Milano — Enel’s 2023 results show a clear improvement compared to those recorded at the end of 2022. In practice, the company had less turnover, 95 billion compared to 140 billion in 2022 which was essentially due to the explosion in electricity prices caused by the post pandemic and since the outbreak of the war in Ukraine. But despite lower revenues, the company earned much more, with a gross operating margin growing by 11.6% (+14% on a constant basis) up to 22 billion and a net profit up by 20%, 6.5 billion.
Enel’s plan to 2026: 35.8 billion in investments, half in Italy. Minimum dividend at 0.43 euros 22 November 2023
The care of the new CEO Flavio Cattaneo, already illustrated to investors in November with the industrial plan, is therefore starting to produce its effects. The cure included a progressive cost cutting worth 500 million euros, the increase of the most profitable productions in Italy and the blocking of loss-making ones, such as in the United States, a market from which Enel gradually wants to exit. In the meantime, we have proceeded at full speed with the divestment policy which also includes the formation of joint ventures in the renewables sector in order to deconsolidate the debt and have a greater return on invested capital.. «The managerial strategy and the actions we are carrying out aim to ensure the group’s solid financial and industrial trajectory. We have a clear focus on cash generation”, explained Cattaneo in the conference with financial analysts. In fact, the Fund from operation (Ffo) item, which measures cash flow, was equal to approximately 14.8 billion in 2023, recording an increase of approximately 5.7 billion compared to 2022 (approximately +63%), 3 billion more the maximum value historically achieved by Enel.
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The divestment plan, which had been adjusted compared to that of the Starace era, has already been 90% implemented. Specifically, the divestitures amount to approximately 11.5 billion: of these, 3.4 billion are closed, 7 billion signed and approximately 1 billion in an advanced stage. Also taking into account those carried out after the end of 2023 and those announced but not yet finalized, the pro-forma net financial debt stands at approximately 53.5 billion, approximately 2.4 times the ordinary Ebitda. For example, Enel recently agreed with A2a to sell the networks it owned in Lombardy at a very advantageous price, 1.2 billion, and this money can be reinvested in the South where it yields more.
Another recent deal concerns the sale of a 49% stake in the capital of Enel Libra Flexsys, the battery energy storage company: the proceeds amounted to another 1.1 billion. All these actions made it possible to increase the dividend for the 2023 financial year by 7.5% to 0.43 euros per share, without drawing on reserves and without increasing debt. «An extra dividend? – analysts asked Cattaneo, imagining that the proceeds of the A2a operation could be distributed -. I can only say that the value of this deal supports the entire return for shareholders. At the end of the year we will take stock and evaluate. We want to maximize shareholder remuneration for 2024».
Cattaneo is also trying to rationalize the huge investments that Enel has in Latin America. In Argentina he decided not to sell the Buenos Aires network after the new president Milei raised the tariffs, in Chile and Colombia the networks owned are profitable while Brazil is still making a loss. This morning we will see how the stock market will accept these results announced after the markets are closed.