Italian energy giant Enel reported a 12% increase in its core profits for the first quarter, buoyed by a robust resurgence in renewable energy production domestically.
The company, quoted as saying this on Thursday, revealed that its ordinary earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached 6.1 billion euros ($6.6 billion).
This figure surpasses the analysts’ consensus of 5.73 billion euros polled by LSEG.
In the first three months of the year, Italy was responsible for more than half of the group’s ordinary EBITDA, with the nation’s core profit climbing to 3.2 billion euros from last year’s 1.9 billion euros.
In contrast, Enel’s Spanish subsidiary, Endesa, which had previously bolstered the parent company’s results, faced setbacks due to declining electricity and gas prices in the Iberian region.
The financial contributions from Latin America remained stable year-over-year, while those from North America showed a slight improvement.
The Italian operations of Enel benefited from a recovery in hydroelectric production and growth in its generation and trading business.
Similarly, the performance of its grids business saw a modest year-on-year increase.
Under the leadership of new CEO Flavio Cattaneo, a cost-cutting initiative was launched last year. Cattaneo has committed to concentrating investments on regulated assets like power grids and adopting a more selective approach to renewable energy projects.
“The cost cutting plan is going better than expected with 300 million euros already achieved,” Chief Financial Officer Stefano De Angelis remarked. He also mentioned the possibility of Enel increasing its total savings goal to 1 billion euros in the medium term.
Funds from operations rose by 800 million euros to 4.4 billion euros, enhancing the likelihood of a higher dividend payout than the baseline of 0.43 euros per share.
Although net financial debt saw a slight increase to 60.7 billion euros at the end of March, up from 60.2 billion euros at the end of 2023, De Angelis expressed confidence in completing the planned 6.3 billion euro disposals by June.
Enel has reaffirmed its 2024 financial targets for both EBITDA and net income.