Endesa reported a 55 per cent drop in nine-month net profits on Tuesday as lower gains from asset sales masked a steady underlying result at the Spanish electricity company.
The company, which is 92 per cent-controlled by Enel of Italy, said profits for the period were €3.05bn, after minorities, compared with €6.8bn at the same stage last year.
However, the figures were distorted by €4.87bn in asset sales last year to Eon of Germany as part of a carve-up agreed with Enel after a tortuous battle for control of the Spanish generator.
These compare with one-off net gains this time of €1bn from the sale of assets to Acciona, the Spanish renewable energy group which part-controlled Endesa before splitting with Enel this year.
After stripping out the impact of these sales, including the removal of production capacity, net profits climbed 5 per cent year on year on a comparable basis, according to the company.
Revenues for the nine months to the end of September were €18.5bn, up almost 6 per cent on the year-ago period. For the third quarter, net profits, excluding minorities, were €785m, down almost 2 per cent on the same period last year. Revenues were up more than 20 per cent at €7.3bn.
The underlying improvement for the nine months came in spite of drops in electricity output, sales and prices in Spain and Portugal, offset slightly by growth in Latin America.
Production across the group was down 6.2 per cent at 105,369 GWh, while sales dropped 3 per cent to 125,905 GWh, Endesa said. Average wholesale prices in the regulated market for the period in Spain and Portugal were down 38.4 per cent, and demand was off nearly 5 per cent.
Endesa said it had been able to offset some of the impact of this downturn through a surge in sales in the liberalised market and improved margins through a more efficient generation mix.
In Latin America, lower costs of production, improved prices and virtually flat demand allowed the company to lift earnings before interest, taxes, depreciation and amortisation by 10 per cent to €2.4bn, from a consolidated group total of €5.8bn.
The results were well received by investors and Endesa’s shares beat a sharply declining Madrid stock exchange to be up slightly at €22.8 before midday.