It will invest 37,000 million in the next three years
Enel will launch an asset sale plan for 21,000 million euros, leaving markets such as Peru, Argentina or Romania, to reduce its debt, including in these divestments the portfolio of its gas business in Spain, where it is the main shareholder of Endesa with a 70% stake.
As the group has announced on the occasion of its Capital Markets Day, it will thus focus on six strategic countries: Italy, Spain, the United States, Brazil, Chile and Colombia.
Last year, Endesa already announced a change in its strategy, hand in hand with Enel, to leave its entire gas business before 2040, within its path towards total decarbonization and the goal of being zero emissions.
Now, in its new strategy for the 2023-2025 period, the Italian company hopes that “the value of the gas portfolio in Spain will crystallize”, as well as that of this business in Chile as well.
Endesa’s natural gas business customer base amounted to 1.8 million at the end of September, of which 1.5 million are on the open market.
The Italian group expects that most of this divestment plan will be completed by the end of 2023, thus focusing on those six markets.
Specifically, in Europe, the energy company will concentrate its activities in Italy and Spain. In Latin America, the company will exit Peru and Argentina. In addition, in other geographical areas, such as Australia and Greece, it plans to develop its business model to catalyze investments in associations (‘stewardship’).
REDUCE DEBT
With this divestment plan, Enel plans to reach a net debt target in the range of 51,000-52,000 million euros by the end of next year, from 69,000 million euros at the end of this month of September.
Likewise, for the period 2023 and 2025, the group will invest some 37,000 million euros, of which 60% will support its integrated commercial strategy (generation, customers and services), and the remaining 40% will be allocated to networks to support its role as facilitators of the energy transition.
Enel indicated that its objective is to “focus on the integrated value chain, seeking sustainable electrification, which is increasingly necessary in global energy systems, covering approximately 90% of its fixed-price sales with carbon-free electricity in 2025, raising renewable generation to around 75% of the total and reaching around 80% of the clients of the digitized network”.
On the other hand, the group expects its ordinary gross operating result (Ebitda) to increase to 22,200-22,800 million euros in 2025, compared to the 19,000-19,600 million euros estimated for this year.
A PROFIT OF UP TO 7,200 MILLION AND A DIVIDEND OF 0.43 EUROS
In addition, it expects its ordinary net profit to reach €7.000-7.200 million at the end of the plan period, compared to an estimated €5.000-5.300 million in 2022, thanks to an annual growth rate of 10-13% with a FFO/net debt ratio of 28% forecast for 2023.
Regarding the remuneration to its shareholders, Enel commits to a dividend of 0.43 euros for the period 2023-2025, compared to 0.40 euros in 2022.
Enel’s CEO, Francesco Starace, stressed that the energy company will focus in the next three years on businesses and geographies “that can add value despite the current challenging scenario, adopting a more agile structure and a stronger set of financial ratios.” .
“This will increase our resilience to possible continued turbulence in the future, as well as position our value creation for further growth, benefiting all our stakeholders and accelerating energy independence in our core countries,” he added.
21 GW OF RENEWABLES IN THE NEXT 3 YEARS
Regarding its commitment to renewables, Enel expects to add around 21 gigawatts (GW) of installed ‘green’ capacity -of which approximately 19 GW will be in its main countries-.
The group plans to develop this renewable capacity backed by a portfolio amounting to about 425 GW. This decarbonization strategy thus allows the company to once again confirm its commitment to zero emissions by 2040.
