Enel closes 2016 confirming a profit of 3,2 billion and a dividend of 18 cents (of which 9 already paid on account
last January). The amount of dividends reaches approximately 1,8 billion, over 400 million will go to the Treasury which controls the group with a 23,5% stake. More renewables and networks to boost growth in 2017, with three innovations on the way: an acceleration on the digitization not only of internal processes and systems but also of customer services; around the corner is the birth of the new Global Business Line, the new division that will deal with electric mobility, energy efficiency, public lighting and smart home services, i.e. all Enel activities outside of production, sales and distribution of electricity and gas electricity; the third pillar remains, that of simplification, efficiency and growth particularly focused on the expansion in renewables and networks.
These are the drivers that Francesco Starace illustrated to the press shortly before the conference call with analysts and the opening of the Stock Exchange, presenting the 2016 budget approved Thursday by the Board of Directors. The figures are already known (after the preliminaries presented in February and the recent hearings in the Senate on the budget for the three-year period) but it is worth mentioning them because they mark significant progress despite the difficult economic situation in the energy sector worldwide. The 2016 profit is confirmed at 3,2 billion (+12,3%), Ebitda remained stable at 15,276 billion despite the drop in energy prices which negatively impacted the revenue down 6,7% to 70,59 billion. The arbitrator's estate was defended with a cost efficiencies plan and the savings obtained on financial charges (-8%) which made it possible to recover 1 billion. Ordinary Ebitda, which reflects the performance of the company activity excluding extraordinary items, grew to 15,174 million euros (15,040 million euros in 2015, +0,9%) and "it is the first time since 2013“, underlined the CEO and general manager, who also noted “the 12,3% increase in net profit to 3,2 billion and the growth of the payout to 57%”. But above all, Francesco Starace emphasized the "robust increase in cash flows to 27% of net debt", an index that signals the greater efficiency in the use of working capital. The net debt/EBITDA ratio is 2,5, “one of the best in the sector”.
In short, a positive balance towards the probable reconfirmation at the helm of Enel on which the government will have to remove the veil before the assembly convened for next May 4th.
Starace prudently spoke of "this year" in indicating the commitments for the future - waiting to have the certainty of reconfirmation for the three-year period - but he has already traced the path: "The 9 billion invested in 2016, most of industrial growth, are a real record and will bear fruit in 2017 by strengthening the increase in Ebitda”.
BUY BACK and LATIN AMERICA
As already announced, if it is not possible to complete the repurchase of the minorities in the investee companies after the reorganization in Latin America, the group will keep the buy back option. The BoD will ask the May shareholders' meeting for authorization to purchase up to 500 million treasury shares, equal to around 4,92% of the capital, with a maximum outlay of 2 billion. Any buyback will last for 18 months starting from the resolution of the shareholders' meeting, specifies the note from Enel. "It is an additional tool – clarified the CEO – and we have not, at the moment, foreseen the cancellation of the actions".
M&A: 1,2 BILLION ON THE TABLE
A part of the funding for acquisitions in 2017, Starace clarified, was committed to the acquisition of the company that distributes electricity in the Brasilia area, in Brazil, with 3 million customers. The acquisition, launched at the end of 2016, is stipulated in the contract for this year. Starace did not want to go into the merits of possible shopping in Europe (Rwe is the "prey" to which reference was made) limiting himself to specifying that "there are potential opportunities in Europe but they can only be evaluated after the elections in France and Germany and only after the EU Commission has provided the indications on the important regulatory change in progress. It would be too risky before."
THE NEW GLOBAL BUSINESS LINE
It will be global, in the sense that it will cover all the countries in which Enel operates and, as has been said, will deal with the non-electricity and gas businesses. The new unit will report directly to the CEO. “It is a unit dedicated to technological development and innovation, it will identify the spaces that exist in the demand of our customers. In the first phase, the objective is to spread the activities in which we are already operating, in the second step we will focus on offering new products": Enel has announced a plan for the installation of 12.000 electric charging stations in Italy and the e- mobility is at the heart of the activity for the new division.
Although the data is in line with expectations, the Enel group lost 2% around 10,30 in Piazza Affari at 4,164 euros in a sluggish market after Thursday's sprint.
