Enel, the Italian state-owned international electricity group released six-month figures which showed a 78 per cent increase in net profits – better than analysts had been expecting.
Enel announced net profits of €1.53bn ($1.39bn) in the first half of the year, up from €861m in the first six months of 2000. Total revenues over the period were €14.3bn, an increase of 19.7 per cent on the first half of 2000.
For the first time, the figures included contributions from CHI Energy, the US renewable energy company and recently acquired gas distribution companies.
Total demand for electricity in Italy had grown by 2.5 per cent during the period, compared with the same time last year. In a statement, Enel attributed the improved position to the effects of continued cost cutting in the group and growing revenues from its gas and telecommunications operations.
The results did include some one-off items, which analysts pointed to as one reason for the better than expected profits. A provision of €113m was made in respect of telecommunication investments and the operating result included the amortisation of goodwill connected with the acquisition of fixed-line group Infostrada from Britain’s Vodafone. Enel also gained one-off receipts of €360m from a state body set up to support investments made by companies in renewable energies.
“Don’t get me wrong, Enel has done well to show a profit boost like this, given the growing liberalization of the Italian electricity market and recent tariff reductions decreed by regulators,” said one Milan-based analyst speaking to the Financial Times. “But this profits increase is mainly due to the impact of extraordinary items.”
Enel reported smaller losses from its wind and telecommunications operations. Wind business lost €20m compared with €35m and the telecoms sector reduced losses by €46m to €116m.
Enel this week acquired Spanish utility Viesgo from Endesa. Enel expressed its appreciation for the deal suggesting that it is favourable to them. Endesa itself was the successful bidder in Enel’s auction of its Elettrogen subsidiary.