Italy’s largest electricity company is blaming an austerity package for its results in the first half of this year.

Enel SpA (ENEL.MI) said that industrial production in Italy and Spain is expected to continue to be negative for the rest of the year, as first-half net profit fell 29 per cent on the year.

Enel plant in Bulgaria
The company was hit by a tax targeting the energy sector and was further troubled by a reduction in energy demand due to a recession in its two biggest markets.

The company’s growth at its Latin America, Russia, Eastern Europe and renewables operations “allows us to minimize the negative effects of the unfavorable [European] economic climate, as well as of the regulatory measures introduced in Spain as of today,” said Chief Executive Fulvio Conti in a statement.

The Rome-based utility said net profit in the first six months dropped to EUR 1.82bn euros ($2.24bn) from EUR2.55bn a year earlier.

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