Terna's H1 2026: Infrastructure Acceleration and a Steady Hand on WACC
Regulated growth, nonregulated momentum, and the wait for the next regulatory period.
TRN.MI · Earnings Call · 2026-07-29
A Solid Operative and Financial First Half
Terna S.p.A. delivered a robust set of H1 2026 results that underscored the resilience of its regulated core while showcasing an acceleration in nonregulated activities. Group revenues rose 12% year-on-year to EUR 2.1 billion, EBITDA grew 8% to around EUR 1.5 billion, and net income edged up 1% to EUR 591 million. More tellingly, CapEx jumped 20% to EUR 1.6 billion, with roughly 92% of the 2024–28 industrial plan already covered by awarded contracts and 93% through the authorization process. As CFO Francesco Beccali noted on the call, the Fabrizio Ragnacci portion of the Q&A focused on the operational and financial drivers, but the tone was clearly one of execution confidence.
“The group delivered another solid set of results in the first half of the year. Performance improved across all our key financial indicators, showing once again the solidity of our business model.” — Operator, Operator · 2026-07-29
Nonregulated Momentum and Output-Based Incentives
The standout was the nonregulated segment, where EBITDA surged 81% to EUR 106 million, supported by a 50% jump in nonregulated revenues to EUR 451 million. Drivers included the Energy Services segment (consolidating STE Energy from late 2025) and the Equipment segment (Brugg Cables and Tamini Group), with only EUR 10 million of the increase attributable to perimeter effects. This is a meaningful shift from the prior narrative: in the March 2025 call, the CFO had described nonregulated activities as noncore and essentially a flexibility tool. Today, they are framed as an “industrial platform.” While management is careful to stress that this does not change Terna's risk profile, the strategic tone has evolved.
They are increasingly becoming an industrial platform through which we can participate in key segments of the energy transition value chain while strengthening our execution capabilities and industrial know-how.
On the regulated side, output-based incentives (OBIs) added EUR 76 million in H1, including EUR 43 million of interzonal incentives and EUR 33 million from the MSD scheme. Full-year guidance for OBIs remains around EUR 200 million, consistent with the output base incentives trajectory observed in prior quarters. The CFO reiterated that incentives will remain tied to dispatching market cost reductions, a mechanism that has been a recurring theme across earnings calls.
WACC, Regulation, and the 2027 Plan
A key forward-looking point was the 2027 WACC mark-to-market. Under the existing formula, lower WACC levels seem likely, but the CFO highlighted volatility and geopolitical uncertainty as cautionary factors. “Current estimates under the existing formula would point to lower WACC levels,” he said, adding that ARERA could revise the basket of comparables if trends in spreads and credit ratings persist. This is a subtle but important update—the regulator has been a central figure in Terna's earnings calls, from the ROSS consultation to the shift towards HICP indexation.
Management also confirmed that the new industrial plan will be presented only in 2027, aligned with the regulatory framework update (which expires at the end of 2027). This timing is deliberate, as the CEO stated: “With the regulation visible and defined, we will be in a position to share with the market the new industrial plan in due course in 2027.” This implies that near-term guidance remains unchanged, but investors will have to wait for the next long-term inflection.
Capital Discipline and a Supportive Policy Backdrop
Financially, Terna maintains a disciplined profile. Net debt stood at EUR 12.6 billion at June end, down EUR 0.5 billion from year-end, and cash flow generation of EUR 1.7 billion fully funded the investment program. The CFO repeated that the CapEx plan to 2028 is fully sustainable without additional hybrid issuance, a stance consistent with the March 2025 call where he stated, “The assumption under this business plan is that we will not raise any additional CapEx and hybrid capital over the business plan horizon.” This consistency is reassuring to a market that has periodically probed the balance sheet.
Finally, the EU's Electrification Action Plan—targeting 46% electrification of final energy consumption by 2040 versus today's 23%—was welcomed as a long-term tailwind. The CFO noted that the plan would reduce gas imports by over 70% and crude oil imports by over 40% by 2040, reinforcing the need for robust transmission investment. While this is only a policy document, it aligns perfectly with Terna's Energy transition narrative and its role as a system enabler. The Adriatic Link and Tyrrhenian link projects remain flagship commitments.
Conclusion
Terna's H1 2026 results were solid but not spectacular—the numbers were in line with guidance, and the story remains one of steady regulated growth complemented by a fast-growing nonregulated platform. The real news is the forward calendar: the 2027 plan, the WACC outcome, and the EU policy tailwind. For now, the market can take comfort in reiterated guidance and a CFO who seems firmly in control of the narrative.