Home » Enel, record leap in debt in 2022: the alarm from the Court of Auditors

Enel, record leap in debt in 2022: the alarm from the Court of Auditors

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Enel, record leap in debt in 2022: the alarm from the Court of Auditors

Enel, the EBITDA ratio exceeds the critical threshold of 3:1

“In relation to the intensification of growth trend in net financial debtthis Court reiterates that measures are adopted to contain the phenomenon, ei investment programs of the Company are based on welfare criteria, aimed at maintaining long-term financial balance”. This is what we read in the report of the Court of Auditors regarding the financial management, year 2022, of Enel spa.

The Enel Group’s debt increased by 8,375 million of euros compared to 2021 (+ 16.2%), reaching “the highest level and pushing the ratio between financial debt and ordinary Ebitda of the Group to 3.1, considered one of the main indicators for measuring the share of debt sustainability ”. Enel spa in terms of installed capacity and number of clients is among the main European electricity companies. In Italy it holds leadership in the electricity market, taking on an important position in the natural gas retail sector. It holds similar positions in the electricity and gas sector in Spain.

As of 12.31.2022, the share capital of Enel spa amounted to 10,166,679,946 registered ordinary shares with a value of one euro each, a publicly controlled company through participation of the Ministry of Economy and Finance in the amount of 23.60%. The market share (floating) amounts to approximately 76.4% held by 670 thousand shareholders including institutions and individual savers (20% of the share capital).

In the latest ordinary meetings, the presence of the Ministry was consistently lower than that of the other shareholders, considered as a whole. In this regard and considering the strategic value of Enel – taking into account the recent tensions in the global energy sector, the Accounting Judges recall “attention to the fact that the statutory clause safeguards public control is destined to lapse if the percentage limit on share ownership is exceeded following the execution of a public purchase offer, as a result of which the offeror comes to hold a stake of at least 75% of the share capital with voting rights” .

Il Strategic Plan 2023.2025 provides for further rationalization of the corporate structure through the exit from some businesses attributable to geographical areas no longer aligned with the company strategy, in order to obtain a more agile structure focused on six countries (Italy, Spain, USA, Brazil, Chile, Colombia). Enel spa has taken initiatives that contribute to the development of the PNRR, thanks to projects relating to new renewable capacity, digitalisation and resilience of networks, electrification of energy end uses. During the two-year period 2022-2023 Enel obtained contributions for both the 13 Smart Grids projects (3,203 million euros in non-repayable funds) and for 11 projects relating to the resilience of networks (275 million euros).

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Analyzing the Group’s results by geographical area, we note that operational results are growing substantially in all areas of competence, with the sole exception of the Africa, Asia and Oceania area which plays a marginal role. In Italy, both revenues and costs increased due to the greater volumes sold and the increase in the sales prices of electricity and gas.

The new guidelines and development objectives aim to decarbonize and strengthen distribution networks. The progressive growth of renewable energy will have to take place at the same time as the exit from coal-fired (2027) and gas-fired electricity production (by 2040). As regards the annual compensation of the top management of Enel spa, we learn that the president of the board of directors is entitled to 533,567 euros, the managing director-general manager 3,291,599 euros, each of the directors 80 thousand euros plus reimbursement of expenses incurred due to the their office, to the president of the Board of Statutory Auditors 85 thousand euros and 75 thousand euros to each of the standing auditors.

The emoluments accrued in 2022 by the 12 managers with strategic responsibilities increase to a total of 14,856,254 euros. The Enel Group’s litigation continues to be significant, as well as of various types and contents, both in Italy and abroad. In view of the potential charges, 703 million euros have been set aside in the liabilities of the balance sheet in the litigation fund compared to 834 million in 2021. The economic and financial performance has demonstrated the resilience of the Enel Group even in highly volatile and adverse contexts such as the one it has characterized the year examined by the Magistrates. Shareholders received an advance on the dividend (0.20 per share) already in the first months of the year (January 2023). The management of the Group has “made it possible to achieve positive results, in terms of sustainability parameters confirmed by specific internationally recognized rating indices”.

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