Enel confident of cutting debt in line with 2024 guidance

Credit: REUTERS/FLAVIO LO SCALZO

By Francesca Landini

MILAN, March 21(Reuters) - Italy's biggest utility Enel ENEI.MI said on Thursday its net debt would fall further as a results of several disposals already signed or in the works, allowing the company to meet its guidance for 2024.

The group is also confident it can increase its core profit this year in line with the guidance indicated in November and hinted at the possibility of raising its dividend.

Presenting its results for last year, Enel said its net financial debt at the end of December stood at 60.2 billion euros from 60.7 billion euros at the end of 2022.

The ratio between net debt and earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to 2.7 last year from 3.1.

Asset sales to be completed in the coming months are expected to reduce net debt by 6.3 billion euros and, together with cost discipline, bring the ratio with EBITDA down to the group's goal of 2.4, Enel Chief Financial Officer Stefano De Angelis said.

Among deals awaiting final approval by all the relevant authorities is the $2.9 billion sale of Enel's equity stakes in two Peruvian assets to China Southern Power Grid International (CSGI).

Enel Chief Executive Flavio Cattaneo said the completion of the transaction would likely come soon.

"All the most relevant authorisations have been released... you will have not to wait for long for an announcement," Cattaneo said, speaking with analysts.

CORE PROFIT RISES

The CEO ruled out the payment of a special dividend linked to a recent sale of distribution assets in Italy, but said the group may raise its dividend already starting from 2024 results after paying 0.43 euros per share this year.

Enel's core profit rose 12% last year, just beating analysts' expectations thanks to growth at its retail business in Italy where it benefited from higher power production from renewable sources and contracts based on increased prices.

Ordinary earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at 22 billion euros ($23.9 billion) in 2023 compared with an estimate of 21.8 billion euros coming from analysts pooled by LSEG.

Some analysts have expressed concerns that European utilities including Enel could suffer due to a fall in power prices in Europe compared with last year, which could give customers scope to switch to other suppliers.

The Enel CFO said the group was not concerned about power price trends and was also putting in place measures to retain customers. ($1 = 0.9209 euros)

(Reporting by Francesca Landini Editing by Keith Weir)

((francesca.landini@thomsonreuters.com; +39 02 66129437; Reuters Messaging: reutersitaly.thomsonreuters@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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