Endesa obtained a net profit of 338 million euros in a first quarter of the year marked by extreme volatility in the electricity sector, which represents a drop of 31.2% compared to the same period of the previous year, as reported by the company in a note to the National Markets Commission of Securities (CNMV). The company has been quick to ratify its financial targets for the whole of 2022.
Endesa’s gross operating profit (ebitda) at the end of March stood at 914 million euros, down 10.4% compared to the first three months of 2021, but 10% higher if no consider the atypical results of last year, mainly the 188 million from a court ruling relating to CO2 rights. The group’s net ordinary profit in this first quarter reached 338 million, with a drop of 31%, although excluding the extraordinary impacts registered in 2021, this result would grow by 10%.
The income of the energy company directed by José Bogas in the period from January to March amounted to 7,596 million euros, with a growth of 59.1%. Endesa explains that it sells more energy than it produces and needs to buy energy on the market, benefiting when prices fall, but seeing its accounts hurt if they are high, it recorded these numbers in a period strongly marked by the deterioration of the macroeconomic scenario and the high prices of raw materials and, particularly, of gas, which was 350% more expensive on average than in the first quarter of 2021, thus leading to high prices in the wholesale electricity markets, with an average of 229 euros in Spain.
Despite this drop in profit, Endesa ratified its financial objectives for this 2022 of a net ordinary result of 1,800 million euros and an EBITDA of 4,100 million euros. The CEO of Endesa, José Bogas, highlighted in a statement that the year begins “facing an even more challenging situation than in the previous one, marked by the macroeconomic tensions derived from the impact of the war in Ukraine and by the transfer of this conflict to a raw materials market that has been highly inflationary for months”.
Bogas stressed that the group “continues to trust in the solidity of its vertically integrated business model to meet the 2022 objectives”. And he concluded: “We also maintain our strategy of advising and helping all clients, covered by any type of tariff, to overcome the turbulence of the energy market in their homes and businesses”, he added.
He knows in depth all the sides of the coin.
At the end of March, Endesa had 100% of its own energy (nuclear, hydroelectric and non-regulated renewable) sold for this year, and 82% by 2023. The complex situation in the raw material markets, together with an increase of the regulatory items pending collection, have negatively affected the working capital necessary to finance the company’s operations, which has placed the cash flow from operations in negative at 476 million euros.
Endesa highlighted that the coverage of this negative cash flow, the disbursement of investments in the period for 533 million and the payment of dividends for 529 million support the rise in net debt to 10,334 million at the end of the quarter. In any case, the cost of the liability was in any case at its historical minimum, 1%, half a point below that reported at the end of 2021. The percentage of debt linked to sustainability criteria rises five points, to 65% , in relation to the end of last year.
With regard to the promotion of green energiesthe company has 90% of the renewable power that it expects to come into operation in 2022, already in operation or in execution, and 70% of that scheduled for 2023. Specifically, the energy company has 2,000 megawatts (MW) in execution of renewable power, half of the objective contemplated in its 2022-2024 strategic plan, and has 8,000 MW of power in an advanced state of administrative processing, all in Spain and Portugal.
As far as its commercial activity is concerned, it has registered a growth in customers in the liberalized market of 800,000 in the last 12 months, reaching 6.4 million in Spain and Portugal, 13% more. As for electric vehicle charging points, they grew by 36%, up to 10,200 at the end of the quarter, including public and private, compared to the same period in 2021.