A prototype of a bifacial photovoltaic module is seen inside Italian utility Enel’s solar panel gigafactory in Catania, Italy, November 28, 2022. REUTERS/Antonio Parrinello/File Photo Acquire Licensing Rights
MILAN, Nov 22 (Reuters) – Italy’s Enel (ENEI.MI) will focus its investments on power grids in the next three years and take a more cautious approach to spending on renewable energy projects, its new chief executive said on Wednesday.
Enel, until now the world’s biggest listed renewables developer, plans 35.8 billion euros ($39 billion) of gross capital expenditure in its plan to 2026, of which nearly 19 billion euros will be spent to modernise and make its networks more resilient.
Investments in renewables will be more selective amid rising interest rates and input costs, Enel said, adding it would spend a gross amount of 12.1 billion euros on onshore wind, solar and battery storage in the period.
The group 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 up 0.3% at 1140 GMT paring a 1% initial loss on the Milan bourse and underperforming a 0.5% gain for the blue-chip index.
“It is imprudent to over-invest,” CEO Flavio Cattaneo said, in a conference call with analysts, adding the group needed to be lean and flexible to grab future opportunities.
Cattaneo and fellow new Chief Financial Officer Stefano De Angelis said the group would focus on grids because this business had returns set by regulators that were therefore more predictable.
Among his previous roles, Cattaneo led Italian power grid operator Terna.
A slowdown in investments in renewable capacity could however make the group less integrated and more dependent on energy suppliers, analysts have warned.
DIVIDEND OPTIMISM
Enel confirmed a floor of 0.43 euro per share for its dividend over the next three years.
Cattaneo, who succeeded long-serving CEO Francesco Starace in May, said the group was confident it could increase the dividend starting from next year, adding he would buy Enel shares to bet on a stock rise.
“I intend to buy 1 million more of Enel shares and… don’t intend to lose my money,” the CEO said, adding the group would cut costs for 1.2 billion euros in three years.
The group will devote some 3 billion euros to actively manage its customer portfolio through bundled offers, which will include different commodities and services.
This would help recover some market share after the customer churn rate rose significantly to 20%.
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)
Additional reporting by Keith Weir;
Editing by Giulia Segreti, Elaine Hardcastle
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Read More: Italy’s Enel turns more cautious on renewables under new CEO