Italian utility Enel is set to concentrate its investments on power grids over the next three years, adopting a more conservative stance on spending for renewable energy projects, according to statements by its new CEO on Wednesday. Flavio Cattaneo, who took over as CEO in May, highlighted plans for €35.8 billion ($39 billion) in gross capital expenditure until 2026, with nearly €19 billion allocated for the modernization and resilience enhancement of its networks.
Enel, previously the world's largest listed renewables developer, expressed a more selective approach to renewable investments due to factors such as rising interest rates and input costs. The company intends to spend €12.1 billion on onshore wind, solar, and battery storage during the specified period. The strategy also involves adding approximately 13 gigawatts (GW) of new green energy capacity globally through strategic partnerships with other entities.
CEO Flavio Cattaneo emphasized the need for prudence in investments and highlighted the importance of being lean and flexible to capitalize on future opportunities. The company's focus on power grids is attributed to the more predictable returns set by regulators in this segment.
Enel's shares initially experienced a 1% decline on the Milan bourse but later recovered to a 0.3% gain, underperforming the broader market. The company confirmed a minimum dividend of €0.43 per share over the next three years and expressed optimism about increasing the dividend starting from the next year.
Cattaneo, expressing confidence in Enel's future prospects, announced plans to buy 1 million more Enel shares. The company aims to cut costs by €1.2 billion over the next three years and allocate €3 billion to actively manage its customer portfolio through bundled offers. The strategy aims to recover market share after a significant increase in the customer churn rate to 20%.
Enel's net financial debt is expected to decrease to around 2.3 times the group's earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2026. However, the net debt at the end of this year is projected to be between €60 billion and €61 billion, or 2.7-2.8 times EBITDA, slightly higher than indicated in the previous business plan.
