Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Enel SpA (ENLAY, Financial) reported a strong financial performance with an ordinary EBITDA of EUR11.7 billion, up by 9% compared to the previous year.
- The company achieved significant cash generation, with FFO reaching EUR5.5 billion, providing coverage for net CapEx.
- Enel SpA (ENLAY) successfully executed its disposal plan, cashing in more than EUR5 billion, which contributed to deleveraging efforts.
- The company recorded a 41% decrease in emission intensity over the past 12 months, highlighting its commitment to environmental sustainability.
- Enel SpA (ENLAY) made progress in its partnership business model, completing deals worth around EUR2 billion, enhancing value and accelerating returns.
Negative Points
- The retail segment in Italy experienced a decrease in EBITDA by EUR100 million due to the normalization of margins.
- The company faced challenges with the regulatory framework in Spain, impacting capital allocation decisions.
- Enel SpA (ENLAY) recorded a negative evolution in its retail client base in Italy, attributed to previous pricing strategies.
- The thermal generation segment saw a decline due to lower output and the end of mandatory coal production requirements.
- Working capital dynamics were negatively impacted by non-recurring items and seasonality, affecting short-term cash flow.
Q & A Highlights
Q: Numbers continue to be strong and you confirm the guidance, what factors could drive a revision upwards?
A: Let me say everything's going well. And as I said before, we see the old '24 numbers to move to the upper part of the range. But it's not the right moment now to talk about a potential revision of the guidance that remain the existing ones. - Flavio Cattaneo, CEO
Q: When will you officially disclose the level of DPS for '24? In case it will be above EUR0.43 per share, how does this translate to '25 and '26?
A: Our dividend policy is extremely clear. If we reach cash flow neutrality, we'll pay up to 70% of the net ordinary income. For years to come, our Capital Market Day is in November, and you will have the answer to your question. - Flavio Cattaneo, CEO
Q: We recorded a negative evolution on retail clients in Italy, what are the main drivers of this evolution? And what do you project for the future?
A: The evolution of the customer base is a consequence of price strategy executed before our appointment. We are now adjusting prices moving back to market condition and for a fair marginality. Our churn rate is below the market average, and in July, we have already clear sign of recovery. - Flavio Cattaneo, CEO
Q: Any news on the grids regulation in Spain? How can you define your capital allocation in absence of visibility on the regulatory framework?
A: We have met the Spanish government explaining that it's difficult to increase our allocation of resources in the grid without a supportive regulatory framework. We think the government understood and a fair agreement will be reached. - Flavio Cattaneo, CEO
Q: Can you provide granularity on the targeted renewable additions for this year and the capacity currently in execution?
A: The additional capacity we have guided is 100% confirmed. We have two gigawatts deployed in Latin America, mainly in Brazil. In Europe, we added around 550 megawatts, mainly in Italy, while the rest was added in North America and Australia. - Stefano De Angelis, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.