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Enel Profit Falls on Weak Demand in Home Markets, Forex Impact

July 31 (Bloomberg) -- Enel SpA, Italy’s largest utility, said first-half profit fell, hurt by weak electricity demand in Italy and Spain and unfavorable exchange rates, especially in Latin America.

Adjusted net income declined 4.8 percent to 1.57 billion euros ($2.1 billion), the Rome-based company said today in a statement. That beat the 1.49 billion euros average estimate of six analysts in a Bloomberg survey.

Revenue slipped 8.1 percent to 36.1 billion euros.

The company also announced a structural reorganization of its divisions and said it would tighten control of Enersis through the purchase of the 60.62 percent owned by Endesa by Enel Energy Europe. An extraordinary cash dividend, at least equal to revenue from the sale, will be proposed to Endesa shareholders, the company said.

“Enel also intends to assess the possibility of undertaking other capital market transactions, depending on market conditions, that could increase the value of its holding in Endesa and restore the stock’s current lack of liquidity,” Enel said.

The company, which raised 1.3 billion euros with the sale of its stake in SeverEnergia to Rosneft OAO in 2013, is seeking to strengthen its balance sheet with another 4.4 billion euros from the sale of it power assets in Slovakia and Romania. The company owns 66 percent of Slovakia’s largest utility, Slovenske Elektrarne AS and power distribution assets in Romania.

Net debt rose 8.5 percent to 43.1 billion euros as of June 30 from 39.7 billion euros at the end of December. Earnings before interest, tax, depreciation and amortization, or Ebitda, decreased 3.3 percent to 7.9 billion euros. Enel said it will focus on the renewables business and emerging economies in the second half of the year.

To contact the reporter on this story: Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Kevin Costelloe

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