- Revenues declined, mainly due to low electricity prices – the result of both high wind and hydro output and low commodity prices.
- Moreover, a non-recurring gain of 173 million euros was recorded in 1Q 2015 from the swap of Emission Reduction Units (ERUs) and Certified Emission Reductions (CERs) for European Union Allowances (EUAs). This one-off effect was not replicated in 1Q 2016, hence the lower revenues in this quarter compared to the same period of 2015.
- The effect of this change was already priced into market guidance. Its comparative impact will diminish over the course of the year.
- EBITDA down on a reported basis, but up 2.8% net of the above-mentioned one-off effect of ERU’s and CER’s swap, driven by:
- The gross deregulated business margin climbing 6% thanks to lower production costs resulting from the decrease in fossil-fuel output in the period; lower taxes on electricity generation; a reduction in fuel costs and a fall in the average electricity purchase costs, a consequence of the 33% drop in wholesale prices;
- The gross margin on gas sales falling by 32%, driven down by greater competitive pressure, mainly in the wholesale market, and an increased supply of gas on the market;
- Unvaried fixed costs.
- EBIT declined by 160 million euros, due to the drop in EBITDA. Depreciation and amortisation charges and impairment losses were in line with 1Q 2015 at 333 million euros.
- Net income declined by 21.4%, reaching 342 million euros. However, excluding the already mentioned effect of the ERUs and CERs swap, the indicator increased by 10.3% year-on-year.
(1) Stripping out the effect of the swap of Emission Reduction Units (ERUs) and Certified Emission Reductions (CERs)
(2) As at 31 December 2015
(3) Gross financial debt - Cash and cash equivalents and - Derivatives recognised as financial assets
Net financial debt, cash flow and investments
- Net financial debt increased mainly to finance capex and dividend payments.
- Operating cash flow declined largely because of the period’s lower profit and because Endesa had collected an additional 249 million euros for non-mainland compensation back in 2015.
- Of the gross investments in the quarter, 177 million euros were related to capex and investment in intangible assets, and the remaining 58 million euros to financial investments.
Operating results, January-March 2016
- Mainland electricity demand decreased by 1.3% year-on-year (-0.6% after adjusting for working days and temperature).
- Endesa's mainland ordinary regime electricity output declined due to high wind and hydro availability, as well as increased electricity trade through the interconnection between Spain and France.
- Nuclear and hydro energy accounted for 70.9% of Endesa’s mainland generation mix (62.7% in 1Q 2015).
- Endesa’s output in Non-Mainland Territories ("TNP" from the Spanish acronym) was 2,952 GWh, an increase of 0.8%.
- Endesa had 5,161,977 customers in the deregulated market at the end of March 2016 – a 1.6% increase.
Dividends: 100% payout confirmed
- Endesa's approved dividend charged against 2015 profit is 1.026 euros/share.
- An interim dividend of 0.4 euros gross per share was paid on 4 January 2016, and a final dividend of 0.626 euros gross per share will be paid on 1 July 2016.
- Endesa is distributing 100% of its 2015 consolidated net income – an increase of 35% on the 2014 ordinary dividend.