Il Enel budget 2021 closes with a group net profit exceeding 3 billion, revenues and Ebitda on the rise, net debt growing to 52 billion driven by sharp increase in investment (+27,5%) to 13,1 billion to accelerate the energy transition and growth in renewables.
The eyes of investors are focused on Enel, the Italian electricity multinational, and questions from analysts flock during the presentation of the 2021 financial statements approved by the Board of Directors. Acquired that the group's 2021 results demonstrated strong resilience and that the group has recovered pre-Covid levels, all questions focus on the current extreme situation gas price volatility, on possible price-cap interventions by the government and the EU countries, on maintaining the dividend policy. “There are no reasons to change the dividend policy,” he reassures Francesco Starace, CEO and general manager of Enel, who is preparing to detach a coupon of 38 cents (+6%) for its shareholders, led by the Treasury. Beside him the CFO Alberto De Paoli clarifies: “We have zero gas supplies from Russia.” Here are the numbers from the 2021 budget and Starace-De Paoli's answers to analysts' questions.
Enel financial statements 2021: the main consolidated data
- Revenues at 88 billion compared to 66 billion in 2020 (+33,3%)
- Ordinary Ebitda at 19,2 billion (+6,6%), Ebitda at 17,6 billion (+3,9%), Ebit at 7,6 billion (-9,2%)
- Group net ordinary result at 5,6 billion (+7,6%)
- Group net result at 3,2 billion (+22,2%)
- Net financial debt at 51,2 billion against 45,5 billion in the previous year (+14,4%)
The strong increase in revenues is to be linked to the recovery - after the 2020 lockdown - and the consequent higher production and sale of electricity. The 2021 figure also includes the sale of the 50% stake held in Open Fiber which allowed Enel to collect 1,7 billion.
The exit from OF clearly had an impact on Ebitda which also benefits from the leap forward of Enel Green Power and the entry into operation of new renewable plants. During the year, Enel increased its green plant capacity by 5,1 GW – a true record – reaching a global capacity of 90,7 GW. On the other hand, the share of Ebitda from thermoelectric plants decreased by 24%.
Enel financial statements 2021 and 2022 scenarios: dividend growth confirmed
The group confirms the strategy of decarbonization and electrification as a driver for growth. There are 11,6 GW of renewables under construction. Digitization is proceeding and 2021 new digital meters were installed in 700. “In this way, we can seize opportunities along the entire value chain and at the same time contribute to theenergy independence in the countries where we operate. It is therefore essential – said Francesco Starace – to accelerate investments in renewables”.
The Enel CEO underlined that the overall dividend yield grew by 7% last year and guaranteed an increase in the coupon for 2022 to 40 cents, as planned and despite the gloomy scenarios of these days. “The results of 2022 are certainly not predictable – answered Starace to a precise question on the point – but they are under our control. In the event of increased turmoil we will have the ability to pay dividends. Even in a worst case scenario we will be able to pay dividends given the financial flexibility. We see no reason to change the dividend policy, even in this turbulent scenario”.
Energy independence and presence in Russia
There was no shortage of questions on the increase in electricity bills, on the risk of introducing a price cap on the price of the kilowatt hour, on the unknowns of Russian gas supplies to Europe.
“We have decided not to develop any more growth in Russia and are exploring various scenarios for our current assets in the country. Any scenario is on the table. The scenarios will be analyzed according to the laws and sanctions. It is a decision that we will take in the next few months but the weight on Ebitda, in any case, is marginal: assets account for less than 1%”, said Starace. Enel currently controls three gas-fired plants through Enel Russia and two wind farms as well as having a 49.5% stake in LLC Rusenergosbyt (electricity sales).
“We have zero gas supplies from Russia. 90% of the gas we use in Europe - added the CFO De Paoli - is covered by our long-term contracts, 55% is LNG from the USA which represents 75% of our contracts in volume".
Enel budget 2021 and bills in Italy
Once the topic of Russia is closed, the topic of Italian bills remains. What do you think about the risk of a price cap? On the subject, the CEO of Enel was clear: “The increases in gas are largely unjustified and it is important to clarify the current turbulence. Enel does not benefit from high gas prices. Instead, it is in our interest to offer customers a competitive price to push the electrification of consumption. The only way to contain electricity prices in the short term is to keep the price of gas under control. A price cap on gas is useful, on electricity it would be the worst method. The government has understood this and is looking for a solution. The other useful element is the abolition of the regulated tariff which is currently the highest: if it were abolished in 2022, it would be a step forward”.
Enel rules out a recommissioning of old coal-fired plants: the decommissioning goes ahead. Instead, they could return to produce the plants - such as Civitavecchia - currently on standby. But only at the request of the government in case of a gas emergency. Instead, the possible IPO of the e-mobility unit has been confirmed. But “it will be decided in the coming months”.
