|January-September 2016||January-September 2015||Variation %||Variation % net of extraord
|Millions of euros
|OPERATING CASH FLOW
|NET FINANCIAL DEBT(2)
(1) Excluding the effect of the swap of Emission Reduction Units (ERUs) and Certified Emission Reductions (CERs) carried out in 2015, and the contribution of Enel Green Power España (EGPE).
(2) Non-current financial debt + Current financial debt – Cash and cash equivalents – Financial derivatives recognised as assets.
(3) At December 31st, 2015.
Endesa’s CEO José Bogas underlined, “the strength and reliability of the company and the results posted for the first nine months of this year mean that the commitments given to investors in the Strategic Plan should be met. This result has been achieved thanks to a business management strategy, which has led to a 16% increase in the deregulated business margin, the stability of the regulated business and the effectiveness of cost containment plans.”
- The results include the full consolidation of Enel Green Power España (EGPE) as of July 27th 2016, as the date of Endesa’s acquisition of the remaining 60% of EGPE.
- Endesa posted a gross margin of 4,338 million euros in 9M 2016, up 3% on 9M 2015 thanks to the strength of the deregulated business margin: cost reductions achieved in commodity and energy purchases in the market, offset the impact of low prices and the negative effect, compared to 2015, of non-recurring income of 184 million euros generated in 2015 by the swap transactions of Emission Reduction Units (ERUs) and Certified Emission Reductions (CERs) for European Union Allowances (EUAs). This effect was not repeated in the first nine months of 2016, which has caused a fall in year-on-year revenue.
- The improved margin in the deregulated business and the sound performance of the regulated business have been key elements in EBITDA growth in 9M 2016. Stripping out the abovementioned one-off items and the intergation of EGPE, EBITDA would have risen by 10.8%. This increase is mainly explained by:
- The good performance of the regulated business, which contributed over 60% of EBITDA in the first nine months of 2016, with margins in line with the same period last year.
- The gross margin increase of 5% in the deregulated market, due to lower production costs (lower fossil-fuel output, lower taxes on generation, and a reduction in fuel costs). There has also been a reduction in average electricity purchase costs due to the 32.1% drop in prices on the wholesale market.
- Personnel expenses, net of the effects of the integration of Enel Green Power España and other impacts derived from the provisions for obligations relating to ongoing workforce restructuring plans and the existing voluntary redundancy scheme, have fallen by 49 million euros (-6.8%).
- These positive trends more than offset the 24% decline in the gross margin in the gas supply business due to greater competition, mainly in the wholesale market, and the increased gas supply on the market.
- EBIT increased by 4.4% or 76 million euros. Net of the ERU and CER swap, and the integration of EGPE, EBIT would have increased by 259 million euros (+16.7%).
- Net income has increased by 8%. However, it would have risen by 22.3% on 9M 2015 net of all the aforementioned extraordinary items in both periods.
Cash flow and net financial debt
- Operating cash flow increased by 861 million euros, mainly as a result of an improvement in working capital, and to lower payments of corporate income tax, which was 328 million euros lower.
- Thanks to strong cash flow, Endesa’s net financial debt in 9M 2016 increased by only 641 million euros compared with 9M 2015 due to the purchase of EGPE and its subsidiaries for 1,207 million euros, as well as the payment of dividends worth 1,086 million euros on 2015 results.
Operating results, January-September 2016
|9M 2016||9M 2015||Variation %|
|ORDINARY REGIME PENINSULAR PRODUCTION||40,451||46,564||-13.1|
|DEREGULATED MARKET SALES||60,204||58,455||3|
|REGULATED MARKET SALES||10,500||11,391||-7.8|
- Electricity demand in the Peninsula in 9M 2016 remained in line with 9M 2015, with a +0.1% increase (-0.1% after adjustment for working days and temperature).
- Peninsular electricity generation under Endesa's ordinary regime declined mainly due to the high availability of wind and hydropower.
- Nuclear and hydro energy (free of CO2emissions) accounted for 64.8% of Endesa's mainland generation mix (compared with 55.3% during the same period of 2015).
- Endesa’s output in Non-mainland Territories (TNP) was 9,449 GWh, an increase of 1.3% on the nine months of 2015.
- During 9M 2016, Endesa reached a market share of 35.2% in mainland generation, 43.9% in distribution and 35.5% of sales to customers in the deregulated market.
- The number of customers in the deregulated market was 5,338,794 in 9M 2016, a 5% increase compared with the same period of 2015.