Enel says it won't be affected by Spain's power market measures

2 minute read

A logo of Italian multinational energy company Enel is seen at the Milan headquarters, Italy, February 5, 2020. REUTERS/Flavio Lo Scalzo

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MILAN, Nov 4 (Reuters) - Europe's biggest utility Enel (ENEI.MI) said on Thursday it will not be affected by further power market measures Spain is currently working on to shield consumers from surging energy prices.

Speaking in a conference call on nine-month results, Enel Chief Financial Officer Alberto De Paoli said the recent decision by Madrid to soften its gas levy was good news.

"We're waiting for clarity on the CO2 clawback decree but we can confirm the (earnings) targets we have for Spain in 2021," he said.

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Enel, one of the world's biggest renewable energy companies, controls Spanish utility Endesa (ELE.MC) which operates green and nuclear assets in Spain.

Last month, in the face of protests from utilities, Spain introduced exemptions to a decree that was originally expected to claw back about 2.6 billion euros ($3 billion) in profit from companies deemed to have gained from the price increases.

Italy also introduced measures to temper price rises for consumers.

According to Jefferies, Enel's higher-than-expected net debt of 54 billion euros was due to a working capital outflow of 3 billion euros from measures to limit energy costs.

"This working capital outflow would reverse when commodity prices normalise which seems unlikely to us in the near-term," the broker said, adding management now saw full-year debt close to the third quarter number which, it said, was above consensus.

De Paoli said he did not expect any meaningful impact on Enel from surging gas prices. He said he expected these to be temporary and to normalise after the winter.

He praised the European Union's introduction of a toolbox of short-term measures, which he said was the best way of tackling the temporary price spikes.

Earlier on Thursday Enel confirmed its guidance for the year as operations in the first nine months returned to pre-pandemic levels and spending on its core green business jumped.

Ordinary core earnings in the period fell 3.9% to 12.6 billion euros, mainly to a one-off gain booked last year and currency devaluation, beating an analyst consensus.

Enel said it had added some 2.3 gigawatts (GW) of new green capacity in the period, almost four times more than in the same period in 2019, adding it was targeting a record yearly add-on of more than 5 GW.

($1 = 0.8655 euro)

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Reporting by Stephen Jewkes; Editing by Gavin Jones and Jonathan Oatis

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