Enel plans to leave Romania next year

The Enel Group has planned its departure from Romania for next year, according to a report presented to the press on the occasion of the Capital Markets Day conference. Enel said it plans to sell assets worth 21 billion euros ($21.51 billion) to reduce its net debt, to focus on its presence in six countries, according to the updated strategy of the largest Italian utility companies presented on Tuesday.

“The cornerstone year of the Group’s long-term streamlining strategy is expected to be 2023. Specifically: activities in Europe are set to center around Italy and Spain, with the sale of Romanian assets; in Latin America, the Group expects to exit from Peru and Argentina; some geographies, such as Australia and Greece, are expected to be added to the Stewardship perimeter; the value of gas portfolio in Spain is expected to be crystallized; the assets in Ceará are expected to be sold in order to increase the focus on distribution networks in megacities (Rio and São Paulo)”, reads a press release.

Most of the asset sale plan – which targets, among others, assets in Romania and Peru – will be carried out by the end of 2023, the company informed in a statement. Enel, which could also sell its gas portfolio in Spain, wants to end 2023 at a net debt level of 51-52 billion euros, up from 69 billion euros at the end of September. Earnings before taxes, interest, depreciation and amortization (EBITDA) should increase to 22.8 – 22.9 billion euros in 2025, from a level of 19 – 19.6 billion euros estimated in 2022.

Also, the state-controlled company intends to invest approximately 37 billion euros in the next three years, of which 60% will be in power generation capacity, customers and services, and 40% in network development. Enel has pledged to reward investors with dividends of 0.43 euros for the period 2023 to 2025, up from 0.40 euros in 2022. Most of the asset sale plan – which targets, among others, assets in Romania and Peru – will be completed by the end of 2023.

Francesco Starace, CEO and General Manager of Enel said while presenting its 2023-2025 Strategic Plan today to the financial markets and the media: “In the next three years, we will focus on integrated business models, digital know-how as well as businesses and geographies that can add value despite the current challenging scenario, embracing a leaner structure and a more robust set of financial ratios. This will increase our resilience to potential future continued turbulence, as well as position our value creation towards further growth, benefitting all our stakeholders and accelerating energy independence in our core countries. Sustainability, which is fully embedded into our decisions, continues to be at the foundation of our Strategy, also leveraging on the acceleration of electrification across economies. These results will be achievable thanks to the highly skilled and motivated colleagues at the Enel Group and the digital platform organizational structure we have set up for the Group.

In 2022, the deployment of the Group’s simplification strategy accelerated significantly. The sale of Enel Russia and of the Fortaleza CCGT plant in Brazil were completed and by year end the Group expects to finalize the sale of transmission assets in Chile, of the distribution grids in Goiás, as well as the Gridspertise deal. Moreover, by the end of 2022, the Group is also planning to crystallize the value of its gas portfolio in Chile.

Following the aforementioned acceleration, in 2023-2025 the Group foresees a further streamlining of its structure, by exiting some businesses and geographies no longer aligned with its strategy. The Group also expects to continue to leverage on its Stewardship model in non-core countries. In addition, and in line with the aim to exit carbon-intensive activities, the Group plans to leverage on the current market environment to initiate the exit from gas assets. This overall divestment program is an integral component of the plan to reshape the Group, maximizing shareholder value.

In 2024, the Group is also planning to crystallize the value of its asset base in the United States and that of Enel X Way.

In a statement sent to our editorial office, Enel mentions that “all the operational activities of Enel in Romania are carried out and will continue to be carried out normally, without affecting the final customers who will continue to benefit from all the services and products they are used to.”

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