Enel Group Releases Financial Results; Q1 2021 Unprofitable

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Enel Group, Italian multinational manufacturer and distributor of electricity and gas, has released the financial results of the first quarter of 2021. The company reports an 8.8% increase in investments and confirmation of yearly targets, among other data, but the quarter has not proved profitable for it.

Revenues earned in this quarter were 17,107 million euros, as opposed to 19,985 million euros in the first quarter of 2020, resulting in a 14.4% decline. The group attributes the change to thermal generation, infrastructure and network activities, end-user markets and low trading activities in Italy and Spain. Adverse exchange rate effects in Latin America were also cited as one of the reasons.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was “ordinary”, standing at 4,159 million euros unlike 4,741 million euros in the first quarter of 2020. According to the firm, the 12.3% decrease is on account of the impacts recognised in Spain in the first quarter of 2020 following the change in the energy discount benefit, mainly in thermal generation and trading and infrastructure and networks, as well as due to the adverse exchange rate effects in Latin America.

EBIT (Earnings before interest and taxes)- indicator of a company’s profitability- was 2,525 million euros this quarter, reducing from 3,109 million euros in 2020 Q1. The 18.8% is said to mainly reflect the operating performance, partially offset by lower depreciation and amortization recorded in the first quarter of 2021 as a result of write-downs of certain coal-fired plants carried out during 2019 and 2020 as part of the decarbonization process.

Group net ordinary income also reduced to 1,214 million euros in Q1 2021 from 1,281 million euros in Q1 2020, the 5.2% decline owing to “lower net financial expenses and by a reduction in non-controlling interests”. Net financial debt rose by 1% from 45,415 million euros to 45,884 million euros mainly due to the investments carried out during the period and the adverse exchange rate effects, partly offset by positive cash flow generated by operations, the group claims.

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The company’s capital expenditure increased by 8.8% from 1,870 million euros in Q1 2020 to 2,035 million euros in Q1 2021. It attributes the increase to growth in capital expenditure in Enel Green Power, in infrastructure and networks and in end-user markets.

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Francesco Starace, Enel Group CEO, commented, “In the first quarter of 2021, we significantly increased our investments, mainly in renewables and grids, in order to further accelerate the Group’s decarbonization process and seize the opportunities that will emerge from the economic recovery. These investments will allow us to accelerate growth, in a context of ever increasing decarbonization, projecting us towards a new record in renewable capacity construction at year-end.” Starace added that in light of the financial and operating results achieved in the first quarter, the company confirms the growth targets for 2021 in terms of ordinary EBITDA and net ordinary income, as announced in November last year during the presentation of the Strategic Plan.