Published : 1 year ago, on 22/11/2023

Enel to invest 36 billion euros by 2026, be more selective on renewables

By Francesca Landini

MILAN (Reuters) -Italy’s Enel plans 35.8 billion euros ($39 billion) gross capital expenditure in the next three years in a more cautious approach to investments, the power group’s new chief executive said on Wednesday.

Nearly 19 billion euros will be spent on grids while investments in renewables will be more selective, the group said in its new strategic plan, with 12.1 billion euros spending on onshore wind, solar and battery storage.

Enel said it plans to add around 13 gigawatt (GW) of new green energy capacity globally, also by clinching partnerships with other groups.

Shares in the state-controlled power group were down 1% in early trading on the Milan bourse, underperforming a slightly positive blue-chip index.

The group will devote 49% of gross capex to investments in Italy, up from a 48% in the previous plan, which envisaged investment of 37 billion euros including 17 billion for renewables.

Flavio Cattaneo, who succeeded long-serving CEO Francesco Starace in May, said the new 2024-26 business plan would turn Enel into a leaner and more flexible group.

“In the next three years, we will adopt a more selective

approach towards investments in order to maximise profitability while minimising risks,” Cattaneo said in a statement, adding financial discipline would be the cornerstone of his strategy.

Enel said its net ordinary income was expected to grow on average by 6% each year to reach 7.1-7.3 billion euros in 2026.

The group confirmed a floor of 0.43 euro per share for its dividend over the next three years and pledged to increase the dividend per share up to a 70% payout on net ordinary income if cash flow neutrality is achieved.

The new CEO redefined a disposal plan announced by the previous management, indicating the group expected to cut debt by around 11.5 billion euros between 2023 and 2024, giving more time to finalise asset sales than previously planned.

Net financial debt is now expected to drop to around 2.3 times the group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2026.

At the end of this year net debt is seen between 60 and

61 billion euros or 2.7-2.8 times EBITDA, higher than indicated in the previous business plan.

($1 = 0.9168 euros)

(Reporting by Francesca Landini, editing by Giulia Segreti, Elaine Hardcastle)