Bloomberg News

Enel Meets 2012 Targets Even as Earnings Fall on Higher Taxes

February 05, 2013

Enel SpA (ENEL), Italy’s biggest utility, met earnings and debt targets even as the economic slowdown and higher taxes spurred a 5 percent decline in full-year profit.

Earnings before interest, tax, depreciation and amortization fell to 16.7 billion euros ($22.6 billion) from 17.6 billion euros the previous year, the Rome-based company said today in a statement. That was in line with the 16.6 billion-euro estimate of 22 analysts in a Bloomberg survey. Revenue rose 6 percent to 84.9 billion euros.

Net debt met a company target of 42.9 billion euros. The company had previously forecast full-year earnings of at least 16.5 billion euros.

Enel met Ebitda and net debt targets “despite a particularly unfavorable macroeconomic and regulatory environment,” Chief Executive Officer Fulvio Conti said in the statement. “We expect this economic cycle to continue throughout 2013, mainly in Italy and Spain.”

Earnings were hurt by lower power-generation margins after Italy increased a profit tax on electricity generators to 10.5 percent from 6.5 percent in August as part of austerity measures. The company is investing in developing markets to offset weaker performance in Italy and Spain where the economic crisis has curbed power demand.

“Conti has done an incredible job keeping earnings and debt targets despite Enel’s heavy presence in Italy and Spain which are the hardest hit markets economically,” said Alessandro Frigerio, a fund manager at RMJ Sgr in Milan. “What we need to know now is how he will keep things steady in the continuing downturn.”

Enel rose 1.5 percent to 3.038 euros as of 4:15 p.m. in Milan trading, increasing its market value to 28.6 billion euros.

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

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


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