Endesa has declared an ordinary net profit of €292 million until march

EBITDA reached €1,079 million, down 26% from 2023

• Endesa has declared a net ordinary income of €292 million, 51% less than in 2023 when there was a positive impact as a result of the market context.
  
• EBITDA stands at €1,079 million and is down 26% compared to €1,462 million in 2023 – a record for EBITDA in the first quarter for Endesa. The company reaffirms its commitment to the targets announced for the year at the last Capital Markets Day.
• Cash flow closed the quarter on a positive note (€167 million) despite the impact of having to pay an arbitration settlement on gas
• The company's investment in the quarter remained stable compared to the previous year at €412 million, with 70% dedicated to networks and renewables.
• 90% of mainland production was emission-free, seven percent more than in the first quarter of 2023, with renewable capacity reaching 10,000MW, with the addition of 700MW year-on-year.
• The company continues to be a leader in electricity retailing with 6.9 million customers in the deregulated market which represents a share of 29%.
• The company is in the final phase of the process of selling 49% of its portfolio of solar plants in operation which will enable it to maintain control over a strategic asset in a vertically integrated electricity company business model.
• The normalisation of electricity and gas margins, together with the policy of pre-selling electricity and gas to be supplied to customers enables the company to protect its margins in the face of historically low market prices.
• The Chief Executive Officer, José Bogas, made a new call to update and improve the regulation of electricity distribution, a critical infrastructure for the Energy Transition

Endesa has started 2024 in a situation of progressive normalisation of the energy market after the extraordinary circumstances experienced the previous year. A feature of the change in trend is a 53% decrease in prices due to a situation involving high renewable production, especially hydropower, and low demand. In this context, Endesa reconfirms the achievement of the objectives established on Capital Markets Day and once again calls for the regulation of the electricity distribution business to be updated and improved to enable the Energy Transition to be achieved.

During the first quarter, the company declared a gross operating profit (EBITDA) of €1,079 million, 26% less than in the same period of 2023. During first quarter of last year the company declared an all-time record for EBITDA at the start of the year. The performance of EBITDA shows the normalisation of the conventional generation business, which includes both thermal production (gas) and the gas business, and the positive contribution of the rest of the business segments.

Ordinary net profit decreased by 51% to €292 million as a result of the trend for both declining EBITDA and the impact of the extraordinary 1.2% sales tax, as it is not deductible.

The company is implementing a more selective approach to its investment policy. Of total capital expenditure for the quarter, which reached €412 million and remained stable compared to 2023, 45% was spent on grids and a further 26% on renewables.

The normalisation of market conditions resulted in a 53% reduction in the average price of electricity in the pool, to €45/MWh, including negative prices for the first time in history starting in April. However, the company's futures and models point to an average price of €60/MWh in the medium and long term. Mainland demand for the quarter decreased by 0.4% (although it increased by 1.2% when corrected for working days and temperature) due to mild temperatures, the non-recovery of industrial demand in sectors such as paper and metallurgy, and savings and efficiency measures.

Emission-free technologies represent 78% of Endesa's installed capacity, up from 71% in 2023, and generated 90% of production, seven percent more than a year ago as a result of improved hydroelectric generation. Endesa has added 700MW of renewables in year-on-year terms to reach a net installed capacity of 10,000MW. With regard to the partnership model announced on Capital Markets Day, the company is now in the final phase of the sale of 49% of the operating solar portfolio, retaining control of a strategic asset for a vertically integrated electricity company.

There has been consolidated development of the client portfolio in the regulated market which stands at close to 7 million, giving Endesa a 29% share in this highly competitive market. There has also been a continuation of the process of simplifying the commercial structure in order to make the customer the focal point.

Higher renewable energy production increased the percentage of fixed-price sales to customers covered by emission-free production by five percent to reach 82%. The company also had future sales corresponding to 95% of in-house production for 2024, 86% for 2025 and 53% for 2026.

The gas business was similarly stable compared to 2023 in a context where there was a 3.4% decrease in demand in Spain (including a 22% decrease in demand for thermal generation). The strategy of future sales of gas committed to suppliers has enabled the targets both for 2024 and the following years to be within reach.

Financial performance

In addition to the main figures included in the income statement, Endesa has shown strength in cash generation and the quarter closed with a cash balance of €167 million. This was in spite of the payment of an arbitration award with Qatar, without which this amount would have been €700 million.

With regard to the development of our indebtedness, net debt increased to €11,300 million due to investments and the payment of an interim dividend. Gross debt remains stable at €13, 800 million. All this has enabled Endesa to maintain a net debt-to-EBITDA ratio – 2.8 times compared to 2.4 in 2023 – and a cash flow to net debt ratio of 44%.