Italy's Enel eyes share buyback to reward investors, CEO says

By Francesca Landini

MILAN (Reuters) -Italy's Enel may add a share buyback as a means of rewarding investors, the chief executive of one of Europe's biggest utilities said on Thursday after presenting 2024 results.

The group last year cut its net debt to 2.4 times its core earnings from a 2.7 ratio in 2023 thanks to the completion of a wide-ranging asset disposal plan started in late 2022.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) excluding extraordinary items came in line with analyst consensus at 22.8 billion euros, up 4% versus 2023, boosted by renewable power generation.

Asked by analysts whether it was time to shift from asset disposals to acquisitions, Enel CEO Flavio Cattaneo said the group would be selective in purchasing assets.

"We only look at accretive M&A deals, otherwise we prefer to buy back our own shares," Cattaneo said.

Enel will propose at the next shareholders meeting to approve a buyback programme worth up to 3.5 billion euros ($3.80 billion), the group said in its press release, adding it would pay a dividend of 0.47 euro per share, up from 0.43 euro per share in 2023.

Enel shareholders could also approve an option to cancel acquired shares in order to allow the group to use buybacks as a way to increase the value of the remaining shares.

Group ordinary net income rose to 7.1 billion euros, beating analyst expectations of 6.9 billion euros.

The core profit from Enel's integrated business, which combines the performance of power generation and energy sales activity, rose 14% last year.

The integrated business grew in Spain and Latin America, while it shrank in Italy where the group decided to lower retail power prices to retain customers in a highly competitive market.

Core profit at the group's power distribution business increased by 8% compared with 2023.

The group's capital expenditures fell to 11 billion euros from 13.6 billion euros in 2023, with investments in renewable energy projects dropping to 3.2 billion euros from 5.9 billion euros in 2023.

($1 = 0.9218 euro)

(Reporting by Francesca Landini in MilanEditing by Keith Weir and Matthew Lewis)