MILAN (Reuters) - Italy’s biggest utility Enel suffered no significant impact from the coronavirus crisis in the first quarter, adding on Wednesday that its core earnings had risen by more than forecast.
However, Enel said it was constantly monitoring the crisis to better estimate any potential impacts and mitigate these if needed through contingency and action plans.
“The impact in the first quarter is limited and moreover manageable,” Chief Financial Officer Alberto De Paoli said in a conference call.
Enel, which is also Europe’s biggest utility, has put in place measures to combat fallout from the pandemic to ensure full service continuity in all the countries it operates in.
The coronavirus outbreak in Italy has been one of the deadliest worldwide and is set to plunge the already fragile Italian economy into its worst recession in 75 years.
De Paoli said the health emergency had put a brake on merger deals in the sector but added he expected it to throw up opportunities at the end of the year, mainly for players with “big financial shoulders”.
“We will be looking at the market to see if we can seize some opportunities,” he said, adding the group’s M&A approach remained focused on mid-size bolt-on acquisitions.
Enel, which controls Spanish utility Endesa, has bought a series of network assets in Latin America in recent years.
It has committed to spending almost 29 billion euros to 2022, with a focus on boosting clean energy and grid businesses across the more than 30 countries it operates in.
De Paoli also said talks to find a partner for a renewable joint venture deal in Africa were in an advanced stage and he expected a deal by the end of the year.
Enel, one of the industry’s most indebted utilities, said its net debt rose to 47 billion euros at the end of March from 45 billion euros at the end of the year, mainly due to investments.
But the company said it had a strong balance sheet with 25.9 billion euros of liquidity available as of April 30, enough to cover 2.1 times its long term debt maturing by 2022.
In the first quarter ordinary core income was up 6.4% at 4.741 billion euros ($5.1 billion), driven by its green energy, retail and grids business.
Reporting by Stephen Jewkes; Editing by Alexander Smith and Jonathan Oatis