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    ENEL   IT0003128367

ENEL S.P.A.

(ENEL)
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Enel S p A : accelerates growth in first half 2021, capex up 16.3% and annual targets confirmed

07/29/2021 | 01:09pm EDT

Global News Media

Investor Relations

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ENEL ACCELERATES GROWTH IN FIRST HALF 2021, CAPEX UP 16.3% AND ANNUAL TARGETS CONFIRMED

  • Revenues: 29,853 million euros (33,375 million euros in the first half of 2020, -10.6%)
    • the change is mainly attributable to Thermal Generation and Trading activities, due to lower trading activities in Italy and to the negative exchange rate effect in Latin America. These reductions were only partially offset by the increase of revenues recorded for Enel Green Power, End-User Markets driven by higher volumes of energy sold, and Enel X activities.
  • Ordinary EBITDA: 8,360 million euros (8,794 million euros in the first half of 2020, -4.9%)
    • the decrease is essentially due to the impacts recognized in the first half of 2020 following the change in the energy discount benefit in Spain , mainly in Infrastructure and Networks as well as in Thermal Generation and Trading, in addition to the adverse exchange rate effect in Latin America. These effects are only partially offset by better margins in the End-User Markets, in Enel X and, in Thermal Generation and Trading, from the recognition of the indemnification related to the CO2emission rights , assigned for free in Spain by the PNA1.
  • EBITDA: 7,719 million euros (8,645 million euros in the first half of 2020, -10.7%)
  • EBIT: 4,371 million euros (4,543 million euros in the first half of 2020, -3.8%)
    • the change mainly reflects the performance of operations, partially offset by lower depreciation, amortization and impairment recorded in the first half of 2021, which were impacted by write-downs, made in previous financial years, of certain coal-fired plants as part of the decarbonization process undertaken by the Group and by lower provisions for bad debts.
  • Group net ordinary income: 2,299 million euros (2,405 million euros in the first half of 2020, - 4.4%)
    • the change in ordinary operating income was partially offset by lower net financial expense and a reduction in non-controlling interests
  • Group net income: 1,778 million euros (1,947 million euros in the first half of 2020, -8.7%)
  • Plan Nacional de Asignación de Derechos de Emisión (in English, National Emission Allowance Allocation Plan).

1

Enel SpA - Registered Office: 00198 Rome - Italy - Viale Regina Margherita 137 - Companies Register of Rome and Tax I.D. 00811720580 - R.E.A. 756032 - VAT Code 15844561009 - Stock Capital Euro 10,166,679,946 fully paid-in.

  • Net financial debt: 50,418 million euros (45,415 million euros at year-end 2020, +11.0%)
    • an increase in the first half of 2021, mainly due to investments for the period, the acquisition of an additional stake in Enel Américas and the adverse exchange rate effect, partially offset by the positive cash flows generated by operating activities
  • Capital expenditure: 4,813 million euros (4,137 million euros in the first half of 2020, +16.3%)
    • the increase is mainly attributable to growth in capital expenditure in Infrastructure and Networks, End-User Markets and Enel X

*****

Francesco Starace, Enel Group CEO, commented: "In the first half of 2021, we continued our significant industrial growth based on sustainability and technological innovation, recording a 16.3% increase in investments and an acceleration in installed renewable capacity in the period, which will allow us to set another record at the end of the year, bringing new installed capacity to 5.8 GW. In the second quarter of the year, the Group's performance accelerated solidly and visibly, returning the main operating figures to pre-COVID levels. In light of the trend recorded in the first half of 2021, we confirm the year-end targets of Ordinary EBITDA and Net Ordinary Income, as well as the guaranteed dividend per share of 0.38 euros, up 6% year-on-year."

Rome, July 29th, 2021 - The Board of Directors of Enel S.p.A. ("Enel" or the "Company"), chaired by Michele Crisostomo, has examined and approved half-year financial report at June 30th, 2021.

Consolidated economic and financial data for the first half of 2021

REVENUES

The following table reports revenues by Business Line:

Revenues (MILLIONS OF EUROS)

1H 2021

1H 2020

Change

Thermal Generation and Trading

7,492

12,276

-39.0%

Enel Green Power

3,941

3,575

10.2%

Infrastructure and Networks

9,460

9,548

-0.9%

End-User Markets

15,382

14,417

6.7%

Enel X

633

463

36.7%

Services

877

824

6.4%

Other, eliminations and

(7,932)

(7,728)

-2.6%

adjustments

TOTAL

29,853

33,375

-10.6%

The following table shows detailed information from Thermal Generation and Trading relating solely to revenues from thermal and nuclear generation:

2

Revenues (MILLIONS OF EUROS)

1H 2021

1H 2020

Change

Revenues from thermal generation

3,999

3,497

14.4%

of which: coal-fired generation

833

853

-2.3%

Revenues from nuclear generation

737

646

14.1%

Revenues from thermal generation as a percentage of total revenues

13.4%

10.5%

of which: revenues from coal-fired generation as

a

2.8%

2.6%

percentage of total revenues

Percentage of revenues from nuclear generation as a percentage of

2.5%

1.9%

total revenues

  • Revenues in the first half of 2021 amounted to 29,853 million euros, a decline of 3,522 million euros (-10.6%) compared with the same period in 2020. The reduction in the period is mainly attributable to: (i) lower revenues from Thermal Generation and Trading in Italy due to lower trading activities on commodities relating to contracts with physical delivery, as a result of the reduction in traded volumes and prices applied; (ii) lower revenues from the activities of Infrastructure and Networks, especially in Italy, due to revenues recognized in the first half of 2020, from the application of Italian Regulatory Authority for Energy, Networks and Environment ARERA Resolutions no. 50/2018 and no. 568/2019 and (iii) the adverse exchange rate effect in Latin America. This decrease was partially offset by: (i) higher revenues in the End-UserMarkets, due to higher quantities of electricity sold; (ii) increased revenues in Enel Green Power, mainly in Italy due to price changes and in Brazil, the United States and Canada due to the commissioning of new plants; (iii) increased revenues in Enel X related to new commercial initiatives and associated services mainly in Italy and North America.
    Revenues in the first half of 2021 from thermal generation alone and included in the results of Thermal Generation and Trading amounted to 3,999 million euros, an increase of 502 million euros (+14.4%) compared to the same period of 2020 mainly due to the higher volumes produced and to the trend in prices in the two periods under exam. In particular, revenues from coal-fired generation in the first half of 2021 stand at 2.8% of total revenues, an amount substantially in line with the same period in 2020.
  • Revenues in the first half of 2021 and in the same period in 2020 do not include non-ordinary items.

3

ORDINARY EBITDA and EBITDA

The following table reports ordinary EBITDA by Business Line:

Ordinary EBITDA (MILLIONS OF EUROS)

1H 2021

1H 2020

Change

Thermal Generation and Trading

961

1,073

-10.4%

Enel Green Power

2,198

2,296

-4.3%

Infrastructure and Networks

3,488

3,849

-9.4%

End-User Markets

1,645

1,591

3.4%

Enel X

108

25

-

Services

45

37

21.6%

Other, eliminations and adjustments

(85)

(77)

-10.4%

TOTAL

8,360

8,794

-4.9%

The following table reports EBITDA by Business Line:

EBITDA (MILLIONS OF EUROS)

1H 2021

1H 2020

Change

Thermal Generation and Trading

867

1,001

-13.4%

Enel Green Power

2,178

2,291

-4.9%

Infrastructure and Networks

3,137

3,816

-17.8%

End-User Markets

1,571

1,582

-0.7%

Enel X

101

23

-

Services

(47)

10

-

Other, eliminations and

(88)

(78)

-12.8%

adjustments

TOTAL

7,719

8,645

-10.7%

4

The following tables present the non-ordinary items leading first half 2021 and first half 2020 ordinary EBITDA to EBITDA for the same periods.

Millions of euros

1H 2021

Thermal

Infrastructure

Other,

Enel Green

End-User

eliminations

Generation

and

Enel X

Services

Total

Power

Markets

and

and Trading

Networks

adjustments

Ordinary EBITDA

961

2,198

3,488

1,645

108

45

(85)

8,360

Restructuring plans

for energy

(28)

(17)

(336)

(73)

(7)

(91)

(3)

(555)

transition and

digitalization

Impairments

(62)

-

-

-

-

-

-

(62)

Costs related to

(4)

(3)

(15)

(1)

-

(1)

-

(24)

COVID-19

EBITDA

867

2,178

3,137

1,571

101

(47)

(88)

7,719

Millions of euros

1H 2020

Thermal

Infrastructure

Other,

Enel Green

End-User

eliminations

Generation

and

Enel X

Services

Total

Power

Markets

and

and Trading

Networks

adjustments

Ordinary

1,073

2,296

3,849

1,591

25

37

(77)

8,794

EBITDA

Impairments

(67)

-

-

-

-

-

-

(67)

Costs related to

(5)

(5)

(33)

(9)

(2)

(27)

(1)

(82)

COVID-19

EBITDA

1,001

2,291

3,816

1,582

23

10

(78)

8,645

Ordinary EBITDA in the first half of 2021 amounted to 8,360 million euros, a decrease of 434 million euros (-4.9%) compared to the same period of 2020. In particular, the improvement in Enel X's margin, amounting to 83 million euros and recorded mainly in Italy and North America, respectively as a result of the increase in margins on services associated with the new commercial initiatives and on demand response activities, as well as the increase in the margin related to End-User Markets, amounting to 54 million euros, mainly due to higher sales on the free market in Italy, were more than offset by:

  • a negative change in Infrastructure and Networks, amounting to 361 million euros, mainly due: (i) to the recognition in Spain, in the first half of 2020, of the positive effect resulting from the amendment to the energy discount benefit, following the "5th Endesa Collective Bargaining Agreement", net of the provision for indemnities referring to the early termination on a voluntary basis of the employment relationship registered in the same period; (ii) to higher income, recognized in the first half of 2020 in Italy, resulting from the application of ARERA Resolutions no. 50/2018 and no. 568/2019 and (iii) to the adverse exchange rate effect in Latin America. These negative impacts were partially offset by the increase in margins in Italy, mainly due to the tariff adjustments for 2021 on electricity transport, and by the improvement of margins in Latin America mainly due to the higher volumes of electricity transported;
  • a reduction in Thermal Generation and Trading activities, amounting to 112 million euros, mainly in Spain, due to the aforementioned change in the energy discount benefit, net of the provision for

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Enel S.p.A. published this content on 29 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 17:08:11 UTC.


© Publicnow 2021
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Last Close Price 6,96 €
Average target price 9,14 €
Spread / Average Target 31,4%
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Francesco Starace Chief Executive Officer, Director & GM
Alberto de Paoli Chief Financial Officer & Head-Administration
Michele Alberto Fabiano Crisostomo Chairman
Anna Chiara Svelto Independent Director
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