(Bloomberg) -- Enel SpA raised its dividend on 2024 earnings and said it’s targeting as much as €6.9 billion ($7.3 billion) in profit for 2025, as the Italian utility nears the end of a debt reduction drive.
The company lifted its dividend for this year to €0.46 per share, according to a business plan for 2025 to 2027 announced Monday.
Chief Executive Officer Flavio Cattaneo is completing a divestiture program aimed at bringing the firm’s debt back under control while focusing investments on the most profitable projects and regions and cutting costs.
The company also signaled Friday that it’s returning to acquisitions, announcing the purchase of Acciona Energia’s hydropower portfolio in Spain.
Enel said Monday it expects adjusted earnings before interest, taxes, depreciation, and amortization to rise to a range of €24.1 billion to €24.5 billion by the end of the new plan.
The company’s target of €6.7 billion to €6.9 billion for 2025 adjusted net income is in line with analyst estimates.
The shares fell just under 1% in early trading in Milan.
Citigroup Inc. analysts said in a note that while they see the new targets as meeting investor expectations, performance is “unlikely to shine given lack of positive surprises.”
Asset Plan
CEO Cattaneo, appointed last year by the Italian government — the firm’s biggest shareholder — inherited the €21 billion asset sales plan from predecessor Francesco Starace.
Net debt dropped to €56 billion in September and the company expects it to fall to below sector average levels by year end, Chief Financial Officer Stefano De Angelis has said.
Enel also plans to raise investments to €43 billion, an increase of around €7 billion compared to its previous plan, focusing on grids in Italy and Spain.
Enel’s new dividend floor of €0.46 through 2027 “looks sensible given its best-in-class balance sheet and slowing earnings prospects,” Bloomberg Intelligence analysts Patricio Alvarez and Joao Martins said.
The company set a dividend floor of €0.46 per share through 2027 and made some adjustments to its dividend policy, which includes up to a 70% payout on adjusted net income.
RBC Europe Ltd. analysts said in a note that the overall plan looks more credible than the one presented last year, with power price assumptions closer to existing forwards and more emphasis on network investments.
Jefferies Financial Group Inc. reiterated its buy rating on Enel, noting that the capital allocation strategy remains unchanged with a focus on grids and regulated businesses.
--With assistance from Antonio Vanuzzo, James Cone and Jerrold Colten.
(Updates with plan, shares from fifth paragraph.)
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