(Repeats to add byline; no other change)
* Sees 2013 EBITDA at 16 bln euros vs 16.7 bln in 2012
* To sell 6 bln euros of assets, issue 5 bln euros of debt
* 2012 profits slump after Endesa goodwill writedown
* Shares down 5 pct
By Stephen Jewkes
MILAN, March 13 Italy's biggest utility Enel
plans to sell 6 billion euros ($7.8 billion) of assets
and cut costs to reduce debt after southern Europe's economic
slump forced a dramatic reduction in its profit outlook.
Enel is one of Europe's most indebted utilities, but it is
by no means alone in its struggle against undermined power
demand, squeezed margins, EU-driven energy efficiency measures
and greater use of renewable energy.
Peers including Germany's E.ON and French
leviathan GDF Suez have already announced extensive
disposal plans and cost-saving measures as they, too, seek to
cut debt and protect their credit ratings.
Enel said on Wednesday that core earnings are expected to
fall to about 16 billion euros this year, from last year's 16.7
billion euros, and to stay at that level in 2015.
Its shares were down by 5 percent at 1009 GMT, with
investors spooked by the weak outlook, while the European
utilities sector was virtually flat.
"The asset sales stand out, but it won't be easy given all
the disposals other utilities are planning," said Nomura analyst
Javier Suarez. "It simply reflects a very tough environment for
Enel Chief Executive Fulvio Conti, however, has every faith
in the strategy. "Like at the Vatican chimney, there is black
smoke coming out of the market chimney. White smoke should come
out of that chimney (after our plan kicks in)," he said in a
conference call with analysts.
Europe's No. 2 utility in terms of installed capacity said
it would cut costs in mature markets by 4 billion euros,
shifting focus away from its ailing core markets of Italy and
Spain to Eastern Europe and Latin America.
The Italian utility, which controls 92 percent of Spain's
Endesa, is hoping to reduce its debt mountain to 37
billion euros in 2014 from last year's 42.9 billion euros.
Like other big European utilities, Enel is burdened by the
debts incurred through rapid expansion before the 2008 crisis.
Its ratio of net debt to market capitalisation is 1.6, against
0.9 for GDF, 1.5 for EDF and 0.6 at E.ON, Thomson Reuters
Starmine data shows.
In a recent note JP Morgan said a downgrade by ratings
agency Moody's, to Baa3 from Baa2, could shave about 4 percent
off earnings per share for Enel in 2015. "More importantly, (it)
would leave the group just one-notch above 'junk' (status)."
Rising political uncertainty in Italy after February's
inconclusive elections has reignited sovereign debt concerns,
putting added pressure on state-controlled groups such as Enel.
The group said it would issue about 5 billion euros of
hybrid bonds to shore up its capital and spend around 8.5
billion euros to buy out minority owners of some of its
Enel said net profit last year fell 79 percent, mainly
because of a goodwill writedown of 2.575 billion euros on its
The company confirmed a dividend payout policy of at least
40 percent and said its 2012 payout would be 0.15 euros, against
0.26 euros the previous year.
($1 = 0.7680 euros)
(Editing by David Goodman)