Enel to Maintain Dividend Policy as Debt Declines, CFO Says
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By Flavia Rotondi and Tommaso Ebhardt
Nov. 5 (Bloomberg) -- Enel SpA, Italy’s biggest utility, will maintain its dividend policy as the company seeks to reduce debt to 45 billion euros ($67 billion) at the end of 2010, Chief Financial Officer Luigi Ferraris said.
“The debt isn’t a problem,” Ferraris said in a Bloomberg Television interview in Rome today. “We’re in a position to confirm our dividend policy, so our shareholders can count on 60 percent of net ordinary income from 2009.”
Enel wants to reduce debt by selling assets. The Rome-based company, Europe’s most-indebted utility, took on 12 billion euros in debt in February to raise its stake in Spain’s Endesa SA to 92 percent. Since then it’s sold 8 billion euros of stock and the equivalent of about 9.5 billion euros in bonds. Enel forecasts that its debt will shrink to 53 billion euros by the end of 2009 from 54 billion at the end of September.
Enel yesterday confirmed an asset disposal target of 10 billion euros by the end of 2010. That includes the sale of a stake in renewable energy unit Enel Green Power, which Ferraris expects to be finalized “by the beginning of next year.” The company may also “close some other minor asset sales before the end of 2009,” he said.
Chief Executive Officer Fulvio Conti reiterated yesterday that Enel wants to sell as much as 49 percent of Green Power, through a direct sale or an initial public offering.
‘Risks’
Enel announced the 60-percent dividend policy in March. Enel’s payout to shareholders for 2008 earnings was 49 euro cents a share, the same amount it paid for 2007 profit.
UniCredit Markets and Investment Banking said in a research report published today that its view on Enel depends on “certain risks mainly linked to the execution risk of the disposal program.” UniCredit, which maintained its “neutral” rating on the stock, also cited “the impact on profitability deriving from a sluggish economic cycle and increasing demand.”
Third-quarter profit fell 43 percent as electricity demand slumped in Italy and a tax gain from a year ago wasn’t repeated. Net income dropped less than analysts had forecast, to 1.19 billion euros ($1.76 billion) from 2.07 billion euros a year earlier.
Enel said yesterday that it plans to sell as much as 4 billion euros of bonds by 2010. “The best timing will likely be the beginning of next year, it could be March,” Ferraris said. The bonds will be offered to Italian retail investors and will have a maturity “around our average of seven years,” he added.
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To contact the reporter on for this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net
Last Updated: November 5, 2009 11:09 EST
