Crisis in Italy, Spain hits Enel 1Q profit

10th May 2012, Comments 0 comments

Italian energy group Enel said Thursday that its first quarter net profit was down 1.4 percent after a drop in demand from crisis-hit Italy and Spain, but was still on course to meet its yearly targets.

The group's net profit dropped to 1.184 billion euros ($1.533 billion) in the first quarter, penalised by high taxes imposed as part of an austerity package to fight off the eurozone-crisis.

The tax hike has only partially been compensated by a surplus value linked to the handover of 5.1 percent of the Terna transport network, the group said.

Enel said its earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropped by 2.2 percent to 4.302 billion euros in the first quarter, while its net ordinary income slumped 15.1 percent to 1.003 billion euros.

The group has been hit hard by "lower demand mainly impacting Italy and Spain", which was only "partially offset by the growth in the markets of Latin America, Russia and Eastern Europe," director general Fulvio Conti said.

The giant said that despite the difficult economic situation, its results were better than forecast and it would be able to achieve its yearly targets.

In March, the company predicted a fall in gross revenues to 16.5 billion euros this year compared to 17.717 billion euros in 2011. It said net ordinary income would also fall to 3.4 billion euros from 4.097 billion euros in 2011.

© 2012 AFP

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