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This new strategic plan announced by Flavio Cattaneo, who took up his post last spring, has everything going for it at first glance. A reallocation of capex revised slightly downwards with more in Grids, less in Renewables, still no offshore wind and more financial discipline enhanced by a cost-cutting plan. Everything sounds aligned with what investors want to hear at the moment.
Companies: Enel (ENEL:BIT)Enel SpA (ENEL:MIL)
AlphaValue
A strong quarter for Enel has resulted in a better-than-expected performance, particularly in the End-user markets. This, combined with the positive results in the grid activities in LATAM and the renewable activities of Enel GreenPower, helped offset lower results in Thermal Generation and Trading. As a result, the high end of the guidance for full-year 2023 EBITDA has been raised by €1.5 billion.
As expected on the track of Q1, energy prices weighed on Enel’s revenues but the group succeeded in generating higher margins in the backdrop of a better operating performance by Enel Grids and its final customers of End-User Markets. The group confirmed its FY2023 ordinary EBITDA guidance of €20.4-21bn, a DPS of €0.43, and indicated c.60% of the €21bn asset disposal programme has already been achieved.
Like a few other peers in the sector, the normalization in energy prices weighed on Enel’s revenues in the Q1 which recorded a 22.6% drop to €26.141bn. This was owing, in particular, to Thermal Generation and Trading as well as the End-user (retail) market. The Italian utility remains however confident in its ability to achieve its assets disposal plan and net debt reduction target for the year. The new touchy topic is now focused on governance and the ew board to lead the Italian liner.
After a challenging 2022 and a disruptive energy market environment, Enel met its guidance provided during the last CMD back in November and even delivered higher-than-expected operational profits, supported by both higher volume and of course a price effect. Although the group managed to land on its feet and deal with last year’s liquidity issues, net debt reduction through assets disposals will remain the main topic in 2023.
Enel reported a 84% increase in revenues to €108.177 bn, attributable to all business units and mainly driven by a rise in the volume of gas and electricity sold at a higher average price amidst the prevailing energy crisis as well as an increase in electricity generated. Rising sourcing costs together with a significant drop in hydropower generation due to a poor water supply weighed on ordinary EBITDA for the 9M2022 period, down 0.8% to €12.68 bn.
While there were no surprises on the results side which came in bang in line with expectations, Enel reassured the market with a series of positive comments. What may seem trivial in normal times is now valuable in a context wherein the share price has collapsed by c.40% over the past year. This paves the way for a return of investor confidence in a company that deserves it – and can embody good value for money.
Strong operational results but soaring net indebtedness are the two key takeaways from Enel’s Q1 22 release. In our view, they offset each other, resulting in a mitigated set of results, even if we want to believe that the good results will recur and the higher debt is temporary. It does however add uncertainty to a business that did not really need it, confirming our preference for pure players versus integrated utilities during such times. Meanwhile, wait and see.
Enel surprised the market by delivering strong FY21 preliminary results (revenue + EBITDA). While we do not yet have the exact breakdown, there is no doubt that the gas-related activities have more than outperformed. In the footsteps of RWE a few days ago, the read-across is obvious for Engie, Fortum, Iberdrola and EDP. In the light of these elements, we reaffirm our bullish view on the sector.
Despite several regulatory and FX headwinds, Enel met expectations with EBITDA 1.7% above consensus. However, a substantially higher net debt raises concerns on the mid-term outlook and 2030 roadmap, for which we expect un update during the CMD on 24 November. FY21 guidance remains unchanged, even if we stand slightly below, and the same applies for consensus. Positive view confirmed as headwinds seem already priced in and the CMD should provide short-term catalysts.
What if the best solution for the energy transition were … nuclear power? Nuke is back at the heart of political debates in the context of the current energy crisis and massive but insufficient investments in renewables. This short review provides an overview of nuclear power in Europe and speculates on options. This ‘nuke optionality’, hinging on a favourable green taxonomy, is a game-changer for EDF, Centrica, Fortum but also Engie, Iberdrola, Enel and EDP.
After a complicated first quarter which was hurt by FX, Enel posted a slump in EBITDA (-4.9%) as one-offs and FX continued to offset additional renewables capacities and the great recovery in Italy and LatAm. On the positive side, capex remained in an upward trend, even if it mechanically weighed on net indebtedness. This did not prevent the group from confirming its FY21 guidance. Positive view confirmed.
Enel released a set of half-tone Q1 results. EBITDA is down by 12.3%, hurt but one-off items and a negative comparable effect but, above all, still affected by adverse FX movements that could become recurring. Guidance for the full year is confirmed, but we are now targeting the bottom of the range. In all, our positive view is reiterated.
Enel released globally sound FY20 figures, driven by net income and dividend that both beat estimates. The FY21 outlook is confirmed, while mid-term targets for net income and dividend were slightly improved. The group continues offering good visibility on its activity and is massively investing (€10.2bn capex), especially to reinforce its European leading position in renewables. Positive view confirmed.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Enel. We currently have 60 research reports from 2 professional analysts.
Companies: Mpac Group PLC
Shore Capital
Companies: GAL BEM AAU SHG GGP AAL SLI 1SN EEE TECK
SP Angel
ITM has announced a new preferred supplier agreement with Hygen, potentially driving new orders for 200MW of electrolysers for the company going forward.
Companies: ITM Power PLC
Zeus Capital
Thruvision’s year-end trading update confirms revenues broadly in line with our expectations at c.£7.8m, and an EBITDA loss of c.£2.5m. There is good momentum from both new and existing clients, with Thruvision reaping the benefits of a broad customer base, spanning a number of international markets. Adjusting for the impact of US Customs and Border Protection (CBP) orders, revenue growth was 85% to £7.6m (FY23: £4.1m). Demand has been strong from the Entrance Security market given the worsening
Companies: Thruvision Group PLC
Progressive Equity Research
Companies: MPE TRI VNET BVXP HVO
Cavendish
Norcros’s disposal of Johnson Tiles is the latest strategic activity taken by management to better allocate capital to fit with priorities. Last year it closed its UK adhesives operation. Norcros has a compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Its rating is low at 6.0x FY24e P/E, which is attractive, especially when compared to its yield of 5.4% on its well
Companies: Norcros plc
Edison
Companies: AURA SYA AAL FAR EEE
Van Elle has announced interim results to 31 October 2023 highlighting a resilient performance despite subdued UK construction activity. Whilst the outlook for the rest of the year remains challenging overall, particularly due to low housebuilding and rail sector activity before the start of CP7, Management is confident in meeting full year expectations. The H1 2024 results provide c. 50% cover to our unchanged FY24 revenue and EBIT estimates. With green shoots emerging, we expect activity to be
Companies: Van Elle Holdings Plc
Companies: eEnergy Group PLC
Canaccord Genuity
Companies: 88E RNO TRIN KRM EXR BOOM
Companies: BBY BYG FOUR SRP CTEC IDS SUPR DOM BOO
Liberum
The FY23 results highlight continued growth in adjusted operating profit, management’s tight control of the business and the ongoing annual efficiencies being delivered. Smiths may also renew several long-term publisher contracts this year, which could imply visibility over at least 80% of annual revenues to 2029. Furthermore, development of new profit streams is beginning to create momentum, which may have the potential to more than offset the slow decline in core profits and support the divide
Companies: Smiths News PLC
EdenRed’s Q3 FY23 trading update was slightly ahead of the street and our expectations. Operating revenue saw robust growth backed by double-digit progressions across all the regions. Consequently, the management tightened the full year EBITDA guidance to the upper half of the €1.02-1.09bn range. Nevertheless, the share price remained under pressure (-4.47% at the time of writing) due to the uncertainty regarding the regulatory environment in France. We will slightly increase our estimates, but
Companies: Edenred (EDEN:EPA)Edenred SA (EDEN:PAR)
Companies: Judges Scientific plc
£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties
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