If you prefer to always view the website in English, please click here.
| Items | 1Q 2020 (millions of euros) |
1Q 2019
(millions of euros) |
% Change |
% change excluding extraordinaries (1) |
|---|---|---|---|---|
|
Revenues |
5,069 |
5,085 |
- 0.3 | - |
|
EBITDA |
1,476 | 928 | 59 |
21(1) |
|
EBIT |
1,118 | 522 | 114 | - |
|
Net income |
844 | 363 | 133 | 59(2) |
|
Net ordinary income |
831(3) |
363 | 129 | - |
|
Operating cash flow |
276 | 335 | 17 | - |
|
Net financial debt |
7,376 | 6,377 | 16 | - |
|
Gross investments (4) |
271 | 395 | - 31% | - |
(1) EBITDA excluding +515 million euros from the release of the provision for obligations under the New Collective Bargaining Agreement and adding 159 million euros from a new restructuring provision.
(2) Net income excluding +167 million euros from the impact of the release of the provision for obligations under the New Collective Bargaining Agreement and adding the new restructuring provision.
(3) Reported net ordinary income - Net gains/(losses) on disposal of non-financial assets (of over 10 million euros) - Net impairment losses on non-financial assets (of over 10 million euros).
(4) Excluding business combinations in the period.
Endesa delivered a solid set of earnings in the first quarter of 2020 thanks to good management of its deregulated business, in addition to the stability of the regulated market. These healthy results reflect the impact of the entry into force of the new Collective Bargaining Agreement and the recognition of certain restructuring provisions, which had a positive effect of 267 million euros on net profit. Excluding these extraordinaries items, net income was up 59% year-on-year.
Total electricity demand in mainland Spain fell by 3.2% year-on-year (or by 2.8% adjusted for working days and temperatures). Non-mainland territories (TNP) registered falls of 5% in the Balearic Islands and 1.4% in the Canary Islands (-3.2% and -1%, respectively, adjusted for working days and temperatures).
This situation was exacerbated by the declaration of the state of emergency, which caused demand to plummet in the second half of March. In any event, the pandemic did not have a material impact on profit or loss for the first quarter.
The first quarter of 2020 featured lower prices in the wholesale electricity market (~35 euros/MWh, -37%) due mainly to decreased demand, the larger share of renewable energies, the lower price of CO2 emission rights and trends in commodity prices.
Endesa's CEO, José Bogas, said "Endesa's good first-quarter results will leave us in better shape to face the impact of COVID-19 in the second quarter. The company has already resumed construction on all its renewable farm projects and remains fully committed to the investments envisaged in the strategic plan. We are even considering speeding up the planned investments, especially in wind and solar plants, to help jump-start the economy by creating jobs and generating wealth".
Trends in key financial figures
Trends in the company's key figures in the first three months of 2020 were as follows:
- EBITDA rose by 59% year-on-year due, in part, to the impact of applying the new measures contained in the Collective Bargaining Agreement approved in January, which resulted in the release of 515 million euros of unused provisions. Meanwhile, a new restructuring provision of 159 million euros was recognised in the period. The combined impact of the two events was 356 million euros.
Excluding these extraordinary items, EBITDA rose 21% year-on-year on the back of a good performance in the free market and stability in the regulated business:
- The company's strategy on the deregulated market helped pave the way for an increase in EBITDA of 185 million euros of 51% to 185 million euros.
- The gross margin in the deregulated business increased to 850 million euros (+25%). This performance was driven mainly by:
- The good performance of the electricity business, which increased by 20% thanks to the integrated management of the business in a market climate shaped by lower demand and falling prices.
- The strong increase in the gas business margin (+117%), to 76 million euros, thanks to integrated management of the business, hedges entered into and the greater flexibility in procurement contracts.
- The contribution by Endesa X of 34 million euros, an increase of 23% year-on-year.
- EBITDA in the regulated business grew by 1% to 570 million euros, due to the increase in non-mainland territories generation. EBITDA of the distribution business fell slightly (-2% due to application of the remuneration determined for the second regulatory period.
- EBIT increased by 114%, due mainly to the increase in EBITDA and lower depreciation expenses for coal-fired plants after the accounting adjustment made to the carrying amounts of the plants last year.
- Net financial losses in the period amounted to 10 million euros, compared with 53 million euros in the same period last year.
Operating cash flow, net financial debt and investments
- Endesa's operating cash flow in the first quarter totalled 276 million euros, a decrease of 17.65% on the same period of 2019, due mainly to trends in working capital.
- Net financial debt stood at 6,377 million euros, 999 million euros higher than at 31 December 2019, due mainly to the payment of the interim dividend Endesa paid shareholders on 2 January 2020 out of 2019 profit of 0.7 euros per share (gross), for a total amount of 741 million euros.
- The net debt/EBITDA ratio is just 1.7x. This financial position affords the company strength and flexibility to deal with the situation caused by COVID-19 and undertake the substantial investment in renewable energies and digitalisation it has committed to in order to meet the objectives of its Strategic Plan and energy transition targets.
- Gross investments totalled 271 million euros, down 31%, due mainly to the efforts made by the company last year to bring the renewable capacity awarded in the auctions held by the government on stream.
Operating results
| Items | 1Q 2020 (GWh) | 1Q 2019 (GWh) |
Change % |
|---|---|---|---|
|
Output |
49,459 | 61,338 | -19.4 |
|
Sales to the deregulated market |
85,117 | 84,246 | 1 |
|
Sales to the regulated market |
13,335 | 14,432 | - 7.6 |
|
Electricity distributed |
116,611 | 117,029 | -0.4 |
|
Gas sales (1) |
79,784 | 86,729 | - 8 |
(1) Net of consumption from own power generation.
- In the first quarter this year, electricity demand in mainland Spain fell by 3.2%, or 2.8% adjusted for working days and temperatures.
- Renewable generation in Spain nearly met 60% of total mainland electricity demand in the period, compared to 53.8% in the same period last year.
- Endesa's electricity output (15,143 MWh) dropped by 11.1% since there was a minimal production by coal-fired plants.
- CO2-free technologies (hydro, wind, solar and nuclear) accounted for 88% of the company's mainland generation mix, above the 68% achieved in 2019.
- Endesa's production in non-mainland territories (TNP) was 2,769 GWh (-3.5%).
- In the period, Endesa recorded market shares of 19.5% in mainland generation, 43.2% in distribution and 33.3% in electricity sales to customers on the deregulated market, confirming the company's leading position in the Spanish electricity sector.
- The company's regulated market customer base stood at 5,818,674 at 31 March 2020, down 0.2% year-on-year.
- At the end of the first quarter, Endesa had a market share of 14.5% of gas sales to deregulated market customers.
Dividends
In November, Endesa's Board of Directors agreed to pay shareholders an interim dividend of 0.70 euros per share (gross) out of 2019 profit, for a total amount of 741 million euros. The dividend was paid on 2 January 2020.
The proposed distribution of profit in 2019 to be submitted by the Board of Directors for approval at Endesa's General Shareholders' Meeting will be the distribution of a total dividend of 1.475 euros per share (gross), for a total amount of 1,562 million euros.
Factoring in the interim dividend also mentioned, the final dividend charged against 2019 profit will would be 0.775 euros per share (gross).
In all, the proposed dividend is 3,4% higher than the dividend charged to 2018 profit.