Enel grows renewables EBITDA by 45.7% y/y in Q1 2023

Enel Green Power, the renewables business of Italian utility group Enel SpA (BIT:ENEL), booked ordinary earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR 1.06 billion (USD 1.17bn) in the first quarter of 2023, 45.7% more than in the same period a year prior.

The boost came on the back of higher renewable power production and sales, particularly in Italy, Spain, Chile and Brazil. The higher output and sales also helped Enel Green Power grow revenues by 27.6% year-on-year to EUR 2.56 billion, Enel said on Wednesday.

Enel Green Power increased total power production from its renewables worldwide by 11.6% to 29,951 GWh in the January-March quarter, as highlighted in the operating report released earlier. The business set out to build 21 GW of new renewables capacity under the 2023-2025 strategic plan, with Enel saying that 10.9 GW of those projects are now being executed. They are almost exclusively wind, solar and battery energy storage projects, with hydro making up a tiny part.

The group as a whole posted a net ordinary income of EUR 1.51 billion in the first quarter, up by 1.9% on the year. Ordinary EBITDA rose 21.8% to EUR 5.46 billion, driven mainly by the positive performance of Enel Green Power and Enel Grids. Revenues dropped by 22.6% to EUR 26.41 billion due to declining energy prices following market normalisation, Enel said.

Net financial debt shrunk to EUR 58.9 billion from EUR 60.1 billion at the end of 2022, the results show.

Outgoing CEO Francesco Starace called the results "outstanding" and confirmed the guidance for 2023 -- full-year ordinary EBITDA standing between EUR 20.4 billion and EUR 21.0 billion and a net ordinary income ranging between EUR 6.1 billion and EUR 6.3 billion. He also said that half of Enel’s EUR-21-billion asset disposal target had been exceeded.

Starace is at the tail end of his term as the CEO of Enel. In early April, the Italian government, which holds a 23.59% stake in the group, nominated Flavio Cattaneo to succeed him and named Paolo Scaroni as chairman. In the meantime, some Enel shareholders rebelled against the government’s nominations and proposed alternative appointments to leadership positions, Bloomberg and Reuters have reported.

London-based hedge fund Covalis Capital, which owns a 1% stake in Enel, has called for the appointment of banking executive Marco Mazzucchelli as chairman, but had no name on the list for the CEO position, Reuters reported. According to Bloomberg, Mondrian Investment Partners will also vote for the list that includes Mazzucchelli.

The shareholders will convene on May 10. The board of directors has instructed its members and company management to remain silent and not give any interviews and statements to the media until then “[i]n order to preserve the Company's neutrality” on the appointment matter, Enel said.

(EUR 1.0 = USD 1.107)

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