Naturgy Is Favorably Exposed to High Gas Prices

Naturgy owns and operates around 70% of the Spanish gas distribution network. It’s also the third-largest electricity distributor operator in Spain. In gas, the company has historically generated economic profits, delivering double-digit returns that consistently exceeded allowed levels. Naturgy has not replicated this return profile in electricity, where it has less scale. In addition, rising investments in Spain’s power grid are inflating the accounting value of its regulated asset base, narrowing the spread between book and regulated returns.