Enel reports rise in Q1 core profit, readies Brazil defence action
Enel, the Italian utility company, reported on Thursday a?rise of 3.6% in its?ordinary core profits for the first quarter. It also said it was preparing to defend a lucrative concession in Sao Paulo in Brazil against the possibility of being revoked.
According to LSEG, the state-controlled company reported that earnings before interest taxes, depreciation, and amortization (EBITDA), excluding exceptional items, reached 6 billion euro ($7.1 billion) by end-March. This is in line with a?consensus of analysts compiled by LSEG.
The group's growth in grid business has offset the weakness of thermal generation and trading. Spain and Latin America grew, while Italy contracted.
EBITDA was recalculated for the first quarter of last year to 5,8 billion euros from 5,97 billion.
The group announced its full-year financial goals at the capital markets day held in February, just before the U.S./Israeli war on Iran.
SAO?PAULO ESTATES VALUED AT MORE THAN 3 BILLION EUR
Enel is facing regulatory risks in Brazil, where the energy watchdog Aneel opened a process administrative that could result in the revocation by Enel of its local unit's concession for the distribution of power to Sao Paulo.
After extreme weather events, the regulator cited "structural failures" within the service?provision.
Enel's Chief Financial Officer Stefano de?Angelis stated that the company is "100% certain" that it has not breached contract. He added that extreme weather conditions?shouldn't be considered? when evaluating service quality.
He said, "We're preparing counter arguments for the regulator."
Enel will have until mid-May in order to make its case before the regulator. The regulator will then assess the arguments made by the company and decide whether or not to propose the revocation of the concession. The government has the final say.
De Angeli stated that the financial assets?linked to Sao Paulo's concession?have a value in the balance sheet of more than?than three billion euros, implying Brazil would have to reimburse Enel if a revocation occurred.
(source: Reuters)
