It is certainly an excellent quarterly report for the first three months of 2023 that Francesco Starace delivers, at the end of his 9 years at the helm of Enel, into the hands of the new management who will be elected by the shareholders' meeting on May 10th. An assembly that promises to be very lively with the presentation of three opposing lists and the inevitable queue of controversies that led the board of directors to take a position at the end of the meeting that approved the accounts. The board asked for a press blackout at the summit until the meeting. A clear reference to Francesco Starace's declarations that he said he was willing to support the new directors for an orderly handover. But let's proceed in order, starting from the accounts first.
Enel: profit and Ebitda up, revenues down due to the gas effect
I revenues of Enel in the first quarter decreased by 22,6% to 26,4 billion due to the significant reduction in prices on the international scene. By contrast, theOrdinary EBITDA increased by 22% to reach 5,5 billion, a result closely linked to the growth of the integrated business. The ordinary net income of the electricity group stands at 1,5 billion (+1,9%) with the positive trend of ordinary operations. The latter more than compensated - explains the Enel press release - the increase in net financial expenses, due to the increase in interest rates combined with the higher gross debt for the period compared to the first quarter of 2022, as well as the higher tax burden. Indeed, during the conference call with analysts it emerged that the measures implemented by European governments during the energy crisis – from the reduction or elimination of system charges to the price cap, to the equalization of tariffs – had a negative impact of 3,2 billions on accounts. The drop in debt has been confirmed, standing at 58,9 billion (60,06 billion euros at the end of 2022, -1,9%).
Investments rose to 2,873 billion in the first quarter, up by 340 million euro compared to the same period of 2022 (+13,4%). In particular, in the first quarter of 2023 there was a growth in investments in Enel Green Power, mainly in Italy, Spain, Colombia and Brazil, and in Enel Grids, especially in Italy.
With these results the guidance is confirmed: in 2023, the Group expects an ordinary Ebitda between 20,4 and 21 billion euros, a net ordinary income between 6,1 and 6,3 billion euros and a net financial debt between 51 and 52 billion euros.
Enel, Starace: these have been 9 exciting years
“The 9 years I have spent with you in this work have been exciting, all very satisfying and have led to the wonderful development of this group and I am convinced that the next few years will be just as satisfying and I wish everyone the best of success with the evolution of Enel”, said the CEO of Enel, Francesco Starace, commenting on the results during the conference call with analysts. Starace recalled that the proceeds from the repositioning plan in Italy and other core geographies have already exceeded half of the 21 billion euro disposal target announced at the presentation of the 2023-2025 Strategic Plan.
During the conference call, the CFO Alberto De Paoli confirmed the guidance and affirmed that there is "wide visibility on the targets", underlining that the integrated business model has given results in line with expectations and it is believed that it will do the same in the coming three quarters. On the possibility of an improvement in performance, De Paoli indicated that the integrated model has growth potential and that, if no other government measures intervene, an improvement with respect to the target cannot be ruled out. Speaking of the increase in debt, the CFO signaled that it is due to the scenario of rising interest rates, but in 2024 there will be a decline due to the normalization of rates and electricity tariffs.
Enel: fiery assembly and press blackout
The assembly of May 10 will arrive with three opposing lists that will compete for the 9 seats on the board. The one presented by the Mef (23,6% of the capital) indicates Paolo Scaroni as president and Flavio Cattaneo as managing director. The hedge fund Covalis Capital presented a list of his inviting the two managers not to vote and proposing Marco Mazzucchelli president. Finally, Assogestioni (representing 1,8% of Enel's share capital) presented its candidates for the Board of Directors, confirming its support for Scaroni. But in the last week there has been a rush of declarations and various funds have expressed critical positions towards the appointments decided by the government at the end of an "opaque and uncertain process". Faced with this situation, Enel CEO Francesco Starace said he was willing – in an interview first with Il Sole and then with Repubblica – to guarantee his contribution to the new management for a specific and short time, especially if different from that indicated by the Treasury, in order to ensure an optimal handover. The position, collaborative in Starace's intentions, was however interpreted with irritation in government circles which considered it an assist to the Covalis fund.
Here then the decision of the Board: to preserve "the neutrality of the company with respect to the appointment of the new board of directors at the meeting of May 10", the Enel board resolved that "until that date, no interviews, statements or in any case any communication by the directors and/or management of the company". The BoD acknowledged the statements made by Francesco Starace regarding the fact "that he has no intention of remaining at Enel for a further mandate and that he is only available to allow, in the exclusive interest of the company and for a period not exceeding one month, an orderly handover, which in the light of the presentation of three competing lists has not been possible so far". Next meeting on May 10th.
