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Last updated: May 7, 2013 8:42 pm
Enel, Italy’s largest utility and its most indebted, said its core profits fell 4.2 per cent in the first quarter as electricity demand continued to decline in Europe, particularly in its main markets in Italy and Spain.
The Rome-based utility forecast a fall in economic output in “mature” eurozone markets of 0.3 per cent this year and pointed to “persistent uncertainty in subsequent years”. In contrast, Latin America and Russia were expected to grow.
Enel said earnings before interest, tax, depreciation and amortisation were €4.08bn, down 4.2 per cent on first quarter 2012. Group net income fell 26.2 per cent to €852m, which included €125m of writedowns. Net debt rose 0.8 per cent from end 2012 to €43.29bn.
Fulvio Conti, chief executive, said the group was on track to meet year-end targets. Results were impacted by “adverse fiscal and regulatory measures introduced in Spain as well as by weak electricity demand in mature markets”. These were offset by contributions from renewable energy and infrastructure and networks divisions, as well as by cost-cutting.
Group electricity sales in the quarter fell 7.1 per cent to 76.7 terrawatt hours (TWh), while gas sales remained flat at 3.4 billion cubic meters. In March Enel said it is planning some €10bn in cost reductions and asset sales to cut debt to €37bn next year.
The company’s power plants in Italy generated 17.4 TWh, down about 12 per cent from a year earlier.
Enel’s shares closed up 1.6 per cent in Milan on Tuesday, making a 15.4 per cent gain over the past month.
Spain’s Endesa, majority owned by Italy’s Enel, earlier reported a fall of 8 per cent in Ebitda to €1.7bn in the first quarter due to falling energy demand and a new power generation tax.
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