.81%
100.00%
Gross Profit
98.07M
108.02%
100.00%
Operating Income
51.68M
110.68%
100.00%
Net Income
19.38M
288.96%
100.00%
EPS
0.76
290.00%
100.00%
Key Financial Ratios
currentRatio
2.29
grossProfitMargin
50.8%
operatingProfitMargin
26.8%
netProfitMargin
10%
returnOnAssets
1.41%
returnOnEquity
1.85%
debtEquityRatio
0.17
operatingCashFlowPerShare
$2.04
freeCashFlowPerShare
$-0.57
dividendPayoutRatio
95.3%
priceToBookRatio
0.52
priceEarningsRatio
6.99
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript was provided in the data set for QQ2 2025. As a result, this section cannot extract management quotes or thematic highlights beyond the published financial results. Investors should seek the QQ2 2025 earnings call transcript or company investor presentation for direct management commentary on strategic priorities, capital allocation decisions, and short-term guidance.
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Forward Guidance
There is no explicit forward guidance included in the provided data. Based on the QQ2 2025 results and Switzerland’s energy transition context, key items to monitor include: (1) hydrological and market-price risk affecting hydro and thermal generation; (2) progression and capex cadence in grid distribution and fibre optics infrastructure; (3) regulatory framework developments impacting regulated asset base pricing and tariff structures; (4) capital allocation policy given a high dividend payout and ongoing investment programs; (5) cash flow trajectory as capex intensity moderates and working capital normalizes. Our assessment is that earnings power remains solid due to regulated earnings and renewables generation, but execution of capex programs and hydrological conditions will be critical to sustaining free cash flow and dividend sustainability over the medium term.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0QQG.L Focus
50.84%
26.80%
1.85%
6.99%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Romande Energie presents a compelling risk-adjusted profile for investors seeking exposure to Swiss utilities with renewables exposure. The QQ2 2025 results show robust profitability metrics, a strong liquidity position, and a favorable valuation (P/E around 7x, P/B around 0.52x). The high dividend payout underscores the company’s commitment to shareholder returns, though it does limit near-term free cash flow generation given ongoing capex. The main investment thesis rests on steady regulated cash flows and a meaningful renewables/build-out program that could drive earnings resilience and dividend visibility if capex is managed efficiently and hydrological risks are mitigated. Key factors to monitor include hydrology-driven generation variance, regulatory tariff evolution, capital expenditure cadence for grid/fibre projects, and the ability to convert earnings into sustainable free cash flow amid a capital-intensive expansion plan.
Key Investment Factors
Growth Potential
Growth is anchored in expanding renewable generation (hydro, solar, biomass) and expanding distribution/fibre optics assets, which should support steady regulated cash flows and potential incremental rate base growth. The firm’s strong liquidity and modest leverage support ongoing capital investments and potential partnerships or project finance to accelerate the renewables pipeline.
Profitability Risk
Key risks include hydrological variability, regulatory changes affecting tariffs and support schemes, execution risk on network and fibre expansions, and potential cost inflation for capex. The very high dividend payout (95.3%) may compress free cash flow coverage during weaker quarters or heavier capex cycles.
Financial Position
Healthy liquidity with current ratio 2.29 and debt ratio 0.125; resilient profitability with gross margin ~50.8% and net margin ~10.0%; however free cash flow per share is negative, indicating near-term financing needs to support capex and distribution payments.
SWOT Analysis
Strengths
Regulated asset base providing predictable cash flows
Diversified generation mix (hydro, solar, wind, biomass) and core grid/distribution business
Strong liquidity (current ratio ~2.3) and disciplined capital structure
Solid gross margin (~50.8%) and EBITDA leverage supporting earnings power
High dividend payout policy with a 3.41% yield and established Swiss market presence
Weaknesses
Negative free cash flow per share in the reported quarter (CHF -0.57) due to capex and investment cycle
Limited visibility on longer-term growth catalysts beyond the renewables/utility mix
Reliance on seasonal hydro generation and regulated pricing may exert earnings volatility
Opportunities
Expansion of fibre optics and grid infrastructure to capture growth in energy services
Optimizing generation mix and improving capex efficiency to convert earnings to stronger free cash flow
Potential partnerships or project financing to accelerate renewable capacity additions
Threats
Hydrological variability affecting hydro-based generation and revenues
Regulatory and tariff design risk in Switzerland impacting returns from the regulated asset base
Rising capex costs and interest rates potentially pressuring capex financing and free cash flow
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