Enel Quarterly Profit Rises as Latin America Sales IncreaseAlessandra Migliaccio
Enel SpA, Italy’s largest utility, said first-quarter profit rose 7.3 percent as higher prices and volumes in Latin America offset weaker electricity sales in Europe.
Adjusted net ordinary income increased to 810 million euros ($908 million), in line with the 811 million-euro average estimate of 10 analysts in a Bloomberg survey.
The results “confirm the positive trend in Latin America and renewables,” Chief Executive Officer Francesco Starace said in a statement from the Rome-based company on Friday. They “are in line with the trend expected for the entire year.”
Starace plans to raise 5 billion euros from asset disposals to strengthen Enel’s balance sheet, including about 2 billion euros from selling 49 percent of its North American renewables business, its Italian hydropower unit and its stake in Slovakia’s Slovenske Elektrarne. The same amount will come from the sale of renewable assets in Portugal and its upstream gas operation, leaving another 1 billion euros to be identified, the CEO said.
Enel rose 2.7 percent, the most in two weeks, to 4.17 euros by 11:30 a.m. in Milan trading.
Starace said a “two-step exit” from Slovenske Elektrarne is a possibility, initially selling part of Enel’s 66 percent holding while remaining “committed” to completing the construction of the Mochovce nuclear power plant. The company has already received binding bids, he said.
The company will also push ahead with its reorganization of assets in Latin America, which should take 12 to 18 months, Starace said.
Revenue rose 9.8 percent to 20 billion euros in the quarter, while electricity sales fell 1.9 percent to 66.5 terawatt hours mainly due to weaker demand in Italy and the Iberian peninsula. Starace said demand has since strengthened in both markets.
Chief Financial Officer Alberto De Paoli reiterated the company’s 2015 net debt target of 39.2 billion euros. Net debt in the quarter increased 5.7 percent to 39.5 million euros.