Interim dividend re-introduced; strong cash flow improvement
10 Nov 16
For the 9M 16 results, the group showed an 8% yoy decrease in revenues, reaching €51.46bn, and EBITDA was reduced by 1% yoy to €12.01bn. However, reported operating profit increased +22% yoy and the reported net income of the group increased by 32% yoy to €2.757m. On an adjusted basis, on the other hand, EBITDA increased +4% yoy, while net profit achieved a +10% yoy increase. The cash flows of the group (FFO) improved by 30% yoy to €6.76bn, enough to cover the 9% yoy increase in capex which reached €5.5bn. As a result of the resilient cash flows, the group’s net debt will be €1bn better than expected as it has already reached €36.82bn (-2% yoy). The group has decided to re-introduce an interim dividend with a payment of €0.09/share, and confirmed all FY16 guidance targets, while upgrading its net debt expectations by reducing the previous objective by €1bn.
Guidance revised upwards after strong half year results; free cash flows suffer
29 Jul 16
Positive half year results for the company despite the 9.3% yoy decrease in revenues to €34.15bn, which is slightly below expectations. Moreover, on a reported basis, EBITDA grew by 1.2% yoy to €8.05bn, operating profit increased 2.5% to €5.21bn, and net income relatively flat at €1.83bn (+0.1% yoy) due to higher net financial expenses. On an adjusted basis, on the other hand, EBITDA increased 3.1% to €7.93bn and 5.2% on a lfl basis without foreign exchange effects, which are ahead of estimates. Adjusted net income increased 8.6% yoy to €1.74bn and 13% on a lfl basis. Net debt increased 1.6% ytd to €38.14bn, but is still below market expectations. As a result, Enel has revised upwards its full-year guidance with adjusted EBITDA now expected at €15bn (€14.7bn prev.), adjusted net income at €3.2bn (€3.1bn prev.) and a FFO/Nnt debt of 25% (23% prev.).
Positive start supported by LatAm and Italian retail, offsetting negative FX
10 May 16
Given the market conditions Enel has released strong Q1 results, despite the 10.5% yoy decrease in revenues to €17.87bn missing expectations by 6%. Reported EBITDA remained relatively flat (-0.1% yoy) at €4.01bn, although on an adjusted basis and besides FX effects, EBITDA grew by 2% to €3.87bn beating expectations by 1.6%. This was supported by positive results in Italy and LatAm (+4.8% and +8.7% respectively), offsetting the decrease in Iberia, renewables and western Europe (-18.7%,-15.5% and -13.8%). Operating profit improved by 1.7% yoy due to lower depreciation and amortisations, where the tax reduction and operating performance pushed reported net income to a 16% yoy increase to reach €939m, although on an adjusted basis, net income reached €795m, a 2.5% yoy decrease but still 2.5% better than expected. Operating cash flows increased more than 300% yoy due to positive working capital and lower financial expenses, enough to cover the 23% increase in investments. Net debt fell better than expected to €36.65bn (-2.4% ytd). Full-year guidance has been maintained with adjusted EBITDA at €14.7bn, net income at €3.1bn and a minimum dividend payment of €0.18/share (with a 55% payout).
Reassuring LatAm outperforms despite FX, restructuring gains momentum, entering the fibre business
23 Mar 16
Revenues remained relatively flat (-0.2% yoy), reaching €75.65bn, but still 3% above expectations, with EBITDA falling 3% yoy to €15.3bn, beating forecasts by 1.5%. Operating profit improved by 150%, but fell short of expectations by 14% mainly due to €909m of impairment charges (€295m linked to Slovakian assets, €408m to Russia, €91m on Romanian renewable assets and €115m on upstream gas). Net income improved by 325% yoy to €2.2bn while on an adjusted basis it reached €2.89bn, a 3.6% yoy decrease and 4% below expectations taking into account the negative effect of the Italian fiscal reform on deferred taxes (€182m); adjusted for this, net income would have reached €3.07bn. Proposed dividend in line with expectations of €0.16/share, a 15% yoy increase. In terms of guidance, the group maintains its objective of long-term growth, especially in renewables and networks, backed by the full integration of Enel Green Power, while, at the same time, confirming its 2016 objective: €14.7bn EBITDA, adjusted net income of €3.1bn and a minimum dividend payment of €0.18/share backed by a 55% payout. It also confirmed its ambitious objective of 4% CAGR on EBITDA over 2015-19, 10% on net income and 17% on the dividend. Moreover, the group has decided to enter the fibre business in 224 Italian municipalities gradually with an investment plan of around €2.5bn. The EBITDA contribution is expected to be €250m/year.
Agreement (finally) found on the Slovakian assets
21 Dec 15
Enel has agreed with EPH (“Energeticky a Prumyslovy Holding”, a privately-held Czech-Slovak holding company) to sell its 66% stake in its Slovakian assets for €750m. The sale will be executed through the creation and transfer of Enel’s stake in Slovenské Elektrarne to a newly-established company (“HoldCo”), with the later transfer of the HoldCo to EPH. The disposal agreement would be divided into two stages: the first includes €375m with the transfer of half of the HoldCo’s share capital (50%) at signing, the second includes the transfer of the remaining shares of the holding company and the remaining €375m payment subject to the completion and operation of the two nuclear reactors under development (expected to be completed in 2019), and an adjustment mechanism. The adjustment mechanism would be calculated at the time of the reactors' completion and would include the net financial position, developments in energy prices in the Slovak market, operating efficiency levels, and the enterprise value of the company with the completion of the two reactors under construction. A put or call option can be exercised by either Enel or EPH on the €375m depending on the values of the adjustment mechanism. In addition to this, Enel has signed a Memorandum of Understanding (“MoU”) with the Slovak Ministry of the Economy, validating the agreement.
Long-term strategy offsets poor performance in Italy and Eastern Europe
13 Nov 15
The group’s positive performance continues on the 9-month mark with revenues increasing 3.6% to €56bn, EBITDA increased by 4.9% to €12.1bn and, on an adjusted basis, it reached €11.8bn with a 3.7% increase. Operating profit decreased by 11.7% to €6.3bn due to €781m of impairment charges in Russia (€417m), Slovakia (€273m) and Romania (€273m). Despite the impairment charges, reported net income still increased by 7.3% ytd to €2.09bn, translating into a €0.22 EPS. While, on an adjusted basis, it reached a 27% increase to €2.36bn. Due to the strong performance, net financial debt decreased by 6% in a single quarter to €39.84bn, although it increased by 5% ytd. The strong operating cash flow (+76.7% ytd to €5.18bn) allows the group to confirm its ambitious investment strategy (+27% ytd) and increasing dividend payment, also confirming all its financial objectives for 2015.
Enel exits the Portuguese renewable business
30 Sep 15
Enel Green Power, the renewable subsidiary of Enel, has decided to exit the renewable business in Portugal with a divestment of all its Portuguese assets. EGP has signed an agreement for the sale of Finerge (fully-owned subsidiary) to First State Wind Energy investments, a global asset management business. The transaction for a value of €900m includes a total consolidated installed capacity of 126MW as well as a minority stake for 292MW. Finerge also holds a 35.96% in Eolicas de Portugal (ENEOP), which will also be included in the transaction.
Positive results amid slower Latin American restructuring and nuclear divestment
30 Jul 15
Good half year results for the group. Revenues increased by 4.2% yoy to €37.63bn, with adjusted EBITDA similar to the previous year at €7.68bn, due to improved results in LatAm (+€272m), Iberia (+183m) and Renewables (+€57m), offsetting decreases in Italy (-€403m) and Western Europe (-€115m). Operating profit improved by 2.1% yoy to €5.08bn. Adjusted net income improved by 3.4% yoy to €1.6bn (5% above market expectations) although reported wise and including one-offs it reached €1.86bn (+10.1%yoy). Net debt, however increased by 6.6% ytd to €39.85bn. Guidance maintained for the full year, in line with the strategy plan presented earlier this year.