Enel's Stable Profit Beats Estimates on Improved Retail Business

Enel SpA said profit was largely unchanged in the first quarter, beating analyst estimates amid improvements in retail businesses in Spain and Italy and better conditions for power generation in Chile.

Earnings before interest, tax, depreciation and amortization fell 0.1 percent to 4.01 billion euros ($4.56 billion) in the first-quarter from a year earlier, the Rome-based company said Monday in a statement. The median estimate of 6 analysts was 3.8 billion euros, according to data compiled by Bloomberg.

Enel is planning to boost Ebitda by 4 percent per year through 2019. It completed the integration of Enel Green Power, its renewable-energy spinoff, during the quarter and is working on a corporate restructuring in Chile. The company is also said to be seeking new income streams from broadband services and is preparing a bid for fiber-optic network operator Metroweb.

“Results in the first quarter of 2016 reflect very good progress,” Francesco Starace, Enel’s chief executive officer, said in the statement. The company is still facing a “persistently challenging macroeconomic environment,” he said.

Ebitda for its domestic Italian business rose 14 percent, even as Italy’s average year-ahead power price slid 19 percent in the first quarter from a year earlier, according to data from the European Energy Exchange AG. Latin America profit rose 8.7 percent, according to the statement.

Sales dropped 11 percent to 17.9 billion euros on sliding prices and a decline in trading. Adjusted net income fell 1.9 percent to 795 million euros compared with last year, missing analyst analyst estimates of 776 million euros.

Enel cut its net debt by 2.4 percent in the three months through March to 36.6 billion euros due to the positive impact of the dollar exchange rate which part of the debt is denominated in and an improvement in operating cash flow, according to the statement.

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